The Kodiak Island Borough assembly spent the bulk of its Oct. 30 work session scrutinizing procurement and reimbursement procedures tied to Providence Kodiak Island Medical Center projects and the boroughs repair-and-replacement (R&R) fund.

At issue was whether current project management and vendor-selection practices followed the PKMC lease (identified in the meeting as contract FY2018-02, section 20.5) and Kodiak Island Borough procurement code, and whether the health facility advisory board (HVAB) and the architectural/engineering review board (ARB) have been consistently aligned in reviewing those projects. Project manager Cody Allen told the assembly staffhad reviewed past projects and found "inconsistencies" between how projects were being advanced and the lease exhibits that describe renewal/replacement eligibility and capital-improvement-plan timing.

Why it matters: the R&R fund that pays many of these projects is an enterprise account overseen by the borough. Assembly members said the public and assembly need clearer, documented processes before the borough reimburses work initiated by Providence or otherwise directed outside the boroughs formal procurement procedures.

What staff and Providence told the assembly

- Cody Allen, Kodiak Island Borough project manager, said his review showed that since about 2020 Providence had assumed more of the project-management role for many projects and that the formal processes described in the lease and in the borough code had not always been followed. He told the assembly that an emergency practice was discussed at HVAB in March 2023 and May 2025 but never formally documented. "Based on our view of the current and historical projects," Allen said, "there appears to be inconsistencies."

- Tyler Steele, interim senior facilities manager for Providence, said Providence typically selects contractors and engineers that have health-care master agreements and prior hospital experience because they understand infection-control procedures, pre-construction risk assessments and long-lead equipment needs. "The contractors that we work with have master agreements," Steele said. "They are familiar with the health-care environment."

Specific examples the assembly discussed

- A boiler-pump invoice of roughly $32,000 included $7,762.50 in travel fees, which drew questions about whether local resources could have done that work and whether travel charges should be reimbursed from R&R. Allen said the travel portion would not have been billable under the lease threshold absent the travel charges.

- An example of design redundancy: staff flagged a sterilizer (sterile processing department, SPD) design that had been advanced to 65% design, then was effectively reworked at 35% after ARB review, creating what Allen described as a potential risk of double-paying design costs.

- Project-specific requests previewed to the assembly included a request to reimburse Providence for permitting, construction and closeout of Distribution Panel 6 (DP-6) for $121,000, and a separate request to procure a long-lead chiller unit for $1,100,000. Allen said DP-6 is needed to provide electrical capacity for the new chiller, air handler and other future equipment.

Assembly concerns and staffrecommendations

Assembly members repeatedly flagged two governance problems: (1) a lack of a recorded, auditable vendor-selection and sole-source justification process when Providence relies on preferred contractors; and (2) a breakdown in continuity between ARB, HVAB and assembly-level approvals that can leave the borough committed to expensive design or procurement steps before the assembly has full cost and scope information.

Assembly Member Dave (first reference: Assembly Member Dave) told Providence and staff, "It's costing us in transparency," and urged a clearer public process. Several members recommended that HVAB and ARB better document the path a project takes, and asked staff to route prospective changes through a defined, documented process before reimbursements are approved.

Providences position

Providence said its practice of using repeat health-care contractors is driven by safety, infection-control and the long-lead times for specialty hospital equipment. Steele said Providence attempts to use local contractors where feasible and that travel and other costs are included on invoices. He asked the assembly to balance the need for transparency with the practical realities of health-care projects.

Next steps

Staff and Providence agreed to assemble additional documentation about procurement decisions, travel and invoice breakdowns and to bring recommendations back through the HVAB and ARB. Multiple assembly members asked staff to develop formal, written guidance on: when preferred-vendor/sole-source procurement is permitted; how HVAB and ARB decisions will be synchronized; and what supporting documentation (vendor vetting, cost comparisons, travel costs) is required before R&R reimbursements are placed on a borough agenda.

Clarifying details noted in the meeting

DP-6 reimbursement request: $121,000 (permit, construction, closeout).
Chiller procurement (long-lead unit): $1,100,000 requested for procurement; a later $2,000,000 line-item was discussed for installation.
RO/steam project: design/completion line items discussed (figures presented in staff slideshow).
Sterile processing department (SPD): staff paused the larger SPD renovation to avoid exceeding R&R capacity and proposed procuring replacement sterilizer units ("AMSCO 400s") so surgical services can continue.
Invoice example: boiler pump invoice totalling about $32,000 with $7,762.50 in travel fees.
R&R fund balance and encumbrances were discussed; staff noted some prior-year encumbrances (2023onward) remain and will affect available funds.

Speakers (selected)

- Cody Allen, Project Manager, Kodiak Island Borough (first on record as borough project manager who prepared the timeline review and flowchart).
- Tyler Steele, Interim Senior Facilities Manager, Providence (spoke for Providence operations and vendor choices).
- Seema (staff), (presenting staff overview and packet materials).
- Assembly members Dave, Beau, Jeremiah, Scott and others (asked questions and pressed for transparency).

Provenance (evidence spans from transcript)

- topicintro: transcript excerpt (tc_start: "01:44:37") "During recent meetings at the health care facilities advisory board, concerns have been raised regarding project manager management and, in particular, the alignment with the current lease between KIB and PKIMC." (speaker: Seema)
- topicfinish: transcript excerpt (tc_end: "03:06:33") "I just wanted to be clear that these haven't been done yet. The decision's in your hands if they..." (speaker: Cody Allen)

Salience and audience recommendation

Overall salience: 0.90 — justification: project costs (multi-hundred-thousand to multi-million dollars), use of public R&R funds and recurring process issues affect borough finances and service continuity for hospital operations. Impact scope: local. Attention level: high (assembly direction requested).