Compromise on Expansion Sought : Tri-City Hospital Hopes to Avoid Developer Fees

Administrators at Oceanside’s Tri-City Medical Center are trying to reach a compromise with city officials to avoid paying as much as $1 million in fees for public improvements that the city says will be needed to accommodate the facility’s $20-million expansion.

In December, when the city planning commission approved Tri-City Hospital District’s plans to enlarge its main facility by 105,000 square feet, it also instructed the district to pay the fees that go into the city’s coffers for capital improvements.

Hospital administrators immediately balked at the size of the fees and questioned the commission’s actions because they say the hospital district had never before been required to pay such fees.

An appeal to overrule the decision was immediately submitted to the City Council by hospital officials. Since then, hospital and city staff members have been negotiating to resolve the dispute on their own.

‘Shocking and Disappointing’

“It was shocking and disappointing. . . . I think those are accurate terms to describe our reaction to the fees, especially because we had not had fees imposed upon us before,” said Richard Hachten, chief executive officer of Tri-City Medical Center.

Since the hospital opened at 4002 W. Vista Way in 1961, it has undergone three major renovations that have expanded it to 438 beds from its original 87, said Wayne Wilson, the medical center’s marketing director.

In each case, the medical center was not charged public improvement fees, Wilson said. The new expansion will not increase the number of beds, but includes construction of an emergency ward, four additional surgery suites and a women’s center.

The hospital district hopes to have the new facilities in operation by 1993.

New Fees Added by City

To ensure that Oceanside’s booming growth is properly managed, and that construction of public facilities keep pace with development, city officials have added public improvement fees and increased existing fees during the last five years, city engineer Ron Beckman said.

City officials say both private and public developers must share the burden of financing such improvements, and, therefore, planned to have the hospital district pay the fees.

“We are trying to deal fairly with those who will impact our infrastructure, and certainly the hospital will,” City Manager Ron Bradley said. “We are only trying to establish a sense of equity between both public and private developers.”

Both parties said attempts to reach a compromise have been proceeding smoothly and that they hope the problem will be resolved next month. If a compromise is reached and hospital officials withdraw their appeal, the City Council will not have to address the issue, Bradley said.

“My staff is looking at the fees and is trying to determine, from the city’s standpoint, what is fair and reasonable,” he said.

Hachten added: “I think there has been recognition by the city that a hospital district is different from a developer and that it should be handled separately. There is a real commitment to resolve this in an amicable way.”

In fact, to help reach a compromise, the hospital district has expressed a willingness to donate a 17,000-square-foot strip of property along Vista Way that the city has targeted for expansion. According to Hachten, the property is worth at least $300,000.

City officials have confirmed such an offer and said it would be considered.

“But right now, it’s premature to say what the final resolution will be,” Bradley said.

Initially, the hospital district opposed the planning commission’s actions, arguing that it was inappropriate to charge fees against their expansion project.

Hachten argues that public improvement fees should be charged against development projects that would create additional “physical impact” on the city, not against a project that is only trying to serve existing needs.

“For example, a new housing development would attract more people, more sewage, more cars,” Hachten said. “But our hospital district, unlike the developer, is not creating a new demand or impacting the community. We are merely responding and accommodating current needs.”

City officials justify the fees, saying that the enlarged facility will attract more patients. But Hachten says future increases in the number of patient visits are unrelated to the facility’s expansion.

“Any additional growth will come whether or not we expand,” Hachten said. “As the community grows, so will the number of our patients. We have no control over that.”

Actually, Hachten said, the hospital district does not plan to draw more patients and is only trying to alleviate existing overcrowding.

“We’re just trying to catch up,” Hachten said of the expansion plans. Last year, the Tri-City Hospital District board of directors issued a $20-million bond to finance the project.

“Although we do see some merit in their argument, we’re not totally convinced that their expansion will not impact our infrastructure,” said Bradley, the city manager. “Indeed, we believe it will.”