Medical Center Board discuss petitions

At its April 18 meeting, some members of the Wrangell Medical Center (WMC) Board of Directors discussed the petitions filed with the city, which seek to recall eight of the nine board members.

The signatures on the petitions were found to be sufficient by the Borough Clerk earlier this month. And, on Tuesday, the Assembly considered an ordinance to create recall ballots for a special election in June.

WMC Board Vice President Jim Nelson, who is included in the petitions, told those gathered in the packed hospital boardroom last week he has enjoyed serving on the board. Nelson said he believes he has been a fair board member and has done what is best to protect the citizens of Wrangell and WMC.

“That’s what I have signed up for, that’s what the community voted for me to do,” he said. “So if the people think I am wrong, that I did wrong, then we’ll go with that. But I am really saddened that this community has done what it has done.”

WMC Board member Linda Bjorge said she, too, has enjoyed serving on the board. However, her concern is not that she will be recalled, but more that the people of Wrangell don’t “turn on each other.”

“We need to quit trying to be mean to each other,” Bjorge said.

Also at the WMC Board meeting last week, hospital Chief Executive Officer Noel Selle-Rea said he was concerned over the possible impacts the recall petitions may have on building a new hospital.

Selle-Rea said First Bank was previously believed to be “first in line” to possibly provide construction financing for the new hospital. However, First Bank has said it no longer plans to submit a proposal for construction funding for the project.

The bank, which has a local branch in Wrangell, cites the recall petitions as reason to not participate in the project.

“We believe that stable management and governance is critical to the success of this project,” First Bank Loan Administration Vice President John Clifton wrote in an email earlier this month.

Selle-Rea said the news is “problematic” for the project. He is concerned about who now will come forward to provide construction funding for the new hospital and what other impacts the recall petitions will have on WMC.

If the WMC Board is recalled, Selle-Rea said there is also concern how WMC would be affected with Medicare payments.

He said WMC is working with its attorneys to assess the impacts of having the hospital board recalled.

“…There has to be some plan that has to be accepted ahead of time so Medicare won’t de-license us or be withholding any funds,” Selle-Rea said.

He also told the Board WMC would be sending a letter to the U.S. Department of Agriculture (USDA) to determine how the federal agency’s loan for the project would be affected should a recall occur.

The USDA has agreed to grant the City and Borough of Wrangell a $24 million loan to build a new hospital, which would be paid back by the future hospital’s revenues.

Selle-Rea said he wants to know if the loan, now structured as a revenue bond, could change into a general-obligation bond requiring the city to pay it back using tax dollars, for instance.

If the structure of the USDA loan would occur, Borough Manager Timothy Rooney said a public vote would need to occur.

However, Rooney said he doesn’t share Selle-Rea’s level of concern regarding financing for the hospital project.

While it is unfortunate a local bank has backed out of submitting a proposal to provide construction funding, Rooney said there are plenty of other financial institutions to possibly provide financing.

According to Rooney’s Borough Manager report, dated April 20, Wells Fargo Bank, First National Bank of Alaska and Commerce Bank of Washington have all expressed concerns about the WMC Board recall petitions.

And according to Alan Richman of Innovative Capital, which is providing financial services for the hospital construction project, possible financiers are clearly uneasy about the prospect of having the WMC Board recalled.

“It is very likely construction lenders’ responses and USDA will be negatively impacted by recall efforts. It is just a question of how badly and when do we get this news?” Richman communicated to the city, according to Rooney’s Manager’s Report.

Rooney said USDA has previously said it could provide interim financing for the hospital project if a financial institution does not.