A panel of state public-disclosure commissioners will decide today whether to accept an offer from Valley Medical Center administrators to pay $120,500 in penalties for using taxpayer dollars to promote hospital ballot measures in 2005 and 2006.

Rich Roodman, president and chief executive officer of the Renton hospital, and Barbara Mitchell, administrator of organizational development, have admitted to misspending nearly $500,000 in public money to pass a tax levy and annexation proposal. Under state law, public entities cannot use tax dollars to campaign.

"We now understand that we were wrong and made mistakes," Mitchell said Wednesday. "We're now trying to rectify them as best as we can."

If the settlement is approved, it would be the largest out-of-court fine levied in the commission's history, said spokeswoman Lori Anderson. The staff is recommending that the commissioners finalize the offer instead of forwarding the matter on to the state Attorney General's Office, she said.

"We always work to reach an agreement that says, 'Yes, I broke the law and I accept responsibility,' " Anderson said. "We think that the penalty ... is appropriate. We don't need to spend more money trying to pursue some other result."

Roodman agreed this week to pay $120,000 to the commission for violating state law, with an added $75,000 fine suspended if he uses private funds to pay the penalty and doesn't break the same law for at least four years. Roodman admits he "improperly paid" vendors $478,249 for work to help win support of the ballot proposals, according to the documents.

He will have to repay the district $155,000 of that "with nonpublic funds," under the proposed settlement.

Mitchell's penalty to the commission totals $500. She "unintentionally" but illegally approved payment for $18,832 for printing, postage and mail handling to push the 2005 tax-levy initiative, according to the proposed settlement. She is also bound to pay that amount back to the district, documents state.

"Ultimately, it's my responsibility," Mitchell said. "The hospital cannot write a check for this."

Valley Medical Center — part of King County's Public Hospital District No. 1 — found itself in the crossfire of controversy when allegations surfaced in 2006 that the district used public money to pay for research, consultants, direct mailings and surveys to sway voter opinion on a proposed annexation.

The commission's investigation was prompted by a complaint from Maple Valley Mayor Laure Iddings. She alleged that Valley Medical officials used about $250,000 in public money to support the annexation through direct mailings and telephone polls to test receptiveness to the proposition, according to a public-disclosure report.

Hospital officials wanted to annex the Greater Maple Valley area because data showed that more and more patients from that region use Valley Medical, and they contended that those who use the hospital should pay taxes to support it. Taxes generated from the annexation would have gone toward opening a new urgent-care clinic in Maple Valley.

The attempt to annex the 25,000 households went down as one of the worst ballot defeats in state history after 94 percent voted against it in May 2006.

This week, another complaint was filed with the state Public Disclosure Commission against Valley Medical. Chris Clifford, a Renton resident who lives in the district, alleged that the hospital misspent public money on a recent "special edition" brochure featuring photos of hospital-board commissioners, two of whom are up for re-election in November.

Anderson said the commission has not examined the complaint yet.

On a related note, the state Auditor's Office said Wednesday it will pursue a performance audit of the district next year.

Sonia Krishnan: 206-515-5546 or skrishnan@seattletimes.com