Barton Hospital targets $18 million upgrade |

Barton Hospital targets $18 million upgrade

Tom Lotshaw

Barton Memorial Hospital plans to move forward with $18 million of debt-financed capital improvement upgrades.

About $14.4 million will pay for a new central utility plant at the community hospital in South Lake Tahoe. The existing utility plant is about 50 years old and obsolete, hospital officials said.

The hospital proposes to build the utility plant between the existing utility plant and the Freel Peak building at the back of the hospital.

According to hospital officials, the utility plant project includes several new technologies including gas-powered cogeneration and results in estimated energy savings of about $250,000 per year as well as compliance with several codes and reduced maintenance costs.

The remaining $3.6 million in debt will be used to upgrade other hospital infrastructure and purchase improved patient care equipment, including three new X-ray machines.

The hospital would borrow money for the project at a 2.75 percent interest rate. The 15-year financing would be tax-exempt and secured through the South Lake Tahoe City Council, which votes on the request on June 3.

“While the hospital had adequate cash reserves to pay for the new facility, the availability of the low-rate, tax-exempt loan made it a better option for funding of the new plant,” said Rich Belli, director of facilities for Barton Memorial Hospital.

The tax-exempt financing would be secured through the city of South Lake Tahoe as a conduit, but the city would not be obligated in any way to repay the debt, Belli said. Similar arrangements between the hospital and city have been approved several times before.

Barton Memorial Hospital has about $17 million of existing debt, all slated to be paid off within the next five years, according to hospital officials.