Council weighing Massena hospital plans
MASSENA — The Town Council wants to consult its financial advisers before signing off on Massena Memorial Hospital's proposed $21.8 million southeast expansion project.
The project would increase the municipality's debt by an estimated $13.5 million.
Hospital officials gave board members an extensive presentation on project plans Wednesday night, offering preliminary architectural sketches, a list of proposed renovations, cost estimates, an overview of the town's existing debts and a summary of the impact the project would have on those debts.
The hospital plans to finance a large portion of the expansion project using cash reserves, but it is seeking the town's OK to bond for about $13.5 million toward the three-phase project, which will include a three-story addition, a major overhaul of the emergency department and a renovation and expansion of boiler room facilities.
"We are extremely cognizant of the economy, specifically our local economy," Chief Executive Officer Charles F. Fahd II told the board. "It is not our intent, in any way, shape or form, to put the hospital or the town in financial jeopardy in moving forward with this project. We have the ability right up to approximately 18 months to two years from now to pull this project back or stop it altogether, if necessary."
The biggest issue left to be resolved is how the expansion will be financed.
By law, municipalities are permitted to take on debts only up to a certain percentage of total assessed value of property. Because the hospital and the Massena Electric Department are municipally owned, any borrowing either agency does is counted toward the town's total borrowing limit.
Both the hospital and MED have proposed significant, multimillion-dollar projects — the hospital's expansion and the utility's proposed Grasse River hydroelectric dam — in addition to the town's own projected capital projects, including a new highway barn and additional water districts, all of which could put a strain on the town's ability to borrow money.
The town's total assessed value is $540 million and the state constitution prohibits it from borrowing more than 7 percent of that total, or $37.8 million.
The town has debts totaling $10.99 million, 29 percent of its total bonding limit, Mr. Fahd said.
Counting the hospital, MED and the town, Massena can borrow up to $26.8 million. With the hospital looking to bond for just over half of that, it would leave the town and MED able to borrow only up to $13.3 million before the town's borrowing limits were reached.
Mr. Fahd said the hospital had hoped to bring the expansion project before the board last year, but held off because of the downturn in the economy on the local, state and national scale.
The hospital also has made efforts to keep the amount it needs to borrow at a minimum, paying out of pocket for a recent $4 million expansion and renovation of the medical imaging department, as a way to avoid racking up more debt.
"We are aware of the MED project and what they're looking to borrow there," Mr. Fahd said. "The hospital is willing to put down a sizable cash down payment on this project. We do have the ability to go to the state Dormitory Authority to borrow the rest, but their fees are higher than a municipal bond. That possibility is out there, but it's not what we would prefer."
The town board's hospital liaisons, Supervisor W. Gary Edwards and Supervisor-elect Joseph D. Gray, plan to sit down with hospital officials, MED, financial advisers and counsel Dec. 2 to discuss the issue.
The Town Council then will hold a special meeting at 5:30 p.m. that day to bring the rest of the board and the public up to speed on the discussions and potentially decide whether to allow the hospital to move forward with the bond.
The three-story southeast addition will include 14 new private patient rooms, each equipped with its own bathroom and shower facilities.
Renovations in the boiler room will upgrade boilers originally installed there in 1952 and expand the plant's capacity by adding another boiler.
The emergency department would gain much-needed space in the plan, with four additional patient examination rooms and an expanded waiting area; additional clinic space would be added to the Levine Outpatient Center, including specialty areas for cardiology, pulmonology and oncology; a new cafeteria would be constructed and kitchen facilities renovated; a second elevator would be installed, and storage, conference and education space would be added.
