New Construction Bid For Our Island Home Sets Final Price Tag For Voters: $137 Million

The final price tag is slightly higher, but the borrowing required to construct a new Our Island Home facility will not increase this year, should voters approve it, judging by the proposed bid reviewed by the Select Board on Wednesday.

The total cost of the project is set to increase by around $3 million from last year, from $134 million to $137 million, but proposed borrowing will remain at $119 million, as the additional funds are slated to come largely from Our Island Home’s retained earnings and the town's sewer revolver fund.

“It is costing more, we’re just using reserve money to offset that increased cost, none of which should be surprising to anyone,” Select Board member Brooke Mohr said. “A year later, it always costs more.”

The increase in the overall cost of the project is around 2.2 percent, which is lower than the 3.3 percent inflation rate over the last year. The relatively small increase was seen as a win by some members of the Select Board, especially given how rapidly the cost of municipal construction has climbed recently.

“I find it encouraging it didn’t go up like 10 percent,” Select Board chair Dawn Hill said. “It’s a smaller increase, which is good for other projects, maybe.”

For the new Our Island Home facility to pass, it will need two-thirds support at Town Meeting, a high bar it was not able to clear last year, despite earning a clear majority vote. If voters opt to reject the spending again, the Select Board has indicated that they will take it as a sign that island residents want the town to stop operating the state’s only municipally-owned skilled nursing facility and will begin to shut the operation down.

The costly new facility has divided voters and government officials alike. The Select Board has recommended in favor of the project, emphasizing that if voters don’t support it, the island will be without skilled nursing care, as it is highly unlikely a private company will open a facility on-island. That could drive elders off-island and be incredibly costly for their families.

The Finance Committee recommended against it on a narrow 4-3 vote. Members opposed to the new facility focused primarily on its cost, which dwarfs anything else on the Town Meeting warrant, arguing that the investment makes no financial sense, especially given the numerous other costly capital projects voters will soon be asked to approve.

Before they voted, members of the Finance Committee reviewed a financial pro forma for the new Our Island Home prepared by the town’s consultant, Clifton Larson Allen (CLA). The financial projections show the town’s subsidy for the Our Island Home operation ballooning to $14.7 million in the first year after the new facility opens, due to the added debt service obligations required for the borrowing. That subsidy would grow to more than $17 million after 10 years, according to the pro forma.