Tulare hospital board ponders bonds to finish stalled tower

TRMC’s unfinished tower in 2016. Nancy Vigran/Valley Voice

Voters in the Tulare Local Health Care District (TLHCD) may be asked again to approve funding for the stalled hospital expansion project.


Bond Plan Doesn’t Raise Taxes

At their meeting Wednesday, January 24, TLHCD directors approved a resolution that may eventually lead to voters approving or disapproving $50 million in bond funding to finish the basement, first and second floors of the hospital’s tower expansion project that now stands half-finished.

Begun a decade ago, the expansion project stalled after publicly-approved funding of $85 million ran out with only the shell of the four-story tower completed. An attempt to gain voter approval for added bond funding by a previous board failed.

The current estimate to complete the entire project is $100 million; however, the basement and first two stories could be made usable for around $65 million. District leaders estimate about 75% of that cost – $50 million – could be covered by the issuance of so-called general obligation (GO) bonds.

GO bonds raise funds with repayments coming from guaranteed future revenue, meaning taxes would not be raised to cover their cost. Voter approval would still be required before the district could issue any bonds.


Adventist Health Will Not Participate

The board’s consideration of bond funding comes after leadership at Adventist Health – which currently operates the TLHCD’s hospital as Adventist Tulare – recently made it clear that while the company remains committed to Tulare, it will not help pay to complete the tower.

That led to reluctance by TLHCD director Jevon Price when it came to approving an exploration of bond funding to finish the tower. Price wants to know Adventist’s plans for Tulare, whether it will continue to operate the hospital, before moving ahead.

“Obviously, Adventist sees that this (helping fund tower construction) is a potential money loss,” he said. “We need to be able to know what the plan is, if there’s going to be a need for the project to move forward immediately. … We just found this situation (Adventist’s reluctance to fund the tower project) is happening.”

TLHCD president Kevin Northcraft said the board would not move forward without a long-term guarantee from Adventist Health.

“They have to commit to the lease, to the payments, before we’re going to do this,” he said of the possibility of issuing bonds.


Tulare Needs Tower Finished No Matter What

Even without a firm commitment to operate Tulare’s hospital by Adventist Health or another management firm, TLHCD CEO Randy Dodd says the tower must be finished to keep the district viable.

“Let’s just say the worst-case scenario happens and the sky falls and Adventist Health leaves,” he said. “If we don’t have a tower to offer somebody else to come to this community, we don’t have a hospital.”

Once the tower is at least partially complete, including finishing new operating rooms, Tulare will be able to attract more surgeons and their patients, Dodd said. At a pair of meetings with executives from Adventist Health, Dodd said they made it clear Tulare’s aged facilities are keeping doctors reluctant to use Adventist Tulare.

“The doctors are the issue, and the doctors are probably not going to come back from Visalia to what we have currently,” he said. “This becomes a physician magnet once we complete that (the tower), (it) becomes a beacon of success to the community.”

Price expressed his concern that the number of patients treated at Adventist Tulare hasn’t returned to levels seen before the hospital closed temporarily. Northcraft, however, said the number of patients using the hospital is climbing and will continue to do so.

“When you close down a hospital, you (patients) have to go somewhere else, you establish,” Northcraft said. “The doctors left. The doctors control what hospital gets used. That may have been a one-year loss, but it takes more than one year to get all that back. But it’s happening.”


Earthquake Risk Could Close Hospital

Pending changes in state seismic requirements for hospitals also have to be considered. At present, Tulare’s hospital does not meet the upgraded standards, which have been repeatedly delayed by the legislature.

“I think we have to do this also relative to the earthquake safety code that is going to get kicked down the road to 2030, likely, but it’s still going to become law at some point,” Dodd said. “That hospital doesn’t meet code.”

The tower expansion is intended to meet those new standards. Yet that need to upgrade didn’t stop voters from blocking the sale of GO bonds in 2016. Northcraft, however, believes that failure happened because voters had lost trust in the previous board of directors.

Current board members Northcraft, Michael Jamaica and Xavier Avila all campaigned against passage of the 2016 bond issue.

“We all campaigned against it because they didn’t say how they were going to use the money,” Nothercraft said.


Bond Resolution Contains No Spending Details

Another objection voiced by Price was the lack of description of what a future bond issue would pay for. His concerns were echoed by Albert Aguilar, a one-time member of the committee tasked with overseeing the original tower construction bonds.

“This resolution to me is very ambiguous. You’re talking about you’re going to be financing ‘certain capital expenditures.’ What expenditures? What part of the tower are we talking about doing?” he said. “It’s not indicated on here (the resolution). You make reference to Exhibit A. Exhibit A is blank. All Exhibit A says is, ‘The project consists of completion of a portion of the hospital tower.’ What portion are we talking about?”

Bud Levine, a consultant with the public finance management firm Wulff, Hansen & Co. that is advising the district, said the ambiguity is intentional. The details will be added if the project advances.

“That’s all we know at the moment, because your project hasn’t been completely defined yet,” he said. “Subsequent resolutions when you move forward then would identify much more specifically what you’re going to be financing and what the terms and the structure of the bonds will be.”

