In 2012, legislators made residents of Western North Carolina a big promise that required a hefty check: a brand new hospital with room for nearly 100 more patients in acute need of mental health care.
The state was supposed to have delivered on that promise more than two years ago. Its latest prediction on opening the new Broughton Hospital in Morganton: two more years.
The $129 million project has been plagued by construction mistakes and delays since 2013. Despite this, state officials under the previous administration were slow to rein in the contractor it paid to build the hospital.
New Department of Health and Human Services Secretary Mandy Cohen, appointed by Gov. Roy Cooper, began inquiring about the unfinished project when she was hired in January. She visited the site and convened a meeting with the contractors Feb. 14. Cohen authorized her staff to initiate efforts to cancel the contract with Archer Western Contractors of Charlotte.
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DHHS officials say cutting contractual ties is complicated.
Rep. Verla Insko, a Chapel Hill Democrat who has been a vocal advocate for mental health services in the state, had another description. “This is not good government,” she said.
Over the past 15 years, mental health reform in North Carolina has shifted services away from the state’s psychiatric hospitals to community-based services, yet the need for hospitalization persists. Legislators decided in 2010 to add about 200 beds across the state – giving the state a total of nearly 1,100 beds – and the Morganton project is part of that expansion.
A new Cherry Hospital opened last year in Goldsboro with 313 beds, about 120 more beds than the old Cherry had. Central Regional in Butner began operating in 2008, with beds available for about 380 patients. That hospital, larger than the Broughton project at 480,000 square feet, was completed in three years for $130 million, even after being delayed by a fire.
Patients with acute needs, such as those involuntarily committed by court order, linger in emergency rooms or jails awaiting a bed. Last year, the wait to be admitted to old Broughton Hospital averaged four and a half days, according to a survey by the National Alliance on Mental Illness.
“There are just not enough options for crisis care in our communities,” said Larry Thompson, a former mental health administrator and a board member for Western Carolina chapter of National Alliance on Mental Illness. “There’s just more need than there are beds available.”
Dr. Richard Zenn, medical director for Behavioral Health at Mission Hospital in Asheville, said the hospital has patients waiting for weeks to months for a transfer to Broughton; the wait is particularly long for male patients. Adding 100 beds to the nearly 280 available in the old Broughton Hospital was designed to help ease that bottleneck.
“We end up having to admit them ourselves, which is not ideal,” Zenn said. “We’re an acute facility. Some patients need longer to stabilize or they are chronically unable to function in the community.”
State health and human services officials acknowledge the Broughton project has been a problem. “The project has not gone as well as we hoped, to say the least,” said Luke Hoff, director of the Property and Construction Division at DHHS and point person for the hospital project.
Archer Western secured the state contract in 2012 with a low bid. The firm’s president defended the company’s performance in a 999-page response sent to DHHS earlier this month.
Peter Glimco, general counsel for the company, said in an interview that Archer Western is committed to completing the project and is in the best position to do so.
Hundreds of pages of letters and field reports exchanged over the past five years reveal a deteriorating relationship between state officials and Archer Western, according to records provided through a public records request.
The correspondence grew increasingly testy during the past year as state officials accused the contractor of trying to “conceal delays” and “avoid ... obligations.” The firm’s executives fired back, saying DHHS officials and design contractors had acted in an “adversarial manner,” refusing to take any blame for the project’s hiccups.
The firm’s officials blame state officials and the design company, now called Perkins + Will, for too many requests to make changes and for not inspecting portions of the project quickly enough.
“While Archer Western acknowledges certain mistakes, the Project did not get where it is solely by Archer Western’s actions,” Archer Western president Michael Whelan wrote in a letter to state officials.
Despite years of problems, the state had made no move to fire Archer Western until February. State officials did not flag problems with the project with the holder of the company’s bond, an assurance Archer Western had to provide to secure the state contract. If the state had filed a complaint, the bond company could have been required to hire a replacement contractor or refund the cost of the contract and allow the state to rebid the contract.
