Plumas District Hospital’s administration came to the Jan. 5 board meeting prepared to answer Skip Alexander, Robert Zernich and other proponents of a petition to cap the hospital bond at $50 per $100,000 of assessed home value.
Alexander and company garnered well more than 1,000 signatures for the petition; 870 of which have already been validated. They needed 600 valid signatures to call for a special mail ballot election. The next step is for the hospital district to designate its elections official. The election process would cost the district approximately $16,000, based on the cost of its Measure A election.
PDH consulted both its own attorney, Steve Gross, and special counsel Michael Colantuono, of Colantuono and Levin, which has offices in Nevada City and Los Angeles.
A statement furnished to the board by the hospital administration for consideration and passage said, “The District Board is not prepared to appoint an election official and move forward with the proposed tax limit initiative ... the measure is illegal because it violates the District’s contract with the bondholders who lent the District money for the new hospital. Our general counsel and our special counsel tell us that neither the District nor its voters can impair a contract.”
When one of the 35 community members in attendance asked what was illegal about the initiative, Chief Executive Officer Dick Hathaway deferred to Gross, who was in tele-attendance. According to Gross, the United States Constitution and California law both disallow “an initiative that would impair existing contractual obligations.”
Gross explained the district couldn’t accept an initiative that could impair its ability to pay back the bondholders of the $3.2 million in bonds that have already been sold.
Audience member Dennis Clemens responded that the $50 cap would certainly be enough to cover those bonds.
Both Gross and Satterfield said the bonds weren’t guaranteed if the rate were capped at $50. “If assessed valuations changed in the wrong way, it may not be safe,” said Satterfield.
The statement that $50 per $100,000 might not cover the already sold $3.2 million in bonds supports the petitioners’ contention that rates could skyrocket if the second set of bonds are sold.
Robert Zernich, attorney for the petitioners, gave PDH representatives a copy of the elections code, saying, “I don’t think you have the discretion to deny our right to file this petition, speaking as a taxpayer. So, hopefully, you’re not inviting a lawsuit you don’t really want to have.”
Board member John Kimmel tried to shift the dialogue to focus on the central intent of the proposed board statement. Rather than pursue a costly and divisive election, the hospital board and administration and the public should “step back, take a deep breath, examine our options and decide what this community wants in a community hospital and what it can afford.”
Further, the document instructs PDH administration and staff that “until we have that dialogue with the community” they should take the necessary steps to bring the bond tax back down to the “smallest amount consistent with the District’s obligations to its bondholders” for the 2010–11 fiscal year. Essentially, this would be only enough to cover the already sold $3.2 million.
Most importantly, it instructs district staff to “take no more steps toward sale of additional bonds; [and] make no final commitment to the scope or design of a new hospital.”
Kimmel asked members of the public to “look at what our intent is.” He tried to change the focus from an argument over legalities to a discussion of what is best for the community.
“We’re trying to ... keep the tax as small as possible, and right now, we’re stepping back and saying, ‘We’re not doing anything anymore.’ We’re stopping and we’re coming back to you guys and saying, ‘Where should we go from here?’ ... If the answer is to stick to $50, we’ve got a problem ... but maybe there’s a middle ground that the community would accept. A thousand signatures is significant. It’s important. That’s not a small part of the community.”
Though some community members were still visibly angry at the hospital’s response to the petitioners, there was a notable change in the public’s response, with more people speaking up to support the idea of a community dialogue.
“I pretty well go along with what you’re trying to convey,” said one resident in response to Kimmel. “I believe this statement allows everybody to take a step back, gather round the table and work together on this ... everyone in this room wants the good of the community. So, let’s just take a step back and think about this statement in great depth and then ... let’s get around the table, rather than in the courtroom.”
The board unanimously approved the proposed statement.
In another development, Hathaway interrupted the proceedings at one point to announce that Facilities Director Dan Brandes had just received an e-mail from the Office of Statewide Health Planning and Development granting the hospital its requested extension from 2013 to 2030 to complete any required seismic changes to the building.
While this obliterates the previous argument that the hospital would close if a new building weren’t constructed, it doesn’t address the truth that a very cramped and crumbling 50-year-old building cannot facilitate patient care or best medical practices comfortably, even though PDH hospital staff go far in making up the difference.
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