Hospital operating deal close

6-year agreement with SPH Inc. in the works

Posted: Sunday, December 09, 2007

Negotiations between South Peninsula Hospital Inc. and the Kenai Peninsula Borough have produced a new six-year operating agreement.

The tentative pact must now be reviewed by the South Peninsula Hospital Service Area Board, which would forward its recommendation to the Kenai Peninsula Borough Assembly, which has the final word concerning ratification.

An ordinance that would authorize Borough Mayor John Williams to execute the Sublease and Operating Agreement with the hospital corporation was introduced at the Dec. 4 assembly meeting. It has been set for public hearings on Jan. 8 and Jan. 22.

The current operating agreement, which expires April 7, 2008, includes an automatic five-year renewal unless notice of termination is filed before Jan. 25, 2008.

Among the new elements is a requirement that the hospital have a detailed strategic plan, said administration Chief of Staff Tim Navarre.

"That's important, so that essentially they have a game plan for operating the hospital, more so than a one- or two-page plan. That was something the mayor required in negotiations and wanted to see," Navarre noted.

In a memo to the assembly, Borough Attorney Colette Thompson outlined some of the major changes in the new agreement.

The new agreement's format was changed to more closely mirror the agreement the borough has with Central Peninsula General Hospital Inc. However, there are still significant differences between the two documents, she said.

The pact is for six years, with a possible six-year extension. The previous contract was for five years.

Hospital corporate officials will be required to present oral quarterly reports to the assembly, just as CPGH Inc. does.

SPH Inc. will be required to follow certain purchasing policies and procedures and obtain the borough's approval to change them. This follows current practice, but was not reflected in the previous agreement.

The hospital will have to notify the borough when it wants to spend in excess of $100,000 on capital improvements and equipment, or when analyses of projects would exceed that figure.

There are several other provisions dealing with levels of expenditures, but essentially, the threshold for getting necessary approvals for spending funds was raised in consideration of the effect of inflation on hospital costs in the past decade.

The agreement also requires the hospital establish a plant/equipment replacement and expansion fund similar to that of CPGH Inc.; meet certain performance measurements including compliance with Medicare and Medicaid law; includes specific requirements related to pension plan funding; and makes other provisions having to do with level of service.

Efforts to reach Hospital Administrator Charlie Franz for comment were not successful Thursday.

In other business at its Dec. 4 meeting, the assembly introduced several new ordinances and set public hearings for Jan. 8. They included:

* Ordinance 2007-19-31 appropriating $20,000 from the state of Alaska reimbursing firefighting costs incurred by the Anchor Point Fire and Emergency Medical Service Area.

* Ordinance 2007-19-32 appropriating a state grant of $200,000 for community purpose under the state's Municipal Energy Assistance Program.

* Ordinance 2007-19-33 accepting $523,650 from the Alaska Housing Finance Corporation for teacher housing in Nanwalek and appropriating matching funds of $200,000 to that project.

* Ordinance 2007-19-34 appropriating a state grant of $100,000 to provide fishing opportunities for disabled veterans and authorizing a sole-source agreement with Last Frontiersman to provide those services.

The assembly also confirmed appointments to the Board of Adjustment and Board of Equalization.

To the BOA were appointed:

* Barbara Belluomini, of Soldotna, Seat A, term expires Dec. 31, 2009.

* Betty Glick, of Kenai, Seat B, term expires Dec. 31, 2010.

* Tom Clark, Anchor Point, Seat E, term expires Dec. 31, 2010.

To the BOE were appointed:

* Michelle Medley, of Kenai, Seat B, term expires Dec. 31, 2010.

* Saylor Rehm, of Kenai, Seat E, term expires Dec. 31, 2010.

Hal Spence can be reached at

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