The Tulare Local Health Care District’s (TLHCD) directors were unable to finish the district’s business Wednesday evening, November 17, after Secretary Xavier Avila unexpectedly left the board’s monthly meeting mid-conversation following a dispute.
Board President Says No VA Lease at Evolutions
At issue was the possibility of the local office of the Veterans Administration leasing a portion of the district’s Evolutions Plaza building as its new home. While the deal was considered off the table by TLHCD President Kevin Northcraft, representatives of the VA hoped to present a new long-term lease offer, one that would have required the board to hold a special meeting in order to meet a VA deadline regarding the matter.
In recent weeks, the hospital board has shrunk to just three members with the resignation of former District 3 representative Senovia Gutierrez and the hiring of soon-to-resign District 1 representative Phil Smith as the TLHCD’s new CEO. That reduced number of board members means all decisions, including calling special sessions, must be unanimous.
Because the decision concerning the lease would take all three board members to vote yes, Northcraft was loath to waste time and taxpayer money to call a special meeting that would involve lawyers, staff and representatives from the VA to give a presentation that was doomed to fail.
“I have no interest in pursuing any discussion of the veterans using this building,” he said. “I will not issue a call for a special meeting for that topic.”
Previously, Northcraft said the board voted to reject leasing a portion of the building to the VA, saying remodeling it to suit the new tenants would carry a price-tag of some $7 million. The cost of remodeling would have to be paid by the VA as part of the lease. The district also has plans in the works to construct medical offices on another plot of land it owns, a complex that would make an ideal home for the VA, Northcraft said.
He refused to budge on scheduling further talks with the VA.
“My mind’s already made up,” Northcraft said. “Of course, the hope is the veterans will come to their senses and go out for a new building.”
Avila Abandons Meeting Loudly
Northcraft’s position on the issue of not meeting with VA representatives to discuss a dead issue apparently irked Avila, who attempted to convince Northcraft to hear out the VA’s updated proposal before walking out of the meeting.
When it became clear Northcraft was not willing to change his position, Avila, who had been gathering his effects while Northcraft spoke, rose abruptly, shoved back his folding chair and cleared a path to leave the room by picking up the table where he was seated and dropping it loudly, partially obscuring the comment he made as he left.
“I’ll see you guys later,” Avila said.
Departure Stymies TLHCD Business
Avila then announced he would not attend a special meeting scheduled later this month to discuss the District 3 seat and possibly appoint a replacement for Gutierrez. The board is facing a 60-day deadline ending December 1 to find a new District 3 director. After that date, the naming of a replacement would fall to the Tulare County Board of Supervisors.
“I can’t make the special meeting on the 23rd,” Avila said as he left the meeting room.
Not only will Avila’s refusal to participate if he does not get his way mean a possible delay in seating a new director, it also brought the night’s meeting to a premature close, leaving issues the board was scheduled to act on undone. The group had been ready to hear the monthly report on the district’s finances when Avila brought the meeting to its untimely end.
“His leaving makes it so you cannot approve your financial statements,” said Jason Howard, the district’s legal counsel. “You lost quorum.”
It appeared to take a moment for the consequences of Avila’s power-play departure to sink in.
“So we are adjourned for a lack of a quorum?” Northcraft asked.
“You are,” Howard answered.
Also left undone in the aftermath of Avila’s unusual departure was the evening’s closed session business, which would have seen board members discussing the district’s ongoing bankruptcy case, other potential litigation involving the TLHCD, and, ironically, a further discussion of lease agreements at Evolutions Plaza.
New CEO Formally Announced
Before the meeting’s surprise adjournment, the board conducted the majority of the evening’s business, including formally announcing a new head administrator for the TLHCD, the board’s soon-to-be former District 1 director Phil Smith. Smith will replace outgoing CEO Sandra Ormonde at the end of the year.
“We were able to make a selection as Sandra’s successor,” said Northcraft. “It happens to be Phil Smith, who also happens to be on the board. The down side is we’re losing another member of the board.”
Smith is expected to resign the District 1 seat effective Friday, November 19.
Following that announcement, Northcraft then presented a plaque to Gutierrez in honor of her service representing District 3 with the “utmost competency and grace.”
“It was an honor for me to serve my community,” she said. “It was difficult times. We did it together.”
TLHCD Financially Sound
While Avila’s departure prevented the board from hearing the monthly financial report, it did receive a clean financial bill of health from the firm hired to perform its annual audit.
“You’ve got a good cash position, about $5.6 million,” Rick Jackson, a CPA with JWT and Associates, told the board.
Following a discussion of the rough details of the district’s finances–it holds $144 million in assets, has a non-tax income of about $3 million annually, and a tax income of $4.8 million that is currently being used to pay off district-issued bonds–Jackson pronounced the TLHCD fiscally fit.
“The district is looking very good financially,” he said. “It’s really come a long way. I think it’s only going to get better in the future.”