Health district seeks funding for new hospital

by Bill Boyle
SJR Editor
The San Juan Health District is seeking funding for a new building to replace the San Juan Hospital in Monticello.
The health service district will request $34 million from the Utah Community Impact Board (CIB) at a meeting on November 2.
The new building would replace the existing San Juan Hospital, which was built in the late 1950s. The new facility, with an estimated price tag of $36.4 million, would be built on 15 acres of land adjacent to the existing campus.
At an October24 public hearing to discuss the proposal, San Juan Health CEO Clayton Holt said it was time to build a new hospital, adding, “San Juan Hospital is – far and away – the oldest hospital building in the entire state.”
Holt outlined the steps the district has taken to look at the current facility and determine how to proceed. Holt said an architectural firm evaluated the hospital building as a whole, in addition to each of the systems that contribute to the facility (such as plumbing, electrical, roofing, foundation, etc.)
“They determined that most of the systems in the building are nearing ‘end of life’ and could fail in the near future,” said Holt. “We are facing difficult choices within the next few years.”
“The architect opinion is you can’t fix this existing building,” added Holt. “It needs to be replaced.”
The district has secured 15 acres of land immediately north and west of the existing hospital and hopes to build a new 41,000 square foot hospital on the site. The new hospital would be accessed from the existing hospital campus.
Holt added that the vicinity to the current hospital is helpful because the federal funding contracts are tied to the current hospital.
The district would contribute $2 million to the project, in addition to the 15-acres of land (valued at $260,750). The CIB funding, if approved, could be a mix of grant and loan.
The general CIB guidelines suggest a funding package that would include a $4.46 million grant and loans totaling $29.756 million at a two percent interest rate.
That loan would create an annual debt service for the district of $1.3 million. Holt stated that the goal is to keep annual debt servicing near $1 million. The district currently has $5.6 million in outstanding debt.
Holt said the district is determined to add no additional tax burden on San Juan County residents to make the payment.
The district currently collects approximately $1 million a year in property taxes.
If the application is approved, the grant/loan balance and interest rate may be adjusted by the CIB.
The CIB is a division of state government that provides loans and grants to counties, cities and towns that are impacted by mineral resource development on federal lands.
It has funded scores of projects in San Juan County, including three for the San Juan Health District.
The prior projects include the Spanish Valley Clinic, San Juan Clinic in Monticello, and a surgical suite expansion at the hospital.
The CIB considers projects on a funding cycle that runs for four months. This is the first meeting to consider the request and it would not be funded until February.
“This is a very worthwhile project for the CIB but they have set no priorities at this point,” said Holt. “They will consider a variety of projects at each monthly meeting and will make a funding decision at the end of the quarter.”
Holt added that a major constraint to the request is the funding available to the CIB, adding, “They have $40 million currently available and $112 million in requests in their current pipeline.”
Holt said that if the funding is approved, the district will “go into full design mode, try to bid next fall, and begin construction in the spring of 2025.”
Holt said the new 41,000 square foot facility is the minimum required and includes nothing extra. The new facility will provide the “existing services and look where we think rural medicine is moving in the future.” He referenced the growth in specialty tele-medicine services and the growing patient base from surrounding areas.
The current administrative building, San Juan Clinic building, and warehouse will remain as is.
In addition, the surgical suite, which was built in 2010, will remain in its current location. The remainder of the hospital will be replaced.
Approximately ten San Juan County residents, all employees of the health district, spoke favorably of the project during the public comment period of the hearing.
Kylor Perkins, the facilities manager for the district, said, “To say the building is old is an understatement. I know every inch of this building and ‘end of life’ is correct. I deal with it every day.”
The health care board approved the application, with one member adding, “In retrospect, this will look like a no-brainer.”
Members of the board are Alan Barry, Steve Simpson, Paul Sonderegger, Casey Veech, Andrea Wilson, Doug Christensen, and Stephen Williams.
Other San Juan County projects on the CIB priority list in the coming year are road improvements in Oljato, repairs to the public safety building in Blanding, a new water-fill station in Blanding, a backhoe in Bluff, and water rights purchase in Monticello.