The University of Hawaii at Manoa will pay a San Francisco-based consultant up to $250,800 to develop a business plan for the financially struggling UH Cancer Center.

Charles Cosovich, a director at publicly traded Navigant Consulting Inc., was selected through a competitive bidding process to come up with a workable business plan covering operations, expenditures and revenues at the research facility. Cosovich plans to visit the campus later this month and has proposed an aggressive timeline to complete a report by late October.

A UH task group earlier this year reported that the Cancer Center is running over budget by approximately $9.5 million a year and could run out of reserve funds in a few years.

The center’s money troubles, according to university officials, stem from a flawed business plan that assumed UH’s share of the state cigarette tax would remain steady at nearly $20 million a year to fund operations. But as fewer people smoke, the center’s share of the revenues has dropped off sharply.

Under former Director Michele Carbone, the center pursued building a new, $100 million facility in Kakaako using that faulty business plan, which has saddled the center with an $8 million annual mortgage payment it can’t afford.

UH-Manoa Chancellor Robert Bley-Vroman in February initiated plans to reorganize the Cancer Center as a research unit within the medical school to cut down on redundant expenditures. He named Dr. Jerris Hedges, dean of the John A. Burns School of Medicine, interim director of the center and asked him to analyze the financial situation and come up with budget scenarios for consolidating the two campuses.

That report, which the chancellor made public in April, said additional state funding would be the “most cost-effective” option to maintain the community service and economic benefits the Cancer Center provides. The Board of Regents Independent Audit Committee recommended that an external consultant come in to evaluate the proposed options and make recommendations — including the possibility of scaling back operations or selling the facility.

Bley-Vroman on Thursday informed the committee of Cosovich’s hiring. He said the consultant will be considering all options.

“Let me make it clear, all options are on the table,” Bley-Vroman said. “However, it is the intent of the University of Hawaii at Manoa, and I think the University of Hawaii system, to make the best possible effort to have a viable cancer center. It’s important for the state, it’s important for the people, it’s important for the university.”

UH President David Lassner echoed that commitment.

“Frankly, I would say the administration’s perspective is we need to do everything we can to understand what it will take to make the Cancer Center succeed as a (National Cancer Institute-designated) cancer center,” Lassner said. “That said, it’s impossible to not also allow for the possibility that that could be a challenge. There will be requirements that either the board or the state may be unable to step up to. I don’t think we’re going in saying what are the options to abolish this, but we need an external look.”

The UH Cancer Center is among 68 NCI-designated centers in the country, which gives UH and fellow members access to about 80 percent of the federal agency’s $4.8 billion annual budget for research grants. Hedges said the designation “helps bring lifesaving cancer treatments to Hawaii through clinical trials and reduces the necessity of residents to travel to the mainland for care.”