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There's good and bad news in hospital construction estimates
"Whidbey General Hospital got a shot in the arm in September when voters overwhelmingly approved a $5 million bond issue for expansion and remodeling of the publicly-owned facility. But now, after reviewing plans for the project, construction estimators have told hospital officials that $5 million won't be enough. Luckily, help appears to be at hand.At a special meeting of the Whidbey General Hospital board Monday night, hospital chief executive officer Scott Rhine explained that overall project costs are now expected to be around $5.2 million based upon the improvements voters were promised. Rhine said the reason for the increase is that the hospital's estimates were done more than a year ago and costs have likely gone up.We're asking for a second opinion, Rhine told the board. He said he has already requested a new estimate from another firm. At the same time, Rhine and hospital architects have looked for cuts to the original plan.But later in the same meeting, the hospital's budget director Doug Bishop produced some estimates of his own showing that the interest rates the hospital had expected to pay on its bonds will actually be lower. According to Bishop the rates will likely be between 4.6 and 5.1 percent instead of his original projection of 5.2 to 6.0 percent spread over the ten-year bond period. That's significantly less, he said.The savings could pump enough dollars back into the hospital budget to cover the increased cost of remodeling, plus a little extra for the construction contingency budget. That means the hospital should be able to build as originally planned. The project involves about 20,000 square feet of the existing hospital and the addition of about 6,000 square feet of new construction. Improvements will be made in the cardiac rehabilitation, diagnostic imaging and medical ambulatory care units, as well as to the hospital's maze of corridors which many feel is too confusing. A new hospital entry is also planned, as is a special family room for those seeking privacy and quiet time.Bishop told the board that they had the option of using the projected interest savings to complete the project as advertised to voters, or return the balance to taxpayers. The hospital's community advisory committee had considered the same option prior to it being presented to the board. Group members said the committee unanimously supported finishing the original project. They pointed out that any delays or cutbacks in the plan would only force the hospital to pay higher prices down the line.Board member Roger Case agreed.I think people who voted for this expect us to act in the best business manner, to get the best deal we can, said Case.Board president Peter Borden asked if there was any advantage in waiting 30 days for the second estimate before deciding how to use the money, but Rhine said the hospital is trying to hit an early December deadline for selling the bonds. He said a month's delay would just put the entire project further behind schedule. Besides, said Rhine, a delay could raise concerns among potential investors.Bishop assured board members that being able to take advantage of lower interest rates was a blessing of the current economic times.This is a real deal for taxpayers. This is real exceptional, he said. We could just as easily have been chasing the interest rate going the other way.At the close of the meeting the board approved the use of the interest savings for construction. "