BHB to spend $10.8m on leasing offices, staff accomodation
The Bermuda Hospitals Board has revealed it has entered into significant operating lease agreements with third parties for the rental of five properties, including office space and accommodation for staff totalling some $10.8 million over five years.
According to the Bermuda Hospitals Board 2011 Annual Report, the annual commitment schedule for the next five years is as follows:
The BHB report was presented yesterday by Health Minister Zane DeSilva.
Asked what the leases were for, a BHB spokeswoman said: BHB had to decant QENR (Queen Elizabeth Nurses Residence) as it was becoming unsafe for residents and offices.
Temporarily, staff (mainly in Human Resources, Finance and IT) were transferred to leased space in Craig Appin (House building) in Hamilton.
They will return after services in the existing KEMH are transferred to the new facility and space can be preferred in the existing build — which is why the lease Year Amount drops so severely post 2015.
Other leases refer to staff accommodation leases, including Horizons and three smaller residences. Staff contribute a portion of their rent so the cost of the lease is not fully borne by BHB alone.
The BHB had secured the closed Grape Bay Hotel in Paget for staff accommodation last year, but confirmed yesterday it is no longer using it. Smaller guest houses are being used now.
The BHB also revealed in the report that on October 14, 2011, the Board purchased 25 percent shares in private company Mill Reach Properties Limited (MRP). MRP currently owns the building located on 2 Mill Reach Lane, which leases warehouse space to BHB for the Materials Management Department.
The BHB declined to give the amount of that investment, saying: This is a commercially sensitive figure, but the investment enables BHB to utilise improved storage space for Materials Management which was previously housed in the basement of KEMH.
On the need for the leases, the BHB report stated: The pressure for clinical and office space at KEMH had already led to an increasing number of nursing residence rooms in the Queen Elizabeth Nurses Residence being changed into offices. This resulted in a negative impact on the number of rooms available to nurses.
As renovations were vital for the continued safety of the building, BHB decided to decant the occupants and undertake a feasibility study on whether to renovate or demolish the building. The most cost effective interim solution for staff was to centralise accommodation at Grape Bay and Horizons. This accommodation is subsidised, which means that staff contribute towards the rent.
The report continued: A centralised contract helped control costs as BHB could negotiate a consistent rent, and provide more cost-effective solutions for staff with regards to transportation and security. The administrative employees with offices in this residence have moved out. Certain functions like recruitment, compensation and benefits, information technology and finance have temporarily relocated to office space in Hamilton. In the current economic environment, there was capacity in the city at good value. Once the new facility is completed and clinical services have decanted to it, support services will return to office space in the existing King Edward building.
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