(Photo by Shelby Herbert/KFSK)
The Alaska Senate finalized its capital budget last week, and a project to build a new hospital in Petersburg didn’t make it onto the list. Now, hospital administration is scrambling for new funding avenues as the community’s old facility continues to decay.
Petersburg Medical Center CEO Phil Hofstetter said the town is running out of time to lock in the funds to build a new hospital. But not in the way you’d think — he said there’s no strict deadline to finance the project. But he’s not confident that the existing hospital can hold up for much longer.
“There’s [the] electrical load,” Hofstetter listed off. “We’re out of capacity for the electrical load [for a] CT scan… And those cast pipes are actually embedded in concrete — it’s the way they built the building back in the day. You can’t look at it on the outside and see if it’s in bad shape, but it’s almost like paper. It just crumbles in your hand.”
(Photo courtesy of Petersburg Medical Center)
He said attempting to fix those problems in the existing facility would only create… More problems. They can’t keep up regular operations at the hospital if they start doing heavy restoration work. And according to a 2015 assessment of the old facility, the repairs would cost more than building a new hospital from the ground up.
“As soon as we break a wall or remove the concrete or do some infrastructure, then all of a sudden the code upgrades start happening,” said Hofstetter. “There’s a cascade effect — all of a sudden you end up with: this is going to be a million dollar repair maintenance improvement for this thing, and it’s going to be three million here, or four million there…”
The new hospital project began years ago. One of the two buildings is completely financed, and they’re finishing up the foundation where the facility will go.
The medical center has $28 million banked for the project, but they need at least $70 million more. They locked down the support of the federal government this year, and got $8 million towards that goal. But they don’t have that support from Alaska. This year, Hofstetter requested $37 million from the state’s capital budget but didn’t get a cent.
He doesn’t have the support of a very key figure in the budget-building process: Southeast Alaska’s Senator Bert Stedman. He co-chairs the Senate Finance Committee, which means he’s one of just a handful of people who essentially hold the state’s purse strings.
Stedman’s name is prolific in Petersburg. One of the local schools is named after his aunt — Rae C. Stedman Elementary. But the Senator said he shows no favoritism towards the town where he grew up — and he has very little warmth for the hospital project.
“I don’t know where all these grants are going to come from, but it won’t be the state of Alaska,” said Stedman. “I told that to the hospital administrator — that any significant financial support [that is] going to come from the state, he should factor: zero.“
Stedman said there are also a lot of other really important projects elsewhere that didn’t get state funding.
Wrangell needs a fire hall and a police station — a whole building replacement,” said Stedman. “They’ve been waiting for several years on that, but I couldn’t even help with that issue this year.”
However, he said that’s not the only reason why the hospital didn’t get funding this year. Stedman is critical of Hofstetter’s plan for financing the project.
“He should come up with a financial plan to move forward with a hospital that includes the entire construction,” said Stedman. “Not in pieces. Because my concern is that you get some grants [to get] started, but you don’t get the grants to finish it.”
However, Hofstetter said piecemeal funding is pretty much the only way the medical center can go: by pursuing grant funding in chunks.
“This is a long term project,” said Hofstetter. “We know there’s no bucket of money that we can get for the total amount. When we ask for funding, if I’m asking for 90 million, it’s just like: ‘No way! Good luck with that!’ So, then, if we can we can look at smaller amounts, we’re able to get some funding to stack as we go forward. If there is a pot of money with a total amount, that’s great! There just is none.”
Stedman said the finance committee’s focus was on education this year, dedicating a significant chunk of the budget to a one-time increase to the Base Student Allocation and deferred maintenance projects — like repairing the deteriorating roof of Petersburg Middle and High School. And energy projects are in the forecast for next year. Ultimately, Stedman said it’s unlikely the medical center can ever look to the state for help with the new hospital.
“All the letter writing you want to do doesn’t change [anything],” said Stedman. “It’s just financial reality, staring you in the face. Of you don’t deal with it, honestly and [straightforwardly,] you’re probably going to walk yourself into a project that’s going to have substantial financial challenges.”
But Hofstetter isn’t ready to throw in the towel quite yet.
“What are our alternatives?” asked Hofstetter. “The only alternatives we have is for our delegation to hear from the community.”
He said, in the meantime, medical center administrators will keep applying for more grants, and that he’ll continue hammering at state legislators and urging Petersburg residents to follow suit.
