Powell River Regional Hospital District will consider a nearly $800,000 expenditure for capital cost sharing with Vancouver Coastal Health (VCH).
At the September 8 hospital district committee of the whole meeting, directors were presented with an extensive recommendation for the hospital board to borrow up to $791,756 to fund 40 per cent of the 2023 VCH cost sharing request.
According to a staff report, VCH is planning to expend nearly $1,979,390 for five projects in the qathet region. These include: modernizing clean and dirty dumbwaiters; upgrading the operating room mechanical room boiler and direct digital control; replacing a high voltage breaker and transformer that is 25 years old; upgrading a generator paralleling gear, which controls both backup generators; and upgrading the roof at qathet General Hospital.
The regional hospital district recommendation calls for short-term borrowing over a five-year term.
qathet Regional District Electoral Area D director Sandy McCormick said she had concerns about the borrowing. The hospital district still has the Willingdon Creek Village funding to pay back, she added.
“Borrowing each year for expenses, to me, isn’t going to be sustainable in the long term,” said McCormick. “We can’t do that forever and a day. We need to find a better resolution to coming up with a cost share that is affordable, from our perspective.”
Manager of financial services Linda Greenan said it does seem there will be continued requests from VCH for capital cost sharing. VCH is in an infrastructure deficit, so it seems like it will be an ongoing request, she added.
“They are trying to get their capital assets where they need to be,” said Greenan. “At this point, we have the large debt (Willingdon Creek) that is going to renew in 2024 and the interest rate for that is very uncertain right now. I’m reluctant to advise the board to use reserves because the interest rate is so uncertain and the debt is so large.
“If we borrow for this smaller debt, then we kind of have some laddering of borrowing and there is a bit more flexibility, especially with five-year open borrowing, because we can pay it down at any time. If we get to 2024, and find out, for example, the interest rate on renewing the larger debt for the Willingdon Creek Village isn’t that bad, then we do have the option that we could use some of that reserve funding to pay off this debt.”
Greenan said going forward, she recommends that the board put further funds into reserves to avoid always having to borrow for these requests from VCH. She said it would be good to have more money set aside for things that come up.
City of Powell River director George Doubt said he is in favour of taking out the loan and using short-term borrowing to fund the capital cost share from VCH. He added that this year’s portion is quite a bit higher than what the hospital district has traditionally been paying.
Doubt said there is an infrastructure deficit that exists, and if infrastructure is going to be kept up to date, the money has to be found.
“We’re funding a percentage of that, not the entire amount,” added Doubt. “Vancouver Coastal Health is providing the rest of the funding. Going over five years makes sense to me because we are in times of changing interest rates.
“It would be nice if it was less, but if we want health care, we have to pay for it.”
The committee voted to send the funding request bylaw to the regional hospital board meeting in January 2023 for inclusion in its 2023 budget.
Greenan said the cost of the loan to taxpayers will be up to $2.44 per $100,000 of property value on the 2023 property tax assessment.
At the April 14 hospital district meeting, Johan Marais, regional director, capital asset management and planning at VCH, made a presentation to the hospital board, providing a capital plan update and a request for the cost share for capital upgrades.
