An average homeowner in the region will shell out an extra $5 in each of the next five years to speed up growth of a reserve fund earmarked for the proposed Penticton hospital tower.
That means an average household will see its contribution climb from $86 in 2013 to $111 by 2018, according to a savings plan given preliminary approval last week by the board of the Okanagan-Similkameen Regional Hospital District.
The board heard the reserve fund currently stands at about $32 million and is projected to grow to $54 million by the end of 2018. That would cover nearly half the expected $120 million cost to local taxpayers of the $300-million tower.
The local hospital foundation has pledged another $20 million, while B.C. government is expected to chip in $160 million.
Hospital board directors expressed support for a gradual increase in contributions to the reserve fund, although some remain concerned about when the patient care tower will receive funding approval and in what amount.
“You know what my fear is? That (the province) will come in with less, that they will offer less,” said Janice Perrino, chairwoman of the board of the hospital district.
“That’s a fight for another day.”
She also downplayed concerns about the project costing more, noting a concept plan actually pegged the price of the tower at $275 million.
“It was me who said, ‘Listen, we all know that price tag’s probably going to go up, let’s use the price tag of $300 million, because that gives us a cushion.’”
The board last month considered options for borrowing the remaining share of its contribution to the tower, and initially supported an arrangement that would see an average household pay approximately $123 a year for 20 years. That debate was apparently premature.
“The debt portion is another discussion and it’s so far off in the future at this point that it will change greatly before we get there, and it’s not something this board will decide in this budget,” said Sandy Croteau, the hospital district’s finance manager.
She noted, however, that projections show an average household’s share of debt payments would be “somewhere in that neighbourhood” of what it will already be paying into the reserve.
The board is expected to approve the new schedule of reserve-fund contributions when its passes its 2014 financial plan later this spring.
A business case for the tower is expected to be completed by March 1, after which it will be sent to the B.C. government for funding approval.
Initial plans for the four-storey tower show roughly 37,000 square metres of floor space. By comparison, Cherry Lane Shopping Centre in Penticton has a retail area of about 25,000 square meters.