Amid financial problems, Sitka dissolves board of city-owned hospital

Sitka Community Hospital. (Photo from KCAW)
Sitka Community Hospital. (Photo from KCAW)

The Sitka Assembly voted Tuesday to dissolve the board of the city-owned Sitka Community Hospital.

The vote came in the aftermath of the hospital’s financial crisis this winter, when the city had to extend an emergency $1 million loan to keep Sitka Community afloat.

Deputy Mayor Matt Hunter said that looking back over the past decade and a half the city has faced similar issues nearly every other year.

“The city has been startled by crises … seven times here,” Hunter said. “In September 2001, the city gave a million-dollar short-term loan — in September 2002, an additional $300,000. In April 2004, another $250,000 line of credit … in 2006 and 2007, interest and loans were written off…In 2009, a $500,000 line of   credit. And then in December 2014, (which) was increased to $1.5 million with an additional million.”

Meanwhile, this spring, the assembly voted to double the tobacco tax to provide the hospital with an additional cash infusion.

Hunter argued that Sitka Community needs closer city oversight and a board that’s better qualified to handle its complex finances. A new proposal would reduce the board from seven voting members to five, and require that at least one member have professional financial experience. It would also include a member of city staff appointed by the city administrator, Mark Gorman, to give the city more say in hospital decisions.

But Ann Wilkinson, who took over as board president this spring, said the current board has been blindsided.

“We had heard that the Assembly was concerned about the board’s ability to handle the finances of the hospital, and we were told we would probably all be asked to quit,” Wilkinson said. “But that didn’t happen – for months that didn’t happen. And then suddenly Mr. Gorman tells me, ‘Well, we’re going to restructure the board and you’re all going to be out.’ They hadn’t told us this, or asked us any questions. They just decided – and I don’t know who decided that.”

The proposal passed 6-1 on first reading, with Steven Eisenbeisz  voting no. It will have to pass at least once more to go into effect.

KCAW - Sitka

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