Juneau’s hospital set aside $8.1M to buy property. The deal fell through, but that won’t solve Bartlett’s budget issues.

Bartlett Regional Hospital isn’t taking over the Juneau Bone & Joint property after all. 

On Monday, the Juneau Assembly authorized the hospital to put $8.1 million back into its savings. That money was originally supposed to buy the property that houses the business.

The decision comes as the board for Juneau’s city-owned hospital contemplates cutting or reducing some services to address a major budget crisis. But Bartlett CFO Joe Wanner said the money won’t solve the hospital’s looming problems.

“It doesn’t do nothing for our operating struggles right now,” he said. “Each of these programs are continuing to lose money on a day-to-day basis. So we still have work to do on those. This doesn’t affect that.”

Last July, the hospital put aside that $8.1 million from its operating funds to purchase the property, which includes two commercial buildings near the hospital campus. 

The idea was that the Bone & Joint Center and other private businesses that lease there would pay rent to the hospital. At the time, hospital leaders said it would give the hospital “immediate access to positive cash flow.” They anticipated making upwards of $700,000 per year in rent. 

But Wanner said the property owners pulled back from the sale in January. He said they did not give a reason. 

Wanner said because the hospital knew the deal fell through back in January, they had already included that money in its three-year timeline for how much the hospital has left before it runs in the red. 

“As we go through the struggles, the ability to have this cash back in the operating fund, it does buy us basically the three years if we don’t change anything today. This doesn’t go very far,” he said. 

As for the hospital’s current budget crisis, the board is still collecting feedback from the public on which services should be cut or reduced. The board is expected to give a final recommendation on June 25 on how to move forward.