September 12, 2006

Hospital's creative accounting

The Royal Gazette
Opinion (12 Sept. 2006)

As the battle for the future of the Botanical Gardens begins, one thing seems certain: the Premier has decided to single handedly produce enough manure to fertilise the old hospital site. Take this absurd and insulting statement for example, delivered at Tuesday night’s Sustainable Development meeting:

“…the greenery will be incorporated into the design. You won’t just walk up to the door and the green stops. It may go into the building. If there’s a tree that needs sustaining, you may find that tree next to your hospital bed in the future.”

Got that? The Parks Department will be mowing the lawn in the lobby and newborns will be swinging in hammocks from that lovely Indian Laurel (covered in ants) which grows through the middle of the maternity ward.

Is the Premier so self-deluded that he actually believes his own nonsense, or does he think we’re absolute idiots? Which one is it Mr. Premier?

With the word ‘national’ on the rise in conjunction with the Premier’s never-ending independence obsession it seems only appropriate then to wonder if Premier Scott is intent on becoming our National Disgrace.

Ironically though, the Premier has two major legacy building initiatives underway; the first no-one is interested in (Independence), while the second (Sustainable Development) he isn’t interested in. Funny that.

So here we are, with the proposed and unnecessary desecration of the Botanical Gardens poised to become not only the largest capital project in Bermuda’s history, but also the most bone-headed; and that’s saying something after Alex Scott and his colleagues’ shameful legacy with the Berkeley project.

Which leads to an interesting study in priorities: while money is reportedly the driving issue for the new hospital it certainly wasn’t at Berkeley.

The difference though is simple; one is about saving the environment while the other was about saving face. And when it comes to saving face, no expense is to be spared, with the Berkeley project running $50 million over budget…and counting…with a secret and no doubt large legal settlement looming. That’s about 100% over-budget in case you’re counting.

Alternatively, when it comes to preserving Bermuda’s most iconic park, an additional 20% or about $100 million over ten years is too much.

You should be cautioned at taking those figures at face value however. A crafty accountant can do a lot with a few numbers, let alone a shifty politician. It doesn’t take much of a leap to believe that the amounts being used to justify the new site versus existing decision are little more than a shell game.

For starters, does the $500 million ceiling estimate for a new site include the cost of tearing down the old structure? It doesn’t look that way, although it certainly is a part of the 20% increase for the existing site proposal. Reality dictates of course that the old structure is going to have to come down regardless. The only difference is that Cabinet can bury the demolition cost elsewhere in the budget and not in the Bermuda Hospitals Board proposal.

Which leads to the next accounting and public relations gimmick: the 14 acres of the existing KEMH site will which (in theory…for now) be returned to the Botanical Gardens - an increase over the existing 10 acres.

Setting aside the two obvious problems – being the absence of any access roads to the new hospital in the middle of the Gardens and the unlikelihood of this ever happening – there will be a large financial cost associated with rebuilding 14 acres of new and immature Botanical Gardens and replacing the lost buildings.

Was this included in the $500 million? Nope, because that cost can be shifted over to the Parks Department budget, not the BHB’s; creative accounting 101.

These are the same gimmicks which the Corporation of Hamilton used in its proposal for the Hamilton Waterfront redevelopment; the projected $600 million cost ignored the cost of relocating the container docks – a massive undertaking and hence an absurd exclusion.

If the sketches of the proposed new hospital were scratch and sniff, the stench would be overwhelming. So little information has accompanied the decision that it’s hard to know what is included. But that’s probably the point.

What would be useful is an all-in estimate and cost comparison between the proposals on a like to like basis. The final costs probably won’t be too different at the end of the day, and far within most of our tolerances to save the Botanical Gardens.

Cost isn’t the only issue at play however; there’s also credibility, but this Government has none of that.

The Botanical Gardens will have to be removed from the schedule of parks (which can’t be developed on) to be placed completely under the auspices of the Bermuda Hospitals Board.

So the suggestion that the actual footprint of the Botanical Gardens will increase is a tad dishonest when you consider that the Gardens will become the property of the BHB, with future expansion on the table.

At its core, bulldozing the Botanical Gardens is just too dangerous of a precedent to set. We can’t allow the few remaining large tracts of green space to be earmarked as fair game for future development. If that’s the case, what’s the point in having a Parks Act?

Sustainable development is about making the hard choices, accepting some of the inconvenience and additional costs that comes with that and not taking the easy way out. Isn’t that what the Premier’s dog and pony show – not the Ag show, that’ll be a thing of the past, I’m referring to the Sustainable Development show – has been preaching?

A little more honesty and a lot less spin from Cabinet is a good place to start this discussion.

Posted by Christian S. Dunleavy