DUNKIRK — A recent proposal put forth by the Brooks-TLC Hospital System for the building of a new hospital has been declined by the New York state Health Department.

That decision continues to delay the release of $74 million in funding for the new facility that is slated to be constructed at the former Cornell Cooperative Extension site on East Main Street in Fredonia. According to an e-mail document obtained by the OBSERVER, Brooks-TLC officials — in its presentation to the state — forecast “a multi-million dollar annual operating loss even with a new hospital.”

That message alone contradicts what Brooks-TLC administrators and its board of directors have been communicating to residents since 2016 — and most recently at a June rally held at the Clarion Hotel Conference Center in Dunkirk– regarding the urgency of a new establishment. “How long can you maintain facility services in this building? … As a hospital, we’re struggling financially and to have all the maintenance costs associated with this … it’s just one thing after another,” said Mary E. LaRowe, chief executive officer at Brooks-TLC in May, who is retiring as of Tuesday.

State Sen. George Borrello, R-Sunset Bay, confirmed to The Post-Journal and OBSERVER the state has major concerns regarding the incessant deficits. “The plan was not one (the Health Department) found acceptable,” he said this week.

As example, Internal Revenue Service filings in 2019 by Brooks-TLC note the New York state subsidized the facility more than $15 million. Even after that handout, Brooks-TLC’s bottom line showed losses of $12 million. Without state funding, Brooks-TLC lost more than $27 million that year.

In an effort to solidify the future of a north county hospital, Borrello, state Assemblyman Andrew Goodell and Chautauqua County Executive PJ Wendel have put together a commission of area residents who have a background in health care to look over the Brooks and Kaleida Health proposal as well as its finances. This committee would also be tasked with modifying a proposal that would then go back to the state. Some of the key members include Richard Ketcham, longtime former chief executive officer and president of Brooks Memorial Hospital; Charles Nazzaro, who was a chief financial officer at UPMC Chautauqua; and Dr. Robert Berke, a county physician and public health officer.

“These individuals provide a fresh set of eyes and have experience,” Borrello said.

Since 2016, Brooks has been working closely with Kaleida when it comes to its administrative leadership and the future facility. There’s no question, from observers and other local officials, the partnership has been shaky at best. Kaleida has invested barely any capital into the effort while Brooks has paid the largest health-care provider in Western New York for LaRowe’s assistance as well as other services.

Though northern Chautauqua County is strongly connected to Buffalo, many of its area physicians are not. Most of the Dunkirk-Fredonia area doctors who have privileges to Brooks are tied to UPMC, which has a partnership with the Jamestown hospital that has been well received.

UPMC was tied to Brooks Hospital from 2012 to March 2016 and may be open to reconnecting since it has deeper pockets than Kaleida Health, which reported a deficit of more than $100 million in 2020. Susan Manko, vice president for public relations at UPMC, did not shut the door on the possibility.

“UPMC is constantly being approached by hospitals and organizations who want to explore opportunities to become part of our successful integrated health care system, and we are always assessing how UPMC can best serve the needs of patients and families in all our communities,” she said regarding Brooks-TLC. “There is nothing new for comment at this time.”

With LaRowe’s exit, Kenneth Morris — who has served as vice president of operations since 2018 — will be steering operations at the embattled Dunkirk location. “We have a lot of work to do, but we have a good team here,” Morris said Tuesday morning about his new role. “I’m happy to be a part of it.”