The meeting was called to order at 6:09 p.m. by Karen Berg-Forrester.

Present:   Doris Cabana               Donna Anderson

     David Green                  Jackie Dentz

     Karen Berg-Forrester    Valerie Byrd

     Sandy Stark                    Barbara Howard (after oath of office was administered)

Excused:   Bettyann Steciw

Also Present: Charles Franz, CEO

           Brenda Parnell, CFO

            Larry Dallas, Support Services Director

            Milli Martin, KPB Assembly Representative

             Randi Somers, Homer Tribune

             Rene Alvarez, MD

             Gwen Watkins, KPB

             Jan Hanenberger,  Homer Secretarial Services

Ms. Berg-Forrester requested adding item H, a letter from the Borough regarding capital projects, and item I, a letter from Anchor Point regarding their clinic, under New Business. She also amended the agenda for approval of the minutes to approve the special meetings on November 1st, 2nd, and 16th. She added the minutes of the regular meeting of November 4th were not available. Mr. Green suggested that when addressing item A under Old Business, which is the SPHI Response, they go into Executive Session briefly to discuss the draft of the response.

Cris Beaudoin said to show their appreciation for the hard work by the SAB they would like to present Ms. Berg-Forrester with a new filing box, which was wrapped in festive Christmas paper, to organize and carry her information and documents in.

Barb Rice asked if the audience would hear anything regarding the SPHI response or if it would be entirely in Executive Session. Ms. Berg-Forrester said that she will be bringing the draft response letter to the SAB directors in Executive Session for approval or amendment. When they return to Regular Session their direction will be announced, and after the letter has been delivered it will then become of public record.

Sharon Merchant, AC Manager, said discussion of the construction project is scheduled for this evening. She said that as a member of the Strategic Planning Committee they have put a lot of work into this, and they have been reasonable and have not designed a facility that is beyond what is needed. Ms. Merchant felt she could not continue to work in the current facility and feel good about it. She said the traffic flow is poor, which makes customer service poor, and it is very difficult to comply with certain regulations. She mentioned CPH is planning a new facility and to remain competitive and keep a viable facility they need to update, upgrade, and move forward with the construction project.

Milli Martin, KPB Assembly Representative, reminded the members there is an ordinance before the Assembly to fund the malpractice insurance for the surgeons. She said she wanted to provide a heads up and she is in a quandary right now. She said she wants to support the SAB and yet she must support the public as well. The members of the public that she has heard from have consistently said they do not support this and do not feel the tax dollars should be supporting what should be provided by the physician. She wanted the SAB to be aware of her concern and of the feedback from the public, which has been absolutely consistent. Ms. Berg-Forrester said there will be two SAB members, who will be attending the next Assembly meeting, to provide support on how this is dealt with in other areas throughout the country, which may help the Assembly in making their decision.

It was mentioned that in the third paragraph on page two where it read, ".....surgical services manager decided to resign affective November 1, 2004" should read ".....surgical services manager decided to resign effective.....".

Mr. Green mentioned he was not present that evening and was not listed as excused. He also mentioned that in the third sentence of the forth paragraph on page one where it read, "In a broad since....." it should read "In a broad sense.....".

Ms. Berg-Forrester said the last paragraph on page two should be struck from the minutes since it was repeated as the first paragraph on page three in its correct form. Ms. Dentz mentioned in the last sentence of the first paragraph on page one where it read, "They will be submitted for approval and the next.....", it should read ".....for approval at the next....". She also mentioned that in the first sentence of the second paragraph where it read, ".....was called to complete review of Operating Board’s response.....", should read, "..... was called to complete review of the Operating Board’s response.....". Mr. Green said that in the second sentence of the eighth paragraph on page two where it read, "In discussion David Green suggested that we appoint with reminder that Betty Ann will be required to file for election to her seat at the next general election.....", it should read ".....David Green noted that our Bylaws allow for appointment until the next general election.....". He then mentioned that in the last sentence of the next paragraph where it read, ".....the vote was unanimous to table indefinitely", it should read ".....the vote was unanimous to table." Mr. Green said mid way on the last page, where it read, "This was the only action taken after discussions in Executive Session", it should read ".....only action taken as a result of Executive Session." He suggested that in the first sentence in the last paragraph where it read, ".....the letter from Fred Lau, earlier tabled, be brought back before the Board.....", should read ".....the letter from Fred Lau, tabled earlier, be brought back before the Board."

Mr. Franz announced that Bill Coghill was unable to attend this evening’s meeting to provide a presentation on the hospital’s audit as planned.

Ms. Stark, Governance Committee Chair, provided the members with copies of an article on public administration, which touches on various types of activities and tools that enable a Board to become a well functioning Board.

