The Wrangell Medical Center Board of Directors held a special executive session meeting on Wednesday, Nov. 9 to discuss issues related to a possible course of action on a contract between WMC and InnoVative Capital.
The contract, signed by WMC CEO Noel Selle-Rea on Aug. 8, 2009, hired the investment and banking firm based in Pennsylvania to find possible funding mechanisms and project team members for the nearly $30 million hospital replacement project.
After meeting in executive session, the board voted to approve three motions concerning the contract. The first paid InnoVative, for work already completed, out of WMC funds.
�The assembly has an opinion of what monies are controlled by each group,� said WMC Board president Mark Robinson. �We chose to pay InnoVative what is owed under the 2009 contract for work already completed and pay with monies from unrestricted grant funds.�
Those unrestricted grant funds could include $500,000 in funding from the Rasmuson Foundation in Anchorage.
Robinson added that Rasmuson would have to approve any use of their funds before they could be applied toward the contract amount.
�If we can�t use the Rasmuson money, the difference may come out of WMC reserves,� Robinson added.
A second motion authorizing Selle-Rea and Robinson to sign a Letter of Compliance and Non-Interference between WMC, InnoVative and the borough was also approved by the board. According to Robinson, the letter would stipulate as to the rights and responsibilities of each group in the on-going process.
According to Selle-Rea the letter contains four requirements: the signatures of Selle-Rea, Robinson, InnoVative CEO Alan Richman, Borough Manager Tim Rooney and Mayor Jeremy Maxand, the dropping of the lawsuit filed by the borough seeking declaratory relief from the InnoVative/WMC arbitration action, that the parties agree to an edit in the original draft of the document, and that Rasmuson agree to the use of their funding for the payment of the contract.
The third motion passed by the board modifies the 2009 contract with InnoVative by spelling out how much money is owed to InnoVative after the passing of Proposition 1 this week.
�InnoVative is still owed further for the completion of the financial package and that compensation will be percentage-based,� Robinson said.
According to Robinson, the balance of payments due to InnoVative after the contract modification will be placed in an escrow account. InnoVative will be able to draw upon that money when benchmarks in the financing process are completed.
�They will get paid as the work gets done,� Robinson added. �When the long-term UDSA financing closes, InnoVative�s responsibilities to the project will be complete.�
According to Richman, his firm is busy getting back to work with WMC and borough.
�Over the past month we have agreed on an amendment to the contract that recognizes our accomplishments thus far,� Richman said. �Further it modifies certain terms to better comport with the current engagement going forward.�
Examples of the work InnoVative was involved in while facilitating the new hospital Richman added, were putting together a project budget, developing sources and uses for funding, obtaining the Certificate of Need from the State of Alaska, putting together the project team players, enabling feasibility and analytical studies, and authoring Requests For Proposals regarding the new hospital.
�My firm has been very good at financing small hospitals for the communities I�ve worked with in the past and I am glad to be working with Wrangell again,� Richman said.
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