by lyle e davis
‘This is the third time you’ve asked me and the answer is still “No!”
Like a mommy telling a reluctant-to-learn child, we think this is likely what the voters should, and will, tell the Tri-City Medical Center folks as they continue to seek voter approval for a bond issue.
This time they seek $589 million in Measure A. The Paper is recommending a NO vote on Measure A.
Make no mistake about it; this is not a vote against Tri-City Hospital or its staff. We are against the form of funding and the repeated ignoring of the will of the people, as reflected in the past two defeats of a similar bond issue.
It is also against the use of a mail ballot to try and pass the meaure. While technically legal, it is also sneaky as hell. It is likely to disenfranchise a large number of the electorate, allows the proponents to pretty well control the ballot (for example, the registrar can, and will, tell them which precincts the ballots are coming from. They can then have volunteers call or contact voters in othere precincts who have not yet voted and "persuade" them to support the issue by mailing in the ballot), and needlessly spends $400,000 of the district's (taxpayer) money for a special election. That’s roughly four times what it would have cost to put Measure A on the November ballot. We think that is both another waste of taxpayer money and an obvious attempt to pull a sneaky end run around the electorate. A legal end run . . . but still sneaky.
The Tri-City Hospital Board seems to feel it can reformat, remodel, rebuild its hospital and have the taxpayer pick up the tab. The tax burden is not evenly or fairly spread. Folks who live in Shadowridge, for example, use Tri-City Medical Center yet they are not within the hospital district boundaries and thus have no vote in the matter, nor would they be required to kick in their share of property tax to support the bond issue. That’s not fair, say taxpayers who live within the district, use Tri-City Medical Center, and would have to pay the added property tax if the measure passes.
There are 140,628 registered voters in the Tri-City Healthcare District. Voters in the health care district ---- which encompasses most of Oceanside, Carlsbad and Vista ----- have until Aug. 26 to return the ballots.
Some of those in the district complain we simply can't afford this bond measure now. Community members are getting hit from all sides on energy costs, food costs and housing costs. They also argue there are other alternatives the board should have considered. They could have obtained a Bond Anticipation Loan to commence construction and thereby fix construction bid prices. When the bonds were issued they would retire the Bond Anticipation Loan; or, they could get out of the hospital business and sell or lease the facility to Kaiser Permanente, Scripps, or Sharp. Or, it could contract with the above hospitals to operate Tri-City Medical Center such as the Grossmont Hospital District has done successfully. Grossmont did this in the 1990 when they ran into money problems. Fallbrook’s Hospital also privatized.
There are a number of options that would not burden the taxpayer.
Observers within the Tri-City Medical Center District also have been watching and hearing what’s been happening at Palomar Medical Center and the facilities within the Palomar Pomerado Health District. That district successfully passed a $496 million bond issue and has had nothing but trouble and angry critics ever since. The president and CEO, Michael Covert, has come under withering fire from a host of critics, including The Paper. Those critics complain about an obscenely high $676,000 annual salary and bonus compensation scheme for Covert, yet are seeing controversy after controversy, delay after delay, cost overrun after cost overrun. Tri-City’s president and CEO Arthur Gonzalez has also drawn criticism for his excessive (to many) compensation plan. Gonzalez’ annual salary and bonuses come to $457,000 as of June of last year. But wait! There’s more! In October of this year his compensation will increase to $483,000. Oh, and he also gets $12,000 a year in car allowance. (You can’t expect someone to pay for their own gas when they only make $483,000 a year.) Combined, that makes for $495,000. Add in medical and dental benefits and it’s well over a half million a year.
And isn’t that just swell?
The feeling seems to be, “if the district can afford to pay that much money to their CEO’s, they don’t need my tax dollars to run the hospital.”
Another concern is the $589 million bond issue will likely result in actual costs, including principal and interest, of over $1 billion over the four decades it will take to retire the bonds. Where will it end?
Another criticsim of both Tri-City Medical Center’s district and that of PPH is one of transparency and openness. The administration and board members of both districts seem to take a position that if you are not an insider you are not entitled to information or to listen to key discussions and debate. We, as a newspaper, serve a role of being the eyes and ears of the people . . . yet we have to jump through hoops and file requests for information under the Public Records Act for even the most simple of information. (We requested the salary and a copy of the contract of Mike Covert, PPH’s president and CEO, for example. No deal. We had to file a Request for Information. Ultimately, it was released to us but neither we nor you should have to go to that trouble for what is absolutely public information).