Northcraft described Exhibit A as a catchall.

“The description in Exhibit A really just provides the umbrella for all the things that might happen underneath the tower that could be included in these revenue bonds,” he said.


No Plan to Issue Bonds Yet

While the TLHCD board members are thinking about how to pay for the tower’s completion, there isn’t a plan to issue bonds yet. The resolution approved on Wednesday only allows the district to reimburse itself for development costs incurred now if bonds are issued later.

Passing a resolution of intent to issue bonds, whether the bonds are sold or not, could save the district money.

“All this resolution does is preserve your rights when and if you should ever issue bonds to reimburse the development costs that you incur developing out what the project will consist of, the scope of the project, the amount of the project and those various areas,” said Ray Nelsen, also of Wulff, Nelsen & Co. “If you wait to adopt this resolution for a period of months or a year, any money you spend in that interim you cannot recover.”

The resolution passed Wednesday is also symbolic. It demonstrates to community members the district is still intent on finishing the expansion project with a minor action.

“This isn’t a vote to start spending money. This isn’t a vote to start finishing the tower,” said TLHCD director Avila. “This is a vote to get the financing together. That’s all it is.”

Resolution 920 passed with a 3-1 split vote. Price voted against the resolution, and board member Kathy Nesper was absent.


Board Approves Pair of Tower Projects

While planning for how to pay for future work on the tower continues, two projects received the board’s OK during a special meeting held Thursday, February 1.

The board hired a contractor to complete one side of the interior walls of the tower. The district has already purchased the materials needed to complete the work, voting Thursday to hire a firm to do the job.

Only one side of the walls will be finished, allowing future work on their interior components.

Also approved by the board is the installation of the tower’s elevators and dumbwaiters.

After a change in state law in 2023, the TLHCD directors learned the tower project could lose state approval if less than 10% of the project is complete each year. The projects approved on Thursday should insure TLHCD’s compliance.

In Depth: Tulare Regional Medical Center

11 thoughts on “Tulare hospital board ponders bonds to finish stalled tower

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  1. The approved resolution allows our bond consultants to work on a possible “revenue” bond of up to $50 million to finish the tower. These type of bonds are paid from the district’s revenue sources, do not increase property taxes, and do not require a ballot measure.

    Also, approval of the work to install elevators and dumbwaiters was tabled to the regular board meeting of February 28, 2024.

  2. What a fool the current CEO, Dodd is. His rationale for completing the tower is that if Adventist leaves, no other entity will come to the rescue if the tower is not completed. If Adventist leaves it will be for financial reasons. Putting the Tulare hospital in deeper debt through the completion of this 10 year old shell does not make the hospital more financially attractive. And of course this tower will not bring back physicians to an organization that is well known to have treated their physicians like crap. . To this day I have fond and proud memories of the physicians that made Tulare their home in the early 2000’s. Now most are gone and it’s not because of some tower. They are gone because of poor management that hasnt changed in all these years. From Montion, through Balouki, then Benzeevi, Kumar (Benzeevi and kumar still not in jail!!!) and now some simpleton who thinks that doctors will come back to Tulare if the tower is completed. Citizens of Tualre, dont be fooled again.!

  3. Randy Dodd’s comments about the physicians is a total lie. I agree with David, they were treated like crap. Randy doesn’t want to tell you if it wasn’t for a few Tulare physicians, the hospital would have never reopened. No one from Adventist gives a hoot about the established Tulare Physicians and want them to leave. Adventist can’t retain doctors as is evidenced by one of their physician directors leaving and becoming the CEO of St Agnes in Fresno. They destroy everything they touch. No better than HCCA. Tulare citizens deserve so much more!!! Wake up citizens!!

  4. Right now, it seems that Adventist Tulare hospital building’s primary function in this community has been that of the town’s ER. Adventist has been spreading its wings and investing its money across this county opening up medical offices left and right. These medical offices in the long run are what Adventist will be making money on. I do see them eventually abandoning the hospital when it is financially feasible for them to do so. As for the hospital’s future in Tulare until the Board and the citizens in this town decide what kind of hospital is really needed to make lives medically better and safter then no tower, no earthquake proof buildings, no bells and whistles will make it profitable. It’s the medical treatment provided to our citizens that will attract better doctors in the long run. Those doctors who are just in it for the almighty dollar won’t bother with small towns but those who are in it to make a difference will come. Don’t look for the bling, look for the substance. It isn’t so much the physical size of Kaweah Delta it’s the quality of services made available that brings us to their doors.

