The Mission Statement for Sitka Community Hospital, posted in the waiting room. Phase 3 of the proposal process for management of the hospital involves performing “due diligence” with the Southeast Alaska Regional Health Consortium. Sitka expects to spend up to $150,000 in legal fees on Phase 3. (Emily Kwong/KCAW photo)

The Sitka Assembly on Thursday night (9-20-18) approved on first reading spending $150,000 on legal fees for the proposed merger of Sitka Community Hospital with the Southeast Alaska Regional Health Consortium.

Assembly members questioned Sitka administrator Keith Brady about the source of the funding, in what has been a tight budget year.

He responded that it was a part of the normal padding built into the municipal budget.

“We have a certain amount we plan for in our revenue, and budget about 92-percent of that,” said Brady. “So we have some extra money for cushion, just in case. That’s where it’s coming from right now.”

Assembly member Richard Ween objected to the expenditure, arguing that SEARHC’s takeover of the hospital in Wrangell was expected to generate only $22,000 in legal fees.

Municipal attorney Brian Hanson said that he had sent a detailed letter to a prospective legal firm describing the project, and the firm estimated costs in the range from $78,000 to $156,000

The Sitka assembly approved the expense on first reading, 5 to 1, with Bob Potrzuski absent. The next reading of the ordinance will be September 27.

Phase 3 of the Sitka Community Hospital process is also called “due diligence,” in which the city and SEARHC will negotiate the specific details of the proposed merger.