AN ORDINANCE AUTHORIZING THE MAYOR TO

EXECUTE A LEASE AND OPERATING AGREEMENT WITH

CENTRAL PENINSULA GENERAL HOSPITAL, INC. FOR

CENTRAL PENINSULA GENERAL HOSPITAL

WHEREAS, Central Peninsula General Hospital is presently operated by Central Peninsula General Hospital, Inc., a private non-profit corporation ("CPGH, Inc.") under a Lease and Operating Agreement for the period beginning January 1, 1993 and ending December 31, 1997; and

WHEREAS, in Resolution 97-22 the assembly approved the concept and approach of leasing the hospital to CPGH, Inc. and authorized the mayor to enter into negotiations with CPGH, Inc. for leasing the hospital after the present agreement ends; and

WHEREAS, Resolution 97-22 also required that the lease include provisions for capital improvements to be borne by the borough through the service area, that the lease not contain provisions for subsidizing operating losses, and that the intent and purpose of the new lease be to maintain fiscally-responsible local control of the hospital with CPGH, Inc. while allowing CPGH, Inc. more flexibility to operate the hospital with a full range of services and programs that will best serve the service area communities; and

WHEREAS, the administration has conducted extensive negotiations with an ad hoc committee of the CPGH, Inc. Board of Directors, and has developed a Lease and Operating Agreement it believes meets the requirements of Resolution 97-22;

NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH:

SECTION 1. The assembly finds that leasing the hospital to CPGH, Inc. for less than fair market value is in the best public interest because all operating revenues of the hospital remain borough property under the proposed agreement.

SECTION 2. The Lease and Operating Agreement draft, dated October 14, 1997, to be entered between Central Peninsula General Hospital, Inc., and the Kenai Peninsula Borough for the Central Peninsula Hospital Service Area, a copy of which is attached and incorporated herein by reference, is approved. The mayor may execute a Lease and Operating Agreement that substantially complies with the terms of the approved draft and take such actions as are necessary to implement its terms and conditions.

SECTION 3. The provisions of KPB 17.10.240 shall not apply to this Lease and Operating Agreement.

SECTION 4. That this ordinance shall take effect immediately upon its enactment.

ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS 14TH DAY OF OCTOBER, 1997.

Jack E. Brown, Assembly President

ATTEST:

Linda S. Murphy, Borough Clerk