Assembly expected to pass South Peninsula Hospital lease

Posted: Tuesday, February 25, 2003

A new working agreement negotiated recently between South Peninsula Hospital Inc. and the South Peninsula Hospital Service Area Board is expected to become law under an ordinance now before the Kenai Peninsula Borough Assembly.

Ordinance 2003-08 authorizes a sublease and operating agreement for the hospital with South Peninsula Hospital Inc., a nonprofit organization that has operated the hospital since 1970. The current five-year sublease and agreement expires in March.

The hospital sits on land owned by the city of Homer that is leased to the borough under a 55-year lease that will expire in 2024.

The new agreement largely follows the precepts of the existing one, with a few minor procedural changes. It continues to require the corporation to use its best efforts to operate the hospital without an operating subsidy from the service area, but it allows for one if needed.

Charlie Franz, SPH administrator, said the fact the agreement made only minor changes shows it has worked well over the years.

"The indications I'm getting from all the folks involved is that the hospital is running smoothly," Franz said.

Ordinance 2003-08 authorizing borough Mayor Dale Bagley to execute the sublease and operating agreement gets a public hearing March 11. Once adopted, it will remain in effect for five years, unless terminated under provisions spelled out in the agreement.

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