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Money borrowed for Penticton hospital construction

From the ceremonial sod-turning photo almost two weeks ago, to the less glamourous but all important debt agreement.
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Preliminary service work is underway on the grounds of Penticton Regional Hospital in preparation for the construction of the new patient care tower. The hospital district recently agreed to borrow over $100 million for the project.

From the ceremonial sod-turning photo almost two weeks ago, to the less glamourous but all important debt agreement.

It was down to dollars and cents for the  board of the Okanagan Similkameen Regional Hospital District last week when they agreed to borrow up to almost $109 million for the construction of the new patient care tower.

The large amount, which will take no more than 25 years to repay, represents the local taxpayers share of debt for the $312.5-million project.

In recent years, taxpayers have seen an increase of $5 annually to their hospital board taxes. That money, along with previous capital reserves, will create a $50 million reserve fund that will be applied to the project — meaning the total cost of the project for local residents would be about $160 million.

A funding model that will see the average household pay about $112 to the hospital board will be used to pay off the debt.

Just under $67 million will be borrowed over a 25-year period. The annual debt servicing costs will be just over $4.9 million.