No bonds for Oregon State Hospital at Junction City, constructions slowed, but continues

From the Eugene Register-Guard, February 27, 2012

There will be no new bond funding this year for the proposed state psychiatric hospital in Junction City, according to Gov. John Kitzhaber and several key lawmakers.

But that doesn’t mean the project is stalled. State officials now acknowledge they in fact have $20 million in old funding still available and dedicated to the project. That will allow on-site infrastructure and foundation work at the Highway 99 property to proceed this year and early next year.

The pace of construction won’t be as brisk as advocates have wanted. Allocation of new bond funding this legislative session would have allowed construction to proceed more quickly, officials said.

Although the state’s capital construction budget hasn’t yet been finalized, the advocates’ request for $29 million in new general, fund-backed bonds to further the project is off the negotiating table, state officials said.

Opposition this session centered largely on fiscal concerns. The state’s Debt Advisory Committee has recommended that the Legislature take on no additional general fund-backed debt this year — although long-standing philosophical questions remain about whether Oregon should commit to another large psychiatric hospital.

But supporters of the Junction City project, including Kitzhaber, say there’s $20 million in unspent bond funds that were allocated to the project back in 2009 that can be used to keep the work going.

With that money, project managers have said they can complete planning, site preparation and foundation work this year and in the first half of 2013.

Although that will mean a slowdown in the anticipated construction schedule, it won’t prevent the hospital from being completed before its target opening of early 2015, said Tim Raphael, a spokesman for the governor.

The decision on new bonding to complete the construction can therefore be pushed to 2013, Kitzhaber said.

“We knew 2012 would be a difficult year for new bonding, so we asked project managers what they could do within the existing allocation,” Raphael said Friday.

While project backers in recent weeks were pushing the Legislature for new bond money, none had mentioned publicly that the project still had $20 million in prior funding available.

The immediate fate of the big project — and the construction and permanent jobs it would generate — has been portrayed by state officials for some months as riding on the ability of project supporters to get more bonding approval through the current Legislature.

Linda Hammond, director of Oregon’s addictions and mental health treatment programs, had told The Register-­Guard previously that delaying the new bonds by at least a year, into 2013, “would make it extremely difficult to meet the target date of 2015.”

Project administrator Jodie Jones would not comment on the project Friday, referring all questions to the governor’s office.

With the effort to gain additional bonding for the project from the Legislature now clearly dead, officials are disclosing they still have the old money available.

The state already has spent more than $30 million on the Junction City project, to complete work such as water and sewer lines around the proposed site and on hospital design and planning.

Hospital advocates hope they will gain more traction in the 2013 Legislature, when the state’s bonding capacity is expected to be rosier.

Another $84 million is needed to complete the project.

The debt committee estimates that as much as $987 million in general fund-backed capacity could be available in just the first year of the 2013-15 biennium.

Legislative leaders “are being very conservative with capital construction projects this cycle,” said state Sen. Chris Edwards, D-Eugene.

“There will still be opponents on philosophical grounds next year, but they won’t be able to hide behind the state’s fiscal difficulties,” he said. “The bottom line is that we still need the hospital.”

State Rep. Val Hoyle, D-Eugene, said she was happy that the people working the project had been able to “keep the project moving with existing funds.”

“I believe holding off on additional funding until we have more (bonding) capacity is responsible,” she said.

Conversely, state Rep. Dennis Richardson, R-Central Point, the state GOP’s chief budget crafter, said he will continue to oppose the project, which he doesn’t believe to be a cost-effective or humane way of treating people with mental illnesses.

“If the Democrats take back the House (in the 2012 elections), and continue to control the Senate and the governor’s office, the project might move forward,” he said. “But it won’t be based on economic reasons.”

Edwards said he understood that some Junction City residents may be increasingly skeptical about the state delivering on its promise of a hospital in their city. Residents long have hoped that a major state facility could provide an economic boost to the area.

“If I lived in Junction City, it would be easy for me to say, ‘This is typical of the state not to follow through on its assurances,’ ” Edwards said.

“But … those of us in the Legislature that support (the hospital) will continue to fight for it.”