Voters OK bonds for Aspen Valley Hospital expansion
November 3, 2010
ASPEN – Aspen Valley Hospital will move ahead with its expansion plan this fall after voters approved the issuance of $50 million in general obligation bonds in Tuesday’s election.
The race was tight throughout the night as Pitkin County’s 10 precincts were counted. Ballot measure 5B won by a margin of 52 percent in favor to 48 percent opposed. The unofficial vote count was 3,219 to 2,951. The Pitkin County Clerk and Recorder’s Office said there were “a few” mail ballots that had been dropped off at polling places on Tuesday that still needed to be counted. There was no indication there were enough final votes to be counted to change the outcome.
John Sarpa, chairman of AVH’s board of directors, said he believes voters understood that it was time to modernize the hospital’s facilities. There have only been three hospitals in town since 1890, he noted, and the current facility was built in 1977, when there was greater emphasis on in-patient care. Times have changed, and the hospital needed to upgrade to meet patients’ needs, such as a greater emphasis on out-patient care.
During the campaign, AVH Chief Executive Officer David Ressler said the hospital had to expand to provide adequate space for the services it offers, not to offer new services.
“It’s about having facilities that are right-sized and meet the needs of our patients,” Ressler said while stumping in September.
The general obligation bonds will be repaid over 20 years by a property tax increase. The owner of a home valued at $500,000 will pay an extra $3 per month.
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The opposition came because people didn’t want to see their taxes raised or they didn’t believe in the expansion plan, Sarpa said.
“I would guess it was more because of fiscal-economic reasons,” he said.
There was a related question on the ballot. Question 5A granted approval to exceed current limits on revenues set by Colorado’s Tabor Amendment. It was approved by a vote of 3,600 to 2,475, or a margin of 59 to 41 percent.
AVH’s expansion plan faced limited opposition in the campaign. A group called Citizens for Sensible Change alleged in a newspaper ad late in the campaign that the expansion was “too big, too expensive, too destructive.”
The group claimed the hospital’s plan to triple its current size was too ambitious and costly. It specifically targeted the addition of 27,000 square feet of office space as unnecessary.
No one affiliated with Citizens for Sensible Change would comment on the record about the race. “It’s hard to fight the hospital and come out [against this] in a small town,” said a person involved in the opposition who didn’t want to be identified.
Sarpa said the election outcome won’t spur the hospital district to alter the expansion plan. The relatively close vote sends a message to the hospital board that it “needs to be careful” with its spending, Sarpa said. He believes the board and administration have already demonstrated their fiscal responsibility, first by digging the hospital out of poor financial health from five years ago, then by carefully examining its expansion plan.
The board determined that it needed more space to adequately offer the same services and that now was a perfect time to pursue the project because interest rates are low and construction costs are favorable. That’s why voter approval was sought, he said.
“We put everything together and decided it was a reasonable risk to take,” Sarpa said.
The cost of expansion is estimated at $120 million, although hospital officials were quick to note that costs for the two later phases could change. The hospital district will rely on cash-on-hand and philanthropy to raise the remainder.
Michael Blimes, chief development officer at the Aspen Valley Medical Foundation, the fundraising arm for the hospital, said the goal is to raise no less than $30 million, and possibly as much as $50 million to $60 million, he said.
The medical foundation has received “very positive feedback” from the community and from philanthropic organizations, Blimes said. Now that the $50 million in general obligation bonds has been secured, the fundraising will begin in earnest. The commitment by voters will make a big difference in the fundraising effort, he said.
Sarpa said construction could start this fall on the next phase of the expansion, depending on weather. The next three phases in expansion could be completed in seven years. The total size upon completion would be 215,000 square feet.