Tulare Hospital Board Responds to Grand Jury Report

The Tulare Local Health Care District Board today filed its response to a Tulare County Grand Jury report about the first phase of construction of a new hospital tower for Tulare Regional Medical Center.

The Board said the grand jury report was incomplete, misleading and based on speculation and opinion, instead of facts.

“By its own admission, the grand jury did not look at the four independent examinations performed and certified by two independent auditing firms, covering the entire course of the bond expenditure, that found no wrongdoing,” the TLHCD Board said in the response.

“The issues that it raised in the report are years old, and have been addressed multiple times by professional independent outside reviewers,” the Board said. “Most importantly, in the past 28 months, the Hospital has shown a dramatic and remarkable turnaround in its operations, governance and the construction project that this report addresses.”

In its response, the Board noted that the grand jury unfairly sought to blame the current Board for the performance of prior Boards.

“The current Board has long since corrected the many deficiencies of prior Boards,” the response said. “This is evidenced by the fact that over the past two years, the current Board took the hospital from the verge of bankruptcy in late 2013 to its present position of financial strength.”

The board said the grand jury report unfairly accused the current Board of withholding relevant financial data from the prior Bond Oversight Committee. In reality, reports about the expenditures of bond funds were approved at public meetings and provided to the oversight committee.

“There has been no withholding of pertinent financial data by the current Board,” the Board said in its response.

In fact, at a public Board meeting on Dec. 9, 2015, a representative of an auditing agency made a public presentation that detailed “every single invoice.”

“Further, the records show that the Bond Oversight Committee met 48 times, an average of once every two months, and there is absolutely no indication in its minutes that the prior boards were not forthcoming with information,” the Board’s response said.

In 2005, voters in the District approved the use of $85 million in bonds to pay for the first phase of construction of a new hospital building for Tulare Regional Medical Center. Public comments and public documents clearly stated that the project would cost $120 million (in 2005 dollars) and an additional bond would be needed to finish the job.

It is important to note that the grand jury did not find that bond funds were used for purposes other than construction of the tower.

By the time the current Board was seated in May 2015, there were no bond funds remaining. The Board, with the help of its management partner, HealthCare Conglomerate Associates, and monies generated from the hospital’s dramatic financial turnaround, finished construction of the new tower’s exterior shell – setting the stage for the final round of funding to complete the interior.

The Board has scheduled an Aug. 30 election at which voters will be asked to approve the issuance of $55 million in bonds to finish the hospital. By law, 100% of the funds will be spent on construction-related expenses.

The tower completion project will have unprecedented oversight, including a public website that shows the construction work and draw schedule and a real-time view of the bond bank account balance. The project will be reviewed by an independent bond oversight committee and a construction monitor who reports to the bond trustee.

If approved by two-thirds of voters, Measure I would provide the necessary funding to deliver to Tulare a new hospital building – and greatly expanded emergency room – that meets state earthquake safety requirements and meets the community’s healthcare needs.

The new 120,000-square-foot hospital will include an expanded emergency room – 400% larger than the current E.R. – an expanded pharmacy, a new maternity unit, a new radiology department and new earthquake-safe patient rooms. Hospital officials estimate it will take 18 months to finish the project and open the new building to patients.

Following the devastating 1994 Northridge earthquake, California lawmakers imposed strict new earthquake-safety standards on acute-care hospitals. Any hospitals that do not meet the new standards will not be allowed to continue operations.

The new Board and its management partner, HCCA, have managed to turn around the hospital’s finances and have shown that they are more than capable of completing the hospital tower.

“We hope our response to the grand jury sets the record straight,” said Board Chairwoman Sherrie Bell. “Despite numerous challenges, the District has righted itself and made dramatic progress toward a modern new hospital in Tulare. It’s a new Board, a new management and a new accountable system to operate our public hospital. We get things done.”

The report is available below.

Tulare Regional Medical Center Response to the Tower of Shame Grand Jury Report

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In Depth: Tulare Regional Medical Center

5 thoughts on “Tulare Hospital Board Responds to Grand Jury Report

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  1. If they are doing a bang up job then they do not need the bond. The doctor in management of Health Care Conglomerate a Assoc. campaigned against the Bond measure in Visalia. He wants to raise our taxes but not his. He lives in Visalia. Double standard I would say.

  2. Here they go again, same old sad song. It is never their fault always someone else. Don’t like the message so they shoot the messenger. No new bond money for this Board. They can’t be trusted.

  3. I encourage that everyone read the hospital’s explanation to the Grand Jury report. Again it lacks truth. For those that really want to know history look at the attached exhibits to the report. Definitely look at the bond meeting minutes from January 2008 when one board member states that the interim CEO and CFO worked magic with the Evolutions bonds and created $115 million so the project only needed $5 million to go. If that was the case then where did that money go? These are the revenue refunding bonds of 2007 that has debt requirements on the District.

    Maybe little points don’t matter but it sets the stage for bigger embellishments or in some situations outright lies. I served on the board from 2000-2008. According to meeting minutes from January 2013 there was 8% of bond money left, not less than 5% as stated in the District ‘s response when HCCA took over.

    This board has sat for far greater than presented, Gadke twice since 2013 and Wilborn on the bond oversight for many years – Does that mean she failed?

    Just perform an independent, forensic audit and give the community answers.

  4. I am confused. In the rebuttal to the Grand Jury report the Tulare Local Health Care District claims that it cannot address the many issues raised because it was a different Board that was involved, not the current Board. If this was true, that every time Board membership changes a new legal entity is created, and the old Board is legally dissolved, then HCCA no longer has a legally binding contract with the “new Board”.

    Are there really no procedures in place to provide for continuity of operations and record keeping for the Tulare Local Health Care District Board of Directors?

    I would vote for a bond issue dedicated specifically to complete the hospital tower currently under construction if I knew exactly what the money was going to be spent on, and could review an approved set of plans and specifications set out for public review.

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