Mr. Green said that generally speaking the hospital has somewhere between $2 million and $2.2 million worth of revenue each month, with expenses coming in at approximately the same. They may fluctuate but by the end of the year it is hoped that there is a small and modest return from operations. He said A/R days decreased by two days in October, and Administration did an analysis to see how many of the patient intake encounters contained errors, which results in delays in billing. Mr. Green then provided a chart, showing percentage of registration errors, and a review on steps taken. He added that he, along with Ms. Anderson, plan to attend the Borough Finance and Assembly meetings to address the malpractice insurance coverage funding for the surgeons.

Mr. Green then reviewed the financial figures. He also mentioned that the Borough has declined to let the contract for the hospital expansion in two phases. They felt that this would allow for better control of costs as each contractor cannot blame the other for any deficiencies.

Governance Committee

Ms. Stark reported the committee visited with three very outstanding candidates that have applied for the vacant SAB seat during their last meeting. She said they also discussed having an ongoing education process where they would be able to visit specific areas of the hospital on a rotating basis.

Ms. Stark then, on behalf of the Governance Committee, recommended Barbara Howard as their appointee to Seat I until the next general municipal election.

Ms. Berg-Forrester said Gwen Watkins, from the KPB, would administer the oath of office to Ms. Howard under New Business.

Secretary

Ms. Dentz reminded the members to turn in their expenses to her so she can forward them to the KPB for reimbursement.

Chairperson

Ms. Berg-Forrester provided Ms. Dentz with a new expense reimbursement form she received from the Borough. She thanked the members for all their extra time spent on the special meetings, and added she appreciated those in the audience who have also attended and participated.

Administrator

In addition to his written report Mr. Franz said that he received the surgical schedule for the month of December today, and there are some gaps in coverage that he was not aware of until this afternoon. The days are Saturday, December 11th, as well as Saturday, December 18th. He said he did know of a gap from December 19th through the 20th in advance and Dr. Mason will be here to cover. He will not be able to arrive until the evening of the 19th and must leave on the evening of the 31st. Mr. Franz said he has not received the surgical schedule for January but thought one of the regular surgeons will be back on January 2nd, which would leave January 1st and 2nd with no coverage.

Mr. Franz mentioned he needed to obtain signatures from Ms. Berg-Forrester and Ms. Dentz on the revised Bylaws.

Operating Board

Ms. Berg-Forrester said Mr. Eckert, current President of the BOD, called her at 4:00 p.m. today to inform her he would not be back in town in time to attend the meeting this evening. Ms. Anderson, who attended the last BOD meeting, provided a report. One item was that several of the BOD members would like to meet with Colette Thompson and hear a similar presentation of what was provided to the SAB on roles and responsibilities. Mr. Franz said he contacted Ms. Thompson who was somewhat reluctant to do this since she is the SAB attorney. He said he has contacted Tom Owens, who has worked with SPH in the past, to go through the Sublease and Operating Agreement and provide his perspective on the roles and responsibilities of the SAB and BOD. Mr. Franz said Ms. Thompson had suggested Mr. Owens contact her for a consultation before his presentation to the BOD on December 15th.

SPH Foundation

Ms. Dentz reported that at their last meeting they held election of officers, decided to move forward in obtaining a gaming permit, and are planning on raffling a boat. Ms. Berg-Forrester mentioned the SAB had appropriated $50,000, under the capital improvement budget for the 2004/2005 budget, would allocate $9,000 of that towards LTC bathroom improvements, and the Foundation was taking on the responsibility for the balance.

Current Financial

Ms. Parnell provided a review of the financials, which included a year-to-date figure of $992,000 in gain from operations. The overall net revenue was slightly lower then projected, with inpatient revenue down, however, outpatient activity increased by 4.8%. She said part of the decrease in the inpatient revenue was due to a low census of 37% and low Acute Care days. LTC is doing quite well with occupancy at 99%. October’s deductions from revenue totaled $201,000, which is better than in fiscal year 2004. Total operating expenses were up $73,575, or 3.6%.

Ms. Parnell said that as they have gone through the capital project process for 2006 they have asked the managers to look at what is left for 2005. To date capital expenditures they have requested from the Borough for reimbursement total $137,440. Ms. Parnell said that after an item has been purchased they will request reimbursement on a quarterly basis. They have asked the department managers to prioritize requests and would like to hold a workshop, with the BOD and the SAB, to show them why they have chosen certain items. Ms. Berg-Forrester mentioned that any meeting the SAB attends must be open to the public.

Ms. Parnell then continued with the review, and Ms. Parnell and Mr. Franz answered various questions from the directors.

