Petersburg’s borough assembly Monday agreed to release an edited version of a recent memo about the Petersburg Medical Center. That’s after local media asked for the document, which discusses the Assembly’s relationship with Petersburg Medical Center and its board.

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Attorney Jim Brennan wrote the 10-page memo at the request of borough manager Steve Giesbrecht following questions from assembly members this year. KFSK news and the Petersburg Pilot requested the document after assembly member John Hoag mentioned it at a meeting last month. Brennan maintains that the memo is privileged communication with the assembly and not subject to public disclosure.

On Monday, the Assembly had a closed-door executive session to discuss whether to release the document. Afterwards, back in open session, Hoag explained why he thought the memo should be made public. “I recognize he did not write this opinion to be released to the public,” Hoag said. “I think though that given the important issues that are discussed in there that have borough-wide import regarding the medical center and any issue that the borough is holding back something it wants to hide, I move that the memorandum as written be released to the public as a public record.”

The assembly has had several work sessions with the medical center board this year about hospital finances. Borough officials earlier this year told the medical center to repay a one point $1.2 million line of credit the hospital took out without voter approval. Meanwhile, Officials at the medical center say they may need borough funding for capital projects in the future. For years the facility has operated at arm’s length from the local municipality without requesting funding.

The legal relationship between the municipality and the medical center is one of the subjects addressed in the attorney’s memo. Assembly member John Havrilek was against releasing it in full. “Because it was just one or two people at the most saying well what if? And that doesn’t seem to have public importance, or the public should wanna know about, some of it was one person just asking a question. It wasn’t an assembly issue,” Havrilek said.

Mayor Mark Jensen disagreed. He thought the relationship between the municipality and the public owned hospital is a public issue. “It all relates to the tax payers because the building, the hospital structure is all owned by the rate payers and if there was ever a financial situation where bankruptcy occurred at the hospital, the borough’s going to be responsible for it and I think all the information at some point is going to be public knowledge and I think we should release it and start the dialogue.”

The motion to release the unedited document failed by a vote of 3-2 with Jensen, Hoag and Cindy Lagoudakis in favor. Nancy Strand and John Havrilek voted against it and Kurt Wohlhueter was not at the meeting. The five assembly members present voted unanimously to release an edited version of the document.

The borough emailed that document out Wednesday morning. It has three sections of the attorney’s opinion removed.

As for what remains, Brennan writes that the medical center is not prohibited by Alaska law or local ordinances from investing in the stock market. That was a contention made by assembly member Hoag during a work session with the hospital board earlier this year. A proposed ordinance would put some constraints on hospital investment.

As for the relationship between the Petersburg borough and its hospital, Brennan offers comparisons to Wrangell and Sitka which also have publically-owned hospitals. Both Sitka and Wrangell, Brennan writes, have enacted municipal code “providing for substantially more involvement and control over their hospitals.” Brennan cites a recent lawsuit between the Wrangell borough and its hospital over a severance package for the hospital administrator. He writes, “The Wrangell code revision arose from extreme confrontation costly to the city and borough of Wrangell.”

Brennan also looks at public records requirements of the other hospitals and notes that a proposed ordinance in Petersburg would require the medical center to release public documents. In addition, the proposed ordinance would require the hospital to go out for competitive bidding for contracts which is a requirement in both Sitka and Wrangell. Brennan also looks at budget and audit requirements and review of rates for services.

Brennan writes that “In nearly all of the subject areas I have outlined, the Sitka and Wrangell boroughs have greater involvement with hospital management and exert stronger control.” He adds that its entirely up to the assembly to decide whether to move in this direction.

This summer, Borough officials denied KFSK’s request for another attorney memo regarding the hospital.
A work session between the hospital board and assembly had been scheduled for this week but has since been postponed because several members of the two elected groups were not available. That session could happen in January.