The Tulare Local Healthcare District (TLHCD) has opened applications for community members who wish to join a new Bond Oversight Committee for the potential Measure I bond. The district also attempted to assuage any doubt among voters by formalizing potential bond oversight and spending measures.
Measure I Supporters Speak
A group of Measure I supporters spoke during the public comment section of the meeting to praise the board and urge the public to vote in favor of Measure I.
One couple spoke of their young child’s heart surgery and their desire to have a fully modern hospital in Tulare, so that their child’s follow-up operations could be in town, instead of San Francisco.
“My name is Carlos, this is my wife, we’re just going to share a brief story with you that we recently went through. We recently had a serious matter with our new born child, she recently required open heart surgery. My wife had a history of high risk pregnancies, so we were not able to be seen here in Tulare or Visalia, they actually sent us to Fresno, just for ultrasounds,” Carlos said. “We went to UCSF, it was a newer hospital, it was less than 6 months old, it was very nice, we were fortunate to be there.. but we were displaced from our family for over eight months.”
“We are going to require another surgery in a couple years, and we’re not looking forward to having to be displaced again from our family. We’re really hoping that this measure passes and that people don’t have to travel so far to get the help that they need.”
Michael Bell, son of board member Sherri Bell, also spoke in favor of the bond measure.
“I can still remember just when the hospital really looked like no hope, it was falling down, just looked really tattered. Then HCCA really came in, brought it all together, as a community we pulled together, and voted in pretty much a new board. I think it’s two members from two years ago that are still there, maybe one. And it really has been this big, big turn around. And then it all kind of came down to this moment — this Measure I. It’s just a wonderful thing, just to have this hospital here in Tulare,” Michael Bell said. “What is this, like, $135-140m total now? I really believe that it will bring in a lot more than we’ll have to put into it, in the long run. It seems like we’re looking really short-run right now, when really the community is built long-term, not short-term.”
District Formalizes Some Oversight
The bond measure headed to the voters this month, only requires the district, the legal body that owns the Tulare Regional Medical Center, to file a yearly report five months after the end of each fiscal year.
During the July 27 board meeting, Dr. Benny Benzeevi, CEO of HealthCare Conglomerate Associates, came to the board and presented a finalized application form for those seeking to be on the new Bond Oversight Committee, should Measure I pass.
The board signalled their approval for this application to be posted and sent out to those interested. During the meeting, it also voted to disband the old Bond Oversight Committee.
HealthCare Conglomerate Associates is the company to which the district has contracted out operations of the hospital, its clinics, and the Evolutions gym.
Benzeevi, while presenting the application and discussing the oversight committee, said he doesn’t want committee members to just observe the construction — he wants them to take part in it.
“We’re not looking just for a committee that will oversee the project,” Benzeevi said. “We’re looking for a committee that will participate and help with the project.”
The Bond Oversight Committee is one facet of Benzeevi’s proposed “Bond Oversight Community” idea, which originally forewent the idea of a committee.
Benzeevi, the board, and Measure I proponents state the “Oversight Community” proposal is unprecedented in the State of California, proposing public websites that would show detailed construction plans, work schedules, and cash draw schedules. Another facet of the scheme would involve outside monitors to ensure purchases and construction are being done judiciously.
“It will contain the bond bank account, so people can see on the website what money’s there, what money’s been drawn, for when and for what. And all of this will be on the website before a single dollar is spent, before a single nail has been put in the project with a new [general obligation] bond,” Benzeevi said, earlier in the year. “We won’t have a bond oversight committee, we’ll have a bond oversight community.”
Those facets of the “Oversight Community” proposal have not yet been voted on, or finalized by the board.
The $55 Million Return Policy
The board also approved a formal resolution requiring the district to return any excess bond funds to the taxpayers.
“By law, if we complete the tower with less than the $55m bond, the money goes back to the taxpayers,” Sherri Bell, chairman of the TLHCD Board, said. “We don’t even need to [make a separate resolution], it’s already written into the law, but we wanted to bring that to your attention and make it clear.”
The ballot measure states that funds from the bond can be used “[t]o pay for the District’s capital improvement projects that includes completion of Tower One, including earthquake compliant expanded Emergency Department space, labor and delivery suites, and refinancing outstanding debt related to construction … with 100% of the bond proceeds being used for construction-related costs and with no bond proceeds being used for hospital administrative costs or to refinance any debt supporting hospital operational costs.”
The full text of the ballot measure goes on to state:
“All funds stay local for the benefit of Tulare Local Health Care District Facilities. All bond proceeds shall be used by the Tulare Local Health Care District for the benefit of healthcare in the local community.”
