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Wednesday, Apr 09 2014 06:00 AM

Healthcare district needs $20 million to complete hospital

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Curbing has been constructed for what will be the driveway to the front of the new Tehachapi Hospital. The Tehachapi Valley Healthcare District has engaged services of a consultant to help address a funding shortfall. Tehachapi News photo

Financial expert hired to help get funding

The Tehachapi Valley Healthcare District is seeking additional funding for the new hospital in Capital Hills as it continues its plans to open in the first quarter of 2016.

At TVHD's most recent board meeting on Wednesday, March 26, it was announced that the district is still in need of $20 million to complete the project. The money will be put towards resources needed once the the project is nearing completion, including costs for medical equipment, signage, furniture, fixture, artwork, as well as various city, county and state fees.

The $20 million will also cover tests and inspections, project administration, land and entitlements costs and banking fees.

As a result, the board of directors approved an agreement with GL Hicks Financial Services to help obtain those extra funds. According to Evan Rayner, Interim CEO of the district, this specialist has helped obtain more than a billion dollars for other hospital projects.

Rayner said the group will help the district take a "multifaceted" approach to obtaining the additional money, including searching for grants, philanthropy, examining the hospital's ability to service debt, among other options.

"I want the community to know we're in the process of due diligence," Rayner said. "We are being proactive in make sure we get this project finished and on time."

The total budget for the project, which was approved in January 2013, amounts to $86,230,000, according to a budget reconciliation obtained from SHP Project Development. Voter-approved bonds will provide $65 million to finance the project.

The district is currently spending $1.5 to 2 million on construction each month, according to Project Manager Stacy Pray.

According to Pray, the project has been slightly delayed due to a few construction mishaps, along with coordination with OSHPD, the state agency that oversees hospital construction.

"I think you will see next month a slight shift in the dates of opening and occupancy," Pray said to the board.

Hospital construction was previously delayed by litigation. In November 2011, just before the district was set to break ground on the project, a group calling itself Tehachapi Area Critical Landuse Group filed a Writ of Mandate with Kern County Superior Court alleging that the district board had violated the California Environmental Quality Act in approving a mitigated negative declaration (of environmental impact) for the new hospital.

In September 2012, Judge Kenneth C. Twisselman II, tossed aside the suit, paving the way for the project to resume. A groundbreaking ceremony was held on March 28, 2013.

At the March meeting the board also voted to move its bond funds into a Local Agency Investment Fund Account, which directors said will give the district a better interest rate than it currently receives.

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