A rhododendron blooms near the emergency room entrance at Petersburg Medical Center in May 2020. (Joe Viechnicki/KFSK)

It’s a long way from a done deal but Petersburg could see federal funding to prepare for construction of a new hospital building.

U.S. Senator Lisa Murkowski Wednesday announced millions of dollars proposed for Alaska projects in spending bills negotiated by the Senate appropriations committee. Petersburg makes that list with a potential eight million dollars to use toward construction of a new hospital.

Petersburg Medical Center CEO Phil Hofstetter is encouraged by the news.

“That’s a positive sign of support from Murkowski’s office and we’re really grateful that there’s some spending allocated towards the next phase,” Hofstetter said Wednesday.

PMC is pursuing a phased approach for construction of a new facility to replace its aging building in downtown Petersburg. This eight million dollars would fund a portion of the next phase for environmental studies, site selection and preparation, utility connection, engineering and design to get the project ready to build. Hofstetter said that’s expected to cost around 14 million dollars.

“It did feel like that was a little high, I feel like that eight million would get us very far along into that next phase,” Hofstetter said. “As much as it would’ve been great to have the 14, the full 14, I feel like that we can move sort of next steps forward.”

The overall cost for a new hospital is estimated at 80 million dollars or more and the medical center is hoping to secure grant money for some or all of that. There’s been widespread community concern about the high cost of the project and discussions about the future of health care in Petersburg.

Hofstetter said news of the potential funding could move that conversation forward.

“It still has a number of levels to go through and while we’re reviewing that opportunity I think that at the ground level here in Petersburg we’re going to have to have some conversations where we’re reviewing and working with the borough on some of the site selection process and community conversations to adopt that idea. I think there’s a lot of work to be done here in the next year I believe,” he said.

Other items identified in the appropriations bills include two million dollars for Wrangell’s water system and two million for the regional civic and business organization Southeast Conference to start a pilot program for electric ferries. Another two and a half million dollars would pay for a social services center in Juneau and two million would go toward a support facility in Sitka for victims of trafficking and substance use. Skagway could see over 10 million dollars for its waste water treatment plant and Klawock over a million dollars for improvements at the landfill used by Prince of Wales Island communities.

The spending bills are not finalized. The proposed projects could be changed or removed as those appropriations bills make their way through Congress. In announcing the Alaska funding, Murkowski also criticized the proposed spending levels and what she called a lack of bipartisan collaboration. Alaska’s senior senator signaled that could doom the proposed legislation.