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Boundary battle: south peninsula residents split over service area move

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Aaron Bolton, KBBI News
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The Kenai Peninsula Borough Assembly and southern peninsula residents are revisiting a contentious issue over a line. The line is a boundary just south of Clam Gulch that separates the Central Peninsula and Southern Peninsula hospitals’ service areas.

A proposal to move that line south of Ninilchik is splitting the community two: those who don’t want to pay taxes into a hospital they say they don’t use and those who want to maintain funding for healthcare on the southern peninsula. 

Assembly members Dale Bagley and Kelly Cooper held a public hearing in the Ninilchik School’s gym Thursday evening to gauge how southern peninsula residents feel about the proposal. 

The measure would move CPH’s service area boundary south of Ninilchik, nearly eliminating property taxes for Ninilchik and some Clam Gulch residents. Residents in the SPH service area pay 2.35 mills while those north of the boundary pay next to nothing at .01 mills.

“It’s not fair that I pay a higher tax rate to an organization that I don’t use,” Richard Hawkins said.

Hawkins and a few other Ninilchik residents told the roughly 50 community members in attendance that this proposal is an opportunity to fix what many refer to as an issue of fairness.

That’s been assembly member Bagley’s argument, who is sponsoring the ordinance.  But others argue that this is not an issue of who uses which hospital more.

“This is not a well considered proposal because it doesn’t provide any solutions for maintaining good quality healthcare in all parts of the borough,” Ron Keffer said, a Homer resident.

Proponents of the measure, like Brent Johnson, say that SPH needs to look to others for tax dollars.

“Homer hospital has not done anything in the last bunch of years to try to get the area on the other side of Kachemak Bay into the hospital service area,” Johnson argued. “It seems especially unfair that I should be paying taxes to a hospital that I don’t attend while folks who do attend that hospital don’t pay taxes.”

SPH spokesperson Derotha Ferraro told residents the move would be detrimental to the hospital. She said SPH would immediately lose about $220,000 per year in tax revenue.

Ninilchik residents would also still be on the hook for 1.17 mills, which would pay for debt SPH has taken on.

That amount would decrease over several years as bonds are paid off. Ferro said once that happens, SPH would lose about $440,000 annually.

She also pushed back against the idea that Ninilchik residents don’t utilize SPH’s services.

“Last year, 39 Ninilchik residents using a Ninilchik zip code were in-patient; 151 used the ER; 531 used out-patient services at the hospital and over 800 visits to the clinics,” Ferraro explained. “This is from the Ninilchik zip code.”

Ninilchik Traditional Council Deputy CEO Shelly Self also told audience members that the tribal government formally opposes the move, citing loss of services from SPH providers at its community clinic.

Several residents also asked the assembly to delay its vote on the ordinance.

The assembly will hold another public hearing at its regular meeting on May 1 before it votes on the measure.

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