Borough and hospital straddle muddled line dividing autonomy and oversight

PETERSBURG – Issues of funding assistance continue to crop up between the Petersburg Borough Assembly and Petersburg Medical Center, and an ambiguous relationship between the two bodies isn’t clarifying the matter.

Last week, PMC CEO Liz Woodyard requested, on behalf of the hospital board, the assembly pay for repairs on a leaking exhaust stack in the borough-owned hospital facility—a request the assembly denied.

Woodyard said PMC is struggling to keep up with repairs as the borough-owned building ages, and the dilemma of not being able to afford the repairs isn’t new.

“We are an essential service to the community just like the police, fire and schools,” Woodyard said during the meeting. “Many local communities in Alaska and throughout the rest of the nation recognize the importance of having a community hospital to ensure a vibrant community, and therefore, they do provide financial support to their hospitals.”

She cited the Kenai Peninsula Borough funding the South Peninsula Hospital in the amount of $1.4 million.

In Kenai, the borough established a separate property tax in a particular service area that directs funding toward the hospital. Additionally, in Kenai the nature of the hospitals board is different than in Petersburg.

According to the Kenai Borough’s hospital ordinance, “The service area (hospital) board shall advise and make recommendations to the mayor and the assembly concerning the operation and management of service area activities, review and recommend the annual service area budget, and perform such additional functions as the assembly may authorize...”

The PMC board, according to borough charter, operates with the “greatest possible autonomy.”

“The relationship with the borough and the hospital right now, according to all the guidelines and legal entities that we have, is that we have the greatest autonomy possible,” Woodyard said during last week’s assembly meeting.

It’s an autonomy some assembly members are uncomfortable with, especially if the borough does decide to provide funding assistance to the hospital. It’s also an autonomy that many of the hospital boards don’t have in places where the hospital facility is municipality owned.

David Martin, Ketchikan’s assistant city manager, said his municipality provides its hospital one percent of sales tax revenues, but the city council has direct influence over capital projects at the facility.

“One city council member always sits on hospital governing board,” Martin said. “The hospital governing board doesn’t approve capital projects, the city council does.”

Last fall, Ketchikan voters approved a $42 million bond that will update the hospital’s 50 year-old surgical suite and increase clinic space, along with other renovations. The hospital also received more than $15 million in state and federal grants to complete the $62 million renovation.

In recent years, the City and Borough of Sitka has provided the Sitka Community Hospital around $150,000 for capital projects and directs its tobacco tax revenues into the hospital as well.

Sitka’s assembly appoints hospital board members whereas in Petersburg they are elected. The Sitka Assembly also approves major grants and facility improvements, whereas in Petersburg, according to code, the hospital board is entrusted with those responsibilities.

While it’s true many municipalities do provide funding to their hospitals, others don’t.

In Fairbanks, voters voted against a bond proposition twice to build a public hospital but private citizens do donate money.

“It is operated as a privately owned hospital,” said Fairbanks North Star Borough Chief of Staff Jeff Jacobson. “There is no tax-payer or public funds spent or given to the hospital or hospital foundation. It is all private donations.”

During the last borough assembly meeting, Jeigh Stanton Gregor was the sole member to vote to fund PMC’s funding request. He said his vote was partly symbolic—a way to ease the tension between the two boards.

“Liz (Woodyard) and the hospital board would like to strike a financial union or partnership,” Stanton Gregor said. “I think it’s quite possible that could happen. In short, I think $20,000 is an inexpensive act of good faith from the borough towards the hospital. If we’re going to open up conversations, let’s do it.”

Stanton Gregor said if the borough needs to start providing funding assistance, which in his view is likely and at costs well beyond tens of thousands of dollars, a more formalized funding mechanism, similar to other municipalities and their hospitals, needs to be established.

“Those are the negotiated terms of doing business,” Stanton Gregor said. “That’s all part of a negotiated relationship. Right now, there isn’t a financial tie for the building and maintenance, and if we’re going to change that, those should all be on the table for discussion topics if we’re going to change the nature of our relationship.”

When called for an interview, Woodyard said questions of autonomy and assembly oversight would be better directed to a hospital board member.

PMC board member Steven Samuelson said he understands some of the assembly members concerns regarding oversight should the borough provide funding assistance, but the hospital board should have control over operations. He hopes the two bodies can meet and have practical discussions.

“As a board member I believe there is a balance to be struck, and I think if the borough is willing to provide funding without all the facts, the assembly would not be doing the community the justice they were elected to do,” Samuelson said. “But we still should have the autonomy and be able to operate because we have shown that we have been able to operate a successful organization.”

Although meetings have been hinted at, no official work sessions are scheduled.


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