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Sponsored by: Corbridge
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CITY OF SEWARD, ALASKA
RESOLUTION 2006-101
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING PAYMENT IN THE AMOUNT OF $28,100 TO
THE STATE OF ALASKA DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, AS APPLICATION FEE FOR THE CERTIFICATE OF NEED
FOR A LONG-TERM CARE FACILITY TO BE LOCATED IN SEWARD
WHEREAS, the State of Alaska Department of Health and Social Services (DHSS)
administers the Certificate of Need (CON) program aimed at reducing duplication of healthcare
facility capacity throughout the State, in order to achieve costs efficiencies; and
WHEREAS, in order to construct Seward's replacement long-term care facility, the City
is required to submit a CON Application to DHSS; and
WHEREAS, Alaska Administrative Code 7 AAC 07.079 requires the payment of a fee
when filing the CON Application, and has established that fee as equal to 0.1 % of the total cost
of the project; and
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WHEREAS, when considering the total costs of the proposed facility, including costs
such as: acquisition of land; preliminary studies; soils testing; site surveys; environmental
reports; consulting services; estimated construction costs of the facility; engineering and
architectural costs; furniture, fixtures, and equipment; landscaping, etc., the total project cost is
estimated at $28,100,000, resulting in an application fee of$28,100.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. The City Manager is herby authorized to submit payment to the State of
Alaska Division of Health and Social Services, as a Certificate of Need Application fee, in the
amount of $28,100, with such funds to come from the Long Term Care Facility Capital Project
Fund.
Section 2. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 25th
day of September, 2006.
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CITY OF SEWARD, ALASKA
RESOLUTION 2006-101
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AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
THE CITY OF SEWARD, ALASKA
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Dunham, Valdatta, Schafer, Thomas, Bardarson, Shafer
None
Lorenz
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CAS
OUNCIL GENDA TATEMENT
Meeting Date: September 25, 2006
Through: Clark Corbridge, City Manager
From: Kristin Erchinger, Finance Director
Subject: Certificate of Need Application Fee
BACKGROUND & JUSTIFICATION
With the help of hospital financial consulting experts, the City of Seward has completed the
Certificate of Need Application for submittal to the State of Alaska Department of Health and Social
Services. The submittal of this application is one of the key milestones in the process of constructing
a new long-term care facility in Seward.
The Certificate of Need process was developed by the State of Alaska and is a required element of
constructing any healthcare facility in the State. Since the State of Alaska is a significant source of
funding for healthcare facilities, and since the State’s Medicaid reimbursement program is a cost-
based reimbursement system, it is to the State’s advantage to ensure there is no excess healthcare
facility capacity constructed throughout the State, which would add redundancy to costs. The
Certificate of Need process will ultimately dictate the number of beds for which Seward’s long-term
care facility is licensed. Initial statistical measures suggest that the State may be willing to approve
construction of up to 52 beds in Seward, and the City desires to construct 40 beds at this time.
Per Alaska Administrative Code 7 AAC 07.079, the amount of the Certificate of Need Application
fee is .1% of the total cost of the project. The total cost of the long-term care facility, including all
preliminary studies, site surveys, soils testing, environmental reports, consulting services, estimated
construction costs, engineering, furniture/fixtures/equipment, architectural services, land purchase,
ROW purchase, etc. is $28,100,000. Thus, the cost of the application fee is $28,100.
CONSISTENCY CHECKLIST:
Yes No
1. Comprehensive Plan
2. Strategic Plan
3. Other
4. Not applicable X
FISCAL NOTE:
Funding for this application fee is to come from the Long-Term Care Facility Capital Project.
Approved by Finance Department ______________________
RECOMMENDATION:
Council approve Resolution 2006-__ authorizing the city manager to pay the amount of $28,100 to
the State of Alaska Department of Health and Social Services, as application fee for the Certificate of
Need Application.