The Fraser-Fort George Regional Hospital District board approved a 2025 operating budget at its Thursday, March 20 featuring a total tax requisition of $23,405,530 — a 4.9 per cent increase compared to the 2024 budget.
It’s the first budget since directors decided last year to cap the district’s contribution to capital projects and equipment purchases to 21.625 per cent compared to the previous amount of 40 per cent.
At the hospital district board’s February meeting, Northern Health representatives said that the cap could force the health authority to have to decide whether some projects can proceed at all.
Director Brian Skakun (City of Prince George) said he went back and looked over the discussion in the legislature when the hospital district boards were first established and there was only talk over capital expenses, not equipment purchases.
He said he wondered whether the board had standing to refuse financial contributions to things like lunchroom purchased and that other regional hospital districts are facing similar scenarios.
Chief administrative officer Chris Calder said the equipment issue has come up before in discussions with Northern Health.
“I do think that over the history of hospital districts, in that time we’ve enhanced the amount of medical equipment that’s needed to run these hospitals that probably wasn’t something considered at the time,” Calder said.
“But I think we have the ability to push back on the different segments of the projects knowing that equipment is a large chunk for the health authority. We are building the new acute care tower and contributing to that, but new facilities aren’t happening all the time.”
Director Cori Ramsay (City of Prince George), the first vice-president of the Union of BC Municipalities, said that organization is currently working on a list of priorities for its upcoming advocacy days and she and Village of Fraser Lake Mayor Sarrah Storey have been lobbying for this item’s inclusion.
Director Victor Mobley (Salmon River-Lakes) asked about the tax impact of the $125 million loan for the district’s contribution towards the new University Hospital of Northern BC acute care tower expected to come on the books in 2029.
It will be around a 2.6 per cent impact on taxes for the first 15 or more years of the 30-year loan, with rates potentially declining afterwards, said Sarah White, general manager of financial services.
She said staff are working on smoothing out requisition increases as much as possible to meet the demands of the debt servicing payments when they start.
Mobley said he was worried about the district’s spending on interest in recent years, which will place costs on future generations.
Calder chimed in to say that there will be an anticipated reserve balance of around $96 million in 2029, which can be used as a sort of down payment towards the debt servicing.
Unlike with retail finance, Ramsay said that because local governments borrow money from the Municipal Finance Authority, their interest rates are lower than deposit rates.
“So, it is actually irresponsible not to borrow funds,” she said. “If we were to take money out of reserves, we’re going to miss out on significant amounts of interest that help us compound to pay for future infrastructure and sometimes the difference can be several percentages.”
Director Art Kaehn (Woodpecker-Hixon) was the only member of the board to vote against the bylaw establishing the budget.
At the February meeting, he had expressed concern about the impacts of the spending cap and the projects that would have to be shelved because of it.
