The full cost of the JPS bond program, which will pay for a brand new hospital, psychiatric emergency center and more, will cost $2.1 billion, consultants working with the hospital said Thursday.
The project was initially estimated to cost about $1.2 billion when voters in 2018 approved bonds to pay for the construction. But in the last six years, a range of factors including inflation, supply chain issues and a labor shortage as construction in Texas booms have increased the total price tag, said Cameron Geertsema, program manager with Broaddus & Associates , one of two firms hired to manage the bond program.
As Tarrant County’s public hospital system, JPS Health Network is responsible for caring for the majority of the county’s uninsured residents, and also treats some of the highest need patients as a Level I trauma center with the county’s only psychiatric emergency room. Voters approved the bond program to rebuild and refresh most of the aging hospital system, which is caring for more and more people as the county grows.
The hospital district’s plan to pay for the new construction has been to use $800 million in bond proceeds, and to cover the rest of the construction with cash the hospital district has saved. In order to pay for the new construction, the health network will have to save about $83 million for the next five years, said Rory McCrady, the hospital’s interim chief financial officer.
“Even though there is what many would call a substantial escalation, if we plan correctly and budget appropriately, we can still pay for this...without an increase in taxes,” said Roger Fisher, chair of the JPS board of managers, at Thursday’s meeting.
Hospital leaders have updated their construction plans to keep the total bill at $2.1 billion, Geerstsema said. The main shift has been a reorganization of the main hospital campus that will keep the total cost down. Leaders also previously decided to reduce the number of neighborhood clinics the bond will build. Initially, JPS had planned to build four neighborhood clinics , called medical homes, before deciding to build one through the bond program.
Board member Trent Petty said that JPS CEO Dr. Karen Duncan and her staff “have done a super job of eliminating the need for four medical homes at this time.”
The hospital’s board learned of the updated price tag days after county commissioners cut the hospital’s tax rate for the second year in a row, which will mean the hospital will bring $523 million from property taxes, compared to a budgeted $543 million this year.
Hospital leaders said Thursday that the reduction in the hospital’s tax rate will be offset by increased revenue from patients, as more patients continue to seek care from the hospital.
“We will essentially be at capacity” next year, Duncan said. “And we’re at capacity now.”
The board also passed a $1.65 billion budget Thursday, an 8% increase from last year. This year’s budget pays for additional staff at two clinics, a Las Vegas Trail clinic that will be operated by JPS and Cook Children’s Health Network, and a neighborhood clinic in Southwest Fort Worth . But most of the the new staff, Duncan said, will be in the Tarrant County jail, where JPS provides medical care. The Tarrant County jail population is expected to grow by at least 400 people after the county has ended a contract that housed some inmates in a private prison in Garza County.
The hospital’s tax rate and budget won’t be set in stone until county commissioners take a final vote on Sept. 17.
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