Regional politicians are grappling with how to meet an Interior Health request to double its take in taxes this year.
IH staff attended the Jan. 25 meeting of the board of the West Kootenay-Boundary Regional Hospital District and presented them with a request for $7.35 million for capital projects in 2023. That’s nearly double the $3.74 million requested for construction projects, equipment purchases and facility upgrades in the West Kootenay and Boundary regions in 2022.
Inflation, supply chain problems, old equipment, and the changing needs of an aging demographic are all helping drive the requested increase, staff said.
“Things that cost us $100,000 before COVID are now costing us $130-$140-$150,000,” said Todd Mastel, the IH corporate director for business operations in the Kootenay-Boundary region. “It’s a challenge to work in that environment and plan.”
Mastel said staff worked to push back projects or spread out certain jobs over several years to reduce costs, but admitted the tax request is still a big jump from 2022.
Several large projects
There are six major projects planned for 2023 that will cost more than $100,000 to complete. Those include improving the air supply systems at Trail’s Kootenay Boundary Regional Hospital and at the Grand Forks hospital, which are both more than 50 years old.
The air handlers at the Trail hospital “provide both the heating and cooling for the lab and the Daly pavilion and have become very unreliable, often impacting the operation of the lab and resulting in periodic shut-downs,” says a staff report.
Also on the project list are improvements to the boiler system at the Trail hospital, planning major system improvements to the MRI facility in Trail and the equipment sterilization facility at Nelson’s Kootenay Lake Hospital.
In total, IH plans to spend $8.388 million in larger projects, and officials are asking local taxpayers to fund about 40 per cent of that – about $3.355 million.
Added to that capital list are five projects costing less than $100,000, including repaving the Castlegar health centre parking lot, upgrading building management systems in Grand Forks, Nakusp and New Denver, renovating the MRI facility at Nelson, replacing aging air systems at a care home in Trail, and an emergency alert system for staff at a front-line clinic in Trail.
Computer upgrades are always on the budget list, and it’s no exception this year. Staff asked for local taxpayers to pay their share – about 10 per cent, by population – of a $13.7 million province-wide project to upgrade long-term and home health tools, improvements to the province’s Health Portal to make it easier to use, as well as measures to improve cyber-security. Other IT improvements include better wifi for staff at the Trail and Grand Forks hospitals.
But the really big driver of the tax bill this year is equipping the brand-new 75-bed long-term care facility in Nelson, currently under construction. The facility will need everything from bedpans to needles to patient lifts when it opens sometime in 2024.
Officials asked local taxpayers to put up $2.8 million of the $7 million needed to outfit the facility to care for elderly, people dealing with substance-use disorders or mental health issues, and home health services.
Other equipment purchases over $100,000 include an improved meal delivery system for Trail hospital (allowing patients a menu with choices), and automatic drug dispensing stations in Nelson.
Nakusp’s hospital will also see an upgraded X-ray station installed.
Small-ticket items can really add up as well, however. A list of purchases of items ranging from $5,000 to $100,000 adds up in total to nearly $1 million – of which the local share would be about $388,000.
IH staff delivered the funding request as part of the annual budget process. If local politicians approve the spending, the $7.35 million will be apportioned out to every taxpayer in the Central Kootenay and Kootenay-Boundary regional districts.
The surprising size of the increase had some directors a little concerned – and reluctant to sign off at this meeting on the draft capital plan.
The board members also mulled ways of reducing the impact on taxpayers this year. One option is to use reserves to bring down the tax load this year; another director asked for the projects to be listed in priority of importance.
“The budget is really high, and how do we stomach it? I want to be prepared in March to have a priority list. Can IH provide that?” asked Area D Director Aimee Watson.
“They are all priorities,” responded Mastel. “Hearing the request, maybe I could work with the CAO [RDCK CAO Stuart Horn] and come up with something to help the discussion for the March meeting.”
Another idea was to try to defer some of the project purchases by a year – for instance, not buy anything for the new long-term care facility in Nelson that’s not needed until 2024.
But directors heard some cautious words about that idea.
“The idea of balancing cash flow … so we’re only going to tax for $5.6 million, that is extraordinarily risky. You don’t know what next year’s ask is going to be …,” said Horn.
“We’ll bring back recommendations around using reserves, but I hear comments that make me think you’re thinking ‘let’s not tax the $7 million this year, let’s tax $5.6 and tax the $1.4 next year.’
“That’s not something staff will recommend. It puts the board in a fair amount of risk because you don’t know what the ask is going to be next year.”
Directors will spend the month pouring over the capital budget requests with IH staff, looking for options to ease the tax burden. In March, the board has to approve the capital spending one way or the other, in order to get the amount included in this year’s property tax bills.