Both hospital districts have outstanding public relations departments. But their mission(s) are not to be open and transparent. Their missions are to see to it that you, the public, the taxpayers, see, hear, and learn only what they want you to see, hear and learn. They will build some of the most beautiful, glossy, handouts and Power Point presentations you’ll ever see . . . but they are close mouthed when it comes to getting answers to hard questions.
While PPH’s public relations and marketing department has come up with horribly bland tv advertisements (and a highly questionable expenditure of $4 million to San Diego Chargers running back, L. T. Tomlinson) the supporters of Measure A have some excellent tv commercials, and videotaped testimonials of both doctors, nurses, and patients of Tri-City, all of whom sing the praises of the Medical Center.
They miss the point, however.
No one is arguing against the hospital or its staff. Even the opponents of Measure A acknowledge there are fixes needed. What they, and we, are saying is that Tri-City should fund the renovation out of its own budget and/or commercial bank loans, such as the aforementioned Bond Anticipation Loan, and that taxpayers should not be asked to foot the bill.
Or how about this idea?
How about getting out of the hospital business and selling or leasing Tri-City to someone like Kaiser, or Scripps, or Sharp? It’s been done before . . . and successfully. Leave the running of the hospital to private industry and take much of the burden off the taxpayer’s back.
The hospital industry is a very profitable one. Tri-City likes that. One million residents to serve and no competing hospital; if they need money they just sock it to the taxpayer via a bond issue, or, at least they try to.
The revenues derived from operations on this very successful hospital should be able to fund the debt service on the necessary funding, even if that funding is an interim or bridge loan, designed to get the process underway.
One of the several problems with bond issues is that funding comes long after the estimates have been made. Sid Colquitt, a retired banker with whom we spoke, pretty much confirmed that when he suggested that “there is too much of a time lag between receiving bids (thereby having a handle on current construction costs) and getting public approval to issue bonds. Also, there is a time lag between getting approval to issue bonds and the ability to market the bonds at advantageous terms. In a growing economy with labor and material costs generally rising those time lags nearly always seem to present a municipality, or hospital district, with the dilemma of having to pay for a project that costs more than expected or that it was authorized to spend. Additionally, these delays can and may certainly have an adverse effect on costs due to rising interest rates and other expenses related to the bond underwriting.
However, most municipalities (including PPH and Tri-City Medical Center ) have the legal ability to borrow in the short term from banks. I don't know offhand what the laws etc are related to borrowing for hospital districts, but that information is certainly available. I should add that those laws are not uniform for all municipalities (cities, counties, fire, hospital and improvement districts of all stripes are regulated separately). Assuming that the municipality or district has the authority to borrow for construction purposes and in an amount that would enable commencing building much sooner, one would think that the municipality/district would approach their bankers for interim financing and repay later from the sale of bonds. Obviously the bankers are going to want to be satisfied that the municipality/district has approval to sell bonds for the project.”
The above example would be a classic application of the Bond Anticipation Loan. This should have been explored before putting a bond issue out. The proposition marks Tri-City's third attempt in the last two years to pass a renovation bond. In 2006, two $596 million measures, Propositions F and T, narrowly failed to earn the 66 percent voter support they needed.
If the measure does pass, the money would cover the essential parts of the hospital's $778 million construction master plan, officials have said. The question crops up, however, “when was the last time any governmental project finished on budget?”
Again, the PPH debacle is an excellent example. Originally the $496 million from the successful bond issue was to be part of the overall project budget of $753 million, the balance to have been secured from fundraising and/or grants. That budget ballooned up to $1.2 billion and has since been cut back to $990 million.
Another concern we have is “who controls the money if the bond issue passes?”
Answer: The Tri-City Medical Center Board. The same board that ignored the public’s voice twice in the past. What concerns us about this is the bearers of the issued bonds can charge up to 12% interest. It is right there on the TCMC website in the declaration, page 4. (http://www.tricitymed.org/media/pdf/20080602113940296.pdf). That’s a pretty heavy hit and, in these economic times. bond bearers may well want to hedge their bets and charge the higher interest rate. Further, page 4 of the declaraton also says the TCMC board can issue the bonds as they see fit. There is no control of that. There is oversight (by an oversight committee that is appointed by the board, not elected by the taxpayers) but that is only on costs of the project and direct expenditures, nothing tied to control and issuance of bonds, something a third party should be appointed to manage and control.
