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2005-09-15 Regular MeetingKodiak Island Borough September 15, 2005 - 7:30 p.m. Mr. Jerome Selby Borough Mayor Term Exp /res 2007 Mr. Tom Abell Assemblymember Term Expires 2005 Mr. Tuck Bonney Deputy Presiding Officer Assemblymember Term Exp /res 2005 Ms. Pat Branson Assemblymember Term Expires 2007 Mr. Reed Oswalt Assemblymember Term Expires 2005 Mr. Cecil Ranney Assemblymember Term Expires 2006 Ms. Nancy Wells Assemblymember Term Expires 2005 Ms. Barbara Williams Assemblymember Term Expires 2007 Mr. Rick Gifford Borough Manager 4s. Judi. Nielsen, CMC Borough Clerk Kodiak Island Borough September 15, 2005 Assembly Agenda Meeting broadcast live over radio station KMXT 100.1 FM and Cablevision station 8. 1. INVOCATION 2. PLEDGE OF ALLEGIANCE Regular Meeting Assembly Chambers 3. ROLL CALL 4. APPROVAL OF AGENDA 5. APPROVAL OF MINUTES - None 6. AWARDS AND PRESENTATIONS A. Proclamations 7. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) A. Agenda Items Not Scheduled for Public Hearing and General Comments. 8. COMMITTEE REPORTS 9. PUBLIC HEARING - None 10. BOROUGH MANAGER'S REPORT 11. MESSAGES FROM THE BOROUGH MAYOR 12. UNFINISHED BUSINESS - None 13. NEW BUSINESS A. CONTRACTS 1. Contract No. 97 -07B Amending Contract No. 97 -07 Agreement Between the KIB & Sisters of Providence in Washington d /b /a Providence Health System in Alaska for Lease of the Kodiak Island Hospital & Care Center. Assembly Agenda Page 1 B. RESOLUTIONS 1. Resolution No. FY2006 -10 Accepting a Designated Legislative Grant Through the Alaska Department of Commerce, Community and Economic Development, for Design and Site Work Associated With the Construction of a new Alaska Department of Fish and Game Research and Administrative Building on Near Island. 2. Resolution No. FY2006 -11 Supporting the City of Port Lions' Fiscal Year 2006 Mini -Grant Proposal Titled "Plan for Beach Drive Community /Recreational Vehicle (RV) Park." 3. Resolution No. FY2006 -12 Supporting Construction of an All- Alaskan Gasline. C. ORDINANCES FOR INTRODUCTION - None D. OTHER ITEMS 1. October 4, 2005 Regular Municipal Election Workers. 14. INFORMATION MATERIALS (No Action Required) A. MINUTES OF OTHER MEETINGS 1. Planning and Zoning Commission Regular Meeting of July 20, 2005. 2. Womens Bay Service Area Board Meetings of April 18, May 23, and June 6, 2005. B. REPORTS 1. Kodiak Island Borough August 2005 Financial Report. 2. Kodiak Island Borough School District Board of Education Special Meeting of August 22 and Regular Meeting of August 29, 2005 Summaries. 15. CITIZEN COMMENTS 16. ASSEMBLYMEMBER COMMENTS 17. EXECUTIVE SESSION A. Matters Involving Negotiations With the IBEW. 18. ADJOURNMENT Copies of agenda items are available at the Borough Clerk's Office, 710 Mill Bay Road, or just prior to the meeting outside the Assembly Chambers. Kodiak Island Borough Assembly Agenda September 15, 2005 Page 2 Kodiak Island Borough September 15, 2005 - 7:30 p.m. Mr. Jerome Selby Borough Mayor Tenn Expires 2007 Mr. Tom Abell Assemblymember Term Expires 2005 Mr. Tuck Bonney Deputy Presiding Officer Assemblymember Term Expires 2005 Ms. Pat Branson Assemblymember Term Expires 2007 Mr. Reed Oswalt Assemblymember Term Expires 2005 Mr. Cecil Ranney Assemblymember Term Expires 2006 Ms. Nancy Wells Assemblymember Term Expires 2005 Ms. Barbara Williams Assemblymember Term Expires 2007 Mr. Rick Gifford Borough Manager 1 .1s. Judi. Nielsen, CMC Borough Clerk Kodiak Island Borough September 15, 2005 Assembly Agenda Regular Meeting Assembly Chambers Meeting broadcast live over radio station KMXT 100.1 FM and Cablevision station 8. 1. INVOCATION DRAFT 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVAL OF AGENDA 5. APPROVAL OF MINUTES - None 6. AWARDS AND PRESENTATIONS A. Proclamations 7. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) A. Agenda Items Not Scheduled for Public Hearing and General Comments. 8. COMMITTEE REPORTS 9. PUBLIC HEARING - None 10. BOROUGH MANAGER'S REPORT 11. MESSAGES FROM THE BOROUGH MAYOR 12. UNFINISHED BUSINESS - None 13. NEW BUSINESS A. CONTRACTS 1. Contract No. 97 -07B Amending Contract No. 97 -07 Agreement Between the KIB & Sisters of Providence in Washington d /b /a Providence Health System in Alaska for Lease of the Kodiak Island Hospital & Care Center. Assembly Agenda Page 1 B. RESOLUTIONS 1. Resolution No. FY2006 -10 Accepting a Designated Legislative Grant Through the Alas' Department of Commerce, Community and Economic Development, for Design and Site Wt. Associated With the Construction of a new Alaska Department of Fish and Game Research and Administrative Building on Near Island. 2. Resolution No. FY2006 -11 Supporting the City of Port Lions' Fiscal Year 2006 Mini -Grant Proposal Titled "Plan for Beach Drive Community /Recreational Vehicle (RV) Park." 3. Resolution No. FY2006 -12 Supporting Construction of an All- Alaskan Gasline. C. ORDINANCES FOR INTRODUCTION - None D. OTHER ITEMS 1. October 4, 2005 Regular Municipal Election Workers. 14. INFORMATION MATERIALS (No Action Required) A. MINUTES OF OTHER MEETINGS 1. Planning and Zoning Commission Regular Meeting of July 20, 2005. 2. Womens Bay Service Area Board Meetings of April 18, May 23, and June 6, 2005. B. REPORTS 1. Kodiak Island Borough August 2005 Financial Report. 2. Kodiak Island Borough School District Board of Education Special Meeting of August 22 and Regular Meeting of August 29, 2005 Summaries. 15. CITIZEN COMMENTS 16. ASSEMBLYMEMBER COMMENTS 17. ADJOURNMENT Copies of agenda items are available at the Borough Clerk's Office, 710 Mill Bay Road, or just prior to the meeting outside the Assemb' Chambers. Kodiak Island Borough Assembly Agenda September 15, 2005 Page 2 KODIAK WOMEN'S RESOURCE AND CRISIS CENTER P.O. 13ox 2122, Kodiak, Alaska 9!613 Business Phone: (907) 186-6171 Crisis Line Phone: 186 -3625 September 5, 2005 Mayor Jerome Selby Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Dear Mayor Selby: Enclosed please find a proclamation, which the Kodiak Women's Resource and Crisis Center would like to sponsor as a means of bringing to the attention of the Kodiak Island Borough Assembly and the public, that DOMESTIC VIOLENCE AWARENESS MONTH will be the month of October 2005. Being asked to be more aware of the victims of domestic violence during October is not pleasant, but a necessary function of the Kodiak Women's Resource and Crisis Center. We feel strongly that the Center provides safe shelter, counseling, referral and productive new beginnings for the women and children who suffer these abuses. Thank you for your time, and if you will please have the proclamation read at an appropriate time during an Assembly meeting. Kodiak Women's Resource and Crisis Center and the women and children of Kodiak thank you. Sincerely, The Board of KWRCC By Letitia Raub, Executive Director Kodiak Women's Resource and Crisis Center Enclosure Fax: 186 -196 1 Kodiak Island Borough PROCLAMATION DECLARING OCTOBER 2005 DOMESTIC VIOLENCE AWARENESS MONTH WHEREAS, historically, women have been and continue to be victims of violence in their own homes, with a women beaten every 15 seconds; and WHEREAS, the problems of family violence are not confined to any group or groups of people but across all economic, racial, affectional preference, and social barriers; and WHEREAS, domestic violence can result in the emotional damage, physical harm, or death to members of the family unit, and FBI statistics show that at least 30% of all homicides victims are killed by their intimate partners; and WHEREAS, during October 2005 the Kodiak Women's Resource and Crisis Center is sponsoring DOMESTIC VIOLENCE AWARENESS MONTH activities to focus attention on battered women and their children and to promote support of shelter and programs that serve them. NOW, THEREFORE, I, OF , do hereby proclaim the month of October 2005 as DOMESTIC VIOLENCE AWARENESS MONTH and encourage all citizens of Kodiak to actively support and participate in the ongoing programs designed to reduce and eventually eliminate violence as a social problem. Signature Witnessed by: Dated: CROWN SPONSORS rg HORION L I N E Z 5 •' IKON( 'AG KODIAK - CHAMBER _ _ OF COMMERCE September 15, 2005 Dear Mayor Selby, K: \DOCS \CGAPP \CG Honor.doc 100 E. Marine Way, Suite 300, Kodiak Alaska 99615 • (907) 48• -5557 • FAX: (907) 486 -7605 www.kodiak.org • Email: chamber @kodiak.org The Honorable Jerom Selby Mayor of the Kodiak Island Borough 710 Mill Bay Road Kodiak, AK 99615 The Kodiak Chamber of Commerce will be honoring the men and women of the U.S. Coast Guard here in Kodiak, Alaska. This celebration, called "We Applaud You," is to be held on Saturday, October 29, 2005 at the Golden Anchor on the U.S. Coast Guard base. The celebration will be the Kodiak community's opportunity to say, "Thank you" to the many unsung heroes of the Coast Guard here in Kodiak. As part of the evening's activities, we would like to present proclamations from many different individuals, groups or organizations. These proclamations and letters will recognize the Coast Guard community for their individual and collective efforts in making Kodiak and all the navigable waters of Alaska a safer and better place to live and work. If you could arrange to prepare a letter or proclamation of support addressed to the U.S. Coast Guard men and women of Kodiak, it would be greatly appreciated. During the evening's program, the Master of Ceremonies would call upon you to read your letter or proclamation of support. Under separate cover, you will be receiving an invitation to the evening event. If you were unable to attend the evening festivities, it would be appreciated if these letters or proclamations could be forwarded to the Kodiak Chamber of Commerce at the above address no later than Friday, October 21, 2005. For your convenience, you can fax the proclamation to us at (907) 486 -7605. Thank you in advance for your support of our efforts to honor the U.S. Coast Guard. Should you have questions or suggestions about this program, please feel free to contact the Chamber office. Respectfully yours, atricia B. Branson President Dedicated to Kodiak's Economic Future Fax: 486 -9391 KODIAK ISLAND BOROUGH CLERK'S OFFICE COP TO: ASSEMBLY V MAYOR MANAGER v OTHER Kodiak Island Borough AGENDA STATEMENT Regular Meeting of September 15, 2005 Item No. 13.A.1 Amending Contract No. 97 -07 Agreement Between the KIB & Sisters of Providence in Washington d /b /a Providence Health System in Alaska for Lease of the Kodiak Island Hospital & Care Center. 997 -66 The attached lease is an amendment and restatement of the original Contract` with Providence Health System in Alaska to lease and operate Kodiak Island Ho The term of the lease is from April 21, 1997 to April 20, 2007 with an option to extend payment for en years. In 1997 Providence leased the Hospital with a $2,000,000 down pay and then lease payments of $720,000 per year for the next ten years. If Providence did not lease the Hospital for the full ten years then the proportional amount of the )00,000 down payment would be returned to Providence Health System in Alaska. The reason for the proposed amendments is to clear up ambiguities in the original lease that have been realized from several years of operating the hospital; clean up and eliminate unnecessary provisions that are no longer pertinent, can be integrated with the amendments and recognize new confidentiality requirements; maximize cost reimbursement from Medicare /Medicaid through depreciation of equipment; and recognize the relationship with Kodiak Community Health Center ( "KCHC ") and its operations within the hospital campus. The amended lease recognizes the operation of KCHC. Currently KCHC leases its ace from Providence. The amended Providence lease proposes that Kodiak Island rough ( "KIB ") will negotiate a lease directly with KCHC and leae w se ments with Providence will be adjusted accordingly take into account urently, KIB purchases $150,000 of equipment for the hospital every year. Since KIB purchases the equipment, the equipment is on the Borough's books. The amended lease will provide that KIB give Providence $150,000 each year for Providence to purchase equipment. The equipment will then be on Providence's books and Providence will be able to recapture the depreciation in their Medicare /Medicaid rates. In a recent presentation at a KIB Work Session, Hospital officials estimated an increase slue to the community over 10 years of approximately $600,000 generated from Medicare and Medicaid reimbursement. he amended lease deletes the profit sharing language. The amended lease allows rovidence to retain any profits for use by the hospital for equipment and operations. Providence will spend 50% of each year's profits, up to $200,000 for equipment and retain the profits for the benefit of the Kodiak Island Hospital. Under the current profit sharing provision, Hospital officials indicate the need to have operating income at twice Contract No. 97-07-B Current Contract Proposed Contract KIB purchased $150,000 in equipment each year and kept title. KIB will give Providence $150,000 to purchase new equipment each year. KIB retained half of net income (including depreciation on capital assets) less capital expenditures. If an asset is purchased and then depreciated it is a capital expenditure. Providence will keep all income. Providence will spend 50 %, up to $200,000, of the previous year's income on equipment to be used at the Kodiak Hospital. Providence had to leave a like amount of operating supplies when they left the Hospital. ($277,000) KIB will give all operating supplies to Providence. Lease payments of $720,000 per year. Providence provided an initial down payment of $2,000,000 for construction of new facility. Lease payments of $720,000 per year. the net operating margin in order to maintain sufficient working capital to operate and to fund cash reserves to replace equipment and expand services to the community. In addition, Hospital officials indicate that dividing the profits with the KIB actually is increasing costs to the community, as prices have to be significantly increased to operate at an acceptable margin. ncial amendments to the contract: FISCAL NOTES: ACCOUNT NO.: ® N/A Expenditure Amount Required: Budgeted: APPROVAL FOR AGENDA: Szs Recommended motion: Move to approve Contract No. 1997 -07B with Sisters of Providence in Washington d /b /a Providence Health System in Alaska. AMENDED AND RESTATED LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as "MB"), and SISTERS OF PROVIDENCE IN WASHINGTON d/b /a PRO •-k - -!- • - SYSTEM IN ALASKA Providence Health System - Washington d/b /a Providence Health System in Alaska, a Washington non - profit corporation (hereinafter referred to as "Providence "). WITNESSETH: WHEREAS, KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon, and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as the "Hospital "); WHEREAS, the Borough KIB, in the interests of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy, mission and values; and WHEREAS, Providence desires to lease the Premises and the Equipment from KM, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby, it is mutually agreed as follows: 1.+ AGREEMENT TO LEASE KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term and upon the terms and conditions set forth in this Agreement. 2.4 PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two -A (2 -A) Hospital Subdivision according to Plat 95 -03, located in the Kodiak Recording District, Third Judicial District, State of Alaska. +Including all buildings appurtenances, and improvements thereto, (herein referred to as 'Premises"). KIB—is in the process of remo the current hospital facility, pursuant to collectively shall be referred to as the Premises herein. KIB shall be solely responsible for all hospital facility. Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB has leased space to Kodiak Community Health Center ( "KCHC "), located in the Hospital in which Providence has leased space. 3.1 EQUIPMENT The Equipment which is the subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an "as is" condition, and all Equipment to be acquired during the term of the Agrccmcnt. The 1991 Champion Coach 1 S .,. ti..° at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB. 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to provide budget a minimum of $150,000 per each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment purchased with KIB contributions based upon an average useful life of 5 years. KIB -w 1-1 discussed. The funds for purchase may be provided by the Fern Fuller Eetatc anel— hamablle KIB, or ether capital funds provided by KIB. Any Equipment purch B at the termination of this Agrccmcnt. 3.3 ADDITIONAL EQUIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence. The purchase price shall be the market value of the acquired equipment less an amount equal to an allowance for depreciation of the equipment between acquisition and termination calculated pursuant to generally accepted accounting principles. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after the termination or expiration of this Agreement. 4.1 TERM OF AGREEMENT: The Premises and Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20, 2007, unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten (10) years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. 2 5.1 FIRST RIGHT TO PURCHASE: KIB hereby gives and grants to Providence the first right to purchase all of KIB'S interest in the Hospital, Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include space leased from KIB by KCHC. KIB shall make any sale of said interest in the Hospital, Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and KCHC. Providence shall have the right to accept the purchase price and the terms of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 5.2 NOTICE: Providence may exercise its first right to purchase by executing an agreement within ninety (90) days of notice of KIB'S intent to sell its interest in the Hospital, Premises and Equipment af4421-Eqiii-pulent, on terms and conditions as agreed between the parties. If Providence does not exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety (90) days of the notice by KIB to Providence of its first right to purchase, then and in that event Providence's first right to purchase shall lapse and KM may sell the Hospital, Premises and Equipment or any part thereof to said third party or any other parties on substantially the same terms stated in the notice. If KIB does not sell and convey the Hospital, Premises and Equipment within 90 days after expiration of the 90 day notice period, any further transaction shall be deemed a new determination by KIB to sell and convey the Hospital, Premises and Equipment and the provisions of this Section 5.1 and 5.2 shall be applicable. 6.1 MONTHLY LEASE PAYMENT SCHEDULE The fixed minimum monthly lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($60,000) payable by Tenant Providence in equal monthly installments, on or before the first day of each month in advance, at the office of KIB or at such other place designated by KM, without any prior demand therefore, and without any deduction or setoff whatsoever. Notwithstanding anything to the contrary, this amount shall be reduced by the equivalent of the of the square foot cost of the hospital, not to include services, ($720,000 times percent of area used) of the premises KIB is leasing to KCHC, regardless of the actual amount KIB charges KCHC for the leased space. 7.1 DOWN PAYMENT: Providence shall contemporaneously with the execution of this agreement, deposit with KIB the sum of TWO MILLION DOLLARS ($2,000,000) representing down payment is non refundable (except to the extent that it may be recovered from operations) and consequently may be used by KIB for the construction or remodel of a portion of the Premiscs without the risk of any remaining claim by Providcncc. Provided, however, that if KIB exercises the power of termination without cause as provided in Section 37.1, then KIB er+1F 8-1 HOSPITAL OPERATIONS: Providence shall be responsible for the total operations of the hospital. Providence shall operate the Hospital under the name Providence Kodiak Island Medical Center. Except as otherwise stated herein, Providence assumes all the rights, duties, liabilities and obligations which shall arise out of its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective dated of this Agreement to be paid, including, but 3 not Limited to, utilities, insurance, salaries, supplies, fees, benefits and other costs normally incurred in the operation of the Hospital. Providence will spend an amount equal to or greater than 50% of the net operating income, up to a maximum of $200,000, per calendar year for equipment or capital assets to be used at Hospital. These funds will be kept in a Providence Funded Depreciation account, restricted for use at the Hospital. Unused portions of these funds will be carried forward to subsequentyears. Funds can also be used to pay debt obligations of Providence Kodiak Island Medical Center. At the termination or expiration of this Lease Agreement unused funds will revert to KIB. during the term of this Agreement, shall be used to offsct operating expenses (which includes rent payments and a return of operations to Providence for the $2 million downpaymcnt)) and ases incurred (in excess of KIB contribution) on or after the effective al basis between Providence return on operations and 8.3 7.2 SEPARATE ACCOUNTING: Providence shall maintain separate accounting records and financial statements for the operations of the Hospital and shall provide KIB with the Hospital's year -end financial statements. KIB recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. 84 7.3 TRAINING: Providence may conduct medical educational training programs at the Hospital, including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations 8.5 7.4 ACCESS TO BUSINESS RECORDS: Providence shall have access to all prior financial, business, medical and other Kodiak Island Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Kodiak Island Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original copies of all such books and records shall be maintained and stored in the Hospital at all times. No such books and records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed, except in accordance with federal and state laws, rules and regulations. KIB agrees to defend and hold Providence harmless against all claims, liability and expense resulting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KIB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. 9 F 8. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas. fuel, oil, electricity, sewer, water, telephone, and garbage collection. All utilities shall be prorated between the parties as of the effective date of this agreement. 4 9.2 KIB agrees to refund up to $200,000-ef the down payment referenced in section 7.1 exceed $520,000. 10.1 9 TAXES: Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this aAgreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non - profit hospital purposes pursuant to AS 29.45.030(a)(3), except to the extent that the leasehold Premises are used by non - exempt parties for their private business purposes as elaborated in Greater Anchorage Area Borough v. Sisters of Charity, 553 P.2d 467 (Alaska 1976). Providence may contest, by appropriate proceedings, any tax assessment, charge or lien, but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KIB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to Providence, or any property owned by Providence during the term of this Agreement. -1-h -1 10. SUPPLIES: Providence shall take ownership all of the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Providence shall, as part of its cost of operating the Hospital, supply and maintain all expendable hospital /medical supplies as may be required in Providence's discretion for the proper operation of Hospital. Upon termination of this Agreement, Providence will transfer ownership of all of the supplies maintained at the Hospital to KIB. The value -ef the of the supplies transferred to Pr vidence at the commencement of this Agreement multiplied by a crest to Kodiak Alaska published by the Bur au of Labor Statistics, United KIB has the option to purchase all of the supplies in inventory as well as floor stock items maintained at the Hospital. 