The Tulare Local Healthcare District Board of Directors will meet tomorrow to vote on a resolution that would allow Healthcare Conglomerate Associates (HCCA) to borrow up to $22m.
HCCA is the company the Tulare Local Healthcare District board has employed to run Tulare Regional Medical Center.
The loan, the resolution states, would allow the company to borrow the money to “fund operational expenses, including costs relating to the Tower construction, to repay indebtedness, and for other hospital purposes.”
While a copy of the proposed resolution was not included with the agenda distributed online, a prior presentation given by Dr. Benny Benzeevi, CEO of HCCA, noted some costs related to tower construction.
In that presentation, Benzeevi noted that a prerequisite to obtaining HUD financing would be paying off the hospital’s existing bonds. The theorized total to do so came out to $13,707,673.
After the bonds are paid off, various provisions in the district’s contract with HCCA would come into play.
HCCA would be able to purchase or lease the hospital, subject to voter approval, under the Option Agreement that the then-board signed with the company.
Additionally, upon repayment of the bonds, the hospital district would also be able to enter into a “Joint Operating Agreement” with HCCA.
The “Joint Operating Agreement” essentially amplifies the current contract between the district and HCCA, and switches from a monthly management fee model to a profit-sharing model, in which the “annual net operating income from the Hospital and other Clinics” would be split between the district and HCCA; the district would receive 5% of that income, while the company would receive 95%.
Among other items, the company would also set the “strategic direction and provide strategic and operating planning for the [hospital’s] Operations,” creating a separate community board that would provide advice and input on the hospital’s operations.
The meeting will be held at 4pm in TRMC’s Allied Services Building, Conference Room #2, located at 869 N. Cherry St., Tulare.