Tulare Hospital Board Backs Bond Audit, No Clear Reopening Date

Xavier Avila, Senovia Gutierrez, and Kevin Northcraft at the Tulare Local Healthcare District’s December 21 meeting. Tony Maldonado/Valley Voice

The Tulare Local Healthcare District officially supports State Sen. Jean Fuller’s (16th District) request for an audit of the district’s prior bond expenditures after a 3-2 vote following significant discussion.

The board also received an update on the reopening of Tulare Regional Medical Center — the hospital still needs funding before a reopening date could be set, the hospital’s interim CEO said.

 

Debating The Audit

Board members Xavier Avila and Stephen Harrell voted against confirming the audit, while chairman Kevin Northcraft and members Mike Jamaica and Senovia Gutierrez voted in favor of it.

The board’s attorney, Nikki Cunningham, advised the board, the audit could reveal information that would put the healthcare district in a negative position — if, for example, prior management had been found to misuse bond funds.

A representative from Fuller’s office stated the initial request would cover:

  • How Healthcare Conglomerate Associates, the hospital’s former management company, spent bond proceeds,
  • Oversight in place for the spending of the bonds,
  • The management structures of the district, its hospital, and its former management company,
  • The “process and the flow” of the district’s 2005 General Obligation Bond funds

The representative noted that the scope could be narrowed after the initial request.

“If they find something in there, which they very well may, that could have a financial impact on the district,” she said.

Cunningham noted that she was not specialized bond counsel, but gave the example of findings which could cause the bonds to lose their tax-exempt status.

“If that happens, there’s the potential that the bond-holders could sue the district for the loss that they suffered,” Cunningham said.

Avila and Harrell both said the risk of a financial penalty caused them to vote against the confirmation.

While they both agreed that the public needs to know if there was any misuse of bond money, they also worried that any penalties could shutter the hospital.

Avila initially moved to support Fuller’s request, but rescinded his motion after Cunningham noted potential risks.

“I’m all in favor of transparency and all that, but I think we have a bigger obligation — as much of a financial hit that this hospital has took, it’s still closed, it’s still not open,” Avila said. “Once we get going — it’s too risky. I’m certainly not against the audit, but we should certainly discuss it with counsel before we take that step.”

Northcraft noted that if the board missed the January date to submit their support, they would have to wait until 2019.

Alberto Aguilar speaks to the Tulare Local Healthcare District’s Board of Directors at the board’s December 21 meeting. Tony Maldonado/Valley Voice

Alberto Aguilar, a former member of the district’s bond oversight committee, implored the board to support the audit.

“I think [the auditors] will be able to prove the bond money was not spent the way it should have been spent,” Aguilar said.

Northcraft and Gutierrez spoke in favor of the audit. Avila asked if the hospital could afford any potential financial hit. That led audience members to interject.

“Can we not afford it?,” Jennifer Burcham, and others, asked from the audience.

“I have a fiduciary duty to look after this hospital – and I’m dying to know just as much as you; but, that big unknown, you’re looking at an $85m bond – it could come back and impact this institution pretty bad later on,” Avila told the audience. “We cannot take a multimillion dollar hit later on.”

Mike Jamaica initially didn’t vote — at one point, Northcraft asked if he would like to abstain — but later, he voted in favor of the motion.

Avila later spoke to clarify his position.

“My number one concern is not money — my number one concern is the people that use the hospital,” he said. “And if hospitals don’t have money, they can’t run and serve the people.”

 

Hospital Update

Larry Blitz, the hospital’s interim CEO, gave a short update — the hospital now has a sufficient amount of staff to reopen.

“We have enough staff for the opening, and we’re working on the staff for the ramp-up,” he said.

He and Dan Heckathorne, the hospital’s interim CFO, are working on funding and potential budgets, and weekly meetings with the California Department of Public Health continue to be held, Blitz said.

He also stated a “Community-Doctor Meeting” was being planned for January.

“We are inviting the community to come and talk about our vision, where we’re going,” Blitz said, “and we’re really excited about that, and the doctors seem to be excited about that.”

While Blitz and his team are working on securing funding, a reopening can’t happen until financing is secured, he said, and a January 1 re-opening date isn’t on the horizon.

“When we’re able to secure funding, then we will have a timeline in regards to opening,” Blitz said.

 

Evolutions Update

Additionally, the board was provided with an update on the Evolutions gym — though the Evolutions Oversight Committee was not officially providing a report, Joseph Soares provided one on behalf of the Evo Management Company.

“We’ve had some loss of members, but nothing like what we were fearing,” Soares said.

Soares told the board that Evolutions has retained a majority of its membership, with approximately 5,600 members still at the gym.

“I think you’ll be very pleased when you get [the committee’s] report in January,” Soares said.

 

Real Estate

The board made no public decision on an unsolicited offer to purchase a vacant parcel of land next to Evolutions, nor did it report any decision from its closed session meeting.

“We have not determined that it is surplus property that we have no future needs for,” Northcraft said, “nor have we determined what process we want to use if we want to market that.”

Northcraft was unable to provide the Voice with any information on the party making an offer on the parcel, but stated during open session that the party would purchase the property for approximately $2.2m.

Any sale of the vacant land would be complicated by a Deed of Trust filed against Evolutions and its adjacent parcel by Healthcare Conglomerate Associates in the days before the Tulare Local Healthcare District filed bankruptcy.

In Depth: Tulare Regional Medical Center

18 thoughts on “Tulare Hospital Board Backs Bond Audit, No Clear Reopening Date

  1. I certainly hope the lack of comments is not an indication that the citizens have lost interest in having a hospital once again in Tulare, that would be a tragedy.

