The Kenai Peninsula Borough Assembly is hoping to settle a longstanding border battle Tuesday. The assembly has considered several proposals to expand Central Peninsula Hospital’s service area boundary towards the south over the last few years. Assembly members from the southern peninsula have historically opposed the move, but both sides seem to have found a suitable compromise.
The latest push to extend Central Peninsula Hospital’s service area to the south was proposed months ago, and it was met with the same oppositionother attempts have faced in the past.
The ordinance’s sponsor, assembly member Dale Bagley,initially wanted to move the boundary south of Ninilchik, eliminating hundreds of thousands of dollars in property tax revenue for South Peninsula Hospital. Bagley pitched the idea as a fairness issue, arguing that most in Ninilchik and those just to the north use Central Peninsula Hospital’s services rather than traveling south to Homer.
Bagley said that those residents shouldn’t pay the higher property taxes levied for hospital services on the southern peninsula, but he eventually compromised, shrinking his proposed expansion.
“The substitute ordinance did move the line from south of Ninilchik to north of Ninilchik in the Barbara Drive area,” Bagley explained.
He also amended the ordinance to add more properties on the south side of Kachemak Bay to the SPH service area. That would make the change revenue neutral for the hospital if the ordinance is approved by the assembly and then by voters this fall.
The latest amendment does not include properties within Seldovia city limits because city residents would need to separately approve the measure.
“The existing line came through somewhere near China Poot, and China Poot, Halibut Cove, Bear Cover was already paying,” Bagley said of the areas already paying into the SPH service area. “From there over to Port Graham, Nanwalek and the area outside the city limits of Seldovia would be included in this boundary.”
Voters within each service area and the affected areas outside of their boundaries would need to approve both expansions separately in October.
For example, voters within the SPH service area and the communities on the south side of Kachemak Bay affected by its expansion would vote on that proposition and vice versa for those in the CPH service area. However, voters affected by the expansion of CPH’s service area would vote on both questions since they currently reside within the SPH service area.
Borough Attorney Colette Thompson explained at a public hearing in Homer Wednesday that there could be four outcomes if the propositions go to a vote.
“One would be just the northern boundary gets changed; the second would be just the southern boundary is changed; the third option is both boundaries could be changed, and the fourth option would be that nothing is changed,” Thompson said. “If both propositions are defeated, then there won’t be any change.”
Both assembly members Willy Dunne and Kelly Cooper said they support the latest proposal, but they did acknowledge that putting both questions to voters at the same time could be bad news for SPH’s finances.
“There is the complication of how the votes could possibly turn out, and I guess it is feasible that the vote could turn out that we still might be in a situation where South Peninsula Hospital would lose revenue,” Dunne said.
Dunne did toss out the idea of asking voters to approve the SPH service area expansion this fall and waiting until 2019 to hold a vote CPH’s boundary. But Dunne said that would drag out process and that he would still likely support the ordinance on Tuesday.