$55 million hospital bond campaign divides Tulare

Voters in Tulare and outlying areas are being courted to vote yes on Measure I, the proposed $55 million bond that supporters say is needed to finish the stalled Tulare Regional Medical Center expansion project.

But some residents who normally would be bond cheerleaders are opposing it, saying they don’t trust the company under contract with Tulare Local Health Care District to run the hospital.

Bond supporters say if the measure fails, the hospital could close.

“The message is very simple,” said Dr. Parmod Kumar of Tulare. “Do we need the hospital, or do we not need the hospital?”

Ballots for the mail-only election will be mailed Aug. 1 and counted Aug. 30. It requires two-thirds approval to pass.

The bonds would be repaid by a property tax assessment averaging $29.88 per year for each $100,000 in assessed valuation over the life of the bond. For property assessed at $150,000, that would be about $3.75 per month, according to proponents.

Kumar, a hospital board member, said those who can afford to travel to UCLA or Stanford for advanced medical care are failing the community by refusing to support the bond measure.

“Measure I is for the the ordinary, hardworking people who work on the farm and make $9 an hour,” Kumar said. “It’s for the ordinary Joe. It will level the playing field for the city of Tulare.”

The hospital has a major economic impact because it employs 500 and has a $30 million annual payroll including benefits, he said.

Tulare Regional Medical Center employee Lubelia Mattos is a volunteer for Yes on Measure I. Everyone she has spoken with says the bond measure is good for the community, she said.

“We have an option to have a state-of-the-art facility, and why shouldn’t Tulare deserve that,” she said.

Tulare Mayor David Macedo and Councilwoman Maritsa Castellanoz, who credits the hospital with saving the life of her child, have publicly endorsed the bond measure.

“Let’s work together and save our hospital,” they wrote in the argument in favor of Measure I that will accompany the ballot measure.

Passing the bond would allow the hospital to meet mandatory earthquake safety requirements, they said.

When complete, the addition would include a larger emergency department with all private rooms, expanded radiology department, expanded labor and delivery area and new operating rooms. It will connect to the old hospital.

Construction on the addition all but stopped three years ago.

Work was paid for by an $85 million bond measure approved by voters in 2005, but the money ran out before the project was completed.

In March, the Tulare County grand jury issued a critical report charging that the health care district withheld financial information about bond expenditures from the bond oversight committee.

The district board formally responded that bond expenditure reports were approved by the oversight committee and copies of the reports are publicly available.

But Bill Postlewaite, a retired schools superintendent who served as chairman of the bond oversight committee, said he has some questions about how the $85 million was spent.

Until those questions are answered, he said he won’t support the bond measure.

Dr. Yorai “Benny” Benzeevi, CEO of Health Care Conglomerate Associates, the private company that operates Tulare Regional Medical Center, questioned why Postlewaite would raise objections now.

“I’m really surprised at Bill Postlewaite,” he said. “He was the guy in charge of the bond oversight committee for 10 years.”

Benzeevi said critics appear to be older community stalwarts whose influence has waned.

The focus of critics’ ire is the contract under which Benzeevi runs the hospital.

They charge that Benzeevi’s company is being paid too much – approximately $250,000 a month, or $3 million per year.

“There isn’t any CEO in the nation being paid $3 million a year to manage a hospital,” said accountant Ken Nunes of Tulare.

But board members credit Benzeevi with saving the hospital from financial ruin.

“We were losing $1.2 million every month for two years” under previous administrations, Kumar said.

After Benzeevi came on board in January 2014, revenues soon exceeded expenses and the hospital has been profitable for more than two years, he said.

“It’s a turnaround of $2.5 million a month,” Kumar said. “I’m paying $250,000 – I will go with that any day.”

Additionally, the value of the hospital has increased and the district’s bond rating has gone up, he said.

But Pat Hillman of Tulare, usually a reliable supporter of community causes, said the contract favors Benzeevi at the expense of the district.

Not only is he getting paid about $250,000 a month, the contract calls for Health Care Conglomerate Associates to collect 30 percent of employee salaries, she said.

“That’s a very unfair contract,” she said. “I can’t understand why the board would approve it.”

Kumar said the 30 percent pays for health insurance premiums and other employee costs. Only 1 or 2 percent ends up in Health Care’s bottom line, he said.

“They have a misunderstanding of the contract,” he said of critics. “All these people are Monday morning quarterbacking. They are spreading nonsense about the contract.”

Critics also point to a clause giving Health Care Conglomerate Associates an option to buy the hospital at the end of the 15-year contract, which has an additional 10-year renewal clause.

Benzeevi said that was included in the contract so if the district should one day seek to sell the hospital, the company gets first refusal rights.

“HCCA has zero interest of buying or leasing the hospital,” he said.

Tulare Local Health Care District board president Sherrie Bell said the board agreed to the option because the company is putting resources into the hospital and deserves to protect its investment.

“The hospital cannot be sold without a vote of the people,” she said.

Lynn Dredge, a retired Tulare city manager who played a leadership role in the 2005 bond campaign, said he has read the contract and believes the board gave up too much control of a public hospital.

“This agreement makes this very much like a private hospital,” he said.

Dredge has not taken a public position on the bond measure.

Benzeevi said the partnership between his company and the district produced the “the most dramatic turnaround in hospital history in California” and is a reason to vote yes on Measure I.

“There is overwhelming support for this in the community,” he said.

This story was originally published July 2, 2016 at 7:00 PM with the headline "$55 million hospital bond campaign divides Tulare."