Although the Sitka Assembly passed the final city budget only two weeks ago, that didn’t stop it from making a few changes during its regular meeting Tuesday evening (6-25-19). The assembly extended the Sitka Community Hospital budget for the month of July, and approved additional money for consultants who aided the city in the hospital’s sale to SEARHC. The assembly also found money to fix a broken water main along to Sawmill Creek Road at a cost of $400,000. 

Sitka’s  chief administrative officer Jay Sweeney said the final purchase agreement for Sitka Community Hospital to the Southeast Alaska Regional Health Consortium was officially signed on June 12. He gave the assembly a rundown of what will happen at the end of July when the transition occurs, from a business standpoint. 

“After July 31, Sitka Community Hospital as a department of the CBS and as a separate enterprise fund will no longer exist, it simply goes away,” he said. 

While it’s no longer a city department, some of the services Sitka Community Hospital provides will continue, just under new names. Acute and emergency care will move to SEARHC on July 29. Home Health will transition on August 1, and long term care will remain in its current location, with the hospital building renamed “Sitka Longterm Care.”

And Sweeney said there would be a lot of work for his department in the coming months. His office will absorb responsibility for any outstanding  financial activity at the hospital, like billing. Sweeney said they expected to deal with payments and insurance issues associated with the hospital for months, even years.

All of this will come at a cost. Assembly member Richard Wein asked Sweeney to elaborate.. 

“Each of those items that you listed have a cost,” Wein said, “I was wondering if you could start by reiterating what the escrow amount will be.”

Sweeney said the city would move $4.5 million from the city’s operational trust fund into a separate fund to cover liabilities associated with the hospital. 

The assembly approved the July budget for Sitka Community Hospital 6-1 with Valorie Nelson opposed. The motion to pay $422,000 in FY19 funds to consultants who negotiated the hospital sale narrowly passed 4-3 with Nelson and assembly members Aaron Bean and Richard Wein opposed. And the assembly voted unanimously to make city attorney Brian Hanson the supervisor for all hospital sale matters moving forward. 

The hospital wasn’t the only big budget item before the assembly on Tuesday. On first reading, it approved a $400,000 emergency public works project to replace a section of water main between Indian River Bridge and Indian River Road. Public Works director Michael Harmon said they discovered the leak about a month ago, and if it isn’t repaired soon could do serious damage. 

“This line is leaking in several locations and leaking quite a bit,” Harmon said. “It’s our main line to town. If that pipe continues to come open, we’re getting more leaks as the week passes, we’re looking at risking Sawmill Creek Road. We could be developing a fairly large sink hole.”

Wein noted recent repairs to a pipe on Jeff Davis Street – he asked if it was the same pipe- Harmon confirmed that it was, and Wein asked what the lifespan of the 24-inch iron pipe should be.  

“Boy, you would hope to get 100 years out of it. Industry standard or even longer. The big factor on that is corrosion. We’re getting interesting corrosion in Sitka,” Harmon said. “We believe muskeg is a big player in that- the water out of muskegs is very corrosive.” 

Assembly members Aaron Bean and Valorie Nelson asked why the project wasn’t being put out to bid, Nelson questioning if the move was in accordance with city code. Harmon said competitive bidding could take 6 months; instead the repair would go to K&E Alaska, who are on a list of on-call contractors for the city in the event of an emergency. 

The assembly voted 5-2 in favor of the $400,000 appropriation, with Bean and Nelson opposed. The matter will have to pass a second reading before work can start on the project. 

At the end of the meeting, the assembly entered into executive session to discuss several legal matters including the forbearance agreement with Baranof Island Brewing Company. After about 20 minutes, the body returned and declared BIBCO in default of their economic development loan, and directed the city attorney to pursue collection actions. The vote passed 6-0, with assembly member Aaron Bean absent for the vote.

In other business…

  • The assembly voted unanimously 7-0 in favor of shifting the seasonal electrical rates by a month. Currently electric rates rise from 12 to 19 cents a kilowatt-hour in March, and then go down again in October. Now, rates will go down in November and increase again in April.
  • On first reading, the assembly voted to approve $165,000 in funding for a development plan for the Granite Creek site on Halibut Point Road, 7-0 on first reading.
  • The body approved $20,000 in funding for harbor cameras and $23,000 for the Sitka Police Department to install a new heat pump in their building, 7-0 on first reading.
  • It approved a marijuana cultivation and retail license renewal for Northern Lights Inc, and voted to appoint Susan Compango to a three year term on the Parks and Recreation Committee, both 7-0 on first reading.
  • The body listened to a presentation from FEMA representatives on the National Floodplane Insurance Program.
  • The body appointed Fire Chief Dave Miller as interim city administrator. Read more about that decision here.

Click here to listen to the June 25 Sitka Assembly meeting in full.