The impending appeal of a lawsuit challenging a voter-approved bond measure to rebuild El Camino Hospital has forced officials to delay groundbreaking on the project, a delay that will prove costly.

Plans for a September groundbreaking on new 325-bed hospital building will be postponed until spring 2006, costing the hospital district an estimated $4.3 million in construction delays.

“We did everything we could to avoid shifting the start of construction into next year, but the delays caused by the (Aaron) Katz lawsuit forced this decision,” said Jon Friedenberg, El Camino’s vice president of resource development.

Although county Superior Court Judge Kevin McKenney dismissed the lawsuit on June 16, all legal issues need closure before the district can sell bonds to fund the project. Katz, contending he should be allowed to vote because he owns property in the hospital district, has indicated he plans to appeal the decision.

Friedenberg said if the appeal goes through the normal court process, it could lead to “additional construction delays and costs for district taxpayers.”

In other news, El Camino Hospital and Service Employees International Union Local 715 have reached agreement on terms of a new two-year collective bargaining agreement that was ratified July 1. Employees covered under the SEIU contract will receive an across-the-board pay increase of 4 percent, with additional wage increases in select job classifications to bring them up to market rate. This reflects an increase in salary costs to the hospital of approximately 5 percent.

The contract guarantees that the hospital will pay at least 95 percent of health insurance premiums for basic HMO coverage for full-time employees. Hospital CEO Lee Domanico announced last week that, beyond what the contract guarantees, the hospital would again pay 100 percent coverage for the 2006 benefit year as it has since 2002.