12.1 11. USE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general medical and surgery services at not less than the level of the ctatc of the art availab as economically feasible and warranted by the local physicians' levels of ability and the reasonable needs of the community, as determined in Providence's sole discretion and in accordance with the terms and conditions as set forth in this Agreement. Contingent on Borough approval Providence may convert parts of the Premises into use for other related purposes consistent with KIB's obligation to supply its inhabitants with facilities for the care of sick and injured persons. Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in accordance with the standards prescribed by the Alaska Department of Health and Social Services. 5 11 4-3--1- 12. QUIET ENJOYMENT. KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein, shall quietly have, hold and enjoy the Premises without hindrance. -I4 13. WARRANTY OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit B, attached hereto and incorporated herein. 15.1 14. PRIOR AGREEMENTS: KIB warrants that entering into this Agreement does not breach any commitments or responsibilities of KIB under prior agreements, including but not limited to financing agreements, and that KIB shall defend and hold pProvidence harmless from any claims, liabilities and expenses arising from or in any way related to any prior agreements of KIB except to the extent such agreements are assumed by Providence. 16.1 15. BUILDING REGULATIONS: As of April 21, 1997, KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations Providence shall otherwise keep and maintain the Premises in good condition. 17.1 CLOSING ACTIVITIES: KIB shall, at its expense, conduct an audit of the hospital's financial statements as of April 20, 1997. The audit sh by Providence. 17.2 KIB shall, at its expense, prepare the Medicare cost report for the period endin_ April 20, 1997, and repay or set aside any Medicare over payments pertaining to such period or prior periods. Upon request, Providence will make a proposal to KIB for preparation of the cost repeck 18.1 CURRENT ASSETS AND CURRENT LIABILITIES: Providence will receive current assets of thc hospital as idcntificd in thc audit provided under sections 17.1 of thi, agreement.. Pr videncc will retain and pay all Hespi•°' es, including acc unts payable and accrued liabilities identified in the audit. KIB will retain and pay non current payables attributable to prior y ars cost reports related to governmental payers, including those resulting ation cost reports of the Hospital. The execs, if any, of current 18.2 Subjcct to this Agreement except as therwise provided during the term f this Agreement, KIB shall retain all liability f r notes payable and other debts, however characterized. 19.1 16. ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB) to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the KIB upon any loss of accreditation a written notice that the Hospital is no longer accredited and the reasons for non - accreditation. 6 20.1 17. QUALIFICATION FOR MEDICARE AND MEDICAID: Providence will use its best efforts (so long as it is in the mutual interests of KIB and Providence) to cause the Hospital to remain fully qualified as a provider of services under the `Medicare" program, the `Medicaid" program, or any program successor of either of the above or any other program by Federal, State or local governments providing for the payment or reimbursement for services rendered. 21.1 18. DISPOSAL OF MEDICAL WASTE AND /OR GARBAGE: Providence shall at it's expense, properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 22.1 19.1 INSURANCE Providence shall, at its expense, maintain throughout the term of this Agreement the following insurance: A. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not Less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person, $3,000.000 per occurrence and $500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self - insurance under the same terms as the policies for hospitals owned and operated by Providence KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB 22.2 19.2 Providence shall also provide tail coverage for hospital professional liability for the KIB LIIS and Lutheran Health Services (LHS) Management System for the period in which LHS operated the Hospital by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 22.3 19.3 KIB shall, at its expense, maintain throughout the term of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 23.1 20.1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times reasonably acceptable to KM, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs in the amount of $10,000 or more. Major maintenance and repairs are defined as repairs greater than $25,000. If a repair is greater than or equal to $25 000, the KIB shall be responsible for the full amount of the repair. Providence shall be responsible for all repairs less than $24,999. If repairs go over the $25,000 limit because maintenance or repairs were not accomplished by Providence in a timely manner, KIB reserves the right to perform repairs or maintenance. KIB will be reimbursed for all costs of such repairs and maintenance by Providence. 7 If Providcncc, after written notification by KIB refuses or neglects to perform maintenance -or- make repairs by reason of Providence's negligent acts or omiceions, KIB shall 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital assets, mutually agreed to by KIB and Providence, including the cost of building components, land improvements, fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets (Exhibit C). Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets. The Section 3.2 $150,000 equipment contribution will not be used to purchase these assets. 21.1 21. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 25.1 22. IMPROVEMENTS AND ALTERATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. 26.1 23. CONTRIBUTIONS: In the event that contributions are made to Providence for the benefit of the Hospital and/or KIB, the Providence may accept such contributions, it being understood, however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and the property of KIR shall revert to KIB at the expiration or termination of Lease Agreement. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KM, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion. For purposes of this paragraph the term `contribution' shall include a gift, bequest, grant or donation of money or property. It is expressly understood that the term "contribution' does not include any money derived by, or from, taxes or other governmental funds or entities. 26.2 Providence, will identify for KIB in advance of purchase or expenditure, the Equipment, project or repairs for which thc contributions will be expended and provide to KIB-a full gof all expenditures. 26.3 The following contributions will remain under thc ownership and control of KIB-ef thcr local entities. The parties will cooperate t insure tha health care purposes for which they are est KIB. The Fern Fuller Estate and Charitable Remainder u 8 27.1 24. MEDICAL STAFF: Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist, who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 28.1 I IOSPITAL STAFF: There is a full staff employed at the H this Agreement. Providcncc will use its best efforts to employ qualified members of the present benefits, subject to Providence's general employment policies. Providence agrees to use its best To the extent consistent with Providence's personnel policies and procedures, Providence will KIR, 29.1 25. ADMISSION TO HOSPITAL: All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 30.1 26.1 INDEMNIFICATION: Providence hereby agrees to indemnify and hold MB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof, and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees, or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 303 26.2 HAZARDOUS SUBSTANCE INDEMNIFICATIION BY PROVIDENCE: Providence shall indemnify, defend, and hold KIB harmless from and against any and all claims, demands, damages, losses, Liens, costs and expenses (including attomey's fees and disbursements) which accrue to or are incurred by KIB arising directly or indirectly from or out of or in any way connected with (4-A) any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances; (2B) the discovery of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement; and (3C) the clean -up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. 303 26.3 HAZARDOUS SUBSTANCE INDEMNIFICATION BY KIB: KIB shall indemnify, defend, and hold Providence harmless from and against any and all claims, demands, damages, losses, liens, costs, and expenses (including attorney's fees and disbursements) which accrue to or are incurred by Providence arising directly or indirectly from or out of or in any way connected with (-1•A) any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being contaminated with Hazardous Substances; (2B) the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement; and (3C) the clean-up 9 of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement. 31.1 27.1 ACCESS TO RECORDS: KIB and Providence further agree that Providence shall retain and make available upon request for a period of four (4) years after the furnishing of such services (operation of the Hospital) as described in this Agreement, the books, documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General, or any of their duly authorized representatives. 31.2 If Providence carries out any duties of this Agreement through a subcontract with a related organization, valued at $10,000 or more over a 12 -month period, the Subcontract shall also provide that the Secretary of Health and Human Services or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four (4) years after the services have been furnished. 31.3 This provision relating to the above retention and production of documents is included because of possible application of Section 1861 (v)(1)(1) of the Social Security Act to this Agreement; if this Section should be found to be inapplicable, then this clause shall be deemed to be inoperative and without force and effect. 31.4 27.2 PERSONNEL RECORDS: Should this Agreement terminate for any reason, Providence agrees to provide to KIB all personnel records for those employees who are to be re- employed by KIB who consent to the release of such records to KIB 31.5 27.3 OPERATIONAL RECORDS: Except as otherwise provided herein, Providence agrees to provide KIB with the books, documents and records, including medical records, in regard to the operation of the Hospital, in accordance with all federal, state and local laws, rules and regulations including, but not limited to, privacy laws. 27.4 CONFIDENTIAL INFORMATION: Providence shall comply with all laws, regulations, directives or requirements in any form related to operating and managing hospitals and long -term care facilities, including, but not limited to the Health insurance Portability and Accountability Act of 1996 ( "HIPAA "), and regulations adopted under HIPAA. The KIB shall not have access to Protected Health Information as defined by HIPAA. KIB has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement, and that Providence therefore has the following obligations: Providence agrees to hold all individually identifiable patient health information ( "Protected Health Information ") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient health care information. Providence further agrees to make every reasonable effort to comply with any regulations, standards, or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible, but in no event later than April 14, 2003. Providence may use and disclose Protected Health Information when necessary for Providence's proper management and administration (if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities 10 pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein; (2) to mitigate, if possible any harmful effect known to Providence of a use or disclosure of Protected Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7) to ensure applicable policies are in place for providing access to Protected Health Information to the subject of that information; (8) if requested by the MB, report to KIB any use or disclosure of Protected Health Information which is not provided for in the Agreement; and (9) to make Protected Health Information and an accounting of disclosures available to the individual who is the subject of the information or to KIB, to the extent required by HIPAA. Breach of this section shall be considered material. 34,6 27.5 STORAGE SPACE: Providence shall provide at no cost to KIB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 32.1 28.1 KIB TO APPROVE ADMINISTRATOR: Administrator All chief executive officers for Hospital shall be selected and hired with KIB consultation. Providence shall conduct annual evaluations regarding the Administrator in consultation with KIB. The Administrator shall attend meetings of the Kodiak Island Service Area Community Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital in an efficient and business -like manner consistent with the needs of the community. 32.2 28.2 TERMINATION OF ADMINISTRATOR: Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to the expiration of its full term, then Providence shall provide an Administrator for the Hospital on a contract basis for ninety days following the termination if requested by KIB. 33.1 29. KODIAK ISLAND HEALTH CARE FOUNDATION OItICE SPACE: Providence shall provide reasonable office space to Kodiak Island Health Care Foundation for th,. Fo director will work cooperatively with Kodiak Island Health Care Foundation to provide financial assistance at mutually agreed upon levels, subject to Providence's annual budgetary limitations, for the committed development of community healthcare. 31.1 30. GOVERNANCE: The overall management and control of the Hospital will rest with the Providence Alaska Service Arca Regional Board. It is anticipated that two KIB residents will be eligible to participate as voting members on the Providence H Ith System in this Board. One member shall be appointed-kern-Se 11 . . • u m ataff the Chief of Staff and one member shall be a la p° on from the community the Board Chair of the Kodiak Island Service Area Community Board. 31.2 31. KODIAK ISLAND SERVICE AREA COMMUNITY BOARD: An Advisory Board meeting the requirements of 7AAC 13.030(a) will be appointed by KIB with the uppro• al of Providence, - -, to provide input to the hospital staff, the medical staff, and Providence, . -- Alaska Regional Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC 13.030(b) and (c). One KIB Assembly member shall be appointed by Providence as a full voting member of the Kodiak Island Service Area Community Board, and Providence shall give KIB the opportunity for review and comment before appointments to the Board are made. Providence shall keep the Advisory Kodiak Island Service Area Community Board updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which it serves. Specifically the dutic& A. C. Rcvicw any changes in Hospital policy. Policies may —be ugg t d by Review any new patient care services. Review appointments and clinical privileges to the Medical Staff or member& and final action. D. Rcvicw the operating and capital budgets prepared for the Hospital. E. Rcvicw thc rate and charge structures in the Hospital. f . Rcvicw and comment concerning thc quality of care rendered to the patients of the Hospital. C. Review any reports prepared by Providence. H. Cooperate with Providence in meeting the requirements of any Federal or State L ^ statutes retaining the Hospital license; in obtaining or retaining accredtaten Joint Commission on Accreditation of H alth Caro Organizations and in maintaining the Blue Cress/Blue Shield. I. To assist the Administrator in long ran J. To assist Providence in reviewing administrator applicant° and rc m end K. To assist Providence in determining and deciding all matters of policy relating to the public relations of the Hospital and the relationship of thc Hospital to the community and thc 35.1 32. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 36.1 33. DEFAULT REMEDIES: `Event of Default' means any one or more of the following events, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: 12 A. Failure to pay rent required by Section 6-1 or 7.1 when such rent becomes due and payable, and continuance of such failure to pay for a period of ten (10) days; or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, with the exception of any obligations imposed under Exhibit B, and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder; or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee (or other similar official) of Providence or of any substantial part e€ to its property, or ordering the winding up or liquidation of its affairs; or D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law, or the consent by it to the filing of any such assignee, trustee (or other similar official) of Providence or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 34. CONTINUING DEFAULT: If an Event of Default by Providence occurs and is continuing, KIB may: A. At its option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re -enter and take possession of the Hospital without termination of this Agreement, and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder; C. Terminate this agreement, excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital, or to another for the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; E. With respect to any personal property, exercise any remedies available to a secured party under the Uniform Commercial Code; and/or 13 F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. 37.1 35. TERMINATION: At any time either KM or Providence may terminate this Agreement by one year's written notice to the other party. This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform any duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Sisters of Providence Health System, pursuant to Exhibit BA, Providence may terminate this Agreement upon 90 days prior written notice to KIB. Upon such termination, Providence shall surrender possession of the Hospital to KM. On the effective date of such termination KM shall have the option to purchase any such accounts receivable, inventory, supplies or equipment at a fair market value agreed to by both parties. Providence agrees to co- operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KM for the actual termination. KM agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. 38.1 36. TRANSFERS OF LICENSES AND PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to operation of the Hospital, including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 39.1 37. NOTICES: All notices, demands, or other writings in this Agreement provided to be given, made or sent, or which may be given, made or sent, by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail, Registered or Certified Mail, postage prepaid, and addressed as follows: KIB: Providence: MayerManager Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Regional Vice President and Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage, Alaska 99519 -96604 38. The address to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 40.1 39. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Hospital, in whole or in part, only with the prior consent of the KIB, but subject to each of the following conditions: 14 A. At the time of the making of any such assignment or sublease, there shall be no Eevent of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, in accordance with this Agreement; C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the part of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB, less a pro -rata share of reasonable maintenance, repair, or administrative handling costs; F. KIB shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 414 40. DAMAGE OR DESTRUCTION: When all or any part of the Hospital is destroyed or damaged, the KIB may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. B. All buildings, improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the KIB as necessary for such restoration, shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6 and 7.1. C. Rent shall be abated in the event of any destruction of damage to, or taking all or any part of the Hospital in proportion to the square footage which is unusable by Providence. D. If fifty percent (50 %) or more of the Premises are rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice in writing, from and after said occurrence, to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 15 42.1 41. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination, however, shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking 43.1 42. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them, hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof, as well as the fixtures, equipment, supplies and other property of either party located in, upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 4'h-I 43. MISCELLANEOUS: All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument. The waiver by either party or any breach of any term, condition, covenant or provision herein contained shall not be deemed a waiver of the same of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein. This Agreement shall be construed in accordance with the laws of the State of Alaska. Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right, remedy or claim under this Agreement. The parties agree the effective date of this Amendment is January 1, 2005. IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. SISTERS OF ROVIDENCE HEALTH SYSTEM - WASHINGTON d/b /a Providence AI ska Medical Center Health System in Alaska By: Its: Date: KODIAK ISLAND BOROUGH By: Its: Date: A I EST: 16 STATE OF ALASKA THIRD JUDICIAL DISTRICT written. STATE OF ALASKA THIRD JUDICIAL DISTRICT written. ) ) ) ) ) ) THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Jerome M. Selby Rick Gifford, to me known to be the Mayer Manager of the KODIAK ISLAND BOROUGH, and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate Notary Public in and for Alaska My commission Expires: 17 ss.: ss.: THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Al Parrish, to me known to be the Regional Vice President and Chief Executive, Sisters Providence Health System Alaska, and known to me to be the person who executed the above and foregoing instrument on behalf of Providence Health System - Washington, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by Providence Health System - Washington Board of Directors. WITNESS my hand and notarial seal the day and year first above in this Certificate Notary Public in and for Alaska My commission Expires: AMENDED AND RESTATED LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as "KIB "), and Providence Health System - Washington d/b /a Providence Health System in Alaska, a Washington non - profit corporation (hereinafter referred to as "Providence "). WITNESSETH: WHEREAS, KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon, and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as "Hospital "); WHEREAS, the KIB, in the interests of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy, mission and values; and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby, it is mutually agreed as follows: 1. AGREEMENT TO LEASE. KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term and upon the terms and conditions set forth in this Agreement. 2. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two -A (2 -A) Hospital Subdivision according to Plat 95-03, located in the Kodiak Recording District, Third Judicial District, State of Alaska. Including all buildings appurtenances, and improvements thereto, (herein referred to as `Premises "). Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB has leased space to Kodiak Community Health Center ( "KCHC "), located in the Hospital in which Providence has leased space. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an "as is" condition, at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB 2 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to budget a minimum of $150,000 each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment purchased with KIB contributions based upon an average useful life of 5 years. 3.3 ADDITIONAL EQUIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence. The purchase price shall be the market value of the acquired equipment less an amount equal to an allowance for depreciation of the equipment between acquisition and termination calculated pursuant to generally accepted accounting principles. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after 3 the termination or expiration of this Agreement. 4.1 PERM OF AGREEMENT: The Premises and Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20, 2007, unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten (10) years by providing MB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. 5.1 FIRST RIGHT TO PURCHASE. KIB hereby gives and grants to Providence the first right to purchase all of KIB'S interest in the Hospital, Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include space leased from KIB by KCHC. KIB shall make any sale of said interest in the Hospital, Premises and Equipment 4 between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and KCHC. Providence shall have the right to accept the purchase price and the terms of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 5.2 NOTICE: Providence may exercise its first right to purchase by executing an agreement within ninety (90) days of notice of KIB'S intent to sell its interest in the Hospital, Premises and Equipment, on terms and conditions as agreed between the parties. If Providence does not exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety (90) days of the notice by KIB to Providence of its first right to purchase, then and in that event Providence's first right to purchase shall lapse and KIB may sell the Hospital, Premises and Equipment or any part thereof to said third party or any other parties on substantially the same terms stated in the notice. If KIB does not sell and convey the Hospital, Premises and Equipment within 90 days after expiration of the 90 day notice period, any further transaction shall be deemed a new determination by KIB to sell and convey the Hospital, Premises and Equipment and the provisions of this Section 5.1 and 5.2 shall be applicable. 6. MONTHLY LEASE PAYMENT SCHEDULE The fixed minimum monthly lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($60,000) payable by Providence in equal monthly installments, on or before 5 the first day of each month in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefore, and without any deduction or setoff whatsoever. Notwithstanding anything to the contrary, this amount shall be reduced by the equivalent of the of the square foot cost of the hospital, not to include services, ($720,000 times percent of area used) of the premises KIB is leasing to KCHC, regardless of the actual amount MB charges KCHC for the leased space. 7.1 HOSPITAL OPERATIONS: Providence shall be responsible for the total operations of the hospital. Providence shall operate the Hospital under the name Providence Kodiak Island Medical Center. Except as otherwise stated herein, Providence assumes all the rights, duties, liabilities and obligations which shall arise out of its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective dated of this Agreement to be paid, including, but not limited to, utilities, insurance, salaries, supplies, fees, benefits and other costs normally incurred in the operation of the Hospital. Providence will spend an amount equal to or greater than 50% of the net operating income, up to a maximum of $200,000, per calendar year for equipment or capital assets to be used at Hospital. These funds will be kept in a Providence Funded Depreciation account, restricted for use at the Hospital. Unused portions of these funds will be carried forward to subsequent years. Funds can also be used to pay debt 6 obligations of Providence Kodiak Island Medical Center. At the termination or expiration of this Lease Agreement unused funds will revert to KIB. 7.2 SEPARATE ACCOUNTING: Providence shall maintain separate accounting records and financial statements for the operations of the Hospital and shall provide KIB with the Hospital's year -end financial statements. KIB recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. 7.3 TRAINING: Providence may conduct medical educational training programs at the Hospital, including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations. 7.4 ACCESS TO BUSINESS RECORDS: Providence shall have access to all prior financial, business, medical and other Kodiak Island Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Kodiak Island Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original copies of all such books and records shall be maintained and stored in the Hospital at all times. No such books and records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed, except in accordance with federal and state laws, rules and regulations. KIB 7 agrees to defend and hold Providence harmless against all claims, liability and expense resulting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KIB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. 8. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas fuel, oil, electricity, sewer, water, telephone, and garbage collection. 9. TAXES: Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this Agreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises. KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non - profit hospital purposes pursuant to AS 29.45.030(a)(3), except to the extent that the leasehold Premises are used by non- exempt parties for their private business purposes as elaborated in Greater Anchorage Area Borough v. Sisters of Charity, 553 P.2d 467 (Alaska 1976). Providence may contest, by appropriate proceedings, any tax assessment, charge or lien, but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KIB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to 8 Providence, or any property owned by Providence during the term of this Agreement. 10. SUPPLIES: Providence shall own all of the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Providence shall, as part of its cost of operating the Hospital, supply and maintain all expendable hospital /medical supplies as may be required in Providence's discretion for the proper operation of Hospital. Upon termination of this Agreement, KIB has the option to purchase all of the supplies in inventory as well as floor stock items maintained at the Hospital. 11. USE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general medical and surgery services as economically feasible and warranted by the local physicians' levels of ability and the reasonable needs of the community, as determined in Providence's sole discretion and in accordance with the terms and conditions as set forth in this Agreement. Contingent on Borough approval Providence may convert parts of the Premises into use for other related purposes consistent with KIB's obligation to supply its inhabitants with facilities for the care of sick and injured persons. Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in 9 accordance with the standards prescribed by the Alaska Department of Health and Social Services. 12. QUIET ENJOYMENT: KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein, shall quietly have, hold and enjoy the Premises without hindrance. 13. WARRANTY OF TITLE. KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit B, attached hereto and incorporated herein. 14. PRIOR AGREEMENTS: KIB warrants that entering into this Agreement does not breach any commitments or responsibilities of KIB under prior agreements, including but not limited to financing agreements, and that KIB shall defend and hold Providence harmless from any claims, liabilities and expenses arising from or in any way related to any prior agreements of KIB except to the extent such agreements are assumed by Providence. 15. BUILDING REGULATIONS: As of April 21, 1997, KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations. Providence shall otherwise keep and 10 maintain the Premises in good condition. 16. ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB) to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the KIB upon any loss of accreditation a written notice that the Hospital is no longer accredited and the reasons for non - accreditation. 17. QUALIFICATION FOR MEDICARE AND MEDICAID: Providence will use its best efforts (so long as it is in the mutual interests of KIB and Providence) to cause the Hospital to remain fully qualified as a provider of services under the `Medicare" program, the `Medicaid" program, or any program successor of either of the above or any other program by Federal, State or local governments providing for the payment or reimbursement for services rendered. 18. DISPOSAL OF MEDICAL WASTE AND /OR GARBAGE: Providence shall at its expense, properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 19.1 INSURANCE Providence shall, at its expense, maintain throughout the term of this Agreement the following insurance: 11 A. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less property than $1,000,000 per person, $3,000.000 per occurrence and $500,000 for damage arising out of any single occurrence. Such insurance policies may provide for partial self- insurance under the same terms as the policies for hospitals owned and operated by Providence. KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. 19.2 Providence shall also provide tail coverage for hospital professional liability for the KIB and Lutheran Health Services (LHS) Management System for the period in which LHS operated the Hospital by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 19.3 KIB shall, at its expense, maintain throughout the term of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 20.1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital 12 to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times reasonably acceptable to KIB, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs. Major maintenance and repairs are defined as repairs greater than $25,000. If a repair is greater than or equal to $25,000, the KIB shall be responsible for the full amount of the repair. Providence shall be responsible for all repairs less than $24,999. If repairs go over the $25,000 limit because maintenance or repairs were not accomplished by Providence in a timely manner, KIB reserves the right to perform repairs or maintenance. KIB will be reimbursed for all costs of such repairs and maintenance by Providence. 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital assets, mutually agreed to by KIB and Providence, including the cost of building components, land improvements, fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets (Exhibit C). Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets. The Section 3.2 $150,000 equipment contribution will not be used to purchase these assets. 13 21. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 22. IMPROVEMENTS AND ALI'tRATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. 23. CONTRIBUTIONS: In the event that contributions are made to Providence for the benefit of the Hospital and/or KIB, Providence may accept such contributions, it being understood, however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and shall revert to KIB at the expiration or termination of Lease Agreement. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KIB, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion. For purposes of this paragraph the term `contribution' shall include a gift, bequest, grant or donation of money or property. It is expressly understood that the term "contribution' does not include any money derived by, or from, 14 taxes or other governmental funds or entities. 24 MEDICAL STAFF: Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist, who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 25. ADMISSION TO HOSPITAL: All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 26.1 INDEMNIFICATION: Providence hereby agrees to indemnify and hold MB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof, and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees, or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 15 26.2 HAZARDOUS SUBSTANCE INDEMNIFICATIION BY PROVIDENCE: Providence shall indemnify, defend, and hold KIB harmless from and against any and all claims, demands, damages, losses, liens, costs and expenses (including attorney's fees and disbursements) which accrue to or are incurred by KIB arising directly or indirectly from or out of or in any way connected with (A) any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances; (B) the discovery of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement; and (C) the clean -up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. 26.3 HAZARDOUS SUBSTANCE INDEMNIFICATION BY KIB: MB shall indemnify, defend, and hold Providence harmless from and against any and all claims, demands, damages, losses, liens, costs, and expenses (including attorney's fees and disbursements) which accrue to or are incurred by Providence arising directly or indirectly from or out of or in any way connected with (A) any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being contaminated with Hazardous Substances; (B) the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement; and (C) the clean -up of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement. 16 27.1 ACCESS TO RECORDS: KIB and Providence further agree that Providence shall retain and make available upon request for a period of four (4) years after the furnishing of such services (operation of the Hospital) as described in this Agreement, the books, documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General, or any of their duly authorized representatives. subcontract period, the Services If Providence carries out any duties of this Agreement through a with a related organization, valued at $10,000 or more over a 12 -month Subcontract shall also provide that the Secretary of Health and Human or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four (4) years after the services have been furnished. This provision relating to the above retention and production of documents is included because of possible application of Section 1861 (v)(1)(1) of the Social Security Act to this Agreement; if this Section should be found to be inapplicable, then this clause shall be deemed to be inoperative and without force and effect. 27.2 PERSONNEL RECORDS: Should this Agreement terminate for any reason, Providence agrees to provide to KIB all personnel records for those employees who are to be re- employed by KIB who consent to the release of such records to KIB. 17 27.3 OPERATIONAL RECORDS: Except as otherwise provided herein, Providence agrees to provide KIB with the books, documents and records, including medical records, in regard to the operation of the Hospital, in accordance with all federal, state and local laws, rules and regulations including, but not limited to, privacy laws. 27.4 CONFIDENTIAL INFORMATION: Providence shall comply with all laws, regulations, directives or requirements in any form related to operating and managing hospitals and long -term care facilities, including, but not limited to the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), and regulations adopted under HIPAA. The KIB shall not have access to Protected Health Information as defined by HIPAA. KIB has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement, and that Providence therefore has the following obligations: Providence agrees to hold all individually identifiable patient health information ( "Protected Health Information ") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient health care information. Providence further agrees to make every reasonable effort to comply with any regulations, standards, or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible, but in no event later 18 than April 14, 2003. Providence may use and disclose Protected Health Information when necessary for Providence's proper management and administration (if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein; (2) to mitigate, if possible, any harmful effect known to Providence of a use or disclosure of Protected Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7) to ensure applicable policies are in place for providing access to Protected Health Information to the subject of that information; (8) if requested by the KIB, report to KIB any use or disclosure of Protected Health Information which is not provided for in the Agreement; and (9) to make Protected Health Information and an accounting of disclosures available to the individual 19 who is the subject of the information or to KIB, to the extent required by HIPAA. Breach of this section shall be considered material. 27.5 STORAGE SPACE: Providence shall provide at no cost to KIB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 28.1 KIB TO APPROVE ADMINISTRATOR: All chief executive officers for Hospital shall be selected and hired with KIB consultation. Providence shall conduct annual evaluations regarding the Administrator in consultation with KIB. The Administrator shall attend meetings of the Kodiak Island Service Area Community Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital in an efficient and business -like manner consistent with the needs of the community. 28.2 TERMINATION OF ADMINISTRATOR: Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to the expiration of its full term, then Providence shall provide an Administrator for the Hospital on a contract basis for ninety days following the termination if requested by KIB. 20 29. KODIAK ISLAND HEALTH CARE FOUNDATION OFFICE SPACE: Providence will work cooperatively with Kodiak Island Health Care Foundation to provide financial assistance at mutually agreed upon levels, subject to Providence's annual budgetary limitations, for the committed development of community healthcare. 30. GOVERNANCE: The overall management and control of the Hospital will rest with the Providence Alaska Regional Board. It is anticipated that two KIB residents will be eligible to participate as voting members on this Board. One member shall be the Chief of Staff and one member shall be the Board Chair of the Kodiak Island Service Area Community Board. 31. Kodiak Island Service Area Community Board: An Advisory Board meeting the requirements of 7AAC 13.030(a) will be appointed by Providence to provide input to the hospital staff, the medical staff, and Providence Alaska Regional Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC 13.030(b) and (c). One KIB Assembly member shall be appointed by Providence as a full voting member of the Kodiak Island Service Area Community Board, and Providence shall give KIB the opportunity for review and comment before appointments to the Board are made. Providence shall keep the Kodiak Island Service Area Community Board updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which it serves. 21 32. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 33. DEFAULT REMEDIES: `Event of Default' means any one or more of the following events, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: A. Failure to pay rent required by Section 6 or 7.1 when such rent becomes due and payable, and continuance of such failure to pay for a period of ten (10) days; or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, with the exception of any obligations imposed under Exhibit B, and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder; or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent, or approving as properly filed a 22 petition seeking reorganization, arrangement, adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee (or other similar official) of Providence or of any substantial part to its property, or ordering the winding up or liquidation of its affairs; or D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law, or the consent by it to the filing of any such assignee, trustee (or other similar official) of Providence or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 34. CONTINUING DEFAULT: If an Event of Default by Providence occurs and is continuing, KIB may: A. At its option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re -enter and take possession of the Hospital without termination of this 23 Agreement, and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder; C. Terminate this agreement, excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital, or to another for the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; E. With respect to any personal property, exercise any remedies available to a secured party under the Uniform Commercial Code; and/or F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. 35. TERMINATION: At any time either KIB or Providence may terminate this Agreement by one year's written notice to the other party. This Agreement shall 24 terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform any duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Providence Health System, pursuant to Exhibit A, Providence may terminate this Agreement upon 90 days prior written notice to KIB. Upon such termination, Providence shall surrender possession of the Hospital to KIB. On the effective date of such termination KIB shall have the option to purchase any such accounts receivable, inventory, supplies or equipment at a fair market value agreed to by both part ies. Providence agrees to co- operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KIB for the actual termination. KIB agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. 36. TRANSFERS OF LICENSES AND PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to operation of the Hospital, including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 37. NOTICES: All notices, demands, or other writings in this Agreement provided to be given, made or sent, or which may be given, made or sent, by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail, Registered or Certified Mail, postage 25 prepaid, and addressed as follows: KIB: Providence: Manager Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Regional Vice President and Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage, Alaska 99519 -96604 38. The address to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 39. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Hospital, in whole or in part, only with the prior consent of the MB, but subject to each of the following conditions: A. At the time of the making of any such assignment or sublease, there shall be no event of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, in accordance with this Agreement; C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the part 26 of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB, less a pro -rata share of reasonable maintenance, repair, or administrative handling costs; F. KIB shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 40. DAMAGE OR DESTRUCTION: When all or any part of the Hospital is 27 destroyed or damaged, the KIB may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. B. All buildings, improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the KIB as necessary for such restoration, shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6 and 7.1. C. Rent shall be abated in the event of any destruction of damage to, or taking all or any pan of the Hospital in proportion to the square footage which is unusable by Providence. D. If fifty percent (50 %) or more of the Premises are rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice in writing, from and after said occurrence, to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 28 41. