Olympic Medical Center $2 million over budget with Sequim project

Construction estimates for Olympic Medical Center’s new Sequim satellite campus are $2 million over budget — an 8.75 percent increase a half-year after hospital commissioners approved the project.

After learning of the overrun Friday at a board retreat, commissioners said they wanted to proceed with the hospital district’s newly dubbed Sequim Medical Park — though they did not decide how they’d fill the funding gap.

“To the surprise of no one, construction estimates are higher than we had budgeted for,” Olympic Medical Center CEO Mike Glenn said during a three-hour presentation.

The new estimate for the project has dug “a $2 million hole,” Glenn said.

The campus is off Fifth Avenue on 20 acres of Clallam County Public Hospital District No. 2-owned land.

“We need to decide whether to absorb the cost or spend a lot of time providing some functionality at a lower cost,” Glenn said.

‘Much bigger’ facilities

He blamed the higher estimates on “much bigger” radiology, surgery and cardiac facilities than were originally envisioned.

Last fall, commissioners approved building a medical ancillary services building with space for 15 to 17 physicians, a multipurpose room, and cardiac, imaging and diabetic-patient services.

They also approved a new chemotherapy wing to the existing Olympic Medical Cancer Center at the site.

The cost of the chemotherapy wing was budgeted between $2.1 million and 2.64 million, and will now exceed $2.9 million, a hospital district official said.

That boosts the cost from $260,000 to more than $800,000 over budget.

The ancillary services building was budgeted for $12.9 million and will exceed $14 million, putting it more than $1.1 million over budget.

The combined increase over budget for the project is $1.36 million to $1.9 million — at least 8.75 percent over the maximum estimate of $15.54 million.

Some empty space

The ancillary services building approved by commissioners last fall also included some space that was to be left empty, an indication that higher costs were anticipated before the building would be fully occupied, a hospital official said.

Retreat participants said rapidly escalating fuel and construction costs played a large part in what one participant privately called “a cost overrun.”

But commissioners were set on proceeding as planned.

The hospital expects to employ 150 at the site.

“It would be a mistake to cut back,” board Chairman Jim Leskinovitch said.

“Let’s do it right.”

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