Dr. Alvarez asked what amount of professional fees were being paid to locum tenens coverage, as well as Dr. Mason. He said Dr. Mason is being given secretarial and office help and asked how that is figured into his payment. Dr. Alvarez said he would like to know if the hospital is supplementing another provider in competition with the other two surgeons. He said he has been told they do not have enough business to justify using the two OR rooms, yet the nurses and techs are receiving an incredible amount of unwanted overtime. He asked how call coverage, and payment for the coverage, was going to be addressed. Dr. Alvarez said he felt he had an agreement with Administration to be paid for coverage in September, which he was not paid for after submitting a bill.

Ms. Dentz mentioned they had been informed there would be no coverage for December 11th and 18th, and also on January 1st and 2nd, and in her recollection both Dr. Sayer and Dr. Alvarez had assured the Boards they would make sure there would be coverage. Dr. Alvarez said he felt he has kept his part of the bargain but until the call coverage pay is worked out with Administration he was going to make it comfortable for himself. Ms. Dentz asked that both Dr. Alvarez and Dr. Sayer look into their hearts and protect this community during this time. Dr. Alvarez said okay, done, it’s covered. He added that Dr. Sayer has been paid for providing extra call coverage and said what is good for one should be good for both. Mr. Green mentioned that when the SAB approved the transfer of funds for the malpractice insurance, they had given a directive to the BOD to research the question of call coverage, with a year’s end deadline to respond. Dr. Alvarez said he would cover call, and not to worry about it.

Mr. Franz said he had asked Dr. Alvarez to cover call and offered him the same contract that he had worked out with Dr. Sayer. He said Dr. Alvarez told him no, he did not want to do that. Mr. Franz also said he did not feel it was appropriate to discuss this during a public meeting.

Ms. Parnell then completed her review and said they have scheduled a fixed asset inventory for March and would bring that information to the SAB, possibly by May.

Ms. Berg-Forrester said they would now swear in Ms. Howard. Ms. Watkins then administered the oath of office to Ms. Howard. Ms. Watkins mentioned Ms. Steciw will be sworn in on Saturday.

A break was taken at 8:07 p.m.

The meeting reconvened at 8:17 p.m.

Ms. Berg-Forrester said Item I, Planning/Construction, would be covered with Item D, SPH Expansion Project, under New Business.

Mr. Green suggested that he step down as Finance Committee Chairman and asked that Ms. Anderson accept that position. He offered to continue on the committee and take notes. Ms. Anderson accepted.

Acceptance of the Denali Commission Grant

Mr. Franz referred to a draft memorandum and ordinance, prepared by Bonnie Golden, KPB Grants Manager. At this time they need a motion from the SAB asking the KPB Assembly to accept the grant funds on behalf of SPH and appropriate them to the construction project. He added that the BOD recommended that the SAB take this action at their last meeting. He also mentioned that if they do not do the construction project the funds would have to be returned.

Mr. Franz provided a presentation on the modified plans for the construction project that were necessary to get the project back within the budget. Most of the modifications were cosmetic changes, or changes that did not affect the overall concept and goal of creating a patient friendly environment, and are also efficient for the staff to work in. He mentioned that the right-of-way for Bartlett Street comes almost to the entrance of the hospital and the new building will extend over it. Because of this they will have to contact the State to vacate the right-of-way. Mr. Franz said they hope to get the construction design drawings out to bid in mid March with construction starting in late summer or early fall. He then reviewed the project financials. Mr. Franz said it has been approved by the BOD to move forward with the project as quickly as possible and take action to vacate the Bartlett Street right-of-way. The BOD is now asking the SAB to take a similar action to move forward with the project. He added the architects should have 65% design review available before the end of the year and 95% by mid February.

Ms. Stark was concerned about waiting to coordinate with the State on the necessary process in vacating the Bartlett right-of-way. She felt it would be useful to discuss this with them right away to at least find out what their timetable is. Ms. Berg-Forrester agreed and suggested going ahead with this step. Ms. Cabana agreed. Mr. Green said he would like to amend Ms. Dentz’s motion, which was seconded by Ms. Stark, to include the following:

Ms. Parnell said the managers will be completing their review process by the end of next week and January 10, 2005, was suggested for a work session to review the capital budget recommendations. Mr. Franz said they would like to have the BOD, SAB, department managers, and physicians at the work session and have an open discussion regarding the items chosen.

Mr. Franz said they would like to plan another Retreat to cover educational topics, and board development and planning, sometime in January. Ms. Berg-Forrester said she had no objection in participating in a Retreat, but would not attend a Retreat that has any discussion incorporated with regard to the responsibilities of the Sublease and Operating Agreement, to which some of the members agreed. Mr. Franz said the topic for the Retreat would be decided by the two Boards.

After some discussion a vote was taken.

The Chair called for a show of hands indicating the vote yes or no or abstaining.

