MEMORANDUM

TO: Gary Superman, Assembly President

Members of the Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

Scott Holt, Finance Director

Walter R. Robson, Capital Projects Director

COPY: Karen Berg-Forrester, South Peninsula Hospital Service Area Board Chair

Charlie Franz, South Peninsula Hospital Administrator

FROM: Bonnie L. Golden, Grants Manager

DATE: November 24, 2004

SUBJECT: Ordinance 2004-19-30: Accepting and appropriating a grant from the Alaska Department of Health and Social Services in the amount of $957,151 for construction and renovations at South Peninsula Hospital

In July 2003, a majority of South Peninsula Hospital Service Area voters approved the issuance of up to $10.5 million general obligation bonds for capital improvements associated with the hospital. An additional $6.5 million was contributed toward the project from the hospital's retained earnings account.

The hospital has been able to supplement its contribution through receipt of state and federal grants. In 2003 it received a $250,000 grant from the Alaska Department of Health and Social Services ("DHSS") to purchase and install an oxygen generating system. It has recently received notice of award of a second grant in the amount of $927,151 from DHSS for construction and renovations. Specifically, the hospital will apply the second grant toward construction of the new emergency department, which is part of the overall expansion project.

The grant requires a cost share on a 50/50 ratio, or an additional $927,151. Since there is $17 million in the project account, there is more than sufficient funding to meet the match requirement.

The South Peninsula Hospital Service Area Board is scheduled to meet on December 2, 2004. Acceptance of the grant and expenditure of the matching funds for this project is on its meeting agenda. In addition, the South Peninsula Hospital Inc. Board met on November 17, 2004, and passed a motion recommending that the service area board accept the grant and request the assembly to appropriate the funds to the construction project. The actions of the service area board will be provided to the Assembly on or before the public hearing date for this ordinance, scheduled for January 4, 2005.

Attachments: Ordinance, Notice of Award