Community Benefits as Alta Healthcare District Emerges from Bankruptcy

The Balanced Budget Act of 1997 killed a lot of small hospitals.

As its name implies, the law was intended to balance the federal budget by 2002, reducing spending by $160 billion in the process. To achieve its self-imposed fiscal goal, which was forgotten after 9/11, Congress cut $119 billion in health care spending over five years, nearly 10% of it from rural hospitals like those that once dotted the Central Valley. Tiny facilities already struggling to stay afloat, like Dinuba’s Alta District Hospital (AHD) and Memorial Hospital at Exeter, took a double blow when Congress slashed Medicare repayments as well. They were doomed.

Dinuba’s Hospital Collapses

Memorial, a privately-owned facility, sold itself off to the Kaweah Delta Health Care District, and some services are still available on its former campus. Alta and the people it served weren’t as lucky, and despite cutting services and changing their business plan, the hospital closed in 2001. The Alta Healthcare District filed a Chapter 9 bankruptcy, a rare portion of the code reserved only for government entities. For the last 14 years, the AHD sat nearly idle, collecting its tiny percentage of property tax income and using it to repay its debts. Now, it’s done.

“The bankruptcy’s been closed,” said Clifford Bressler, the Clovis-based CPA who oversaw AHD’s finances during its insolvency and now works for the District as its administrator. “I was the gentleman in charge of collecting the income and paying it back out.”

What Bressler and the District managed to accomplish was rare.

“This is only the third case in 25 years that I’ve been a trustee that all creditors have been paid off with interest,” he said.

A New Start

In total, more than $3.5 million dollars was returned to more than 100 creditors. The final payment was made this fall, and on October 31, the US Bankruptcy Court in Fresno closed the case. But, Bressler, who is semi-retired, decided to stay with the District. After all these years, he said, AHD can finally resume providing health care services to the people living inside its boundaries. The possibility seems to excite him.

“There are a lot of things that happen,” Bressler said. “They (AHD’s board of directors) can benefit the people who are paying for the service, and there’ll be no increase in taxes.”

The first thing the board decided to do was buy the Dinuba Fire Department a $180,000 ambulance.

“I agreed to work with this board for the Alta Hospital District because of the things they’re doing, like working with the fire department to get an ambulance,” Bressler said. “With all the wear and tear, they just couldn’t afford it. This is a great benefit to the people in the district.”

Bressler described Fire Chief Chad Thompson’s reaction to the board’s decision this way – “He was like a little kid with a new toy.” He wasn’t far off.

“We were ecstatic,” Thompson said of his department’s reaction to the donation. But, the city’s emergency personnel aren’t quite ready to start playing. “I haven’t even ordered it.”

And, he cannot, not until the District transfers the funds. AHD and the city signed a donation agreement December 10. Once the money comes in, delivery of the new ambulance will take about 90 days, Thompson said. Then they can start to play, after one last slight delay.

“Adding decals will take about a week,” Thompson said.

Ambulances Wear Down Quickly

The new vehicle is more than a toy, of course. It is a valuable addition to the city’s fleet of ambulances, which spend a lot more time on the road since Alta District Hospital shut its doors. Patients are now sent far out of town, to Reedley, Visalia and Fresno.

“Our ambulances, they wear down quickly,” said Thompson. “We put quite a bit of miles on our three ambulances each year. We try to replace ambulances after five years of service. We’re not always able to do that.”

That schedule of rotation means the city, which provides ambulance service to almost the entire AHD, is always saving for a new vehicle to replace one at or past its retirement date. Now, the funds it was about to spend can be rerouted.

“With this donation of the ambulance, it freed up money we were saving to buy a new ambulance,” Thompson said. “All that money is going to new gurneys, heart monitors, defibrillators, CPR machines. Those are big-dollar items.”

AHD Donations to Continue

The Dinuba Fire Department and other organizations that provide care to residents in the AHD, which includes unincorporated communities like Yettem, Cutler-Orosi, Sultana and Stone Corral, can expect to see more donations in the future, especially now that solvency has increased interest in serving on AHD’s board.

“Before they (the District’s creditors) got paid in full, it was hard to get people to work on the board,” Bressler said. “Now that they’re deciding what to do with the money, it’s wonderful.”

The AHD’s board members include Chairperson Yvette Botello, Paulie Romero, Javier Quevedo, Martha Swain and Irene Atilano. Together, they will be deciding what to do with the District’s income now that it has no expenses other than office costs and salaries for Bressler and the District’s clerk. For the 2014-15 tax year, the District took in more than $380,000. They can expect similar income in the future, and their job now is deciding how it can best benefit the community.

“We have one or two ideas to help people in our district, not just a little group,” said Botello. “It’s going to be quite a challenge, actually.”

Ideas Needed for Future Gifts

The board is looking for more ideas and wants citizen input. They have designed a survey for health-care providers and have been visiting doctors’ offices. They’re also accepting input directly from the public, which can mail them at P.O. Box 410, Orosi, 93647. In the meantime, they’ve got no firm plans yet, Botello said.

“There’s a lot of things. Because it’s so new, we have to look at people turning these surveys in,” she said. “I think we have a good board on hand. They’re diverse.”

Buying an ambulance has emptied the District’s coffers for now, so it will be a few months before they receive another disbursement from the Franchise Tax Board, but in the meantime the board will continue to meet, with its next session scheduled for 11:30am on Thursday January 14 at the Dinuba Library, 150 S. I St., when they will be discussing their budget for the upcoming year.

They will also be keeping up the search for new ideas.

“We’re supposed to walk the streets, talking to the constituents and seeing what they need,” Botello said. “Find out what they think is important.”

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