Mr. Franz said the BOD is requesting approximately $30,000, per list attached, reallocated from one of the budgeted capital equipment items for this year. He said the Hematology Analyzer was put into the budget but is continuing to work okay and will be put into next year’s budget. They would then like to reallocate funds to purchase some of the surgical equipment that has been requested by Dr. Sitenga, Dr. Alvarez, and Dr. McCallum. Mr. Franz also informed the members a Colonoscope failed yesterday and they would like to recommend purchasing two for a total cost of approximately $36,500. The total original allocated amount for the lab equipment was $115,000.

Ms. Berg-Forrester mentioned there have been comments from surgeons, nurses, and patients regarding problems with equipment sterilization and asked what the cost is for new sterilization equipment. Mr. Franz said they do not need additional sterilization equipment but do need another set of instruments, which are in the requested surgical equipment included in the $30,000. Ms. Parnell said they may need to purchase a Sterad, whic h is a special cleaner for the Colonoscopes, which costs between $20,000 and $40,000. Ms. Berg-Forrester felt they should purchase it since there are funds left that can be reallocated.

Ms. Berg-Forrester said she received an e-mail from the KPB regarding a capital project program they offer, and in order to have requests considered they must respond to it by December 6th. Mr. Franz said each year they submit a "wish list" to the Borough. He said they have usually requested large ticket items, such as a reserve water system, and have never received funding. Last year they requested the Distance Delivered Education Satellite System, which they received. Ms. Berg-Forrester said nothing had been brought before the SAB to decide what they would like to submit for 2005. Mr. Franz said this is the first he has heard of it this year. Ms. Berg-Forrester then read the e-mail from the Borough Clerk. Mr. Franz suggested picking a couple of items in the $10,000 to $20,000 range.

Ms. Berg-Forrester reviewed the circumstances regarding the desire by the residents of Anchor Point to open some type of facility to provide medical services. In October she received a call from Ken Markve who, after speaking with Milli Martin, felt she may be able to help since she is on the SAB. Ms. Berg-Forrester asked that he send her a request in writing. She then read a letter she received from Mr. Markve asking for support from the SAB. Ms. Berg-Forrester said she would like to refer this to the SAB Finance Committee. They could then contact the Borough, find out what steps should be taken to look for funding, and report back with a proposal. Mr. Franz suggested the Economic Development Agency may be able to assist them also. Mr. Green mentioned two Finance Committee members will be in Soldotna next Tuesday and can check on this.

Ms. Berg-Forrester then read a letter from South Peninsula Professional Services, LLC and asked for it to be incorporated into the minutes. She did not feel there was any specific call for action at this time.

Maria Soto said she wanted to acknowledge Colleen James, who was present this evening, and a very nice article that was in the Homer News today on the SART/SANE Program. She said she is very proud of Ms. James and her excellent program. Ms. Soto said she also appreciates all the hard work done by the SAB. She said the surgery staff has put in a phenomenal amount of hours during the last few weeks and they are totally committed to the hospital.

Ms. Berg-Forrester said she has witnessed the Surgery Department’s commitment, and felt the SART/SANE Program was one of the most important programs on the Kenai Peninsula and in this community.

Barb Rice said she thought that the action taken during Executive Session was going to be discussed. Ms. Berg-Forrester said they provide the motion but they cannot release the letter because it has not been finalized and delivered to the BOD.

Ms. Byrd suggested shortening the Retreat to 1 ½ days.

Ms. Dentz welcomed Ms. Howard to the SAB.

Mr. Green welcomed Ms. Howard to the Board and mentioned they have had the pleasure of having a presentation by Ms. James on SART/SANE Program. He thanked the members of the audience for coming and staying through the whole time.

Ms. Howard thanked the Governance Committee and said she felt they were professional, kind, and thorough, and is looking forward to working with the members.

Ms. Anderson thanked the members of the audience for coming, welcomed Ms. Howard to the SAB, and thanked Ms. James.

Ms. Cabana thanked the guests for coming, welcomed Ms. Howard to the Board, and said she felt they still had a lot of work to do.

Ms. Stark said she was delighted to have Ms. Howard on the Board and thanked the audience.

Ms. Berg-Forrester thanked everyone for all their patience, all their work and efforts, and commented that she felt Ms. Stark is doing a great job on the Governance Committee.

SAB Regular Meeting,   12/02/04 6:00 p.m.,   SPH Conference Rooms

QI Meeting,   12/08/04 8:00 a.m.,     SPH Conference Rooms

Christmas Banquet 12/18/04 6:30 p.m.,    Land’s End Resort

BOD Finance Committee Meeting,  12/14/04 12:00 p.m.

SPH Foundation Meeting 12/14/04 3:00 p.m.,   SPH Conference Room 2

SAB Governance Committee Meeting,   12/14/04 4:00 p.m.,    SPH Conference Room 2

BOD Regular Meeting,  12/15/04 6:00 p.m.,    SPH Conference Rooms

Christmas Day,  12/25/04