City weighs cost of annexing AVH |

City weighs cost of annexing AVH

Janet Urquhart
Aspen Times Staff Writer

Aspen could incur annual expenses of $50,000 to $131,000 if the City Council agrees to annex the Aspen Valley Hospital campus into the municipal boundaries, according to estimates by city staffers.

The cost is one factor the City Council is likely to consider when it meets with AVH representatives on Tuesday to discuss the hospital’s petition for annexation.

City Manager Steve Barwick, in a memo to the council, recommends the council reject the annexation request.

“I believe this difficult economic period is the wrong time to add permanent expenses to the city’s budget, especially when there is so little obvious public policy benefit to be gained through this annexation,” he wrote.

The hospital is within the city’s community growth boundary – an area identified in the Aspen Area Community Plan as logical for city expansion through annexation, according to Julie Ann Woods, head of the city’s Community Development Department.

The hospital board of directors believes it makes sense to pursue annexation into the city, since the AACP identifies the campus as an area to be annexed, rather than seek development approvals through the county and then be annexed into the city after the fact, according to Randy Middlebrook, hospital CEO.

AVH is currently pursuing plans for a 5,000-square-foot expansion along with internal changes, he said.

“We know we’ve got some serious physical plant issues to be addressed,” Middlebrook said. “The project we’re talking about represents the here and now – what do we need to do right now.”

In addition, the hospital will be contemplating a master plan outlining its vision – and what could be more significant development – in the next 15 or 20 years, he added.

Speculation that the hospital is seeking annexation because it anticipates an easier land-use review through the city than it would get in the county is unfounded, according to Middlebrook. He expects the hospital would be asked to mitigate for certain impacts in a development review by either government.

“I don’t know whether it’s less mitigation in one venue versus the other to tell you the truth,” he said.

The hospital’s annexation petition has been contemplated for some time and has been the subject of negotiations between the city and AVH, according to John Worcester, city attorney.

City staffers need direction from the council before a preannexation agreement can be finalized and considered when the council takes up the annexation ordinance at second reading, Worcester notes in a memo to the council. It is scheduled for first reading on Tuesday.

Conditions of the annexation have focused on three issues – the construction and operation of a detoxification center, reconstruction of the Castle Creek Road/Doolittle Drive intersection that serves as the entrance to the hospital, and the fiscal impacts of the annexation to the city, according to Barwick.

The key unresolved issue is the anticipated annual loss of between $50,000 and $131,000 as a result of the annexation, he explains in his memo.

The expenses include maintenance of Castle Creek Road from the roundabout to Doolittle Drive, a stretch that would be annexed along with the hospital property, and providing police service to the hospital.

“The City Council is faced with the basic choice: Do they want to take additional costs into their budget to help the hospital in their development process?” Barwick said.

AVH is currently located in unincorporated Pitkin County. Castle Creek Road is maintained by the county, and the county Sheriff’s Department has jurisdiction over the AVH campus.

In a letter to Barwick, Middlebrook outlined several terms the hospital might offer to the city in conjunction with the annexation.

AVH is willing to give the city a 15 percent discount on AVH charges for 10 years after the annexation. Last year, the discount would have resulted in a $13,676 savings to the city, according to Middlebrook. In 2002, 59 percent of the hospital charges for city employees were generated at Aspen Valley Hospital; if 80 percent of the charges had been generated at AVH, the savings would have been $18,543, he said.

The hospital is also willing to share in the cost of reconstructing the Doolittle Drive intersection, and commit to offering three health fairs per year and at least five free educational seminars for the community, Middlebrook said in his letter.

The value of the health fairs to participating citizens could exceed $450,000; the annual savings to the city if half of its employees used the health fair lab tests would be $43,634, he estimated. Two health fairs in Aspen – one for senior citizens – and one in Basalt are proposed.

A detox agreement that establishes when police should bring an individual to the hospital emergency room versus the jail has been established, and AVH is willing to be a partner with the city if a local detox center is needed, Middlebrook notes in his letter.

The hospital’s proposal represents a significant financial commitment to the city, according to Middlebrook.

Janet Urquhart’s e-mail address is

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