Juneau city manager seeks $7.4 million more for Bartlett hospital, on top of $12 million

City Manager Katie Koester is asking the Juneau Assembly on Monday to introduce an ordinance giving Bartlett Regional Hospital $7,427,659 more in fiscal 2026 spending authority, drawn from hospital funds.

The request follows a $12 million appropriation the Assembly adopted July 27 for fiscal 2026 operating costs. Together they would add $19,427,659 in spending authority for the year that ended June 30. The adopted fiscal 2026 budget separately included $3 million for the hospital.

The ordinance is up for introduction at the 6 pm meeting. A public hearing is set for Nov. 16. The ordinance summary cites "additional expenses in FY2026" without saying what they are. Unlike the July version, it does not say whether the hospital board reviewed the request. The board meets Tuesday, and its packet has no item on the new request.

The same ordinance covers about $2.2 million in risk management money for insurance claims, mostly from the winter storm disaster, which the city expects to largely recover through insurance or state disaster funding.

In June, Chief Financial Officer Angela Davis told the hospital's finance committee that adding Bartlett Family Medicine and specialty clinics had pushed expenses over budget. The $12 million figure annualized results through May and added a buffer. The hospital board approved that funding June 30, its minutes saying the money "will come from revenues generated by expanded services of the hospital, not from CBJ funds."

At the July 27 Assembly meeting, Mayor Beth Weldon asked whether clinic revenue would prevent future supplements. CEO Joe Wanner said, as the minutes record it, that converting the clinics to rural health clinics should make them financially sustainable.

Year-end figures presented July 22, before audit adjustments, showed expenses of $169.5 million against a $153.7 million budget. Operating revenue of $158.3 million was flat with budget. The hospital posted a loss of about $8.8 million instead of a budgeted $6.6 million gain. Davis's June memo tied much of the gap to $7 million in Rural Health Demonstration reimbursements held up by pending federal legislation.

An August memo put the hospital's rolling 13-month average monthly loss at $716,000. September showed $767,000 in net income.

Draft minutes of the hospital's Oct. 20 finance committee meeting say an audit found Bartlett did not meet its debt service coverage covenant. The hospital carries $28.2 million in bonds. Administration sent the city and the auditors a consulting engagement with Stroudwater and an improvement plan as a potential cure, and expects the impact to be a disclosure only. The minutes also say the hospital's customary $3 million deferred maintenance appropriation "is unlikely this year given the cash position."

The city wants audited fiscal 2026 figures finalized by Nov. 15, the day before the public hearing.