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination, however, shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking. 42. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them, hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof, as well as the fixtures, equipment, supplies and other property of either party located in, upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 43. MISCELLANEOUS: All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be 29 affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument. The waiver by either party or any breach of any term, condition, covenant or provision herein contained shall not be deemed a waiver of the same of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein. This Agreement shall be construed in accordance with the laws of the State of Alaska. Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right, remedy or claim under this Agreement. The parties agree the effective date of this Amendment is January 1, 2005. 30 IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. PROVIDENCE HEALTH SYSTEM - WASHINGTON d/b /a Providence Health System in Alaska By: Its: Date: KODIAK ISLAND BOROUGH By: Its: Date: ATTEST: 31 STATE OF ALASKA THIRD JUDICIAL DISTRICT 32 Notary Public in and for Alaska My commission Expires: ss.: THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Rick Gifford, to me known to be the Manager of the KODIAK ISLAND BOROUGH, and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate written. STA 1E OF ALASKA THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Al Parrish, to me known to be the Regional Vice President and Chief Executive, Providence Health System Alaska, and known to me to be the person who executed the above and foregoing instrument on behalf of Providence Health System - Washington, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by Providence Health System — Washington Board of Directors. WITNESS my hand and notarial seal the day and year first above in this Certificate written. 33 Notary Public in and for Alaska My commission Expires: s s.: EXHIBIT A PROVIDENCE HEALTH SYSTEM PHILOSOPHY MISSION AND VALUES Letter from Archbishop of Anchorage Francis T. Hurley (See Attached) 34 aRcnotocese o}. ancnotzacc rn co.eeva suss • asthma Ica *90140 aous3Ne9e • Wt: air r3llaew Office of the Atentesho9 Mr, Duuyfas Bruce Administrator Providence Alaska Medical Center 3100 Providence Drive P.O. Box 196604 Anchorage. AK 99519 -6604 September 9, 1996 Dear Mr. Bruce, Trio initiative of Providence Alaska Madical Center to enter into an operating agreement with small Alaskan rural communities for the purpuse of providing better heath care for more people is one that i applaud. It without question is fully consistent with the commitment of the Catholic: Church and rfie Sisters of Providence to meet the human as well as the spiritual needs of people. From my own observation of with the health care available In the smaller communities of Southcentral Alaska, I know how much the people strongly desire that more medical services be more readily available to than locally. local communities can not meet the escalating costs of medical equipment and care. The people are often prevented from traveling to medical centers in Anchorage because of distance and weather. In addition to that, It is the desire of patients to be close to their famitiea, friends and ministers at the time of Illness. The operating agreement being developed by the City of Kodiak and by Providence Alaska Medkal Canter will alleviate these difficulties. The plan is. if you will allow a play on words, providential. Forging operating agreements presents some difficulties In communities where there are many varied and at times conflicting attitudes and convictions about what medical practices are morally permissible. The guidelines utilized for Catholic health care systems are contained In tree £thieal and Religious Directives for Health Services of the Catholic Bishops Of the United Stateir-Tre—Ciii—trirarik has itandards for Kodiak Hospit e. veils Neva indicated that the City of Kodiak deems it necessary that their long standing practice of elective sterilization be continued. As you know this practice is not within the Directives. nu ogle if it would be within the parameters of the Catholic teaching for Providence Medical Center to tolerate the continuance of that practice within the City of Kodiak as part of the agreement. September 9, 1996 Page 's I take note of an important factor. Kodiak Hospital remains a community hospital. The operating lease does not change that. The mutually accepted terms of the lease identify the principles and practices that will allow both Providence and the City of Kodiak to be faithful to their commitments. n this context 1 make an observation about moral decisions. principle. isi re generally not made by the application of only one several principles must be recognized and brought into harmony. to this instance the principle of cooperation may be brought Into play with our principles relative to life and respect for the human body. Within the principle of cooperation 'and under certain conditions and circumstances it is permissible that one may cooperate materially, in an action of another that is contrary to one's convictions. n ► 7Jdynent the principle of material cooperation does apply in the situation that prevails in Kodiak. Kodiak Hospital remains a community hospital!. The operating agreement with Providence Alaska Medical Center does not transform It into a Catholic Hospital. Rather Kodiak Hospital remains :a rrn;munity hotnital of. the City of Kodiak. The mutually acCepted tones of agreement define the practices that will be permitted. The material cooperation fnr *teriiiention in no way implies approval of the Procedure by Providence. I hope that the arrangement with the City of Kodiak comes to completion. ! know the community well. I was personally involved in working out an agreement with the administrators of the City for the establishment of gruiher Francis Shelter - Kodiak. Cod bless. Sincerely in Christ. 4 ,75041 "" : i;;ii •Francis T. Hurley Archbishop of Anchorage TOTAL P.03 EXHIBIT B ENCUMBRANCES AND SECURITY INTERESTS There are no encumbrances and security interests. 35 EXHIBIT C American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets See Attached 36 THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as "MB"), and SYSTEM IN ALASKA Providence Health System - Washington d /b /a Providence Health System in Alaska, a Washington non - profit corporation (hereinafter referred to as "Providence "). WITNESSETH: AMENDED AND RESTATED LEASE AGREEMENT WHEREAS, KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon, and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as the "Hospital "); WHEREAS, the Borough KIB, in the interests of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy, mission and values; and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby, it is mutually agreed as follows: 1.4 AGREEMENT TO LEASE: KM agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term and upon the terms and conditions set forth in this Agreement. 2.4 PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two -A (2 -A) Hospital Subdivision according to Plat 95 -03, located in the Kodiak Recording District, Third Judicial District, State of Alaska. +Including all buildings appurtenances, and improvements thereto, (herein referred to as `Premises "). financial costs associated with the remodel of the old facility a hospital facility. Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB has leased space to Kodiak Community Health Center ( "KCHC "), located in the Hospital in which Providence has leased space. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an "as is" condition, and all Equipment to be acquired during the term of the Agreement. The 1991 Champ'a presently uscd in conncction with the extended care facility will be included with the Equipment, at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB. 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to provide budget a minimum of $150,000 p each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment purchased with KIB contributions based upon an average useful life of 5 years. KIB will discused. The funds for purchaze may be provided by the Fern Fuller Estate and Charitable will remain the property f KIB at the termination of this Agreement. 3.3 ADDITIONAL EQUIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence. The purchase price shall be the market value of the acquired equipment less an amount equal to an allowance for depreciation of the equipment between acquisition and termination calculated pursuant to generally accepted accounting principles. Any equipment or personal property which belongs to Providence and is not purchased by K1B may be removed by Providence after the termination or expiration of this Agreement. 4.1 TERM OF AGREEMENT The Premises and Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20, 2007, unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten (10) years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. 2 5.1 FIRST RIGHT TO PURCHASE: KIB hereby gives and grants to Providence the first right to purchase all of KIB'S interest in the Hospital, Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include space leased from KIB by KCHC. KIB shall make any sale of said interest in the Hospital, Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and KCHC. Providence shall have the right to accept the purchase price and the terms of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 5.2 NOTICE: Providence may exercise its first right to purchase by executing an agreement within ninety (90) days of notice of KIB'S intent to sell its interest in the Hospital, Premises and Equipment and Equipment, on terms and conditions as agreed between the parties. If Providence does not exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety (90) days of the notice by KIB to Providence of its first right to purchase, then and in that event Providence's first right to purchase shall lapse and KIB may sell the Hospital, Premises and Equipment or any part thereof to said third party or any other parties on substantially the same terms stated in the notice. If KIB does not sell and convey the Hospital, Premises and Equipment within 90 days after expiration of the 90 day notice period, any further transaction shall be deemed a new determination by KIB to sell and convey the Hospital, Premises and Equipment and the provisions of this Section 5.1 and 5.2 shall be applicable. 64 MONTHLY LEASE PAYMENT SCHEDULE. The fixed minimum monthly lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($60,000) payable by Tenant Providence in equal monthly installments, on or before the first day of each month in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefore, and without any deduction or setoff whatsoever. Notwithstanding anything to the contrary, this amount shall be reduced by the equivalent of the of the square foot cost of the hospital, not to include services, ($720,000 times percent of area used) of the premises KIB is leasing to KCHC, regardless of the actual amount KIB charges KCHC for the leased space. 7.1 DOWN PAYMENT: Providence shall contemporaneously with the execution of thin down payment is non refundable (except to the extent that it may be recovered from operations) and consequently may be used by KIB for the construction or remodel of a portion of the Premises without the risk of any remaining claim by Providence. Provided, however, that if KIB 8-1- HOSPITAL OPERATIONS: Providence shall be responsible for the total operations of the hospital. Providence shall operate the Hospital under the name Providence Kodiak Island Medical Center. Except as otherwise stated herein, Providence assumes all the rights, duties, liabilities and obligations which shall arise out of its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective dated of this Agreement to be paid, including, but 3 not limited to, utilities, insurance, salaries, supplies, fees, benefits and other costs normally incurred in the operation of the Hospital. Providence will spend an amount equal to or greater than 50% of the net operating income, up to a maximum of $200,000, per calendar year for equipment or capital assets to be used at Hospital. These funds will be kept in a Providence Funded Depreciation account, restricted for use at the Hospital. Unused portions of these funds will be carried forward to subsequent years. Funds can also be used to pay debt obligations of Providence Kodiak Island Medical Center. At the termination or expiration of this Lease Agreement unused funds will revert to KIB. during the term of this Agreement, shall be used to offset operating expenses (which includes eufrtal equipment purchases incurred (in excess of KIB contribution) on or after the effective if any, shall accrue to the sole financial benefit of Hospital. an equal basis between Providence return on operations and &a 7.2 SEPARATE ACCOUNTING: Providence shall maintain separate accounting records and financial statements for the operations of the Hospital and shall provide KIB with the Hospital's year -end financial statements. KIB recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. &4 7.3 TRAINING: Providence may conduct medical educational training programs at the Hospital, including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations. 84 7.4 ACCESS TO BUSINESS RECORDS: Providence shall have access to all prior financial, business, medical and other Kodiak Island Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Kodiak Island Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original copies of all such books and records shall be maintained and stored in the Hospital at all times. No such books and records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed, except in accordance with federal and state laws, rules and regulations. KIB agrees to defend and hold Providence harmless against all claims, liability and expense resulting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KIB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. 9-1- 8. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas fuel, oil, electricity, sewer, water, telephone, and garbage collection. All utilities shall be prorated between the parties as of tho effective date of this agreement. 4 9.2 K-IB agrees to refund up to $200,000 of the down payment referenced in section 7.1 to the extent that the utility expenses for the first year of operation under this se Agreement exceed $520,000. 10.1 9 TAXES: Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this aAgreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises. KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non - profit hospital purposes pursuant to AS 29.45.030(a)(3), except to the extent that the leasehold Premises are used by non - exempt parties for their private business purposes as elaborated in Greater Anchorage Area Borough v. Sisters of Charity 553 P.2d 467 (Alaska 1976). Providence may contest, by appropriate proceedings, any tax assessment, charge or lien, but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KIB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to Providence, or any property owned by Providence during the term of this Agreement. 4-14 10. SUPPLIES: Providence shall take ownership all of the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Providence shall, as part of its cost of operating the Hospital, supply and maintain all expendable hospital /medical supplies as may be required in Providence's discretion for the proper operation of Hospital. Upon termination of this Agreement, Providence of the cupplics transferred to Providence at the commencement of this Agreement multiplied by a fraction the numerator of which is the Consumer Price Index for all items for the arca States Department of Labor, or if non, by any ther instrumentality f the United States or the ally nearest to Kodiak, Alaska (the "CPI ") at—the KIB has the option to purchase all of the supplies in inventory as well as floor stock items maintained at the Hospital. 12.1 11. USE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general medical and surgery services at not less than the level of the state of the art available presently at the Hospital --en April 21, 1997, or such gr ter level as economically feasible and warranted by the local physicians' levels of ability and the reasonable needs of the community, as determined in Providence's sole discretion and in accordance with the terms and conditions as set forth in this Agreement. Contingent on Borough approval Providence may convert parts of the Premises into use for other related purposes consistent with KIB's obligation to supply its inhabitants with facilities for the care of sick and injured persons. Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in accordance with the standards prescribed by the Alaska Department of Health and Social Services. 5 444 12. QUIET ENJOYMENT KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein, shall quietly have, hold and enjoy the Premises without hindrance. -14:-1 13. WARRANTY OF TITLE KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit B, attached hereto and incorporated herein. 15.1 14. PRIOR AGREEMENTS: KIB warrants that entering into this Agreement does not breach any commitments or responsibilities of KIB under prior agreements, including but not limited to financing agreements, and that KIB shall defend and hold pProvidence harmless from any claims, liabilities and expenses arising from or in any way related to any prior agreements of KIB except to the extent such agreements are assumed by Providence. 16.1 15. BUILDING REGULATIONS: As of April 21, 1997, KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations. Providence shall otherwise keep and maintain the Premises in good condition. by Providence. hospital's financial statements as of April 20, 1997. The audit shall be performed according -to 18.1 CURRENT ASSETS AND CURRENT LIABILITIES: Providcncc will receive current assets of the Hospital as identified in the audit provided under sections 17.1 of this as otherwise provided during the term of this characterized. -1-9r1 16. ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB) to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the KIB upon any loss of accreditation a written notice that the Hospital is no longer accredited and the reasons for non - accreditation. 6 20.1 17. QUALIFICATION FOR MEDICARE AND MEDICAID: Providence will use its best efforts (so long as it is in the mutual interests of KIB and Providence) to cause the Hospital to remain fully qualified as a provider of services under the `Medicare" program, the `Medicaid" program, or any program successor of either of the above or any other program by Federal, State or local governments providing for the payment or reimbursement for services rendered. 21.1 18. DISPOSAL OF MEDICAL WASTE AND /OR GARBAGE: Providence shall at it's expense, properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 22.1 19.1 INSURANCE Providence shall, at its expense, maintain throughout the term of this Agreement the following insurance: A. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person, $3,000.000 per occurrence and $500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self- insurance under the same terms as the policies for hospitals owned and operated by Providence. KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. 22.2 19.2 Providence shall also provide tail coverage for hospital professional liability for the KIB 1445 and Lutheran Health Services (LHS) Management System for the period in which LHS operated the Hospital by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 22.3 19.3 KIB shall, at its expense, maintain throughout the term of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 23.1 20.1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times reasonably acceptable to KIB, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary KIB shall provide and pay for any major maintenance and repairs its the amount of $10,000 or more. Major maintenance and repairs are defined as repairs greater than $25,000. If a repair is greater than or equal to $25,000, the KIB shall be responsible for the full amount of the repair. Providence shall be responsible for all repairs less than $24,999. If repairs go over the $25,000 limit because maintenance or repairs were not accomplished by Providence in a timely manner, KIB reserves the right to perform repairs or maintenance. KIB will be reimbursed for all costs of such repairs and maintenance by Providence. KIB M ill s et up and annually fund a Iospital Fund which shall be used for maj r repair:, 7 If Providence, after written n tification by KIB refuses or neglects to perform maintenance or make repairs by reason of Providence's negligent acts or omis ions, KIB shall 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital assets, mutually agreed to by KIB and Providence, including the cost of building components, land improvements, fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets (Exhibit C). Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets. The Section 3.2 $150,000 equipment contribution will not be used to purchase these assets. 2 /1.1 21. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 25.1 22. IMPROVEMENTS AND ALTERATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. 26.1 23. CONTRIBUTIONS: In the event that contributions are made to Providence for the benefit of the Hospital and/or KIB, the Providence may accept such contributions, it being understood, however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and the property of KIB shall revert to KIB at the expiration or termination of Lease Agreement. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KIB, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion. For purposes of this paragraph the term `contribution' shall include a gift, bequest, grant or donation of money or property. It is expressly understood that the term "contribution' does not include any money derived by, or from, taxes or other governmental funds or entities. 26.2 Providence, will identify for KIB in advance of purch se or pendi the 26.3 The f (lowing contributions will remain under the ownership and control of KIB KIB. 8 27.1 24. MEDICAL STAFF: Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist, who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 28.1 HOSPITAL STAFF: Therc is a full staff employed at the Hospital at the time of this Agreement. Providcncc will use its best efforts to employ qua staff following the commencement of the lease term, subject to Providence's general employment policies. Providence will use its best efforts to maintai present staff including employee bargaining units, seniority, wage schedules and—retirement benefits, subject to Providence's general employment policies. Providence agrees to use its best To the extent consistent with Providence's personnel policies and procedures, Providcncc will give its new employees credit for vacation and sick leave benefits a{I;� 29.1 25. ADMISSION TO HOSPITAL: All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 30.1 26.1 INDEMNIFICATION: Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof, and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees, or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 26.2 HAZARDOUS SUBSTANCE INDEMNIFICATIION BY PROVIDENCE: Providence shall indemnify, defend, and hold KIB harmless from and against any and all claims, demands, damages, losses, liens, costs and expenses (including attorney's fees and disbursements) which accrue to or are incurred by KIB arising directly or indirectly from or out of or in any way connected with (4A) any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances; (213) the discovery of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement; and (3C) the clean-up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. 