RE: April Article by Kathleen Johnson, President/Marketing for HCCA

Kathleen Johnson states, “In order to complete the tower, we must ask voters for $55 million to finish job. That’s an amount previous administrations and multiple boards (including the one serving in 2005 when the first GO bond was introduced) knew it needed but failed to ask for.” Kathleen Johnson makes no reference as to why or how the board of directors made their decision to adopt the recommendation made by Laura Gadke for a “parcel tax in the amount of $55 million by way of a mail-in ballot” during a special board meeting on March 23, 2015. (Reference Board Minutes)

The truth is that during the public comment period before Ms. Gadke made her recommendation to the board, Mark Watte, David Macedo as a City Council Member and Mayor of Tulare, Lynn Dredge and Skip Barwick all announced their support for a parcel tax to complete the tower. During her presentation Ms. Gadke stated, “Jack Stone prepared a timeline and budget for the completion of the Project. He estimates $49 million is needed to complete the Tower and it will be move-in ready one year from the date of funding is secured. The committee suggests including a contingency of 10%, which would make the additional funding needed at $55 million.” Obviously Ms. Gadke is not very good at math because 10% of $49M would not equal $55M, but then no one on the board cares because a motion was made by Linda Wilbourn for approval, seconded by Dr. Kumar and approved. So, what data (records) did Laura Gadke present to the Board of Directors on March 2015 that the Board relied upon for approving the $55 million dollar parcel tax measure to complete the expansion Tower 1 Project? According to the hospital’s attorney, Bruce Greene, “No such records exists.”

During that meeting there were only four board members present because Rosalinda Avitia had previously resigned thus the remaining board members were; Richard Torrez, Linda Wilbourn, Parmod Kumar, Vice Chairman and Sherrie Bell, Chairman/President. Everyone of these board members had been provided with a copy of the hospital district fiscal year report ending June 30, 2014, prior to casting their votes for approval of the $55 million parcel tax and everyone of them should have had first-hand knowledge of the auditor’s report as noted on page 35; “Estimated costs to complete all projects as of June 30, 2014 are approximately $35 million, of which $15.7 million pertains to the contract with the general contractor.” { $35M – $15.7M = $19.3 to complete all construction projects not just the Tower } So why are the voters being asked for another $55 Million?

The TRMC Finance Committee meeting minutes of July 30, 2013, state, ” Delbert Bryant gave a brief update on the construction project for the month June 2013; advising the Committee the Project Budget is still $106 mm, of which $78.5mm (82.2%) has been spent as of June 2013. Mr. Bryant reported $27mm is remaining in the budget. Mr. Bryant reported the Bond Fund has $10.5mm remaining; the Capital Lease has $1.3mm remaining and $2.5mm in commitments from the Foundation. The amount needed to complete the project is $13.5mm.” Apparently, Delbert Bryant the hospital’s Controller didn’t know that the cost of the Tower project was $120 Million. (Reference minutes)

Reference the Tulare Regional Medical Center 2011 Annual Report authored by the hospital’s CEO and the Chairman/President of the Board of Director’s that states, “Through innovating cost-saving strategies, we expect the Tower to be completed in 2013 for $93 million, generating a $27 million savings for our community’s tax payers.” WOW..$93 Million and completion date 2013. There is a similar report found within the Tulare Hospital Foundation’s Report that states, “The estimated cost of the project is nearly $93 million. Total cost of the project $92,875,000, Funds from bond measure $85,000,000, Hospital Contribution from net income $4,875,000 and Medical Tower Expansion Capital Campaign $3,000,000. (Ref. Articles Enclosed)

So what happened to this CEO who told us that the Expansion Tower was going to be completed in 2013 at a cost of $93 million? He was terminated by the former Board of Director’s and then in December 2012 he was re-hired by the current Board of Director’s under the leadership of Sherrie Bell and Dr. Parmod Kumar who then fired the same CEO again within 14 months. How much money did it cost the tax payers? Over $1.5 Million and the mess that is now before us, thanks to the current Hospital Board of Directors.

Kathleen Johnson also states, “The original official 2005 bond documents (which are public and can be viewed by anyone) show that the Tower required $120 million to complete, but voters were instead asked to approve only $85 million and led to believe that additional funds would mysteriously appear.” The truth is that no one was led to believe that additional funds would mysteriously appear for the expansion project as Mrs. Johnson has stated and it’s sad that she thinks that the voters in the district are stupid enough to believe her.

When Rosalinda Avitia ran for a seat on the hospital board of director’s and won, it was due in part to her campaign message about the $85 million bond to build the hospital that was over due and over budget. She advocated the hospital has lost more than one-half of the cash it had six years ago. Where did the money go and how did it get so dangerously low? That is the same message many of us in the hospital district still want answered.

Reference TRMC cash reserve mystery solved (finally) – Tulare Voice by Julie Fernandez; “Had today’s management reported the cash and investment total in the same manner as the three prior management teams had done, the following would be the results: The management report for 2007-2008, for example, reported $30.5 million in cash and investments. This includes a large portion of the $15 million in proceeds that the district received after an August 2007 bond sale. That money could only be spent on construction of the new Tower. $28.28 million on June 30, 2009, as opposed to $24.3 million; $99.23 million on June 30, 2010, as opposed to $24.45 million; $68.77 million on June 30, 2011, as opposed to $13.34 million; $51.43 million on June 30, 2012, as opposed to $13.17 million.” Julie’s investigative report also states, “If you want to include all cash, including that which is restricted or designated for a specific use, then the numbers are $24.1 million in 2005 and $51.43 million in 2012.” Therefore, Kathleen Johnson’s attempt to put a spin on the financial picture of the hospital is refuted by the investigative report compiled by Julie Fernandez to get at the TRUTH.

I believe that most of the voters within the Hospital District are in favor of having the expansion Tower completed but we also want transparency and accountability. How can we support taxing ourselves for more money than what is necessary to complete the Project? The last audit compiled on the $85 million bond was through December 2012 and the current Board of Director’s and their managing firm, HCCA have refused to provide the Bond Oversight Committee with all of the necessary financial data for the Committee to perform their task of overseeing and monitoring all expenditures regarding the expansion project, not only the $85 million bond funds. There is more than $52 million in unaccounted tower one construction expenditures by the bond oversight committee and that number keeps growing everyday. The last Bond Oversight Committee was held on August 31, 2015, when the committee was asked to approve an audit report that was presented to us by Dr. Benzeevi and his staff. However, the three page document provided clearly states that it was not an audit, therefore the committee rejected it as such. Since then no other committee meetings have been scheduled by the Board of Director’s and/or HCCA.

Respectfully Submitted By,

Alberto Aguilar
TRMC Bond Oversight Committee Member
Former Member TC Grand Jury