CBJ to seek PERS exemption for Bartlett executives

The City and Borough of Juneau will seek to exempt senior executives and general surgeons at Bartlett Regional Hospital from participation in the Alaska Public Employees’ Retirement System.

The change was requested by Bartlett’s Board of Directors, after a recent shake up in management at the city-owned hospital. Last year, the board decided to hire its own Chief Executive and Chief Financial Officers – positions previously employed by an outside management company.

The hospital board, which is appointed by the CBJ Assembly, is currently recruiting a new CEO. Board Vice President Linda Thomas told the Assembly last night (Monday) that excluding the positions from PERS would attract more candidates.

“This gives us an ability to negotiate with candidates based upon what they’re bringing to the hospital, and what’s going on in their life as far as retirement,” Thomas said. “They can handle their own financial planning and retirement planning. And I think it opens up a larger universe of candidates for recruitment.”

Bartlett’s Interim CEO John Vowell said the average tenure of a chief executive at a single hospital these days is between three and five years. As a result, he explained, most top-level executives choose to manage their own retirement, which they negotiate as part of a contract with the facility where they work.

“That way they’re not continuously leaving their retirement dollars someplace else, and never reaching a point where they have accumulated enough years then to qualify to receive benefits at some point in the future,” Vowell said.

The trend in the health care industry also has been toward doctors negotiating their own retirement, which is why the board requested to exempt general surgeons as well. Most doctors at Bartlett have their own private practice, but see patients at the hospital on contract. However, there are two general surgeons on Bartlett’s payroll.

Assemblyman Jesse Kiehl said he understood the benefit of exempting doctors from the public employees’ retirement system, but not senior executives.

“I am not comfortable with the notion that we’ll treat every Bartlett employee except the two at the top in one way, and the two at the top will in essence negotiate their own deal under a different structure,” Kiehl said.

But Deputy Mayor David Stone – the assembly’s liaison to the hospital board – referenced former long-time hospital administrator, the late Robert Valliant, in arguing the change was needed to keep up with the times.

“Clearly, Mr. Valliant – who was administrator for a number of years – is a rare exception,” Stone said. “We’d be lucky if we get someone to serve five years or more. But I think we need to give the board flexibility to make them competitive, for us to attract the best CEO or CFO that we can get.”

The city’s participation in PERS is governed by a contract with the State of Alaska, which manages the retirement system. The Assembly passed a resolution last night (Monday) authorizing the city manager to seek an amendment to the contract, exempting the three positions at the hospital.

At Kiehl’s request, there were separate votes on whether to exempt the top-level executives and general surgeons. The vote on the surgeons was unanimous. Kiehl and Assemblywoman Ruth Danner were the only members opposed to an exemption for the executives.

The city will request the exemptions take effect April 1st.

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