30.3 26.3 HAZARDOUS SUBSTANCE INDEMNIFICATION BY KIB: KIB shall indemnify, defend, and hold Providence harmless from and against any and all claims, demands, damages, losses, liens, costs, and expenses (including attorney's fees and disbursements) which accrue to or are incurred by Providence arising directly or indirectly from or out of or in any way connected with (4-A) any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being contaminated with Hazardous Substances; (213) the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement; and (3C) the clean -up 9 of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement. 31.1 27.1 ACCESS TO RECORDS: KIB and Providence further agree that Providence shall retain and make available upon request for a period of four (4) years after the furnishing of such services (operation of the Hospital) as described in this Agreement, the books, documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General, or any of their duly authorized representatives. 31.2 If Providence carries out any duties of this Agreement through a subcontract with a related organization, valued at $10,000 or more over a 12 -month period, the Subcontract shall also provide that the Secretary of Health and Human Services or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four (4) years after the services have been furnished. 31.3 This provision relating to the above retention and production of documents is included because of possible application of Section 1861 (v)(1)(1) of the Social Security Act to this Agreement; if this Section should be found to be inapplicable, then this clause shall be deemed to be inoperative and without force and effect. 31.4 27.2 PERSONNEL RECORDS: Should this Agreement terminate for any reason, Providence agrees to provide to KIB all personnel records for those employees who are to be re- employed by KM who consent to the release of such records to KIB. 31.5 27.3 OPERATIONAL RECORDS: Except as otherwise provided herein, Providence agrees to provide KIB with the books, documents and records, including medical records, in regard to the operation of the Hospital, in accordance with all federal, state and local laws, rules and regulations including, but not limited to, privacy laws. 27.4 CONFIDENTIAL INFORMATION: Providence shall comply with all laws, regulations, directives or requirements in any form related to operating and managing hospitals and long -term care facilities, including, but not limited to the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), and regulations adopted under HIPAA. The KIB shall not have access to Protected Health Information as defined by HIPAA. KIB has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement, and that Providence therefore has the following obligations: Providence agrees to hold all individually identifiable patient health information ( "Protected Health Information ") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient health care information. Providence further agrees to make every reasonable effort to comply with any regulations, standards, or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible, but in no event later than April 14, 2003. Providence may use and disclose Protected Health Information when necessary for Providence's proper management and administration (if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities 10 pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein; (2) to mitigate, if possible, any harmful effect known to Providence of a use or disclosure of Protected Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7) to ensure applicable policies are in place for providing access to Protected Health information to the subject of that information; (8) if requested by the KIB, report to KIB any use or disclosure of Protected Health Information which is not provided for in the Agreement; and (9) to make Protected Health Information and an accounting of disclosures available to the individual who is the subject of the information or to KIB, to the extent required by HIPAA. Breach of this section shall be considered material. 31.6 27.5 STORAGE SPACE: Providence shall provide at no cost to MB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 32.1 28.1 KIB TO APPROVE ADMINISTRATOR: Providence agrees to select and hire, with KIB consultation, a competent chief executive officer for the Hospital to be known as the Admi-n-iatrator All chief executive officers for Hospital shall be selected and hired with KIB consultation. Providence shall conduct annual evaluations regarding the Administrator in consultation with KIB. The Administrator shall attend meetings of the Kodiak Island Service Area Community Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital in an efficient and business -like manner consistent with the needs of the community. 32.2 28.2 TERMINATION OF ADMINISTRATOR: Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to the expiration of its full term, then Providence shall provide an Administrator for the Hospital on a contract basis for ninety days following the termination if requested by KIB. 33.1 29. KODIAK ISLAND HEALTH CARE FOUNDATION OFFICE SPACE: Providence shall provide reasonable office space to Kodiak Island Heart Cure F oun d a ti on f the Fo • a i rector will work cooperatively with Kodiak Island Health Care Foundation to provide financial assistance at mutually agreed upon levels, subject to Providence's annual budgetary limitations, for the committed development of community healthcare. 344 30. GOVERNANCE: The overall management and control of the Hospital will rest with the Providence Alaska Service Arca Regional Board. It is anticipated that two KM residents will be eligible to participate as voting members on Alaska Community Board ( "Pi c ") this Board. One member shall be appointed-from-the 11 14aspital medical staff the Chief of Staff and one member shall be a lay person from the commun -ity the Board Chair of the Kodiak Island Service Area Community Board. 34.2 31. KODIAK ISLAND SERVICE AREA COMMUNITY BOARD: An Advisory Board meeting the requirements of 7AAC 13.030(a) will be appointed by 1 J1B ° ith the approval of Providence n as liaison between KIB, to provide input to the hospital staff, the medical staff, and Providence, - Alaska Regional Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC 13.030(b) and (c). One KIB Assembly member shall be appointed by Providence as a full voting member of the Kodiak Island Service Area Community Board, and Providence shall give KIB the opportunity for review and comment before appointments to the Board are made. Providence shall keep the Advisory Kodiak Island Service Area Community Board updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which it serves. Specifically the duties and responsibilities of the Advisory Board include the following: A. Review any changes in hospital policy. Policies may be suggested by C. Review appointments and clinical privileges t the Medica' Staff or members which have been recommended for approval by the Medical Staff in accordance with its Medical and final action. D. Review the operating and capital budgets prepared for the Hospital. E. Review the rate and charge structures in the Hospital. F. Review and comment concerning the quality of care rendered to the patients of the Hospital. C. Review any rcports prepared by Providence. H Eeeperatc with Providence in meeting the requirements of any Federal or State a .., o s t a tutes i.. retaining the II spital license; in obtaining or retaining accreditation from 8+++ Cross /Blue Shield. J To assist Providence in reviewing administrator applicant, and r° mend a K. To aneist Providence in determining and deciding 35.1 32. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 36.1 33. DEFAULT REMEDIES: `Event of Default' means any one or more of the following events, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: 12 A. Failure to pay rent required by Section 6-1 or 7.1 when such rent becomes due and payable, and continuance of such failure to pay for a period of ten (10) days; or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, with the exception of any obligations imposed under Exhibit B, and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder; or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee (or other similar official) of Providence or of any substantial part of to its property, or ordering the winding up or liquidation of its affairs; or D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law, or the consent by it to the filing of any such assignee, trustee (or other similar official) of Providence or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 364 34. CONTINUING DEFAULT: If an Event of Default by Providence occurs and is continuing, KIB may: A. At its option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re -enter and take possession of the Hospital without termination of this Agreement, and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder; C. Terminate this agreement, excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital, or to another for the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; E. With respect to any personal property, exercise any remedies available to a secured party under the Uniform Commercial Code; and/or 13 F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. 37.1 35. TERMINATION: At any time either KIB or Providence may terminate this Agreement by one year's written notice to the other party. This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform any duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Sisters of Providence Health System, pursuant to Exhibit BA, Providence may terminate this Agreement upon 90 days prior written notice to KIB. Upon such termination, Providence shall surrender possession of the Hospital to KIB. On the effective date of such termination KM shall have the option to purchase any such accounts receivable, inventory, supplies or equipment at a fair market value agreed to by both parties. Providence agrees to co- operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KIB for the actual termination. KIB agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. 38.1 36. TRANSFERS OF LICENSES AND PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to operation of the Hospital, including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 39.1 37. NOTICES: All notices, demands, or other writings in this Agreement provided to be given, made or sent, or which may be given, made or sent, by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail, Registered or Certified Mail, postage prepaid, and addressed as follows: KIB: Providence: Mayer Manager Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Regional Vice President and Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage, Alaska 99519 -96604 39,2 38. The address to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 4041 39. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Hospital, in whole or in part, only with the prior consent of the KM, but subject to each of the following conditions: 14 A. At the time of the making of any such assignment or sublease, there shall be no €event of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, in accordance with this Agreement; C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the part of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB, less a pro -rata share of reasonable maintenance, repair, or administrative handling costs; F. KM shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 41--b 40. DAMAGE OR DESTRUCTION: When all or any part of the Hospital is destroyed or damaged, the KIB may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. B. All buildings, improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the KIB as necessary for such restoration, shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6 and 7.1. C. Rent shall be abated in the event of any destruction of damage to, or taking all or any part of the Hospital in proportion to the square footage which is unusable by Providence. D. If fifty percent (50 %) or more of the Premises are rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice in writing, from and after said occurrence, to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 15 42.1 41. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination, however, shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking 43.1 42. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them, hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof, as well as the fixtures, equipment, supplies and other property of either party located in, upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 44-1 43. MISCELLANEOUS: All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument. The waiver by either party or any breach of any term, condition, covenant or provision herein contained shall not be deemed a waiver of the same of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein. This Agreement shall be construed in accordance with the laws of the State of Alaska. Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right, remedy or claim under this Agreement. The parties agree the effective date of this Amendment is January 1, 2005. IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. 818-TER-S-OF ROVIDENCE HEALTH SYSTEM - WASHINGTON d/b /a Providence Alaska Medical Center Health System in Alaska By: Its: Date: KODIAK ISLAND BOROUGH By: Its: Date: A l I EST: 16 STATE OF ALASKA THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Jereme -M. Selby Rick Gifford, to me known to be the Mayer Manager of the KODIAK ISLAND BOROUGH, and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. written. WITNESS my hand and notarial seal the day and year first above in this Certificate STATE OF ALASKA THIRD JUDICIAL DISTRICT ) ) ) ) ) ) Notary Public in and for Alaska My commission Expires: ss.: ss.: THIS IS TO CERTIFY that on the day of , before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Al Parrish, to me known to be the Regional Vice President and Chief Executive, Sisters o f nr .id W-as6i b/a Medical -- Center Providence Health System Alaska, and known to me to be the person who executed the above and foregoing instrument on behalf of Providence Health System - Washington, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by Providence Health System — Washington Board of Directors. written. WITNESS my hand and notarial seal the day and year first above in this Certificate Notary Public in and for Alaska My commission Expires: 17 Kodiak Island Borough AGENDA STATEMENT Regular Meeting of September 15, 2005 Item No. 13.B.1 Resolution No. FY 2006 -10 Accepting a Designated Legislative Grant Through the Alaska Department of Commerce, Community and Economic Development, for Design and Site Work Associated With the Construction of a New Alaska Department of Fish and Game Research and Administrative Building on Near Island. This resolution accepts $1,500,000 grant from the Alaska Department of Commerce, Community and Economic Development, Division of Community Advocacy. This grant will be used to perform site work and design for a new ADF &G facility on Near Island. This building is estimated to cost approximately $8,000,000 with the remainder of the funding to come from the Exxon Valdez Oil Spill Trustees, future grants, and revenue bonds. The Assembly identified the funding for this project as a priority with the adoption of KIB Resolution 2005 -14. The Assembly in that resolution noted the efficiencies of locating this state research agency adjacent to the existing federal research facility. A previous $20,000 legislative grant to the Borough was utilized to perform a "Condition Survey" of the existing ADF &G building. This study showed that there were many shortcomings in the existing structure and its ability to support the state's research of Kodiak's fish and game resources. A "Needs Survey" was also performed. It identified the need for approximately 60% more space than currently exists in this structure for existing staff. It is anticipated that an RFP for Architectural Services will be advertised this fall and site work on the structure to be performed next spring /summer. Acquisition of additional land from the City of Kodiak is also being requested. FISCAL NOTES: ACCOUNT NO.: 430 - 648 - 000 -02107 ® N/A Expenditure Amount Required: Budgeted: Recommended motion: Move to adopt Resolution No. FY 2006 -10. A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY ACCEPTING A DESIGNATED LEGISLATIVE GRANT THROUGH THE ALASKA DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, FOR DESIGN AND SITE WORK ASSOCIATED WITH THE CONSTRUCTION OF A NEW ALASKA DEPARTMENT OF FISH AND GAME RESEARCH AND ADMINISTRATIVE BUILDING ON NEAR ISLAND KODIAK ISLAND BOROUGH RESOLUTION NO. FY2006 -10 Introduced by: Manager Gifford Requested by: E/F Department Introduced: 09/15/2005 Adopted: WHEREAS, the Kodiak Island Borough has identified a new Alaska Department of Fish and Game building as a community priority; and WHEREAS, the State has approved a grant in the amount of $1,500,000 for site work and design of this new research and administrative facility; and WHEREAS, acceptance of the grant award by the Kodiak Island Borough Assembly is necessary in order to utilize the funds to pay for the project; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT the Borough Manager is hereby authorized to accept the Legislative grant funds of $1,500,000 through the Alaska Department of Commerce, Community and Economic Development, for design and site work associated with the construction of a new Alaska Department of Fish and Game research and administrative Building on Near island. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS DAY OF 2005 Judith A. Nielsen, CMC, Borough Clerk KODIAK ISLAND BOROUGH ATTEST: Jerome M. Selby, Mayor Kodiak Island Borough Alaska Resolution No. FY2006 -10 Page 1 of 1 Introduced by: Interim Manager Galstad Requested by: Assembly Drafted by: Eng/Fac Director Cassidy Introduced: 02/17/2005 Amended: 02/17/2005 Adopted: 02/17/2005 KODIAK ISLAND BOROUGH RESOLUTION NO. FY2005 -14 A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH ADOPTING A FEDERAL CAPITAL IMPROVEMENT PROGRAM FOR THE FISCAL YEARS 2006 -2010 WHEREAS, a federal capital improvement program has been adopted by the Kodiak Island Borough Assembly that identifies the needs of the community for the next five (5) years; and WHEREAS, the Kodiak Island Borough has identified six main projects to submit to the Alaska Congressional Delegation for funding consideration; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that: Section 1: The Kodiak Island Borough's top three federal capital improvement project priorities for fiscal years 2006 -2010 are as follows: 1. Kodiak /Kenai Fiber Optic Cable $14,500,000 The construction of a fiber optic cable linking Kodiak with Anchorage and the world would support new economic development in an area where our primary economic sector, commercial fishing, is experience a downturn. The benefits of cable over satellite include greater reliability, secure transmission, and additional capacity to serve the local economy as well as provide a secure and reliable system for the Kodiak's Rocket Launch Facility 2. Kodiak Near Island Research and Administration Facility $4,480,000 Locating a new Alaska Department of Fish and Game building on Near Island and adjacent to its federal counterpart will have many obvious advantages. Information sharing is just one. But the real crux of the justification for this new building is the shortcomings found in the existing ADF &G building as identified in the ASCG "Condition Survey" performed in 2002. In the report it is demonstrated that there is a need for additional space (approximately 60% more), which includes basic lab space. Though the cost of construction of a new facility is estimated to be $8,000,000, the KIB will be requesting through the Exxon Valdez Oil Spill (EVOS) Trustee Council an amount associated with research space only. That space is approximately 56% of the total space of this facility. The estimated cost to repair the existing ADF &G building is projected to be $1.5 million dollars. Even with completion of these improvements, the building does not provide the space needed by the organization. 3. Kodiak Landfill — Lateral Expansion /Close Out of Existing Footprint $6,754,585 The costs to operate and manage a landfill on an island in the North Pacific are substantial. But alternatives are limited. As one of the busiest commercial fishing and processing ports in the nation, having a functioning landfill is a vital piece of infrastructure and important to the local economy. Construction of the landfill's lateral expansion (Phase 3) is planned to occur in the next few years. Initial preparation for the lateral expansion area began in 1998/1999. It is anticipated that use of the lateral expansion area will occur approximately one year before the existing landfill reaches capacity. The lateral expansion site is a maximum eight -acre cell with an estimated nine to twelve year capacity. It will be constructed immediately east of the existing landfill and utilize some of the existing infrastructure. Kodiak Island Borough, Alaska Resolution No. FY2005 -14 Page 1 of 2 Expansion costs per acre are estimated at $61,213 for site preparation and $244,852 for a liner and leachate collection system. Engineering /Design costs are estimated at $306,000. Total capital cost for the projects is estimated to be $6,754,585 for this 8 -acre cell. 4. Anton Larsen Boat Floating Dock $500,000 The Anton Larsen Floating Dock is located 18 miles from town. It is a facility that is heavily used by residents of the communities of Port Lions, and Ouzinkie as well as those living on the island's west side. During the summer it is used by charter boats and sports and commercial fishermen. It was originally constructed as a supply dock for work associated with the Terror Lake Hydroelectric Project. Instead of dismantling the dock upon the completion of the dam, the Borough became interested in it. This interest resulted from the boating public's desire for a safer route to the community of Kodiak through Anton Larsen Bay. A road leads to the City of Kodiak from this dock. The potential risk to loss of life and property is huge when navigating around Spruce Cape. Spruce Cape is one of the most dangerous stretches of water on Kodiak Island and many people risk navigating around this cape to receive essential services. The KIB improved the dock in 1995 by driving piles and refurbishing the floating dock structure. Much more needs to be done to replace the dock and piles and improve this important facility. 5. Chiniak Tsunami Center Expansion Protect $250,000 The community of Chiniak is located almost 40 miles from the City of Kodiak. There is a need for an emergency shelter in time of a crisis. Phase 1 of the construction of the evacuation center was completed in 1990, but there is a need for an addition to the existing structure. Though designed to be a larger facility, funding for its entire construction never materialized. This funding would complete-the design of an addition, as well as upgrade the present water system and backup generator. Presently the shelter also serves a dual purpose acting as the community's library and community center. 