  2. Without a strong solid foundation any future plans for this hospital could very likely be built on quick sand. That both Avila and Harrell were more than willing to keep their heads covered in that very sand is concerning. Anyone with a working brain knows that abuse of hospital bond monies occurred, just how wide spread that abuse has been is yet to be determined and that answer can only be found in an audit. If the hospital is to be “shuttered” due to massive penalties owed then it is better to find out now before the current board “borrows” more bond money that we taxpayers will be paying on. We taxpayers are already paying on a dead horse so to speak thanks to a group of people who wanted this small town hospital to be competitive with Kaweah Delta even though there was no taxpayer base in Tulare to support it, no large population in Tulare to support it, and above all a board who was not willing to take care of and sustain existing buildings that were the bulk of our hospital before adding an unnecessary “helicopter pad/tower/etc”. Size does not constitute a healthy vibrant hospital but solid safe buildings, quality personnel, quality of care, and quality of services does. We once had something along those lines in this city, so too bad that previous board members no longer had an interest in sustaining and keeping it so. What a profound loss to those of us who counted on and paid for a hospital that one could get good decent care for almost all of our ailments. Visalia, Fresno, Bakersfield, Samsun, Stanford, and UCLA were all within reach for more specialized medical services. Greed, vanity, lack of integrity and downright foolishness brought down this hospital. Let us hope that the hospital can be resuscitated and brought back to life to serve this community’s medical needs like it had done through past decades. But it cannot be done with blinders on or in having board members who lean toward picking and choosing on when to be transparent. Get the audit done!

  3. I agree, suddenly no comments. I see no quick progression with the hospital and I think the audit is opening a can of worms… move forward and start new pointing fingers gets no where fast just holds things up. Then what about the risk if hospital is at fault dies the district have funds to pay.., NO

    • The can of worms needs to be opened. Anyone who believes otherwise is willing to put blinders on to what happened. Or better yet is promoting the coverup of the one board member that controlled the purse strings, the same person that built a farming empire during this same time period and signed off on promissory notes to Benzeevi without full board awareness.

      Tell us why Eli is that okay with you if you are a tax paying citizen of Tulare?

      • It is not okay, my concern is I hope this does not hold up reopening the hospital or bring on a new burden to the district if they are found to have to pay something back. They have been very clear that monies are tight. There is no disagreement that responsible parties need to be held accountable but the audit will take much time and money…

  4. Harrell is a great guy, Senovia a puppet, Kevin has a bad track record, Mike a nice guy.. and Xavier, well not much to say there not very fond of him.

  5. I still have faith this board is trying their best to get the hospital on track, we need to support them, I’m sure Benzeevi left this hospital in a bigger mess than anyone of us can fathom. My fear is the longer the doors stay closed the community will just adapt to not having a hospital , that was my concern with the lack of comments , we need to stay Tulare strong meaning stay involved!

  6. Everyday the hospital is closed lives are at risk…. please please please reopen. We have a population to sustain it, we need good quality fare and management. Tulare is not a 3rd world country, don’t treat us like one. It makes me sad that while our surrounding neighbors are growing and now impacted we are stagnant and moving backwards instead of forwards with respect to growth. Tulare deserves better, the community deserves and needs a hospital people are dying that could have been saved or stabilized and transferred. Please do all you can to get things operating soon!!!

  7. i believe this audit is absolutely necessary. What I would like to see happen is the responsible parties who had knowledge of the misappropriation of bond money and the general account be prosecuted. The misappropriation of district monies is serious. Let’s name names of those involved: Shawn Boluki, Fred Capazelko, Viktoria Meyers, John Barbadian, Steve Debuskey, Benny Benzeevi. Alan Germany, the CIO under Benzeevi, Sherri Bell, Rosalinda Avitis, Parmod Kumar, Richard Torres, Laura Gatke and Linda Wilborne. All were responsible in some or had knowledge of how the money was misspent.

  8. i believe this audit is absolutely necessary. What I would like to see happen is the responsible parties who had knowledge of the misappropriation of bond money and the general account be prosecuted. The misappropriation of district monies is serious. Let’s name names of those involved: Shawn Boluki, Fred Capazelko, Viktoria Meyers, John Barbadian, Steve Debuskey, Benny Benzeevi. Alan Germany, the CIO under Benzeevi, Sherri Bell, Rosalinda Avitis, Parmod Kumar, Richard Torres, Laura Gatke and Linda Wilborne. All were responsible in some or had knowledge of how the money was misspent. We need this audit and they need to take ownership of the part they played. The community needs to know all of the players. If anyone has knowledge of others who had knowledge or were directly responsible, please include them.

  9. Most of the Bond money, if not all was spent prior to Benzeevi. So yes, an audit of bond money is important to assure it was spent on what it was intended for, the tower. If you are speaking to a general audit, I thought one was done late and filed. As stated at Board meetings last year, it was reported that less than 3 % of total operating expenses were Public District funds from taxes which means that almost all revenue was from patient care billing, which they struggled with because the computer system couldn’t get bills out the door.
    How about publishing the contract with the new management group. What are they getting paid, considering they have been on the job for 3 months and the hospital is still closed?

  10. This goes far deeper than the $85 million bond. Refinancing of the Revenue bonds in late 2007, approximately $18 million and $24 million in cash reserves.

    This mess was years in the making. Management group got control the Wednesday before Thanksgiving at 5pm, not even 2 months ago. Let’s see what continues to be discovered,

  11. The community of Tulare has a festering wound that won’t heal until the failed Alberto Aguilar stops his venemous vitriole and hiding his past shortcomings on the bond oversight committee.

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