PORT ANGELES — Jefferson Healthcare commissioners have voted unanimously against putting a $35 million bond on November’s general election ballot.
The bond would have been to help fund a hospital campus expansion and modernization project.
In rejecting a bond referendum on Wednesday, commissioners Jill Buhler Rienstra, Marie Dressler, Kees Kolff, Bruce McComas and Matt Ready opted for self-funding as a more limited expansion that would address Jefferson Healthcare’s needs in the near term, but not the long-term demand for space that it needs to accommodate anticipated growth.
The vote came after a 50-minute presentation from Jefferson Healthcare CEO Mike Glenn, who had been asked by the board at a special session July 20 to prepare a comparison between a project that included a bond and one that did not.
Glenn ran through the financial, design and operational details of the two options: an 81,500-square-foot expansion project that included a bond ask with an estimated budget of $90 million to $95 million, and a non-bond project of 57,780 square feet to 58,000 square feet with an estimated budget of $70 million to $75 million.
Cost savings for the non-bond project came primarily through the elimination of 16,000 square feet of shelf space that would have provided room for growth, expansion of current services such as obstetrics and gynecology and dermatology, and create space for new specialties such as pulmonology and neurology so that patients would no longer need to travel out of the area to be treated.
Rethinking and reconfiguring space in the non-bond project — or, “squeezing down the square footage,” as Glenn called it — such as creating a multi-check-in area for some specialities rather than each department having its own check-in were ways he said the design team had come up with to get the most out of less space.
Emergency & Specialty Services Building, the newest building on campus, ran out of space within two years of its completion in 2016.
Nonetheless, Glenn said, “I promise there will be a day it would be nice to have that extra space.”
The need for space was a primary driver of the campus expansion project, along with retrofitting aging buildings and the demolition of a building from 1965 that was seismically unsound.
But the cost of the project was a concern among the commissioners throughout the three special sessions on July 5, 13 and 20, when Glenn presented updates and the design and construction budget estimates.
The simultaneous demolition of the old building, construction of new ones and construction of temporary structures, like a cafeteria, as well as escalating construction costs contributed to an initial price tag of $160 million that was pared down to the $90 million range.
In its application to the Washington Department of Enterprise Services approved last September, Jefferson Healthcare projected a budget of $112,724,630.
Commissioners said they were reluctant to place a bond before voters when the county still had not completely recovered from the COVID-19 downturn and families were struggling.
“My feeling has always been that if we can finance it out of operations and the right amount of borrowing, that would be a preference,” McComas said.
“With the economy and inflation and the way things are right now, I don’t think it’s the right time to ask them for more. But the community needs to know that, as things fill up, as they did with the ESSB, then we’ll have to come to the community for support eventually.”
Without the bond, Jefferson Healthcare plans to pay for the expansion project with cash reserves, bank loans and federal and state funding. It also anticipates revenue from the growth of it special services departments.
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Reporter Paula Hunt can be reached by email at paula.hunt@soundpublishing.com.
