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Assembly to consider expanding CPH service area south

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Courtesy of the Kenai Peninsula Borough
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The Kenai Peninsula Borough Assembly is set to introduce an ordinance that would move the boundary of the Central Peninsula Hospital service area south to include all of Ninilchik. The current boundary sits just south of Clam Gulch at about mile 119 on the Sterling Highway. The move would mean less tax revenue for the South Peninsula Hospital, but it would also significantly lower property taxes for Ninilchik residents, setting up a discussion that played out back in 2016 when a similar proposal failed.

Two years ago, the assembly was considering a similar proposal that would have moved the current boundary south into Ninilchik, splitting the community in two just north of Oil Well Road.

Former assembly member Brent Johnson introduced that ordinance, and now assembly member Dale Bagley is reviving the issue.

“I realize from a south peninsula perspective, this financially hurts the South Peninsula Hospital,” Bagley explained. “That’s not my intent. My intent is that I don’t think it’s fair to people that live between Clam Gulch and Ninilchik to pay 2.35 mills to the South Peninsula Hospital when they’re probably going north to the Central Peninsula Hospital.”

Residents in the Central Peninsula Hospital’s service area pay next to nothing at .01 mills while residents south of the current boundary pay 2.35 mills.

But Bagley said if the ordinance passed, effected residents would still be on the hook for debt South Peninsula Hospital has taken on.

“A chunk of the 2.35 is paying debt reimbursement, and they will still have to keep paying the debt reimbursement until that debt is paid off,” Bagley added. “It would probably take 10 or 15 years of paying debt until it would all go away. It would take a while.”

Bagley’s proposal would move the current boundary just south of Ninilchik. He said it’s a an issue of fairness, but south peninsula assembly members say the move would financially damage South Peninsula Hospital.  

“It would harm our local hospital and reduce the revenue to the local hospital. As it stands right now, I’m certainly opposed,” assembly member Willy Dunne said.

Bagley’s proposal differs from previous versions in that it includes all of Ninilchik rather than splitting the community in two.

South Peninsula Hospital estimated in 2016 that it would lose a minimum of $179,000 annually if the boundary moved to the midway point between the two hospitals. That number does not include oil and gas revenue from the state, and the borough has not released numbers based on the current proposal.

Homer’s representative on the assembly, Kelly Cooper, opposes moving the boundary in any way. Cooper adds that the South Peninsula Hospital also provides several services to area residents through the local clinic in Ninilchik.

“You know we have people from Ninilchik on our opioid task force. We have OB-GYNs going up and working in their clinic,” Cooper noted. “We do have quite a bit of people from Ninilchik that come to South [Peninsula Hospital] for their care, and there’s always that same old argument that, ‘Well, we think most of the people go north.’ Well, I haven’t seen any figures or information that shows that.”

The South Peninsula Hospital said in a 2016 resolution opposing the move that the hospital would legally not be able to provide services at the Ninilchik Clinic if it was removed from the service area.

The resolutions also says the number of Ninilchik residents driving to Homer for services has grown. It says about 150 Ninilchik residents were treated in 2005. That number grew to 240 residents in 2015 and continued growing into 2016 with 266 Ninilchik residents going to SPH by September of that year.

Cooper adds she is also concerned about the quality of care patients from outside of the service area receive.

“We have people from all over the borough that have property in Homer, that come down and go fishing, they have boats in our harbor, and they expect good quality hospital care if something happens,” Cooper said.

SPH declined to comment on the current proposal, saying it’s still examining the measure.

The ordinance is up for introduction at the assembly’s meeting on April 3 with a public hearing scheduled on May 1. If passed, residents in the Central Peninsula Hospital service area would vote on whether to expand the area’s boundaries.

Clarification: A previous version of this story said that assembly member Kelly Cooper stated the South Peninsula Hospital would stop providing services at the Ninilchik Clinic if it was removed from the hospital's service area. While it is correct that SPH legally would not be able to provide services there, Cooper clarified that she was not referring to services being discontinued if the ordinance passed. 

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