Because of continued demands for additional services and increased space, the South Peninsula Hospital sought professional assistance to evaluate and recommend expansion options for its facility. A conceptual design for the expansion has been approved by the hospital administration and physicians as well as the South Kenai Peninsula Hospital Service Area Board.

The estimated cost of the project is $17,000,000. South Peninsula Hospital intends to partially finance the project through the issuance of up to $10,500,000 in general obligation bonds. The balance of the funds needed to complete the project ($6,500,000) will be provided from hospital retained earnings.

This construction project will: add a new Emergency Room with clinic space for visiting specialists; add a new Nursing Wing with 8 single-occupancy patient rooms to improve patient privacy and comfort; expand the Diagnostic Imaging Department; remodel the Surgery Department to improve efficiency and provide a more comfortable space for day surgery patients; and add additional space for support services including laundry, nutrition services and medical materials.

In total, the project will add approximately 25,000 square feet of new space to the hospital and remodel approximately11,000 square feet of existing space. The project should meet the hospital's space needs for the next 20 years. Construction should begin in the Summer of 2004 and be completed by December 2005.

Based on the estimated 2003 tax year assessed valuation of the service area, the cost to repay the proposed general obligation bond debt will be $101 for each $100,000 of assessed real and personal property value in the South Kenai Peninsula Hospital Service Area. This is equal to approximately 1 mill of property tax. However, no tax increase is anticipated at this time as the current 1.75 mill levy is adequate to cover these costs.