If the measure passes, Tri-City will tear down and rebuild its two oldest buildings and renovate some of its existing space. Voters would be saddled with a debt through a property tax increase over the next 40 years. Tri-City estimates that the annual property tax bill for each home and commercial property in the district would increase $21.97 for each $100,000 of assessed value.
The money from Measure A would be used to build two new, seven-story hospital towers on the hospital's existing medical campus at Thunder Drive and Vista Way. The hospital would demolish its central and south towers, its two oldest structures, which do not meet earthquake safety standards.
After the two new towers are built and the two old ones are razed, the hospital would expand its existing emergency room and would also renovate its labor and delivery department. Tri-City's neonatal intensive care unit, which is now in the south tower, would move to one full floor of the hospital's pavilion building, which was built in the early 1990s.
Though the hospital would build all seven stories of each new tower, only the first four floors of each building would be completed and operational right away, officials have said. The upper three floors would be "shells" that would require significant additional investment to complete.
Opposition to Measure A
A political-action group called Stop Taxing Us is opposing Measure A. Led by former hospital employee Joe Brown, who now lives in San Diego, the group questions whether Tri-City really needs to ask voters for so much cash. Brown, and a small group of other opponents, fought against the hospital's last two measures on similar grounds.
"They can get a loan themselves and pay it back themselves ---- they don't really need to come to us to fix the hospital," Brown said recently.
The former hospital orderly noted that union members have recently accused Tri-City administrators of skimping on hours for nurses aides and other support staffers in order to shrink the public hospital's expenses, leading to an estimated $9 million profit at the end of the last fiscal year.
"To us, ultimately they have proven they are not good stewards of the cash that they already have, and it scares the hell out of me that they are asking for a half-billion dollars," Brown said.
Art Gonzalez, Tri-City's chief executive officer, said recently that Measure A defers some of the hospital's much-larger master plan and focuses on parts of the hospital that must be replaced to meet state earthquake safety guidelines, anticipated patient growth and changing medical technology.
"We feel very confident in saying that these are the basic essentials that are necessary now," Gonzalez said.
Gonzalez said Brown is wrong about the hospital's ability to fund needed repairs and upgrades. He said it would cost $30 million per year to service the debt on Measure A ---- a cost that can't be borne by an institution that writes off more than $1 million per month in bad debt due to patients who can't pay.
The hospital does plan to borrow $139 million against its revenue to furnish and equip the new buildings if Measure A passes, Gonzalez said. Under California law, bond proceeds can't be used on furniture, equipment or salaries. In addition to Brown, a private-practice anesthesiologist based in Escondido has entered the fray. Brown's fellow bond critic, Carlsbad resident Dr. Gary Gonsalves, said Tri-City should tighten its purse strings instead of putting another bond measure on the ballot.
"This reminds me of a child who has been told 'no' multiple times and so he keeps asking the same questions over and over again, hoping that this time he'll get a 'yes,' " he said.
Dr. Gonsalves said he and other opponents do not necessarily disagree that Tri-City needs updating. But he said he believes the hospital, which turned a profit in the last fiscal year, does not really need to tax the public to get the job done. He also objected to the use of an all-mail ballot. While technically legal, he said the method is designed to disenfranchise votes who are not aware of Measure A.
"For those who do not read about it in the newspaper, they will just throw it away," he said. "We feel this election is deliberately trying to circumvent the democratic process."
Brown, said recently that he chafes at the idea of a mail-in-only ballot. So do we at The Paper.
"We would like regular people who may not feel comfortable mailing in their ballot to be able to vote the old-fashioned way," he said.
According to a financial statement filed with the San Diego County Registrar of Voters, Citizens for Tri-City, the political action group supporting the measure, has raised $357,250 since July 1 with the Tri-City Hospital Foundation contributing $250,000.
