MEMORANDUM

TO: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

FROM: David Green, South Peninsula Service Area Board Chair

Colette Thompson, Borough Attorney

Jeff Sinz, Finance Director

DATE: February 6, 2003

SUBJECT: Ordinance 2003-08, authorizing the mayor to enter into a sublease and operating agreement with South Peninsula Hospital, Inc.

In September 2002, the assembly by motion authorized the issuance of a notice to South Peninsula Hospital, Inc. that the service area board and borough administration wish to review the contract between the borough through the South Peninsula Hospital Service Area Board and South Peninsula Hospital, Inc. and potentially negotiate changes. Subsequently, the service area board and the South Peninsula Hospital Inc. board of directors reviewed the contract and negotiated changes which are shown in bold in the accompanying draft contract. These are primarily procedural in nature and do not change the underlying basic contractual relationship whereby the South Peninsula Hospital Inc. Board operates the hospital on behalf of the service area board and the borough. The service area board remains required to oversee the operation and budget of the hospital pursuant to borough code and this contract. A shortened hearing is requested in order that the revised agreement may be approved before the existing agreement expires, which will be on March 24, 2003.