Borough officials say they are negotiating to resolve the controversy over the lack of public access to meetings and documents of the nonprofit corporation that runs the public hospital in Soldotna.
"The mayor takes the position that their meetings should be presumed to be open except in limited circumstances, and not the other way around," said Kenai Peninsula Borough Attorney Colette Thompson. "In our opinion, the records pertaining to the work they're performing for the borough should be open for inspection."
There are certainly exceptions, she said. Personnel issues and certain matters pertaining to pending litigation are normally discussed in private. However, she said, CPGH Inc. should conduct most of the business of borough-owned Central Peninsula General Hospital in public.
CPGH Inc. president Diana Zirul said she was hopeful that the corporation and borough could reach a solution amenable to all.
"I think we're coming to a resolution of the issues. I feel very hopeful about it," she said.
CPGH Inc. leases and operates the $40-million hospital under a contract signed in 1997. The borough's Central Kenai Peninsula Hospital Service Area raises about $1 million per year in property taxes to help support the hospital. An elected service area board advises the borough assembly on service area matters.
The corporation's contract requires it to seek borough approval for any expenditure of more than $100,000 from its plant replacement and expansion fund. The borough also must approve hospital expenditures from the service area budget.
There has been some controversy over the corporation's practice of excluding the public from parts of its meetings that do not deal directly with borough business. CPGH Inc. vice president Dolly Farns-worth said the corporation does not have to hold public meetings.
The corporation's contract with the borough says CPGH Inc. board meetings "will be open to the public as provided in its articles and bylaws," and "repeated or flagrant failures to conduct open meetings as provided in the articles and bylaws will be grounds for the borough to terminate this agreement."
CPGH Inc. struck provisions on public access to its board meetings from its bylaws and wrote a policy on that issue instead, Thompson wrote in a March letter. She claimed the policy, like the bylaws, is public record.
Robert Molloy, the corporation's attorney, said the bylaws are internal documents.
"They are not required to make them public," he said.
CPGH Inc. also has declined to provide the service area board with copies of certain planning documents. Zirul said those are proprietary, and making them public could aid the hospital's competitors.
Borough Mayor Dale Bagley said he and Thompson have met twice with Zirul to try to resolve openness issues. Thompson said she plans to send the corporation a letter detailing what items the borough believes can be kept confidential. Thompson said she hopes to address some issues in the letter and agree on a process to resolve the rest.
"We're trying to resolve the problem," she said. "If we have to amend the lease and operating agreement to make it clear and agree what portions of their meetings are open, then we'll amend the agreement."
CPGH Inc. and the assembly would have to approve any amendments, Thompson said.
"I think they are going to have to meet the people at least halfway, or the borough is going to have no choice but to find them in violation of their contract," said Nikiski assembly member Jack Brown. "They have a $40 million asset they're leasing for $1 per year, and we gave them a $9 million fund balance. There's a lot of people that would love that deal."
During informal discussions several years ago, Providence Health System offered $60,000 per month to lease and operate the hospital, he said. The borough declined, because the community wanted to maintain local control. But if CPGH Inc. does not open to the public, he said, a similar deal might look attractive.
"If (CPGH Inc.) forces the borough to end the contract, and someone comes up with a good bid, if someone says, 'We'll pay $60,000 or $70,000 per month to lease it, and our meetings will be open,' that wasn't attractive before, but it might be a lot more attractive now," Brown said.
Sterling assembly member Grace Merkes also said she believes CPGH Inc. should open its meetings as much as possible to the public.
"The only way it's going to be resolved is if the (CPGH Inc.) board decides they should be open," she said. "If they stand on their closed meetings, it probably won't be good for them."
Bagley and the borough's legal department will have to decide whether sufficient grounds exist to terminate the contract with CPGH Inc., Merkes said.
"But I think that in order to have good public opinion, they're going to have to be open," she said. "Maybe they need to look at their stand on these issues because of the public outcry. ... Maybe they need to look for some sort of compromise."
Meanwhile, the assembly has been debating the service area board's proposed bylaws and its role in hospital oversight and planning community health services. Those issues next appear on the assembly's agenda May 16. They likely also will be topics at the service area board's Wednesday meeting.
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