The financial picture for Stop Taxing Us, the committee opposing Measure A, is less clear. No financial statement has yet been submitted for the group. Gonsalves said he has not had time to file a statement, but added that he plans to come into compliance with filing requirements soon. He has said he couldn't say whether the opposition group has raised at least $1,000, the requirement for filing financial statements.
Frankly, we don’t know how effective or how well organized the opposition is. Phone calls to them have not been returned, the website is a minimal one. There are questions about how much money they have raised to fight the bond measure and it is unknown how large their opposition base of volunteers is; those who will walk precincts, hand out fliers, and/or donate funds.
The pro Measure A forces are well organized, seem to have a lot of money, a good list of volunteers, and some effective advertising. Both the North County Times and the San Diego Union Tribune have endorsed Measure A.
We, The Paper, appear to be a very small voice in the wilderness saying . . . “Wait! This isn’t right! Vote No on Measure A!”
If those of us who oppose Measure A are to succeed against such highly organized supporters of the bond, then we need to roll up our sleeves and get to work. It will not be easy.
Mailing It In
If you don’t mail the ballot in with your vote of “No” then the proponents of Measure A win by default. When the Tri-City board of directors voted in May to pursue an all-mail ballot, leaders cited the ever-increasing cost of delaying construction, and the possibility that a hospital bond might be overlooked by voters on the crowded November ballot. But there were strategic reasons for this move as well.
Bond opponets can do the same thing. While the mail-only special election automatically favors those who are already connected to Tri-City through its first two bond attempts, the opponents, if they are organized, can use the same techniques as the pro-bond folks.
In both of the earlier failed attempts, supporters spent months calling voters and asking for their support. The Tri-City Hospital Foundation, which has provided most of the cash for all three recent bond efforts, retains a detailed database of addresses and phone numbers for its previous supporters, allowing volunteers to contact those voters and urge them to return their ballots.
Ballots must be returned to the registrar's office on Ruffin Road in San Diego by 8 p.m. Aug. 26. That means voters who are mailing their ballots back to the registrar's office should not slip them into the mailbox on election day. Voters should allow at least 48 hours, and even 72, to make sure that their ballot gets to the Registrar of Voters in time.
If ballots are accidentally lost or thrown away, the registrar's office has the ability to cancel the original and issue a replacement.
Things You Need To Know
-- Ballots are postage paid.
-- To ensure your ballot is received, put it in the mail at least 48 hours before Aug. 26.
-- Marked ballots can also be returned to the registrar of voters office in San Diego.
-- It's not too late to register to vote in the election. The final registration deadline is Aug. 11.
Tina Knight, treasurer of Citizens for Tri-City, said the group has been busy in the last few weeks calling potential supporters and has already sent out its first political mailer of the election, asking voters for their support in the mail-only election.
"We have so many volunteers who are helping us make calls in the evenings that we keep running out of phone lines," Knight said.
Opponents of Measure A need to do the same thing.
Proponents have the advantage of experience on this third try. In the previous two attempts, which raised more than $1.2 million in donations, volunteers compiled a database of supporters. Today's volunteers can simply call those past supporters and make them aware of the new measure.
Gonsalves said he is not intimidated by proponents' experience. We would be more impressed if Dr. Gonsalves would return phone calls to the media, answer some questions, and help us to help him get the word out to those who are opposed to Measure A.
"Our volunteers are quite substantial. We have dozens and dozens of volunteers," he said.
We’d like to see those volunteers. And talk to them.
A handful of bond supporters, such as former Vista Mayor Bernie Rappaport, told the board they will campaign in support of the measure. Rappaport recently led two successful campaigns in Vista ---- one to raise the sales tax, the other to adopt a city charter.
"I want to make it three out of three," he said.
This time, hospital officials have had so many focus group sessions with the public they have lost count. It was suggested the district annex the Shadowridge area and its 3,300 properties to help share the financial burden.
A mail-ballot election in August is an interesting twist. With 140,000 voters eligible, this mail-only election may be an interesting exercise in testing the comfort level for voters and election workers. Again, for those of us against Measure A, it is an uphill battle against a determined, well financed, group that insists on taxpayers picking up the tab.
In the unlikely event our message has not gotten through clearly, The Paper, for reasons cited above, strongly recommends a NO vote on Measure A.
We may well lose this one - but if we do, let’s make them earn their victory.