The Kenai Peninsula Borough Assembly voted on Tuesday to move forward with issuing more than $3 million in bonds to fund a Central Peninsula Hospital project.

The bonds, which were originally proposed to fund medical equipment purchases for the Central Peninsula Hospital in Soldotna, will be extended on short, 8-year terms, according to Kenai Peninsula Borough Mayor Mike Navarre. 

Assemblyman Blaine Gilman objected to issuing the bonds. He argued that because the hospital currently has approximately $13.8 million available in its plant replacement and expansion fund, issuing more bonds would incur unnecessary debt on the hospital. The hospital already has more than $57 million in bond debt, and using unencumbered funds to pay for equipment is more practical, Gilman said.

However, Central Peninsula Hospital CEO Rick Davis supported the bond issuance, saying that because the hospital has multiple significant upcoming capital projects to fund, issuing bonds would be a wiser business move.

Navarre also supported the issuance of bonds, saying the low interest rates make it an opportune time to do so. The assembly unanimously approved the motion. 

The construction on the new building began in May 2014. It is slated to be completed in December.