VA provides Congress with comprehensive plan to fund billion-dollar Aurora hospital

AURORA | The Department of Veterans Affairs sent a plan to Congress June 5 outlining how the department plans to complete the half-finished, billion-dollar replacement veterans hospital.

“Inaction by Congress will result in a shutdown of the Denver Replacement Medical Center and punish Colorado Veterans today for past VA errors,”  VA Secretary Robert McDonald said in the letter sent to Congress last week.

In the letter, McDonald asked for Congress to increase the budget for the hospital by $775 million for a total price of $1.675 billion. The VA said it would be able to reduce the cost from $1.73 billion by delaying completion of a community living center and post-traumatic stress rehabilitation facility. The facilities together, the VA said, cost $55 million.

Under its proposed plan, the VA said it could take $150 million from its 2015 budget to cover construction through September. A large portion of that money would come from the VA’s Filipino Compensation Fund, the Franchise Fund and the money for nationwide green energy projects.

According to the VA, that leaves $625 million needed for the department to complete the project.

The VA offered two options for how to come up with rest of the money for the project, but said only one would meet criteria set forth by Congress that the money does not delay other VA projects.

The option that would not delay other projects would involve re-appropriating money from the VA’s 2016 budget to its major construction account. That money would be offset by an across-the-board percentage reduction to all VA discretionary accounts, which would include a $534-million cut to medical care and services. Another $90 million would be cut from medical research, veterans benefits administration, grants for cemeteries and state-extended care facilities.

The second option would take money away from future hospital projects around the country and delay them, but would  guarantee Aurora’s replacement hospital has enough money to be completed, according to the VA. The department didn’t say how long the other projects would be delayed if Congress accepts this option, shifting money from other construction and maintenance projects to the Aurora hospital project. The list includes as many as 44 construction projects in 24 states, plus up to 65 maintenance projects in about 16 states.

Last month, members of Congress said they strongly disagreed with the VA’s suggestion to use a $5-billion fund Congress approved to resolve another scandal — long wait times for veterans seeking health care.

Colorado legislators said they are still analyzing the details of the plan and have not come to a final decision about it.

“Time is of the essence, and we need to ensure we complete this hospital. We’ll take a very close look at this plan, and we urge congressional and committee leadership to do so as well,” said Democratic Sen. Michael Bennet in a statement.

U.S. Rep. Ed Perlmutter, D-Golden, said in a statement that he considered the proposal “serious,” but that he needed more time to digest the information.

“While I continue to digest this information, I call on Speaker Boehner and Secretary McDonald to immediately get in a room and negotiate a deal to do what’s best for the veterans of the Rocky Mountain region,” he said.

The chairmen of the House and Senate Veterans Affairs committees had no immediate comment on the VA proposal, nor did U.S. Rep. Mike Coffman, R-Aurora, whose district includes the new medical center.

The VA also agreed as part of the plan to put the Army Corps of Engineers in charge of awarding contracts to complete the medical center. McDonald said that employing the Corps is necessary “to prevent a recurrence of the unacceptable mistakes made on the Denver project.”

The VA plans to make the Corps its construction agent on seven of 15 active major construction projects planned for the next three years.

“Going forward, VA believes that the Corps should be designated as our construction agent for all new medical facilities with a cost of $250 million or greater that have not yet started construction,” he said.

U.S. Sens. Bennet and Cory Gardner last week passed an amendment in the Senate to the National Defense Authorization Act for Fiscal Year 2016 to look into construction contracts for major medical facilities at VA. The report would determine how projects have gone over budget and where the money has gone on mismanaged projects such as the Aurora replacement medical center.

Steven Rylant, president of the United Veterans Committee of Colorado, said his group was encouraged by the new options,  and urged Congress to consider the proposal and pass legislation that will allow the VA and contractor Kiewit-Turner to complete the hospital.

“The veterans are waiting, and we have been waiting too long,” he said in the statement, adding that the hospital will not only serve Colorado when completed, but veterans in Kansas, Montana, New Mexico, Utah and Wyoming.   

The ambitious, 184-bed medical center in Aurora is a collection of a dozen large, interconnected buildings that would replace an old and overcrowded facility in Denver.

Unless Congress and the VA reach a deal, construction could stop in mid-June, when the current spending cap is reached. Contractor Kiewit-Turner has said a shutdown could add up to $200 million to the cost because of the expenses of winding down work, securing the site and then gearing back up again.

To date, VA has already reprogrammed about $100 million from its own capital resources for the project.

— The Associated Press contributed to this story.