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Hospital service area considers putting excess money to use

Grants would boost good health

Posted: Monday, December 11, 2006

Central Kenai Peninsula Hospital Service Area board members are considering a program to provide grants to local nonprofit healthcare organizations out of surplus funds that may become available within the hospital’s budget in healthy fiscal years.

Bylaws approved by the assembly and adopted by the service area board in 2000 provide for consideration of such a grants program, though all sides agree that appropriations would have to be run through the assembly, likely at annual budget time.

But there are many questions about just how such a grants program should work, and those and other issues have been the subject of discussions between service area, hospital and borough officials for several months. Many of those issues got an airing during joint worksession last week in Soldotna.

A request for financial assistance earlier this year by the Cook Inlet Council on Alcohol and Drug Abuse, CICADA, focused attention most recently toward the kinds of procedures that might govern such a grants program.

According to Craig Chapman, borough finance director, figures show that the projected unrestricted fund balance that could be available at the end of the current fiscal year (June 30, 2007) could be as high as $775,152. It might also be as low as $25,508. Some of that could be the source of future grants.

The service area is working on draft parameters and guidelines that should govern the handling of grant requests. Here are examples of what is being considered:

· Grantees would be required to be nonprofit corporations recognized by the IRS in good standing with the state, and their purpose would be healthcare-related.

· Eligible projects would have to fall within the scope of the authority of the service area board and enhance or complement service area goals. Projects could not conflict with other programs, services or operations of the service area, Central Peninsula General Hospital Inc., or other agencies, and they would have to be conducted within the service area’s boundaries.

· Grantee organizations would be responsible for submitting periodic reports detailing how the money was being used, and the service area, and probably the assembly, would have oversight duties.

· Grant amounts could not exceed $250,000.

As envisioned currently, groups seeking grants would submit applications no later than Nov. 15 for consideration for the following fiscal year. Fiscal years begin on July 1 and continue through the next June 30. Grants meeting the board’s criteria would be included in the service area’s annual budget and forwarded to the mayor and assembly for approval.

Another issue is what the exact source of grant money would be — property tax revenue, hospital operational dollars, a mix of the two, or neither. That question is yet to be answered.

In the discussion Tuesday, borough Mayor John Williams said he was reluctant to agree to the board’s giving out grants at this time because the hospital now has a brand new $50 million expansion about to come on line for which it has no track record of operation and maintenance costs.

“We know what the debt is going to be and how the debt is going to be covered, but we have changing parameters within areas of operations such as energy needs, cost of fuel and personnel costs and all those sorts of things. There is no solid line established as to what the operating costs are going to be,” he said.

In the past 10 years, the hospital has had only one year in which it faced a major deficit. In that respect, it has been fortunate, the mayor said.

“... In my opinion the hospital needs at least a year, if not two years, of operating experience to get their feet on the ground to clearly understand the ramifications of the new facility and [what] the cost and expense of running that facility is going to be.”

Williams said it was “my indecision” whether the grants program should move forward that had brought the parties together for the worksession. He said the whole issue needs “a full study.”

Hal Spence can be reached at harold.spence@peninsulaclarion.com.



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