Utah bill doubling bonding authority for hospital project passes

Bonds

A bill that includes additional bonding authority for a University of Utah Health medical campus project hit with ballooning costs passed the legislature Wednesday. 

A provision in Senate Bill 241 would increase the amount of revenue bonds for the West Valley Health and Community Center to $800 million from $400 million.

The University of Utah Board of Trustees approved a move to ask the legislature for more bonding at its Feb. 13 meeting, where hospital officials said the project’s price tag had grown to about $855 million from $500 million. 

An illustrative rendering of planned West Valley Health and Community Center. The Utah Legislature passed a bill doubling the amount of revenue bonds that can be sold for the medical campus project.

University of Utah Health

Changes to the project as well as escalating construction and imaging equipment costs contributed to the hike, Chief Financial Officer Charlton Park told the board.

“The cost estimate changed dramatically, the scope of the project has also changed dramatically,” he said. “There’s been an increase in square footage within the overall project of over 165,000 square feet.”

In response to emailed questions, Park’s office said “the amount and timing of the sale of additional bonds will depend upon several factors including forecasted project costs, the financial position of University of Utah Hospitals and Clinics, and the potential impact of philanthropic efforts.” 

An initial $340.8 million of general revenue bonds were sold for the project as part of a $478.4 million Utah Board of Higher Education issue in 2022, according to the University of Utah’s 2023 annual financial report.  The bonds were rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings.

The project includes a multi-specialty outpatient health center, an emergency department and hospital west of Salt Lake City in West Valley City.

Construction is expected to begin later this year or in early 2025, according to a University of Utah Health spokeswoman. 

Articles You May Like

Colorado property tax growth limit is a negative credit factor: Moody’s
Police drop probe into claims Angela Rayner broke electoral law
A proposal to fix illiquidity, disclosure woes: cut down number of issuers
Tax measure for ailing Bay Area transit system advances, with caveat
Washington airport authority is coming to market with $829 million