At DHHS, Hoff defended the action state leaders have taken since 2013 to wrangle completion of the more than 400,000-square-foot hospital. Hoff said the former secretaries of DHHS were informed about problems and that officials decided to hold off on legal action, instead urging the company to get back on track through a series of sternly written letters.
Hoff said health and human services leaders made “the best decisions they could” to try to finish the project.
Rep. Justin Burr, an Albemarle Republican whose district is served by Broughton Hospital, was stunned by the issues plaguing the hospital’s construction. “There is no excuse for this kind of delay,” he said.
Burr said he will call on DHHS officials to brief the legislature on the status of the project. He said he will also urge state leaders to ban Archer Western from winning state contracts in the future.
“We’re not talking about the delay of a building where employees are in there doing paperwork,” Burr said. “This is a building that’s life or death to the people it serves.”
Archer Western built the state’s new Cherry Hospital in Goldsboro. That facility opened in summer 2016, three years behind schedule.
Mark Benton, DHHS deputy secretary for health services, said the state did not encounter problems with Archer Western on the Cherry project until after it signed a contract with the firm in 2012 to build Broughton Hospital.
Flubbing the floor
Construction mishaps burdened the Broughton project from the start, records show. From soil erosion to water damage to fire retardant that had not been shielded from the rain while it set, Archer Western was forced to address mistakes made by its staff and the subcontractors it had hired.
The biggest hiccup came in summer 2013. A surveying error caused the newly poured concrete floor to be dramatically uneven. Efforts to level it by pouring additional concrete slabs and grinding down other portions of the floor overstressed the foundation, records show. Engineers demanded the work be redone.
Archer Western accepted blame for the elevation issue and swallowed all costs to redo the work. But it brought a major delay.
The first target of September 2014 completion slipped to September 2015. The contractor then pushed the date back to November 2015. According to documents, Archer Western then became embroiled with several disputes with subcontractors who pressed to be paid. Some filed liens against Archer Western.
In a letter last month, DHHS leaders described Archer Western’s completion date as a “moving target.”
DHHS dismissed Archer Western’s latest promised completion of July 2017, saying “it is not physically possible to complete all the remaining work” in that time frame. In prior letters to Archer Western, Hoff, the DHHS official, estimated a finish of March 2019.
As for the money it will take to get the project back on track, neither side is budging.
State leaders plan to commit no more than the initial contract amount of $129 million. They can, and will consider, assessing damages to the contractor to the tune of $1,200 for every day the project is late.
In a voluminous March 8 letter with attachments, Archer Western’s Whelan indicated plans to litigate over wrongful termination should DHHS cancel its contract. He, too, indicated that the company will try to recoup money from the state to cover cost overages. Whelan argued his company is in the best position to complete the project and should be allowed to do so; he promised crews would work seven days a week.
DHHS officials say they are still evaluating Archer Western’s response.
“It’s a little premature to jump to the next conclusion,” Hoff said. “We’ve got to review their 999-page response.”
Locke: 919-829-8927 or @MandyLockeNews
A building boom
Capacity at state mental hospitals in North Carolina has dwindled since 2001 as state leaders tried to shift care away from institutions into community services.
The state closed Dorothea Dix Hospital in Raleigh, one of its four public psychiatric hospitals. It began cutting its capacity at psychiatric facilities in half.
But some argued the reduction in bed space came too swiftly, putting pressure on local hospitals and law enforcement to manage patients with severe mental health issues in need of longer-term treatment. Those patients include people whom the courts have ordered to be committed because they pose a danger to themselves or others.
Since 2010, the state embarked on a building boom in psychiatric facilities. It allocated $139 million to replace Cherry Hospital in Goldsboro, adding about 120 more beds than the existing 19th century facility could hold. Legislators invested in a new Broughton Hospital in 2012, allocating $129 million for a facility that would serve 385 patients, nearly 100 more than the aging hospital.
Central Regional in Butner began operating in 2008, with beds available for about 380 patients. Cherry Hospital opened its doors last summer, with space for 313.