Tuesday's Kenai Peninsula Borough election yielded a victory for Central Peninsula General Hospital. More than 53 percent of the votes from the hospital's service area were in support of Ballot Proposition 2, a plan to renovate and expand the hospital over the next three years.
"This is a milestone date for this service area," said hospital CEO David Gilbreath. "It's a validation that the men and women of the area are saying 'we want to keep (medical) care in the community.'"
Out of 23,432 voters in the hospital service area, 4,790 votes were cast with 2,552 choosing "Yes" and 2,238 saying "No" to the plan.
The ballot proposition asked voters to choose whether to allow the borough to take on the debt of $49.9 million in general obligation bonds to pay for the expansion plan, that would be repaid over a 20-year term by a combination of hospital revenues and property tax dollars.
On the peninsula's east side, voters in and around Seward also said yes to Proposition 3, creating the Seward-Bear Creek Flood Service Area. The ballot issue won by a margin of two-to-one.
The region around the head of Resurrection Bay, including the city of Seward, has been subject to periodic destructive flooding for the past couple of decades. After last fall's flooding, residents petitioned the borough for the service area.
Just as they did in 1998, however, voters in the unincorporated borough rejected trails powers in no uncertain terms. Proposition 1, which would have created a Kenai Peninsula Borough Trails Service Area, was losing by a wide margin late Tuesday night -- 2,731 against to 1,287 for, a 65.4 percent to 34.5 percent margin.
On the hospital bonds, an annual .5-mill tax levy, the equivalent of $50 per $100,000 of assessed property value, will be the minimum property owners contribute to repaying the bond debt. However, should CPGH be unable to contribute to repaying the debt, the annual amount taxpayers take on could increase to approximately 1.21 mills, or $121 per $100,000 of taxable assessed value.
"This proposition increases costs for all services and products on the Kenai Peninsula," said Ruby Kime, a Ninilchik woman who organized a campaign against Proposition 2.
"Even though it will not affect my personal taxes, my grocery bill is going to go up because Three Bears will have to pay more taxes, Napa will have to pay more taxes, MediCenter will have to pay more taxes," she said.
But Gilbreath said he expects the project to provide a boost to the peninsula's economy.
"In the short term, we're going to have tens of millions of dollars being spent locally, instead of in Anchorage," he said, saying the hospital will contract with local labor and with local vendors for equipment and services.
"In the long run, it will attract those additional services needed in the area."
Among those services are oncology, or care for cancer patients. Additional operating room suites and outpatient recovery space will be built, and the current 33 multi-patient rooms will be replaced with 50 single-patient rooms.
Gilbreath said he hopes to begin bidding for contractors as soon as possible, once the borough assembly ratifies the election. He said he expects to be able to begin construction in 2004, with a completion date set for sometime in 2006.
The $49.9-million expansion is planned to take place in three phases, calling for renovation of approximately 46 percent of the existing facility and the addition of a 74,000-square-foot, two-story wing with a basement.
Gilbreath said the hospital's financial record should give voters confidence that the hospital can shoulder its share of the load, keeping the tax levy to .5 mill.
"There are no guarantees, but the hospital has been profitable over the last 20 years," he said. "I expect it to be profitable over the next 20 years, which is the life of the bond commitment."
He added that the aging of the population within the service area will lead to greater need for increased hospital services.
The hospital originally was built in 1971 to accommodate a service area of 5,000 people. The last major expansion the facility had was completed in 1986.
The service area population has increased to 35,000 since the hospital began service, and patient visits have grown from 3,185 in 1972 to 51,944 in 2001.
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