6. Womens Bay Emergency Shelter $575,000 There is no emergency shelter in the Womens Bay Community. Womens Bay is located 8 miles from town and 2 miles from the USGC Support Center. Should there be a tsunami that destroys the roads, or a rock slide at the Pillar Mountain slide area or the Womens Mountain site, the community of 670 residents would be without support services. A logical location for an emergency shelter is adjacent and attached to the Womens Bay Fire House. This existing building acts as a community gathering center, but there is presently no additional space to respond to sheltering needs in times of a crisis. A proposed 2,500 square foot addition with an emergency generator is proposed at a cost of 5575,000. Section 2: Kodiak Island Borough, Alaska The Kodiak Island Borough administration is hereby instructed to advise Congress and the appropriate agencies of the United States Federal Government of the Capital Improvement Program and priorities adopted by the Kodiak Island Borough Assembly. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS SEVENTEENTH DAY OF FEBRUARY 2005 ATTEST: . ( O bt3 Ju 9 a 4 % A. Nielsen, cM orough Clerk KODIAK ISLAND BOROUGH rome M. Selby, Borough Mayor Resolution No. FY2005.14 Page 2 of 2 Kodiak Island Borough AGENDA STATEMENT Regular Meeting of September 15, 2005 This resolution was requested by the City of Port Lions. Recommended motion: Move to adopt Resolution No. FY2006 -11. Item No. 13.B.2 Resolution No. FY2006 -11 Supporting the City of Port Lions' Fiscal Year 2006 Mini -Grant Proposal Titled "Plan for Beach Drive Community /Recreational Vehicle (RV) Park." FISCAL NOTES: ACCOUNT NO.: ® N/A Expenditure Amount Required: Budgeted: KODIAK ISLAND BOROUGH RESOLUTION NO. FY2006 -11 Introduced by: Mayor Selby Requested by: City of Port Lions Introduced: 09/15/2005 Adopted: A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY SUPPORTING THE CITY OF PORT LIONS' FISCAL YEAR 2006 MINI -GRANT PROPOSAL TITLED "PLAN FOR BEACH DRIVE COMMUNITY /RECREATIONAL VEHICLE (RV) PARK" WHEREAS, the City of Port Lions is a State and Federally recognized Second Class City; and WHEREAS, the Port Lions City Council is the Governing body of the City of Port Lions; and WHEREAS, the Port Lions City Council acknowledges that their community's fragile economy is being threatened by high fuel costs, lack of affordable transportation, rising food costs, failing infrastructure, etc.; and WHEREAS, the Alaska Marine Highway System threatens less consistent use of the Port Wakefield docking facility by their vessels unless flag stops at port Lions become more profitable; and WHEREAS, State funding will likely not be awarded to Port Lions' for a new docking facility unless there is an RV Park to generate funds to maintain that facility, and WHEREAS, the Port Lions City Council is pleased that seasonal use of the Community /RV park by non - residents will allow Port Lions to control its growth; and WHEREAS, the Port Lions City Council recognizes that property Tract A -1 of the City of Port Lions, Port Wakefield Subdivision belongs to the City of Port Lions; and WHEREAS, the Port Lions City Council is aware that Tract A -1 of the City of Port Lions, Port Wakefield Subdivision has great economic potential, but has been continuously overlooked as such; and WHEREAS, it is important to the Port Lions City Council that employment opportunities, entrepreneurship, new income, and grant funding created by a Community /RV Park, are made available to our community; NOW, THEREFORE BE IT RESOLVED THAT THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH supports the City of Port Lions' Proposal titled "Plan for Beach Drive Community /Recreational Vehicle Park" for Fiscal Year2006 Mini Grant Funds for the purpose of building a stronger economy and providing for more economic opportunities within their community. Kodiak Island Borough Alaska Resolution No. FY2006 -11 Page 2 of 2 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS DAY OF 2005 ATTEST: Jerome M. Selby, Mayor Judith A. Nielsen, CMC, Borough Clerk KODIAK ISLAND BOROUGH Kodiak Island Borough Alaska Resolution No. FY2006 -11 Page 2 of 2 SENT BY: CITY OF PORT LIONS; September 2, 2005 Kodiak Island Borough Attn: Mayor (Jerome Selby 710 MW Bay Road Kodiak, AK 99615 Dear Mayor Selby and Assembly Members, The City of Port Lions is currently applying for FY 2006 Mini -Grant funds, which are offered by the State of Alaska, Department of Commerce, Community and Economic Development. Preferably, 1 would ask for a signed resolution of support from your organization, but if the signing of a resolution would not coincide with one of your regular meetings I would ask for a draft resolution with a letter of support attached that explains why the resolution could not be signed in time for the grant application deadline. In our proposal, I have planned to use Mini -Grant funds to finance a feasibility study for Tract Al of the City of Port Lions, Port Wakefield Subdivision, with the goal of creating a Community / Recreational Vehicle Park on this property. The Proposal is entitled City of Port Lions, "Plan for Beach Drive Community / Recreational Vehicle Park." I have enclosed a rough draft copy of our Proposal for your reviewing. Please do read through our application, as awarded funds from this mini-grant may have lasting, positive implications- It would be optimal if your organization could provide the City Office with a final draft of your resolution/letter of support by September 12, 2005. 1 do apologize for the quickly approaching deadline. Sincerely, Marvin Bartleson Sr. Mayor 9074542420; SEP -2 -05 1:49PM; PAGE 2 City of Port Lions Administrative Office P.O. Box 110 Pof Lions, Alaska 99550 • Phone: (907) 454 -2332 • Fax: (907) 454 -2420 E- mail: cilyolportlions @hotmail,com SENT BY: CITY OF PORT LIONS; Mini -Grant Pro • ram Name of Applicant Name of Community(s) to benefit Joint Applicant (if any) Applicant Entity Type (check one) Title of Project Contact Person Mailing Address E-mail Address Telephone & FAX numbers IRS tax identification number Distressed Community? Yes x No II Ce llc :Lon Marvin 6areeson Sr., Mayor, City of Port Loin 9074542420; FY 2006 Application (Issued utxnisaion Data nd an • and 4 coops to: Jo E. Grove, Grant Manager, Deparbnent of Commerce. Community end Economic Development. Division of Community Advocacy. 211 Cushman Street. Fairbanks, AK 99701. All Applications most be RECEIVED in ere Fairbanks Office no lase than 4:00 PM on Friday, S pannbar 46, 2005. For a copy of an application form and the FAQ on program eligibility. scoring aaerie and other roquiremuds or to discuss projectlprogram requirements, go to http: //a rw. cornmerq .sbte.akuM$calgn/miregranthbn or contact Jill Davis M 907- 451 -2717 orpr daviararammerte.state.akus or Jo E. Grove at 907451.2716 orlo_grove mmerce.aWte.ak.ua. City or Port Lions, Marvin Battleson Sr., Mayor City of Borough x Non-Profit Organization ❑ Non -Profit Tribal Government 0 Plan for Beach Drive Community / Recreational Vehicle (RV) Park Marvin Bartleson Sr., Mayor p,Q. Box 110, Port Lions, AK 09550 cityofponlions©hotmail.com (907) 454 -2332 phone, (907) 454 -2420 fax Population of Community Approx. 250 US Census or DCCED x (4 as appropriate) Mini -Grant Request $ + Cash Match $ + In -Kind Contributions $ = TOTAL Project Cost $ Pon Lions SEP -2 -05 1:50PM; PAGE 3 92- 0035153 To the best of my knowledge, the representations in this application are true. FY06 Mini -Grant Application 8/01105 -Pagel of 6 o=i.i ar: C rr OF PORT LIONS; 9074542420; SEP -2 -05 1:50Pt1; PAGE 4 PROJECT DESCRIPTION Th P stage for the City of Port Lions' "Beach Drive Community / Recreational Park" entails hiring a surveying/designing company to create prints for a section of City oceanfront property, Tract A-1. It is our Community's plan to transform this potentially picturesque land into a Community / RV Park. We would Dike to know how much of the land is suitable for construction and how much it will cost to see the project through The plan for our Community / RV Park is needed because the property we will transform is currently occupied by abandoned and dilapidated trailer homes and vehicles. It is also overgrown with brush and trees. Another reason we are in need of the plan is the nacceptable access roads to the property, which need to be built -up and widened. The project will have an impact on all our community's members, as it will affect our quality of life, recreation and relaxation time, tourism economy, and popularity as a vacation destination. The plan is a necessary step to persuade the Alaska Marine Highway System to increase their number of annual visits to the City's Port Wakefield docking facility, a vital part of our transportation and livelihood, which is presently endangered as their monthly visits to our port will decrease from four (4) to one (I). It is also crucial that the City of Port Lions create an RV Park, in order to encourage State Funding for a new docking facility. The City of Port Lions will host a series of public meetings for the project, in order to gather ideas and constructive information from community members. We would like to put together a public gathering prior to the surveying/designing company's visit and ag Re is a s, our we seven member Port can and discuss uss the e prints. The f e ve gnll � %o will community for decades. OJECT READ_ S City personnel have taken part in multiple brainstorming sessions and have compiled an inventory of the trailers, equipment, etc. that will need to be removed from the property. We have also noted the accessibility of water mains to the oceanfront property. Before we begin to transform the property though, we will need to be entirely aware of its possibilities, propensities, and downfalls. We would like to have an answer to the question, is this property well - suited for the construction of a Community / RV Park Upon receipt of any Mini Funds, we would schedule our first Public Heating for the early spring, April of 2006; then we would ask the surveying/designing company to visit the property directly after in May or June. This will allow the surveying/designing SENT SY: 0ITY OF PORT LIONS; 0074542420; SEP -2 -05 1:50PM; PAGE 5/8 company adequate time to complete the prints and cost estimates and to send a final invoice for their work. This timeline will meet the September 30, 3006, grant deadline. The completion of the Community / RV Park is dependant on future grant funding for similar type projects. With gtartt funding, we would estimate a one year timeline for the completion of the project. PROJECT IMPACT This project will widen Port Lions' appeal as a favorite tourism destination by giving travelers the choice of renting an RV, boarding the State Ferry, and visiting our peaceful community in the comforts of their own surroundings. Travelers taking this route may choose to be entertained at one of our community's hunting and fishing lodges or bed and breakfasts on their next visit fhe City of Port Lions would profit from travelers' visits and facility use, the artists of our community would gain monetary benefits as well as recognition for their work. The entrepreneurs here would be more inclined to start up businesses and tourist shops. We would be able to share and spread our cultural values, history, and knowledge, as well as infiltrate and enjoy foreign ideals and customs. This project has the intensity to enrich our quality of life, while allowing the community to control its growth and maintain our village lifestyle. While these subsequent benefits do not hold much monetary value, they are nonetheless precious. Elders, adults, teens, and children will gain a park where they can relax, entertain, and play. The restoration of this property will create a safe and healthy area where unhealthy and unsafe activities might otherwise occur. Community members will be given peace of mind in knowing that our children can enjoy such a place. Funding for the planning stage of the City of Port Lions' "Beach Drive Community / RV Park" would bring the larger project to a "funding ready" condition. It is an essential, preliminary step in seeking funding for this larger endeavor. Our Community's plan is a great use of Mini -Grant funds because Port Lions is classified by the Denali Commission as a "Distressed" community. Tourism in Port Lions, Alaska is sure to be a booming business, but without accessibility, recognition, and the ability to provide for our visitors, we are unable to fully participate in that business. PROJECT FOLLOW- TIIROUGIj The plan will be used as a base for public and council discussion, as well as a starting point for grant seeking opportunities and construction planning. We would Tike the Community and City Council to review the plan- City personnel will also have a chance SENT BY: CITY OF PORT LIONS; 9074542420; SEP -2 -05 1:51PM; PAGE 6/8 to review it. We would like to follow through and dedicate the "Beach Drive Community / RV Park" to one of Port Lions' loved and admired elders. The City of Port Lions will provide some in kind vehicle rental, labor, and administrative costs. Due to the early stages of this plan, no actual funds have yet been budgeted. The City of Port Lions and the Native Village of Port Lions (NVOPL) work very closely on most of the community's endeavors; we will discuss the establishment of a memorandum of understanding with the NVOPL in order to establish a, agreement specific to this project. COMMUNITY & OTHER SUPPORT This project has been warmly received by our community and by surrounding organizations. Evidence of community support can be seen in the excerpts copied from our Comprehensive Cor mtmity Plan, compiled in 2001, and in letters of support written by various residents. The NVOPL, Afognak Native Corporation (ANC), and the Kodiak island Borough (KIB) have all submitted thcir Resolutions/Letters of support. Please see the attached evidence of support. GRANT ADMINISTRATION CAPABILITIES a Ensuring the terms of the grant agreement are met will be the responsibility of Mayor Bartleson Sr. The City Clerk, Patricia Conley, will be responsible for reporting and grant close -out activities. Mayor Bartleson Sr.'s mayoral duties began in October of 2004; he has been administering grants since that time. Ms. Conley has held her title of City Clerk since February of 2005, and has been responsible for grant repotting and other activities since the date of her employment. Port Lions has had no problems or liens with the IRS in the past five (5) years. Mayor Bartleson Sr. and Ms. Conley have successfully closed out one (1) grant and are currently administering multiple grants for the City of Port Lions. These grants include: • State of Alaska Department of Commerce Community and Economic Development, Mini- Grant- Port Wakefield Dock Repair/Replacement Feasibility Study for S8,470.00, complete/dosed • State of Alaska Department of Education & Early Development, Title I Even Start Grant for 575,000.00, in progress • State of Alaska Department of Commerce Community and Economic Development, FY 2005 Designated Legislative Grant- Community Facilities & Equipment for 510,000.00, in progress • State of Alaska Department of Commerce Community and Economic Development, FY 2003 Capital Project Matching Grant Program- CPI City Equipment Repairs for 525,001.00, in progress SENT BY: CITY OF PORT LIONS; 9074542420; SEP -2 -05 1:51PM; PAGE 7/8 • Denali Commission, Solid Waste Equipment Purchase for $12,906.00, in progress • State of Alaska Department of Commerce Community and Economic Development, Fire Hall Heating, Lighting, and Electrical Upgrade for $10,000.00, in progress • State of Alaska Department of Education & Early Development, Public Library Assistance Grant for $6,200.00, in progress • State of Alaska Department of Environmental Conservation, SFY 2007 Village Safe Water, the award is pending the scoring process, final score and award notification on October 1, 2005. PROJECT MANAGEMENT CAPABILITIES Mayor Barticson Sr. and City Streets and Roads Foreman Alvin Mullen will work jointly as project management. Ms. Conley will perform all administration duties. In addition to Mayor Bartleson Sr. and Ms. Conley's experience, Alvin Mullen has held is title under thc City of Port Lions for five (5) years and has been involved with numerous City projects and maintained a well - earned track record of completing projects. Kodiak Island Borough AGENDA STATEMENT Regular Meeting of September 15, 2005 Supporting Construction of an All- Alaskan Gasline. This resolution was requested by Assemblymember Ranney. FISCAL NOTES: ACCOUNT NO.: ® N/A Expenditure Amount Required: Budgeted: Recommended motion: Move to adopt Resolution No. FY2006 -12. Item No. 13.B.3 Resolution No. FY2006 -12 APPROVAL FOR AGENDA: KODIAK ISLAND BOROUGH RESOLUTION NO. FY2006 -12 Introduced by:Assemblymember Ranney Requested by:Assemblymember Ranney Introduced: 09/15/2005 Adopted: A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY SUPPORTING CONSTRUCTION OF AN ALL - ALASKAN GASLINE WHEREAS, Alaska resources, including the vast oil and gas reserves on the North Slope, are owned by the people of Alaska, and Alaska's constitution mandates that they be developed for the maximum benefit of Alaska's people; and WHEREAS, Southcentral Alaska's gas supplies are declining, which will result in continued drastically increased prices to consumers and businesses; and WHEREAS, Fairbanks and rural Alaska residents are paying higher and higher prices for diesel fuel and would benefit from access to natural gas; and WHEREAS, several Alaskan municipalities have joined together to form the Alaska Gas Pipeline Authority (AGPA) to build an AII- Alaskan gasline to actually develop the gas reserves on the North Slope, rather than continue on with years of further delay; and WHEREAS, the Alaska Natural Gas Development Authority (ANGDA) is prepared to build a spurline to connect Southcentral Alaska to a main gasline; NOW THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT an AII- Alaskan gasline would provide superior benefits to Alaska's citizens in the form of employment, revenues to municipal and state government, potential for value added processing within Alaska, and a faster development timeline than competing projects facing an uncertain regulatory process in a foreign country; AND BE IT FURTHER RESOLVED that the Assembly supports construction of an All - Alaskan gasline with a firm commitment to build the line and market our gas under a set timetable. A supply of gas for consumer needs and economic development in Southcentral Alaska must be secured and assured. Any agreement to build the gasline must also serve the best economic interests of Alaskans as guaranteed under the State constitution. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS DAY OF 2005 ATTEST: Jerome M. Selby, Mayor Judith A. Nielsen, CMC, Borough Clerk KODIAK ISLAND BOROUGH Kodiak Island Borough Alaska Resolution No. FY2006 -12 Page 1 of 1 A TIa A C,UE L Alaska Conference olMayors RESOLUTION A RESOLUTION OF THE ALASKA MUNICIPAL LEAGUE BOARD OF DIRECTORS ON GASLINE DEVELOPMENT WHEREAS, Alaska resources, including the vast oil and gas reserves on the North Slope, are owned by the people of Alaska, and Alaska's constitution mandates that they be developed for the maximum benefit of Alaska's people; and WHEREAS, Southcentral Alaska's gas supplies are declining, which will result in continued drastically increased prices to consumers and businesses; and WHEREAS, Fairbanks and rural Alaska residents are paying higher and higher prices for diesel fuel and would benefit from access to natural gas; and WHEREAS, several Alaskan municipalities have joined together to form the Alaska Gas Pipeline Authority (AGPA) to build an AII- Alaskan gasline to actually develop the gas reserves on the North Slope, rather than continue on with years of further delay; and WHEREAS, the Alaska Natural Gas Development Authority (ANGDA) is prepared to build a spurline to connect Southcentral Alaska to a main gasline. THEREFORE, BE IT RESOLVED that the Alaska Municipal League Board of Directors finds that an AII- Alaskan gasline would provide superior benefits to Alaska's citizens in the form of employment, revenues to municipal and state government, potential for value added processing within Alaska, and a faster development timeline than competing projects facing an uncertain regulatory process in a foreign country. AND BE IT FURTHER RESOLVED that the AML Board of Directors supports construction of AII- Alaskan gasline with a firm commitment to build the line and market our gas under a set timetable. A supply of gas for consumer needs and economic development in Southcentral Alaska must be secured and assured. Any agreement to build the gasline must also serve the best economic interests of Alaskans as guaranteed under the state constitution. Kodiak Island Borough AGENDA STATEMENT Regular Meeting of September 15, 2005 Item No. 13.D.1 October 4, 2005 Regular Municipal Election Workers. FISCAL NOTES: ACCOUNT NO.: ® N/A Expenditure Amount Required: Budgeted: APPROVAL FOR AGENDA: Recommended motion: Move to approve the regular municipal election workers as submitted by the Borough Election Supervisor. TO FROM : DATE : SUB . OLD HARBOR Chair Judge Judge Judge PORT LIONS Chair Judge Judge Relief Clerk MEMORANDUM Kodiak Island Borough Assembly Judi Nielsen, Borough Clerk September 15, 2005 Regular Municipal Election - October 4, 2005 Pursuant to KIB 7.30.010, I respectfully request approval of the individuals who have volunteered to serve as election workers for the Borough's October 4, 2005 Regular Municipal Election KODIAK NO. 1 Chair Judge Judge Judge Translator Relief Clerk MISSION ROAD Chair Judge Judge Judge Relief Clerk Relief Clerk CAPE CHINIAK Chair Judge Judge Relief Clerk Relief Clerk PRECINCT NO. 618 Victoria Mackey Linda Ross Merle Powell Justine Hartman Mediatrix Santamaria Gretchen Saupe PRECINCT NO. 622 Bryan Martin David Blacketeer Carol Blacketeer Jean Barber Linda Madsen Mike Marion PRECINCT NO. 605 Debbie Bergen- Henderson Jane Wheeler- Williams Judith Wood (Connie) Diane Peterson (MaryJo) Katie Lewis PRECINCT NO. 625 Wilmer Andrewvitch Frances French Anna Nestic Justina Ignatin PRECINCT NO. 645 Diane Cole Janet Thompson Roxanne McGavran Lisa Robustellini RECEIVING BOARD / HAND COUNT BOARD Lorna Steelman Heather Fincher Judy Fine Gail Otto KODIAK NO. 2 Judge Judge Judge Judge Judge Translator Translator FLATS Chair Judge Judge Judge Relief Clerk Relief Clerk Relief Clerk LARSEN BAY Chair Judge Judge Relief Clerk OUZINKIE Chair Judge Judge Judge ACCUVOTE BOARD Supervisor Coordinator Coordinator Coordinator Coordinator Coordinator CANVASS BOARD Mary Sundberg Lynn Furin Karen Still Sally Haldewang PRECINCT NO. 620 Elinor Ramos Jessica Goss Carol Wandersee Heather Fincher Greg Wallace Glenn Fanlo Delia Aspiras PRECINCT NO. 608 Sarah Thayer Jocelyn Zwiefelhofer (Terry) Robin Stevens Kerry Woods Spencer Schaeffer Marie Rice Dale Rice PRECINCT NO. 615 Marie A. Squartsoff Charlene Malutin Marlene Aga Lars Naumoff PRECINCT NO. 635 Barbara Anderson Wanda Morrison Paula Boskofsky Christine Z. Bennett Judi Nielsen Nova Javier Jessica Basuel Debbie Marlar Kris Williams Nita Nicolas I. CALL TO ORDER KODIAK ISLAND BOROUGH PLANNING AND ZONING COMMISSI REGULAR MEETING JULY 20, 2005 MINUTES The regular meeting of the Planning and Zoning Commission was called to order at 7:30 p.m. by CHAIR FRIEND on July 20, 2005 in the Borough Assembly Chambers. II. ROLL CALL Commissioners Present Jerrol Friend — Chair David King Reed Oswalt Gary Carver Dennis McMurry Brent Watkins A quorum was established. III APPROVAL OF AGENDA VI. PUBLIC HEARINGS Excused Casey Janz Others Present DECEHNE BOROUGH CLERK'S OFFICE AUG 1 9 2005 Mary Ogle, Director Community Development Dept. Duane Dvorak, Planner Community Development Dept. Sheila Smith, Secretary Community Development Dept. COMMISSIONER KING MOVED TO APPROVE the agenda as presented. The motion was SECONDED by COMMISSIONER McMURRY, and CARRIED 6 -0. IV. MINUTES OF PREVIOUS MEETINGS COMMISSIONER KING MOVED TO APPROVE the minutes of May 18` June 15` and Special meeting of June 15th, and Special meeting on June 29, 2005. COMMISSIONER OSWALT SECONDED the motion, and CARRIED 6 -0. V. AUDIENCE COMMENTS AND APPEARANCE REQUESTS A. Case 05 -010. A request for a Conditional Use Permit, per KIBC 17.13.040 (D), to permit seasonal recreation camp with provisions for up to thirty -five (35) clients and staff, in accordance with KIBC 17.67, on a five acre parcel located within Township 26 South, Range 19 West, Section 28, located within Spruce Island; An un- subdivided portion of land located within Township 26 South, Range 19 West, Section 28 and zoned for C- Conservation. Staff reported (10) public hearing notices were distributed for this case on June 22, 2005 with none returned. The subject location is a site previously used as the Spirit Camp that the Kodiak Area Native Association does cooperatively with the village youth. They had platforms there and did some extensive soil investigation P & Z Meeting Minutes: July 20, 2005 Page 1 of 12 gistered engineer to show the site could handle the particular use, and that — , r � ► a� 2001 -2003, a three year camping program This is a similar type of use, Z�Xr 3J0 "i?