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Prop. 2 pays for hospital expansion

1% tax also would go to school, ice rink

Posted: Wednesday, September 27, 2000

The largest part of ballot Proposition 2, which asks voters to renew the city's temporary 1 percent sales tax for five years, would fund major changes at Bartlett Regional Hospital.

City officials plan to spend $20 million of some $27 million in tax proceeds on Bartlett. Another $5 million would pay off school repair bonds and $1.1 would go to a covered ice rink in Savikko Park.

Bartlett wants $40 million for its Project 2005 a plan for structural additions, expansion of services and relocation and consolidation of departments. The other $20 million will be paid for by hospital receipts which would be boosted by a one-time 5 percent rate increase.

With an annual budget approaching $37 million and upwards of 375 employees, the city-owned hospital is the fourth largest employer in Juneau. The city pays Quorum a company that manages 235 hospitals nationwide $300,000 annually to manage the hospital. In addition, the city pays the salaries of the hospital's chief financial officer, Garth Hamblin, and administrator Robert Valliant both Quorum employees.

Bartlett also buys up to $6 million worth of goods and services from Quorum per year.

Bartlett opened its doors in 1971 and had its first major expansion in 1986, a $9.5 million project that improved its surgical, emergency-room, lobby, physical-therapy and radiology services. The project was funded by general obligation bonds, with the city assuming 70 percent of the debt. About $4.4 million remains to be paid, according to Valliant.

"The hospital at the time was on the ropes this was before we hired Quorum and was essentially an emergency care facility," said Juneau Assembly member Dwight Perkins, liaison between the assembly and the hospital board of directors. "But the taxpayers property owners in this case stepped up to the plate and supported the hospital."

In 1998-99, Bartlett's Project 98 invested $8 million in hospital operations, a project that included a new 18,840-square-foot administrative building and expansion of outpatient surgery, a cardiac-pulmonary rehabilitation ward and other areas. Hospital receipts paid for that project.

Project 2005, scheduled for completion in late 2005 or early 2006, will expand the hospital's bed capacity by 12. It will also transform current semi-private rooms into private rooms with their own showers and wheelchair-accessible bathrooms. The obstetrics unit will be expanded with five private labor-delivery-recovery-postpartum rooms with enough space to accommodate stays by spouses.

The Critical Care Unit will expand from four to eight beds necessary to meet demand, according to Valliant. The space shortage has sent some patients to other facilities in Alaska or Washington.

The project expands the emergency and radiology department waiting areas and provides for a new pediatric waiting area in the emergency department.

Currently the emergency room area can be extremely crowded, said Linda Millard, manager of Bartlett's Social Work Services department. "There have been times when we've been completely full," she said, particularly during the cruise ship season, when passengers are brought to the hospital.

The project will also improve traffic flow between departments, expand the Mental Health Unit by six beds, provide space for a hemodialysis unit, improve the pharmacy so it complies with national standards, and complete asbestos abatement work.

Community concerns about the project have centered on why sales taxes are being promoted as the funding vehicle and on whether the project is necessary.

"Using sales tax revenues will effect large savings," said financial officer Hamblin. "Borrowing $20 million at 6.5 percent for 20 years instead of borrowing the full $40 million project cost will save the hospital about $16.3 million in interest," he said.

Alternative financing scenarios could delay the project by several years and mandate higher rate increases, he said.

"Funding that $20 million with bonds instead of the sales tax would mean the city's property owners would be taking it on the chin," said assembly member Perkins.

Whether or not the project is necessary is being considered by the state Department of Health and Social Services.

"A hospital must show that what it plans to provide is needed by the community and does not duplicate existing services," Valliant said. "We're confident we are satisfying the criteria."

Valliant said he expects the certificate process to be completed in about two months.

One resident has already weighed in with a criticism that there is no need for one planned Project 2005 service, anyway.

At an August assembly meeting, Dr. Lou Packer of Juneau Urgent Care, a medical clinic providing emergency care, said, "Increasing (emergency room services) will duplicate services that are already provided in the private sector and will drive up health costs."

Packer asked why the existing, emergency room adequate to meet community needs must be demolished and rebuilt "at four times the cost and increase in size when it was built 10 years ago for about $11.5 million."

Valliant responds that the 1986 project totaled $9.5 million and that the emergency room was only a small part of that project.

Defending the emergency room area expansion, Dr. Bob Urata, president of the Bartlett board of directors, said a hospital survey showed the waiting period in the emergency waiting room was unacceptable. Enlarging the room and initiating "fast-track" methods both part of Project 2005 would shorten the waiting time, he said. The hospital does not plan to market its fast-track methods or compete with the private sector, Urata said.

Another part of the tax proceeds, $1.1 million for construction of a covered ice rink in Savikko Park, will be combined with a privately raised sum of $50,000 and a city grant of $250,000 to build a "bare-bones" facility, said Rich Poor, president of the Douglas Fourth of July Committee.

For Poor, bare-bones means an unheated, 26,000-square-foot building with a bathroom and minimal seating.

The building will be owned by the city and operated by the Parks and Recreation department.

Thursday's Empire will review planned school repairs partially funded by the proposed sales tax.



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