The Kenai Peninsula Borough Assembly introduced an inter-fund loan at their meeting on August 1st for the South Kenai Peninsula Hospital Service Area. If approved, the loan would provide the SKPHSA in the amount of $7 million from the Borough’s General fund. The ordinance (2023-19-11) was approved as a part of the consent agenda, and is intended to provide the South Peninsula Hospital in Homer the means to purchase more up-to-date Electronic Medical Record Software (EMR).
In a memorandum provided to the assembly, the necessity of the expenditure is explained as;
“South Peninsula Hospital’s (“SPH”) current Electronic Medical Record (“EMR”) Software is 20+ years old and has reached end-of-life. Replacement of the EMR software will increase patient access and transferability to medical records as well as provide hospital employees with additional tools for better serving patients”
The money will come from the Borough’s General fund. Another option for funding the purchase, the Plant Replacement and Expansion Fund, which would traditionally be the financial go to for such needs, was deemed too risky a course of financing “because it would put the hospital in a vulnerable financial position, and could inhibit the hospital’s ability to respond to unforeseen capital needs over the next year.”
Although the ordinance states that the loan is generally intended for the EMR purchase, it also stated that the Kenai Peninsula Borough is entering into an Operating Agreement with South Peninsula Hospital, Inc. for operation of the South Peninsula Hospital and other medical facilities, and to provide other healthcare programs and services, on a nonprofit basis in order to ensure the continued availability to the South Kenai Peninsula Hospital Service Area residents.
The proposed terms of the loan are $7 million for five years with a fixed interest rate of 4.81%, compounding daily, which will begin accruing on the date of the first reimbursement draw. Payments will be due quarterly beginning 90 days after the first draw.
The ordinance also states that “providing the inter-fund loan to SKPHSA will have no external overhead, and no long-term cost to the Borough General Fund as it is an internally handled process.”
The ordinance was passed onto the assembly once it had been approved as a resolution by the South Peninsula Hospital Board on June 28th.