�a e , this is a family recovery camp that will be run seasonally twenty -eight _(28) days in June and August over the next four (4) years. They have indicated a maximum of thirty-five (35) personnel on site. They have submitted a waste management plan, and intend to use the same site plan layout , the onsite privvy system that the previous camp utilized. They have brought forward all of the packet materials from the previous Spirit Camp submittal, which is an attachment to their narrative. Staff believed this request meets all the conditions necessary for a Conditional Use Permit subject to four (4) recommended conditions of approval, Conditions 1, two, and three primarily relate to the submittal of the Kodiak Area Native Association's staff. Condition # four is more substantial; staff recommends they get ADEC approval. In June DEC published new guidelines and permit process for camps of this type, and they fall into the large camp category. We have included an application form in your packet for review of the kinds of criteria ADEC would be looking at. Staff recommends approval subject of the four (4) conditions, and will answer any questions you may have. COMMISSIONER OSWALT MOTIONED TO GRANT a Conditional Use Permit in accordance with KIBC 17.13.040.D (Conditional Uses) of the Borough Code, to permit a seasonal recreation camp with provisions for up to thirty-five (35) clients, visitors and staff, on a five (5) acre parcel located on Spruce Island, subject to the conditions of approval contained in the staff report dated July 12, 2005 and to adopt the findings contained in that staff report as "Findings of Fact" for this case COMMISSIONER McMURRY SECONDED the motion. Special session closed: Public hearing open: Public hearing closed: Special session open: CONDITION OF APPROVAL 1. This conditional use permit is issued for a maximum of thirty-five (35) clients, visitors and staff 2. The "Family Recover Camp will be operated seasonally from June 1, to June 28, and August 1 through August 28, 2005 -2008. 3. The petitioner will ensure that sanitary and waste management practices will be adhered to as indicated in the engineering assessment and narrative program description submitted for this case. 4. The petitioner will apply for approval by the Alaska Department of Environmental Conservation (ADEC) in accordance with the Large Camp Practices application form dated June 7, 2005 (attached) and will provide P & Z Meeting Minutes: July 20, 2005 Page 2 of 12 written approval for seasonal camp operations prior to the issuance of zoning compliance by the Kodiak Island Borough. FINDINGS OF FACT 17.67.05 A. That the conditional use will preserve the value, spirit, character and integrity of the surrounding area. The operation of the camp is seasonal and temporary. Minimal impact is ensured, not only by the short-term nature of the operation, but also by the nature of the principal activity to engage in individual and group therapy activities. In this way the value, spirit, character and integrity of the surrounding area should be preserved. 17.67.05 B. That the conditional use fulfills all other requirements of this chapter pertaining to the conditional use in question. This proposed conditional use is consistent with both the intent of KIBC 17.67.010 requiring compatibility of the activity with the surrounding area, and also KIBC 17.13.010 addressing the description and intent of the C- Conservation zoning district, which provides for limited commercial land uses. It is also consistent with the special district regulations of the C- Conservation zoning district in KIBC 17.13.090 since impact on the natural environment is minimal and natural features will be preserved intact. 17.67.05 C. That granting the conditional use permit will not be harmful to the public health, safety, convenience and comfort. The granting of this conditional use permit will not be harmful to the public health, safety, convenience and comfort since there are essentially, no immediate neighbors or adjacent land uses. Measures have been taken to protect the health and safety of participants with the requirement that a potable water source and solid waste disposal system compliant with ADEC regulations is provided. 17.67.05 D. That sufficient setbacks, lot area, buffers or other safeguards are being provided to meet the conditions listed in subsections A through C of this section. Minimum lot area and setback requirements are satisfied. Natural buffering is provided by trees and topography. The Family Recovery Camp is seasonal and temporary, as well as remote, and the potential for conflicts with surrounding neighbors or adjacent land uses is minimal. P & Z Meeting Minutes: July 20, 2005 Page 3 of 12 The question was called, and CARRIED 6 -0. B) Case 05 -009. Request for a Variance, in accordance with KIBC 17.66, to permit the creation of lots by subdivision with less than five (5) acres of lot area that is not subject to tidal action below the mean high tide, per KIBC 16.40.040.A.2, KIBC 16.40.050.B.1, and KIBC 17.13.050.A., located at Kalsin Bay Estates, Lot 3, and zoned for C — Conservation. Staff indicated there were eleven (11) public hearing notices were distributed on June 22, 2005 with no written response returned. We have one (1) agency response from the Army Corp of Engineers and several correspondences from the petitioner and the petitioner's representative. In addition, there are a couple of photographs that were taken at approximately 3:00 pm of the property to give a visual assessment of the property as it sits. They were taken from the Kalsin Hill road, looking out from the guardrail. This request is related to a preliminary plat submittal to create seven lots from a large remainder tract from a previous subdivision. The Title 16 date of requirements indicates that for the purposes of zoning area calculations that we cannot consider lands lying below the mean high water line. For that reason we returned the plats to the petitioner at that time and advised them of the code requirement. They have since brought forward this Variance request to have the commission to review and evaluate the proposed subdivision in the context of the lot area issue. In terms of condition # one (1) staff did find the properties to be affected of the tide influence, but staff couldn't find all six (6) standards to be met. There were some concems about the safety of developments that could be developed on the property, particularly at the front near the shoreline at Kalsin Bay. There maybe some concerns about the availability of getting water and sewer on the properties, although that hasn't been investigated, that would be part of the subdivision review process. There was concem that there might require follow on Variances for set back purposes to get structures on the highest portions of the properties near the front property line. The opinion of staff is that there are other conforming alternatives other than a Variance that could be investigated, and for that reason staff recommended denial of that request. Staff would be happy to answer any questions on the analysis. COMMISSIONER FRIEND inquired about the options that might be done other than the Variance. DUANE DVORAK replied that the wetland or tideland issue affects four (4) out of the seven (7) lots being proposed. Two (2) out of the seven (7) lots have ten (10) acres each, and it seems that if the lots were redesigned in such a way that three (3) or four (4) of the lots weren't carrying seventy-five (75) or eighty (80) percent of the wetlands, that if the wetlands could be divided up in such a way that each lot had five (5) acres of upland associated with them a different design may be conforming without the need for a Variance. I would grant that it may mean losing a lot or two from the design as proposed, but density is a subjective and discretionary thing that the sub - divider has control over, and the code guarantees people a reasonable use of their land. It doesn't always guarantee the highest and best use of the land or the most return on their land, but in my opinion, it would P & Z Meeting Minutes: July 20, 2005 Page 4 of 12 create a better subdivision to provide a better tideland to upland ratio. Without getting into specifics, I think that is what staff's position is about. COMMISSIONER CARVER inquired to what the tide was when the photographs were taken. DUANE DVORAK stated we didn't have a watch with us and we were held up by the traffic construction. We were trying to catch the afternoon tide, which was suppose to be a 6.2 at approximately 3:00 p.m. COMMISSIONER CARVER asked if there were any kind of easement access to the lots 3F, E, D, and C that's associated with this. DUANE DVORAK stated that the highway use to go along the head of Kalsin Bay before the 64' earthquake and tsunami. When they subdivided the previous phase there was some residual right of way which comes out and accesses the tidelands that still remains. The petitioners are proposing access along the tidelands along the front of the property, which is public and maybe highway, although this isn't a subdivision review. When we do get to the subdivision review we will circulate this to DOT and hopefully they can fill us in on the status of this access, whether they believe this feasible or not. It's not developed as a roadway and I don't know if it meets any kind of access standard. This Variance is not about reviewing that or the feasibility of that, so we didn't get into it. COMMISSIONER KING MOVED TO GRANT a variance; in accordance with KIBC 17.66, to permit the creation of four (4) lots by subdivision with less than five (5) acres of lot area that is not subject to tidal action below the mean high tide, per KIBC 16.40.040.A.2, KIBC 16.40.050.B.1, and KIBC 17.13.050.A. COMMISSIONER McMURRY SECONDED the motion. Special session closed: Public hearing opened: Grant Shields, the broker for Alaska One Realty, is representing Kathy Dillard and Wayne Sargent I think the most of the concems or speculation in development is in regards to the wetlands, an actual usable area in the four (4) five (5) acre parcels that are ocean front. My purpose is to pass some information on of the intent of the owners at Alaska One Realty if the Variance is granted. First, the property was comprehensively surveyed by Stan Austerman with Horizon Survey into five (5) and ten (10) acre parcels. The parcels we will talk about tonight are the ocean front five (5) acre parcels. The owners would be marketing some of the parcels of the subdivision, but not all of them again the four (4) five (5) acre parcels. Myself, as the agent for the owners, would include in the marketing packets pertinent information on the wetlands and the correspondence from the Army Corp of Engineers, which I believe Duane has that correspondence. It is our feeling that the area of land that would be utilized for the actual structures, assuming somebody will want to put up structures up on the property if they purchased it, would cause little impact, if any, to the wetlands in the surrounding P & Z Meeting Minutes: July 20, 2005 Page 5 of 12 area. As a licensed real estate agent, I would handle the marketing of the proposal part of the proposed parcels that would be offered to the public responsibly with a comprehensive packet detailing the wetlands and correspondence from the Corp of Engineers in regarding to permit requirements in that type of thing if one should needed. As a real estate professional, it is notes there is a very high consumer demand for coastal land with little, if any to offer. That again is the reasoning for the five (5) acre ocean front parcels. I don't feel that subdividing into five (5) acre parcels would bring in more dollars, just offer more opportunity for interested purchasers in the affordability scenario. The subject parcels would be perk tested and investigated to see if they would meet well and septic criteria. But before spending more dollars on tests and footwork, the owners feel it would be imperative to have Variance approval as obviously they don't want to spend more money for a maybe. Bottom line is that the property will be subdivided responsibly with any potential buyer knowing what is allowable on the property. In this way, we would expect that the property would appreciate in value and also bring in additional tax revenues to Kodiak. Public hearing closed: Regular session opened: COMMISSIONER CARVER inquired where the building sites are on lots 3F, 3E, 3D, and 3C? COMMISSIONER FRIEND asked DUANE DVORAK when they come in with a subdivision request first. DUANE DVORAK stated that they did come in with a subdivision request first, staff rejected it because of the wetland issue. We didn't feel the plat was conforming to the subdivision standards on its face because of the wetlands and that was in a pre- review status. We retumed it to the petitioners immediately when we discerned there was a problem Realistically, we advised them to one of the altematives to try to resolve this was to request a Variance. They are following staffs recommendation. In addition, while this is the preliminary plat, but I think they may have added some additional information.regarding the potential building sites if you look at the frontage along Kalsin Bay you'll see some lot areas indicated there between the dash line and the front property line. Starting with 3C, I believe it's 44,000 sq. ft., 43,000 sq. ft. on 3D, 50,000 sq. ft on 3E, and 66,000 sq. ft on the front and you'll also notice there's also 60 something thousand sq. ft in the back. 3F is a little different because it has frontage both on the beach, as well as this private drive that is proposed that will loop around the back. But when staff was looking at this, on the first page you'll see that staff estimated the overall acreages of each lot, and then estimated how much wasn't subject to tidal action. These figures came off this map, and we utilized this additional information to come up with these estimates. COMMISSIONER CARVER asked if these building sites are all on this berm that faces the ocean? P & Z Meeting Minutes: July 20, 2005 Page 6 of 12 DUANE DVORAK stated that this is the assumption. COMMISSIONER CARVER asked if DUANE DVORAK knew how much that burm has retreated since 1964? DUANE DVORAK stated that staff does not know that. COMMISSIONER CARVER stated that the highway easement, the landward margin is shown there and the old highway would be out somewhere on the beach -face right now. Does that bar ever get washed over with waves during large storms and storm surges? DUANE DVORAK stated that staff doesn't have that information, but I think there is a concern, in the Coastal Management Plan it indicates any property within 30 ft.of mean high water may be at risk of Tsunami, if not storm search. The highest contour, which roughly approximates the front property line along the Kalsin Bay side is 15 ft. as indicated on the plat. COMMISSIONER CARVER stated that he thinks there is cause to want to understand two issues: One is the coastal erosion rate at that site because the useful property is part of those lots that's directly subject to erosion. Second, is whether those are sites that are above storm wave effects. It makes no sense to create a lot, which is in a natural hazard zone and eroding so that the only buildable part of it is the part that is going to be eroded. COMMISSIONER McMURRY stated we aren't really approving building lots, all we are doing is approving the creation of the lots. If they are going to build on them then they have to come back, right. COMMISSIONER FRIEND asked how these lots compare to the Pasagshak lots and property? DUANE DVORAK stated that he doesn't think there is a direct comparison here in terms of zoning because those lots were zoned RR -1 and so the lot sizes are quite a bit different. That particular subdivision, the plat notes that talk about the lot lines change as the river and shoreline changes. That was a more recent subdivision. Subdivisions that were pre earthquake and tidal wave the boundaries generally were fixed and don't move along with the movement of the beaches and shoreline. There maybe some differences both in the subdivision aspects and the zoning aspects. I encourage the commission of not necessarily getting into subdivision issues The Variance is really about whether or not if they can count the tidally influences areas in the inside of the subdivision as part of the lot area. Your really not creating lots here tonight, you are dealing with just this Variance. Whether or not they can count these tidal areas as part of the five (5) acre lot area. Otherwise, the way the code currently reads, they will only get credit for the square footages that are noted on the frontage of these lots, which is approximately acre, an acre and a half for the three lots. The fourth lot has a little more area in the back. P & Z Meeting Minutes: July 20, 2005 Page 7 of 12 COMMISSIONER FRIEND inquired if we approve this they will still have to come back before us for the subdivision, which we can then regulate the buildable areas and look at that at that time. DUANE DVORAK stated I think with the subdivision process this will get sent out again to the review agencies and presumably we would have more feedback regarding the history of the DOT right of way and that type of thing. We would have these agencies giving us more thorough review and we would be looking at all these other aspects, whereas in this case while I think staff indicated that Title 16 and Title 17 have to work hand in hand because Title 16 is what kicked this back as a Variance, but at the same time the Variance standards and the request that is before you is very narrowly construed as to what you are deciding here this evening and doesn't get into some areas that were being discussed I think there were some issues that staff brought up that may or may not bring problems down the road, but I wouldn't go into that too deeply. It's not a subdivision review. COMMISSIONER WATKINS stated he wished the percentages were tilted the other way as far as the wetlands and uplands go. COMMISSIONER McMURRY stated that I wouldn't approve it the way it is. COMMISSIONER CARVER stated that I don't see any reason to get them into something that's going to be harder later on. They might create those lots, but they might have a lot of trouble building on them later on. COMMISSIONER FRIEND stated that we are not creating lots. We still have that to come back in the subdivision that we can set a buildable area. MARY OGLE stated that if you approve this Variance you are setting the stage for them to come up with a subdivision with the understanding that subdivision approval is less discretionary than a Variance. COMMISSIONER FRIEND said it allows us to use more at a later day. If we want to use part of that we aren't limited to the five (5) acre buildable area. If these guys come in with a large enough area that is buildable we wouldn't be able to let them do it without this Variance. COMMISSIONER CARVER stated another five acres doesn't bother me, but the way they are presently construed. COMMISSIONER FRIEND stated he doesn't mind them using part of the tidal land but I don't see this layout working. MARY OGLE asked DUANE DVORAK because it is a Variance procedure could the commission grant part of a Variance, set criteria on the Variance saying it's not a Variance from not counting any of the five (5) acres towards minimum lot size, could they make the Variance approval contingent upon each lot would have to have at least two, two and a half acres. A partial Variance. DUANE DVORAK stated it is a possibility that you can grant them less than what they have requested. What they have requested is what is shown on this map. Basically, the square footages along the frontage there for the three lots, then the P & Z Meeting Minutes: July 20, 2005 Page 8 of 12 front and back for lot 3F. That is the request as staff understands it and that is what we diagramed or spelled out on the front page of the staff report as far as the net usable area. If you were to set a net usable area more than what they've indicated here it would mean they would have to go back to the drawing boards to redesign the subdivision but it would give them partial relief from what they have requested. In addition, if you put on conditions that would specify building locations had to be a certain distance away from the shoreline if there's an erosion concern, you might also include some guidance like that. But that gets into the subdivision realm and this is going to come back as a subdivision, and I think it could be addressed more appropriately in the subdivision process. MARY OGLE stated that she just wanted to give them some of the legal options for your comfort level, a level of predictability for the next stage if they come back. COMMISSIONER FRIEND asked if they would have to re -adopt findings if they granted this request. MARY OGLE stated yes they would. The question was called on the main motion, and CARRIED 6 -0. COMMISSIONER McMURRY MOVED TO DEFER adopting the findings of fact until the next regular meeting. COMMISSIONER WATKINS SECONDED the motion. COMMISSIONER CARVER said he would like to see some information about the history of retreat of that coastline before we follow through with the decision about findings of fact. Can staff research that and tell us what that coastline has done since 1969? DUANE DVORAK stated they can try. The question was called and CARRIED 6 -0. VII. OLD BUSINESS A) Case S02 -009. Extension Request — A request to extend the preliminary approval for Case S02 -009 until December 23, 2005. Staff indicated that the plat involved here was intended to correct some violations of zoning. The plat itself is in the final form has been granted final approval, but there were some building improvements that were also included that preliminary approval and some compliance deadlines set for those buildings to be brought into conformity and certificates of occupancy issued. The petitioner has suffered from an illness according to their submittal, and they have requested an extension of the compliance deadline that was spelled out in the conditions of the preliminary approval, so they are really requesting an extension of the compliance deadline. Staff has recommended the commission grant the extension until November 18, 2005 and has provided a motion and a condition of approval. P & Z Meeting Minutes: July 20, 2005 Page 