Elected officials balked at a $75 million cost increase to Cranbrook's F.W. Green Home redevelopment project and are seeking to meet with Interior Health senior management and the Ministry of Health, as project costs have soared to an estimated $232 million.
Interior Health provided an update on the project during a Kootenay East Regional Hospital District board meeting — a board that is represented by mayors and regional district area directors in the East Kootenay and parts of the West Kootenay — on Friday, June 13.
The F.W. Green Home redevelopment project is a 150-bed facility at full build out. The plan includes building a new five-storey facility on vacant land beside the existing facility, and then move residents from the current facility into the new one in the first phase. The second phase involves demolishing the current building and rebuilding it.
The new building is projected to be complete by October 2027, and the demolition of the old building and construction of a new one on the existing site is projected to be finished by late 2029.
The new site is currently undergoing an environmental assessment and shovels are expected to be in the ground by August.
Originally, the entire project was estimated at $156.5 million when it was announced by the provincial government in September 2023.
The $75 million increase was blamed on cost pressures due to inflation, updated codes and standards, energy requirements, and other factors.
Categorically, the increase breaks down to $29 million for repricing of mechanical and electrical needs, $15.5 million for updated design costs, $13.9 million for contract management costs where the final bid price was higher than the business plan, $7 million for building code requirements that were updated in 2024, $6.65 million other generalized price increases, and $3.6 for increased management reserve.
For large capital healthcare infrastructure projects, the cost-share breaks down to 60 per cent funding by the province, and up to 40 per cent by local property tax payers within the hospital board jurisdiction.
Currently, the hospital board has committed to providing $62.6 million for the project as part of its 40 per cent cost share for the original $156.5 million project estimate.
With the $75 million increase, that means the hospital board, which is funded by property taxes within the board's jurisdiction, is on the hook for an additional $30.2 million based on the cost share formula.
David Wilks, the mayor of Sparwood and chair of the hospital board, expressed frustration the cost increase wasn't brought to the board at the last quarterly meeting earlier in the spring during budget deliberations.
"I'm extremely concerned that Interior Health Authority (IHA) has come to this board for an ask of $30.2 million after we've already set our budget in March," said Wilks. "Further to that, I have spoken to senior levels of IHA who shall remain nameless, knew this was coming, and if they knew it was coming, why wouldn't they have come in March when we still had budget room?
"We don't have room right now. We're locked in. Can we borrow? Absolutely, we can borrow. Can we find money? Absolutely, we can find it... but does that mean we should jump?"
"...I'm having a real hard time with $30.2 million."
After the project update from Interior Health, the hospital board had to decide whether or not to approve additional requested funds.
However, some hospital board directors felt it was too short a turnaround between hearing the updated cost figures for the first time and having to make a multi-million budget decision shortly thereafter. They believe facilitating more conversation with IH management or provincial government officials to explore options is needed.
"We need somebody who has fingerprints on this thing to come in here and justify for us the money that is being spent," said Kimberley Mayor Don McCormick.
Other directors expressed frustration with the process for capital funding requests by Interior Health.
"Right now it feels to me as if Interior Health knows our hands are tied," said Mike Gray, the mayor of Radium Hot Springs. "We don't really have many options except to either fund or not have a project and I find it really challenging to be a member of this board and to feel like we're a rubber stamp.
"We're not really part of the process, we're not really a part of finding out what comes before us. We're sort of held with a bit of an ultimatum — 'do this or your project might not go ahead.'"
A majority of board directors voted to seek a meeting with IH and Ministry of Health officials to discuss the cost-share formula for the $30.2 million cost increase.
The consequences of denying the additional funding were unclear at the time, as it would go back to the Ministry of Health for review and the viability of the project would likely be examined, according to Interior Heath.
Outside of the cost increase, Interior Health also noted that the completion of the new facility would help alleviate overcapacity pressures at East Kootenay Regional Hospital (EKRH).
One official said there are currently 20 patients at EKRH who need an alternative level of care, but not hospital-level care, while seven of those patients are currently being assessed for long-term care.
For context, EKRH has 89 hospital beds as of 2023/24, according to an IH facility profile.