Taking Aim at Critics
During the July 27 meeting, Bell also responded to critics of the board and Measure I who state that construction on the hospital could be halted for up to two weeks.
The Yes on Measure I campaign, through its mailers and on its website, states that if construction stops for as few as two weeks, the hospital would have its construction permits revoked, causing the hospital to either incur large costs to restart construction or cut its losses.
Citizens for Hospital Accountability, the main No on I group, has cited California construction laws that rebut this assertion — construction could stop for up to a year, they say, without the state taking any action.
Bell agreed with their position — though the Yes on Measure I campaign still uses the two-week figure — but said that it was not the right option for the hospital.
“I really thought a lot about this, because one of the things I’m hearing out there is that we could stall construction, and it is legal to stall it for a year. And it is,” Bell said. “But if it was recommended, we would, for this very reason: we’re having to use our cash in order to pay for construction, and what that’s doing is preventing us from building the security that we would like to have. We are at 61 days [cash on hand], and [financial ratings agencies] like us to be somewhere around 200-250 days cash on hand.”
Bell went on to state that keeping a larger cash on hand amount is important due to larger costs that would be incurred during revitalized construction efforts, including utility costs and other “fixed costs.” She also used the time to contrast what she feels is the current board’s perspective with that of prior boards.
“And I just want to add one more thing. I’ve heard another board — the original board that made the decision to build a $120m tower with $85m. I have looked at the cash on hand and they never were anywhere near that 200 and whatever mark. If they were going to use the cash on [hand] — and they were losing money, they weren’t even a profitable institution at that point, their operating margin was not good, and so they made a decision to use operations, which we didn’t have, thinking erroneously that their cash on hand could be used, and it was never a reality. It was a poor decision. And that was the thought, she says ‘well, I never knew that the hospital wasn’t doing well.’”
Bell did not state who she was referencing when she used the word “she.”
Benzeevi also joined Bell in explaining why neither the hospital, nor HCCA, could pay for the tower’s construction, outlining how the hospital is paid by insurers, including the state through the Medi-Cal program, and why he feels financing construction using the funds of either entity would be ill-advised.
“On to profit versus cash, because I’ve heard some comments in the community about, ‘well you’re so profitable, why don’t you just build the tower’ — well, that would be akin to saying, Sherri, you’ve got a great job, you’re getting paid really well, why do you need a mortgage to buy your house? You can have companies that are very profitable but have no cash, or you can have companies that have a lot of cash but are not profitable at all, and go out of business,” he said.
““Let’s assume we have this much money in the bank, patients in the hospital, and we’re taking care of them. Well, we have to pay the nurses, we have to pay the staff, we have to pay for equipment, and so that money goes away.”
“We send the bills off to the insurance companies, and to the government, but they don’t pay right away. They can take 30, 60, 90 days, or depending on what happens with the state, whenever they feel like it, frankly. We send out the money that we have to pay employees and services that we’re using here, but we’re still waiting, and waiting, and waiting for the rest of the money to come in.”
The HCCA Connection
During the public comment section of the meeting, Tulare Resident Sally Boucher asked why HCCA had inserted its branding across the hospital’s operations, including Evolutions and the hospital itself. The former Tulare Regional Medical Center website has also been moved to a subpage on HCCA’s own website, teamhcca.com.
“My questions/concerns are why do all the new banners, mats, ads, posters, forms, I mainly see at Evolutions because that’s where I go the most, […] that have huge HCCA logo in the name, and TRMC or Evolutions is included only in very small print, if at all,” Boucher said. “Another question is, who’s paying for all this HCCA advertisement? Is it HCCA out of their pocket, or is it Tulare Local Healthcare District? I also have the question of, is TRMC still our ‘public’ hospital, and if so for how long?”
Benzeevi used his portion of the meeting to respond to the question.
“The reason that we have the HCCA logo everywhere is we want to reassure the banks and investors that are going to be buying those bonds that there is stable and professional management in place,” Benzeevi said. “It doesn’t mean that HCCA owns the hospital, by no means do we have that. The hospital owned by the District, is publicly owned by law, and will remain that way.”
“It’s to reassure folks that there is a professional management team in place and that we’re here to stay, and that we’re not going to be a fly-by-night operation like has happened here for decades before,” he continued. “In fact, we’ve seen the results already, because as you know Fitch rating has changed the outlook from negative to stable, and has upgraded our bonds for the two years HCCA has been here — but thank you for bringing that up.”
Bell ended the meeting, during which Dr. Parmod Kumar, vice-chairman of the TLHCD Board was absent, with an admonishment for those who oppose Measure I.
“If you’re not supporting the building of the tower, you’re playing Russian Roulette with our hospital. That is why it frightens me what’s happening out there, because this is reality.”