9 of 12 COMMISSIONER CARVER MOTIONED TO APPROVE an amendment of preliminary plat approval for Case S02 -009, to extend the compliance date set forth in Conditions of Approval #2 until November 18, 2005. The motion was SECONDED by COMMISSIONER McMURRY, and CARRIED by unanimous voice vote. CONDITION OF APPROVAL (as amended) 2. Within twenty -nine (35) months (by November 18, 2005), applicable inspection reports and/or certificate of occupancy required by the Building Department must be issued for conversion of the barn on proposed Lot 3 to a single - family residence, or it must be otherwise brought into compliance with Title 17 Zoning. Absent this, zoning enforcement action will be initiated. B) Mobile Home Park Proposed Code Revisions. DUANE DVORAK stated that they have a memorandum before you, a cover memo for this case that was referred to the Commission by the Borough Assembly based upon recent appeals of the mobile home park code and permitting decisions made by staff based upon the code as it is and the commission looked at this with the idea of reducing or elimination non conformities in the mobile home park code and making the code a little more development friendly and yet encouraging standards for building safety and convenience of the residents to be upheld. This revised code developed by the Planning & Zoning Commission over a year or more of work sessions and meetings, capped off more recently by public review draft circulated in April -May's time frame, then re- advertised due to discrepancies on how it was sent out. One of the mobile home park owners was omitted from the mailing list inadvertently. Comments were received, most recently the commission had a work session and went through all the comments received. They did a fine tuning of this draft. Staff believes that, based on the efforts put forth by the commission the input from the public, and the input of staff that this particular code draft is ready to go before the Borough Assembly for their consideration and additional public hearing and staff recommends you forward it with a recommendation of approval at this time. COMMISSIONER OSWALT MOVED TO RECOMMEND APPROVAL of the code amendment to Chapter 17.26 to the Borough Assembly, in accordance with KIBC 17.72, as indicated in this report. COMMISSIONER KING SECONDED the motion, and CARRIED 6 -0. C) Case 05 -011. Condition Use Permit — A request of approval of site and parking plan. DUANE DVORAK stated this case relates to a Conditional Use Permit Case 05- 011 that the commission recently approved subject to four (4) conditions of approval. Condition #4 required the site plan to be brought back for review. Apparently, the original CUP didn't have a detailed site plan associated with it, P & Z Meeting Minutes: July 20, 2005 Page 10 of 12 and asked that this come back. Staff has included some vicinity maps and a couple of different views of the site plan. One is the site plan and one is the floor plan. This is a two phase development, you are looking at phase one right now. Phase two will be developed at another time. They have presented the entire site plan- floor plan for your review and consideration at this time. Staff has recommended approval of this site plan. COMMISIONER KING MOVED TO ACCEPT AND APPROVE this site plan as submitted by the applicant, in accordance with Stipulation # four (4) of the decision rendered in CUP Case 05 -011. COMMISSIONER McMURRY SECONDED the motion, and it CARRIED 6 -0. VIII NEW BUSINESS There is no new business. IX. COMMUNICATIONS COMMISSIONER McMURRY MOVED TO ACKNOWLEGE RECEIPT of items A, B, C, D, E, and F of Communications. COMMISSIONER KING SECONDED the motion, and CARRIED 6 -0. X. REPORTS Staff reported the following meeting schedule: • August 10, 2005 work session at 7:30 p.m. in the KIB Conference room. • August 17, 2005 regular meeting at 7:30 p.m. in the Assembly Chambers. • August 28, 2005 joint Assembly/P &Z work session at 7:30. COMMISSIONER FRIEND stated that August 28, 2005 should read July 28, 2005. MARY OGLE stated that she just wanted to clarify it is July 28` and the purpose of the meeting is to discuss Borough's lands management, as well as she will be giving a brief introduction to the upcoming comprehensive planning process where the new Borough Comprehensive Plan will be an initial discussion of issues and brainstorming to set the overall parameters of the new comprehensive plan. COMMISSIONER McMURRY MOVED TO ACCEPT receipt of reports as submitted. COMMISSIONER KING SECONDED the motion, and it CARRIED 6 -0. XI. AUDIENCE COMMENTS There were no audience comments. XII. COMMISSIONER COMMENTS COMMISSIONER McMURRY congratulated DUANE DVORAK for lasting 10 years at the Borough. MARY OGLE stated that we have incorporated new mapping into the staff reports for submitting with all reports, now location maps as well as zoning maps to try to clarify the location and standards of property in your staff reports. Also, try to think of any changes P & Z Meeting Minutes: July 20, 2005 Page 11 of 12 you would like to see and do, the format of staff report or operations of the meetings so we can discuss them at the next packet review. XIII. ADJOURNMENT CHAIR FRIEND ADJOURNED the meeting at 8:20 p.m. ATTEST By: Pa Qn Yt Sheila Smith, Secretary Community Development Department DATE APPROVED: August 17, 2005 KODIAK ISLAND : OROUGH PLANNING AND ZONING ' • 1 SSION By: _ ;1 fL�r o f Li Jerrol ' Chair P & Z Meeting Minutes: July 20, 2005 Page 12 of 12 Women's Bay Service Area Board Regular Meeting Minutes Apri118, 2005 CALL TO ORDER 7:15 pm Members Present — Chris Lynch, Spencer Schaeffer, John Isadore, Dave Conrad Guests Present — Craig Breighton, Kevin Arndt Citizen's Comments — None. Approval of Minutes — Approved meeting minutes as submitted Old Business Fire Department —By laws, Constitution and SOP discussion was differed to a future meeting when Dale can be present. Dave has submitted the grant for the tanker truck. Road Service Area — New member recommendation — Craig Breighton was approved for recommendation to the service district board. Ed will mark trees for Contractor to cut down. Work list update — Culverts are the next items on the list. Requested that crack sealing be performed before the end of the contract. The Board requested that 3 more stop signs, a yield sign and a speed limit sign be ordered. New Business Fire Department — Road Service — New contract is scheduled to be advertised this month. Board members requested copies of the contract for review. Additional work list items — Dale Stratman's culvert — Ed will look at with Kevin Pull the shoulders back into the road, re -ditch Otter. Board Member Comments — Meeting was adjourned at 8:30 p.m. Next Meeting — May 23, 2005 Ily Submitted, hair Person ess ECE SEP - 1 2005 BOROUGH CLERK'S OFFICE Women's Bay Service Area Board Regular Meeting Minutes May 23, 2005 CALL TO ORDER 7:15 pm Members Present — Chris Lynch, John Isadore, Dave Conrad, Ed Gondek Guests Present — Kevin Arndt Citizen's Comments — None. Approval of Minutes — Approved meeting minutes as submitted. Old Business Fire Department —By laws and Constitution have been signed; recommend distribution to Manager's Office. Road Service Area — New member recommendation — Craig Breighton was approved by the assembly to the service district board. New Business Fire Department — ISO will be on island in July or August to review files. This is for insurance ratings — we will probably lose our rating due to lack of recods kept by the Fire Chief. Dave was authorized to spend money to build sign for building. Volunteers are getting physicals. Road Service — Board Member Comments — Meeting was adjourned at 7:40 p.m. Next Meeting — To be determined based on bid results. C[ OW SEP - 1 2005 BOROUGH CLERK'S OFFICE Women's Bay Service Area Board Regular Meeting Minutes June 6, 2005 CALL TO ORDER 7:00 pm Members Present — Chris Lynch, John Isadore, Dave Conrad, Ed Gondek, Spencer Schaeffer. Guests Present — Steve DeHart Citizen's Comments — None. Approval of Minutes — No minutes to approve. Old Business Fire Department —By laws and Constitution have been signed; Dave submitted items to Manager's office. Road Service Area — Fill material currently being placed is acceptable. Roads should be graded now and at the end of the month before the contract expires. New Business Fire Department — Road Service — Board reviewed bid tabs for new contract. It was recommended and approved that TC Enterprises be our recommendation for award. The recommendation was based on price, availability, ability to perform and past performance. Chris will send a memo to E/F Department. Board Member Comments — Meeting was adjourned at 7:40 p.m. Next Meeting — July 18, 2005 fully Submitted, Chair Person fitness ACTION ITEMS: APPROVED: APPROVED: APPROVED: KODIAK ISLAND BOROUGH SCHOOL DISTRICT Board of Education Regular Meeting - August 29, 2005 Motion to approve certificated contracts for the 2005/2006 school year to Yvonne Boudreau - MA +0 /0 in the amount of $40,517 for 1.0 FTE Main Elementary School; Arlene Hood - BA+0/0 in the amount of $35,541 for 1.0 FTE Peterson Elementary School; Lori Prysock - BA +0/3 in the amount of $43,360 for 1.0 FTE Peterson Elementary School; Tonya Heitman - BA +0/6 in the amount of $47,980 for 1.0 FTE North Star Elementary School; and David Wages MA +0/5 in the amount of $52,245 for 1.0 FTE North Star Elementary School. Motion to approve Purchase Requisition Number 459006012 to Apple Computer, Inc., in the amount of $10,959.20. Motion to adjourn. SUMMARY ACTION ITEMS: APPROVED: APPROVED: KODIAK ISLAND BOROUGH SCHOOL DISTRICT Board of Education Special Meeting - August 22, 2005 Motion to adjourn. SUMMARY Motion to approve a certificated contract for the 2005/2006 school year to Roy Strom - BA +0/5 in the amount of $46,914, plus $355 village stipend for 1.0 FTE rural schools. - plECE11WEI _ AUG 2 5 2005 D BOROUGH CLERK'S OFFICE 0 N 0 i Q O N I 2w LL W0 ° O U Qw 7 Q z w Q > U w 0 M m w c; ui O O O o (n o z 4 O O N m N M M O H o o 0 i O d cl 0. C7 0 R 0. ci H CO N N a 0 ct. 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L m m v m c_ c T� z .c: 8 E aL.ci ry y G d .; 3 >> ` 7 �1 E 8 y Cp ~ E O c° ,_ E d a N co c �� fi o ra K y :� ��p . c m 0 c «$cm �? � c E m W S F mm N c cyo Eai`°cagpm= yO 5 J k F '0g a0 m :1= 2 ,,, K ` d al E c U cot E '0 c a O 0,0:00z,>, 0.- O E'O Ua C�v�aOro q.a.:$ °cm q'`mm o C 0) 0 OQ3otEocc oa or � v m 0 c n c 0 0 >. � 0 c2 a) A N N T ce 0 N Last update for 7 -1 -2005 EMPLOYEE BENEFITS Full -time Employees RETIREMENT BENEFITS Public Employees Retirement System (PERS) PERS is a retirement and disability benefit program. As an employee of the Borough you are automatically enrolled in the PERS program. Each pay period, 6.75% of your gross wages are contributed to your PERS account. The Borough contributes a percent, set by PERS annually, of each employee's gross wages to the PERS program After five (5) years of service in PERS, you become a "vested" member. This means you are eligible to receive a retirement benefit when you reach retirement age. If you should leave the Borough, you have the option of having your contributions returned to you in full, or you can choose to leave your money in PERS for retirement, or you can transfer your PERS contributions into another approved retirement account. Further details of this benefit are outlined in the PERS information handbook, which you will receive in the mail after enrolling in the program Or on line at http: / /www.state.ak.us/local INSURANCE BENEFITS Aetna Insurance (Medical, Dental, Vision) This insurance coverage becomes effective 31 days after your date of hire. You must select your level of coverage within 31 days after employment or you will have to wait until an open enrollment period to add dependents. There is generally only 1 open enrollment period per year. The Premiums for Health Insurance effective 7 -1 -2004 for Full time Employees are as follows: Cover Full Rate MB Pays Employee Bi Weekly Pays Self 484.00 443.12 40.88 20.44 Children 901.46 825.58 75.88 29.49 Spouse 1070.99 979.23 91.96 45.88 Family 1487.60 1360.90 126.70 63.35 As part of the Group Health Plan, Aetna also provides a Group Life Plan for each eligible employee which, includes a basic life amount of $2,000 and a basic accidental death & dismemberment amount of $5,000. (The plan also provides benefits for each employee's eligible dependents.) This coverage is provided at no cost to the employee. Employees may elect to purchase additional life insurance equal to their basic annual salary with a maximum benefit of $60,000. Age and salary determine premiums. Further information will be provided upon request. LIFE AND AD &D INSURANCE Standard Life $75,000 policy for employee only. THERE IS NO COST TO EMPLOYEE. DISABILITY INSURANCE - LONG -TERM AND SHORT -TERM Fortis This insurance provides for a percentage of income in the event an employee experiences a disability while employed by the Kodiak Island Borough. THERE IS NO COST TO THE EMPLOYEE. Insurance while traveling for Borough. 1,000,000.00 \\dove \users\skennedy\Personnel Files \Orientation\Benefits7- 1- 05.doc LEAVE BENE Employed 0 — 2 Years 2 - 5 Years 5 - 8 Years 8 -10 Years 10 + Years HOLIDAYS FITS Each Pay Period 5.5384 Hours 6.4615 Hours 7.3846 Hours 8.3076 Hours 9.2307 Hours 12 days per year Annual Leave 18 Days 21 Days 24 Days 27 Days 30 Days OTHER BENEFITS AVAILABLE TO EMPLOYEES ADDITIONAL INFORMATION \ \dove \users\skennedy\Personnel Files \Orientation\Benefits7- 1- 05.doc Each Pay Period 4.6153 Hours It Annual Sick Leave 15 Days 15 Days 15 Days 15 Days 15 Days LONGEVITY 15 years total service 5% salary increase (For employees employed after 10/01/94) AFLAC Insurance AFLAC 125 offers reimbursement accounts for medical and dependent care expenses and a premium conversion plan, which allows for medical premiums to be payroll deducted on a pre -tax basis. If you would like further information on these AFLAC products please contact the AFLAC representative, David Johnson 1- 907- 349 -8958. You will need to call and sign up within 30 days of your first employment date in order to be covered under the pre -tax option of the program Or sign up at the beginning of the plan year in July Deferred Compensation (ICMA) Employees can choose to participate in this deferred compensation program at any time. There are several investment options available. Contributions to the plan are payroll deducted pre - federal -tax. Information on this plan will be provided to you. Credit Unionl /Alaska USA Federal Credit Union/Wells Fargo As an employee of the Borough you are eligible to become a member of either Credit Union. They each offer different options. Wells Fargo also offers special accounts for Borough Employees. Contact them for more information. PROBATIONARY PERIOD All appointments from open, competitive selection are subject to a six(6) month probationary period. Probationary employees must obtain at least a satisfactory performance rating at the completion of their probationary period in order to obtain regular status. All appointments from open, competitive selection shall receive a step increase after serving a six(6) month probationary period and satisfactory performance. Annual leave cannot be used during probationary status; sick leave may be used provided the supervising officer is satisfied that the absent employee, their dependent child(ren) or spouse was sick and required the physical presence of the employee. Any employee terminated under this provision shall have no recourse to the grievance procedure. MOVING EXPENSES Upon approval by the Borough Manager and the Borough Assembly, employees may be reimbursed for actual and necessary moving expenses not to exceed the equivalent of one month's salary. New employees who are assisted with their moving expenses are required to sign a Transportation Agreement prior to employment. NON - SMOKING ORDINANCE Ordinance 90 -17, effective July 1, 1990, has prohibited smoking in all owned or leased Borough offices, buildings and vehicles. Please be notified according to Asbestos Hazard Emergency Response Act (AHERA) Asbestos was found to be in the following places during an inspection on January 4, 2002 Code KM MSI KB RDI KB HJC KB SV2 KB SV1 KB WC1 KB WC2 KB VT KB CB Location Mechanical Boiler Room Attic- Rain Drain Above Ceiling Boiler Room, Pipe Chases & Utilities Floor- Bathroom Upper Floor Floor -SW Dockside Entryway Walls- East Wing I Floor Walls Remainder of Building Floor/Mastic — Throughout Attic, Soffit, & Window MAIL HEALTH CLAIMS TO: As shown on your insurance card: Aetna US Healthcare P.O. Box 91110 Seattle, WA 98111 800 - 426 -3211 Material Description Hard Pack Pipe Insulation Joint Mud Compound Hard Fittings Linoleum - White Linoleum - Brown GWB Taping Compound GWB Taping Compound 9x9 Tile — Brown & Mastic Cab Board Friable Y/N No N N N N N N N N When you call they want your social security number for identification. Your Group No. 392675 -17 -021 Forms for Medical, Dental, Prescription and Vision Claims are available in the Payroll Office — Room 123. Near the shredder. Or in the MB Borough forms file. Help yourself and let payroll know if they are low please. PERS on line address for more information: http: / /www.state.ak.us/local Or call 800 - 821 -2251 our representative is Judy Hall. This document fs for Information purposes only and is subject to change without notice. This document should not be considered as a contractual obligation by the Kodiak Island Borough. \ \dove \users\skennedy\Personnel Files \Orientation\Benefits7- 1- 05.doc TOTAL. I Ms. Williams I Ms. Wells 1 II Mr. Ranney I I 'wawa I Ms. Branson Mr. Bonney I Mr. Abell 0 0 47 0 4 a • to u I ✓I I ✓I z TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell � CA 0 0 Z TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell CA 0 td Z TOTAL Ms. Williams Ms. Wells Mr. Rannev Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell 'C' CA 0 Cd G o c 5 A z TOTAL Ms. Williams Ms. Wells Mr. Rannev Mr. Oswalt Ms. Branson Mr. Bonney 9° Mr. Abell C 0 0 P- by k: Cr 6 c) C z ci th tg 2 0 0 0 Q. a 0 0 z 0 0 0 0 d 0 Ms. Wells Ms Williams TOTAL Mr. Ranney Mr. Oswalt 1 ✓ II ■ Mt Ms. Branson 1 4' I ✓ Mr. Bonney I ✓ Mr. Abell I ✓ CID ed C+ `< O a . -o i Ea lb TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell 0 . On . E. \ in c Y z TOTAL Ms. Williams Ms. Wells Mr. Ranney ;e Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell 0 m N o V O Y TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell 0 c/ ✓ I V I z TOTAL Ms Williams 7k Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell C C° a `• 0 a % ‘, -0- UM <il\Ea-< z ® CD W t g Fp 0 0 0 0 0 0 0 a 0 0 ao CID 0 0 0 w TOTAL p Ms. Williams I Ms. Wells I Lr. Ramey Mr. Oswalt 11 Mr. Bonney i Mr. Abell (1) n ° 7 a CG `.S , -C z TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell n 0 O F?. 1-C z TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bonney Mr. Abell cn n 0 o a ro Z TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bomey Mr. Abell (4 2 0 o E to '< .0 TOTAL Ms. Williams Ms. Wells Mr. Ranney Mr. Oswalt Ms. Branson Mr. Bomey Mr. Abell v 2 O o a to Z o 0 < fro CD a Kodiak Island Borough September 15, 2005 - 7:30 p.m. 5. APPROVAL OF MINUTES - None 6. AWARDS AND PRESENTATIONS - None Assembly Guidelines Regular Meeting Assembly Chambers 1. INVOCATION Pastor Larry Cornett of the Church of the Nazarene. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Clerk's note: Assemblymembers may be out and asked to be excused. Recommended motion: Move to specifically excuse any Assembiymembers that are absent. VOICE VOTE ON MOT /ON 4. APPROVAL OF AGENDA Recommended motion: Move to approve the agenda. VOICE VOTE ON MOTION TO APPROVE THE AGENDA 7. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) A. Agenda Items Not Scheduled for Public Hearing and General Comments. Read phone numbers: Local Number 486 -3231 Toll Free 1- 800 - 478 -5736 PLEASE ASK SPEAKERS TO SIGN IN AND STATE THEIR NAME FOR THE RECORD. Kodiak Island Borough Assembly Guidelines September 15, 2005 Page 1 8. COMMITTEE REPORTS 9. PUBLIC HEARING - None 10. BOROUGH MANAGER'S REPORT - Manager Gifford 1 1 . MESSAGES FROM THE BOROUGH MAYOR - Mayor Selby 12. UNFINISHED BUSINESS - None 13. NEW BUSINESS A. CONTRACTS 1. Contract No. 97 -07B Amending Contract No. 97 -07 Agreement Between the KIB & Sisters of Providence in Washington d /b /a Providence Health System in Alaska for Lease of the Kodiak Island Hospital & Care Center. Recommended motion: Move to approve Contract No. 97 -07B with Providence Health System - Washington d /b /a Providence Health System in Alaska. Staff report - Manager Gifford. Assembly discussion. ROLL CALL VOTE ON MOT /ON B. RESOLUTIONS 1. Resolution No. FY2006 -10 Accepting a Designated Legislative Grant Through the Alaska Department of Commerce, Community and Economic Development, for Design and Site Work Associated With the Construction of a new Alaska Department of Fish and Game Research and Administrative Building on Near Island. Recommended motion: Move to adopt Resolution No. FY2006 -10. Staff report - Manager Gifford. Assembly discussion. ROLL CALL VOTE ON MOT /ON Kodiak Island Borough Assembly Guidelines September 15, 2005 Page 2 2. Resolution No. FY2006 -1 1 Supporting the City of Port Lions' Fiscal Year 2006 Mini -Grant Proposal Titled "Plan for Beach Drive Community /Recreational Vehicle (RV) Park." Recommended motion: Move to adopt Resolution No. FY2006 -11. Staff report - Manager Gifford. Assembly discussion. ROLL CALL VOTE ON MOTION 3. Resolution No. FY2006 - 12 Supporting Construction of an All Alaskan Gasline. Recommended motion: Move to adopt Resolution No. FY2006 -12. Staff report - Manager Gifford. Assembly discussion. ROLL CALL VOTE ON MOT /ON C. ORDINANCES FOR INTRODUCTION - None D. OTHER ITEMS 1. October 4, 2005 Regular Municipal Election Workers. (Clerk's note: Attached on pink paper is the list of election workers.) Recommended motion: Move to approve the regular municipal election workers as submitted by the Borough Election Supervisor. Staff report - Clerk Nielsen. Assembly discussion. ROLL CALL VOTE ON MOT /ON 14. CITIZEN COMMENTS (Limited to three minutes per speaker) Read phone numbers: Local Phone Number 486 -3231 Toll Free 1- 800 -478 -5736 PLEASE ASK SPEAKERS TO SIGN IN AND STATE THEIR NAME FOR THE RECORD. Kodiak Island Borough Assembly Guidelines September 15, 2005 Page 3 15. ASSEMBLYMEMBER COMMENTS ANNOUNCEMENTS - Mayor Selby The Assembly will meet in a work session on Thursday, September 29, 2005 at 7:30 p.m. in the Borough Conference room and a regular meeting on Thursday, October 6, 2005 at 7 :30 p.m. in the Assembly Chambers. Absentee voting for the October 4, 2005 Regular Municipal Election will be available in the Borough Clerk's office Monday, September 19 through Monday, October 3 from 8 :00 a.m. to 5 :00 p.m. Remember to vote on Tuesday, October 4. The polls will be open from 7 :00 a.m. to 8 :00 p.m. Please call the Borough Clerk's office at 486 -9310 if you have questions or need information. 16. EXECUTIVE SESSION A. Matters Involving Negotiations With the IBEW. Recommended motion: Move to convene into executive session to discuss matters involving negotiations with the IBEW, this qualifies for executive session per KIBC 2.17.030E, matters involving negotiations with labor organizations representing borough employees. ROLL CALL VOTE ON MOTION Please invite the Assemblymembers, Manager, Finance Director, and the Clerk's office staff to participate. (Upon returning from the executive session, Mayor Selby reconvenes the regular meeting and announces there is no action to be taken as a result of the executive session.) 17. ADJOURNMENT Recommended motion: Move to adjourn the meeting. ROLL CALL VOTE ON MOTION Kodiak Island Borough Assembly Guidelines September 15, 2005 Page 4 KODIAK ISLAND BOROUGH ASSEMBLY MEETING Regular Meeting of: Serf; f5 atoos Please print your name Please print your name .0 id P /.4 41 1 /Lt 4t,gz s-'oGS /v..� pi ,4 7