Kenai Peninsula Borough Mayor Dale Bagley said he is not yet ready to end the contract with the nonprofit corporation that runs the borough-owned hospital in Soldotna.
"In spite of the letter they sent to us, we're still going to work with them and try to resolve this," he said. "We're still in the negotiating stage."
The borough owns the $40 million Central Peninsula General Hospital, but leases it to CPGH Inc. A borough service area raises about $1 million per year in property taxes to help support it. Assembly President Bill Popp said he is increasingly concerned about the conduct of nonprofit CPGH Inc.
"The issue of their board meetings taking place largely in executive session -- even though I don't believe there is anything wrong taking place in executive session -- is casting aspersions on what they are doing," he said. "It's undermining their credibility with the public and with the assembly."
Bagley said the board's stance is unacceptable.
"It is a borough hospital and borough money," he said. "There's a lease and operating agreement. That's where we're at on this. It's not like everything over there is CPGH Inc. and we have no say, because we do have a say."
Speaking for herself and not for the board, CPGH Inc. vice president Dolly Farnsworth said she cannot understand why it bothers anyone that the board discusses corporate business in private.
"What's not discussed in public are those things that are corporate things," she said. "Any corporation would discuss things they want to do to increase their business in private."
Providence Health System of Alaska lobbied to take over the hospital, she said, but the community wanted local control.
"Why the Clarion and the borough and certain people think we have to do everything in the open when we're doing such a good job is beyond me," she said.
CPGH Inc. president Diana Zirul said the board does conduct most of its business in public.
"The executive session is primarily dealing with evaluations, credentialing and (proposals for new services) that are still in the initial stages," she said.
Once the administration recommends adding a service, she said, the board will discuss it in public.
Assembly member Tim Navarre, who represents Kenai, said the debate over public access to CPGH Inc. meetings and records is hurting the borough and the hospital.
"You can't probably find anybody that says the hospital isn't doing a good job," he said. "They're running a smooth operation. The doctors and everyone are happy. They have the second lowest rates of any hospital in the state. There are a few little problems that need to be smoothed out, but those can be worked out."
The controversy reached a boiling point after Gene Dyson, a member of the elected service area board, tried to attend a CPGH Inc. meeting.
"A couple of minutes into the meeting, I was told to leave," he said later.
The CPGH Inc. board also declined to give the service area board certain planning documents.
The corporation's contract 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."
In a letter last March, Borough Attorney Colette Thompson said the board eliminated provisions on public access to its meetings from its bylaws and wrote a policy instead. It declined to make the policy public.
Navarre said the corporation is working to resolve borough concerns and has put a member of the service area board on its strategic planning committee.
"I want to go on record as supporting the hospital 100 percent," he said.
In an April 24 letter, Bagley asked CPGH Inc. to conduct its business more openly.
"The current approach of the nonprofit corporation is to presume that its meetings are closed to the public with certain limited exceptions," he wrote. "I think a more fitting approach is to presume that all meetings of the board will be open to the public with limited exceptions."
He suggested amending the contract to require the board to meet in public, except on:
n Confidential or personal information about a patient, physician, employee or director;
n Claims or litigation involving the hospital or the corporation;
n Or, with consent from the borough mayor, information whose release would cause the borough economic harm.
He also proposed amendments making all documents relating to performance of the corporation's contract public, with similar exceptions, and requiring the board to give advance notice of meetings, post its agendas and take public comments.
"Probably the biggest thing I'd like to see more open is their capital improvement projects, so that people know what plans they have for the hospital," he said.
With a May 15 letter, the board rejected the mayor's proposals.
"The new borough administration appears to want to micro-manage the operation of the hospital as a de facto borough department," the letter said, but the contract makes clear that CPGH Inc. is an independent business.
"CPGH Inc. provides for reasonable public oversight of its operations of the hospital through, among other things: reasonable public access to meetings consistent with the proper management and handling of business, public participation on board subcommittees -- such as strategic planning -- regular reporting and accounting to the borough administration and assembly as well as regular reporting to the service area board," the letter continued.
The board set new written policies that allow public attendance when the board hears presentations from the public and discusses proposals for which the contract requires borough approval, such as proposals to:
n Spend more than $100,000;
n Assume debts exceeding $100,000;
n Eliminate hospital services;
n Spend service area funds.
Following the public session, the board will meet behind closed doors.
"CPGH Inc. is not subject to federal, state or municipal 'sunshine laws' such as the Alaska Open Meetings Act (AS 44.62.310-312), which requires prior notice of and public access to meetings of government bodies," the policies say.
Zirul said the policies allow the board to add other topics to the public agenda.
"Some things may take longer to discuss than others, but we are conducting the majority of our business in open session," she said.
The board agreed that many financial records about hospital operations are public.
"However, CPGH Inc.'s proprietary records are not public records," it wrote. "The requirement that the mayor or his designee approve in advance a record for it to qualify as a private proprietary record is not practical, and does not allow CPGH Inc. to operate independently. Therefore, the board cannot agree to this proposal."
Nikiski assembly member Jack Brown said the CPGH Inc. board is forcing the assembly to consider other options for managing the hospital.
"On my No. 1 concern -- public access and meetings -- they're not budging," he said.
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