  5. It’s so disappointing and yet so predictable that the minute someone tries to do something good in Tulare, the haters come out and try to destroy them. David and Lisa – you should be ashamed of yourselves. Adventist Health came to our rescue and saved our hospital, which would now be closed if they had not. The district is trying to finish a tower that we invested $85M in and still have nothing to show for it. In case you haven’t noticed, we have new clinics from both Kaweah Delta and Adventist Health, and Altura is about to open an entire new campus. Let’s also finish the tower for our community. The tower was originally designed to replace the old building and meet the new earthquake requirements. If we don’t do that then we can expect the hospital to close forever. Also, why do you choose to criticize a doctor who pursued an opportunity to become the CEO of a hospital and then blame Adventist Health for losing her? Is this just more of your hatred and anger? And which Tulare doctors do you think were responsible for re-opening the hospital? Did they offer their money to hire employees, make repairs and restock the hospital? I sincerely doubt it. I’m assuming that “Lisa” is Lisa Dillon and “David” is David Phelps making these comments based on your previous gibberish. You are both totally ignorant to the fact that our hospital is older and the improvements in the tower will, in fact, attract new physicians. You think Adventist Health is no better than HCCA? What are you smoking? HCCA stole our money and drove our hospital into bankruptcy and closed. Adventist Health has invested $millions keeping our hospital open. The bad management of the past is gone. Wake up and get with the program today or just keep your mouths shut.

    • If KDH and Adventist have opened new clinics, I have to assume that these entities believe it is worth their while. In contrast, it is noteworthy that Adventist refuses to help complete the tower. TLHCD director Jevon Price is quoted as saying, “Obviously, Adventist sees that this (helping fund tower construction) is a potential money loss,” Perhaps “FedUp” should ask what Price and Adventist have been smoking? There seems to be a consensus that that the Tower is a bad financial decision. Perhaps the squandering of public money could be tolerated if Tulare was not the poorest county in California. Adventist IS better than HCCA. That is why they dont want to contribute to the tower. Finally, I would encourage readers to NOT get with program and definitely NOT be bullied into keeping our mouths shut. I clearly remember when HCCA was first presented to the community. One brave women at the Hospital public meeting (I recall) held at Evolutions, pointed out that Eddo Benzeevi was at that time being investigated by the FBI! (He was!). She was shouted down by the Hospital board and city officials. She did not keep her mouth shut. She was an informed citizen taking active steps to protect her community. If more people recognized her efforts, it is possible that we would never have dealt with HCCA and the hospital would still be operating. Moral of the story: Always question. NEVER keep your mouth shut!
      By the way, I have no idea who David Phelps is. It sounds like you “hate” him.

    • HCCA stole our money with the help of the hospital board at that time and now we are at the mercy of the current hospital board hoping that they will do the right thing for this town. Why not start with informing the entire city exactly what $50 million dollars will buy us. Will the tower become the new hospital and the old one eventually torn down? And no I don’t wish to go to a board meeting to get the answers. Those board meetings are for PR purposes only because real honest dialogue between the public and the board is purposefully limited and quickly shutdown at the board’s behest.

  6. A nice new building DOES NOT attract doctors. This kind of thinking is faulty on the most elementary level! I don’t know anyone who accepts a job is because they like the building! The bad situation with this hospital is toxic because all the people who are running it is no better than the previous management. The current management is driving the doctors and patients away!

  7. Tulare needs the hospital and the tower. As a resident of Tulare, I can honestly say that it’s been a while since I have stepped foot into the Tulare hospital but what I do know is that the management of the new hospital are at least trying to make it better. The previous management ran it into the ground and ultimately caused it to close. Which resulted in the loss of jobs and loss of hospital patient care for our town. Visalia is 15 to 30 minutes away on a good day and that time can cause the loss of a life.

    The new management, Randy Dodd, care about what happens and is trying to make the hospital the best it can be. Which I have to commend, because it’s not an easy job and it’s an uphill battle to change the attitude of people in Tulare that the previous management left unhappy.

    I have to say the people on this post speaking that a new tower will not bring physician are incorrect. The new tower will bring more than just physicians, it will bring much needed jobs to our town. I personally know that physicians are excited for the tower to be completed. Will it bring new physicians to our town, that will be left to the future to be seen, but it definitely will not hurt us. Who doesn’t like to go to work in a beautiful new building? But it will also not be just a building but a new building with new equipment to help care for us and our loved ones. Which will ultimately mean better medical care and possibly new services. Without any growth, Tulare District will remain stagnant, and we will lose our hospital. Which will negatively impact us all.

    For the people on here that are only speaking negatively, what have you done to make our city better? What have you contributed?

    • Thanks for the reference. The press release says: “Resolution 920 provides the District with the option to utilize Revenue Bonds, if issued, to reimburse the
      District for costs incurred toward the tower from November 2023 through the time bonds are issued.” In contrast , this article describes General obligation bonds (GO bonds).

      This article states: “GO bonds raise funds with repayments coming from guaranteed future revenue, meaning taxes would not be raised to cover their cost. Voter approval would still be required before the district could issue any bonds”. So which one is it, GO or Revenue bonds? Investopedia.com describes these two different entities. IF GO bonds will be used, then the communities credit rating will be at stake (which indirectly will definitely “tax” the community if the Hospital fails). If Revenue Bonds will be used, then if the Hospital fails, the District will simply loose the money that it invested, money that could have been more effectively used to improve healthcare in Tulare. So which one is it? General obligation bonds or Revenue bonds. I think that TDH needs to fully explain to the community all possible consequences if the Hospital fails financially after obtaining these proposed bonds (of whatever type). It is not respectful of the community to simply speculate on the consequences of not finishing the building.

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