Tale of Two Meetings

by Malcolm Macdonald, December 21, 2016

This is a tale of two meetings. The first occurred Monday December 12th at Fort Bragg's Town Hall. The main order of business, recognizing outgoing councilmembers Scott Deitz and Doug Hammerstrom then seating Will Lee and Bernie Norvell in their places. With that done the city clerk called for nominations for mayor. When councilman Mike Cimolino said, “I'd like to nominate Lindy [Peters] to be mayor,” in the audience Rex Gressett grumbled, “Oh, no.”

Mr. Peters was voted in as mayor by a 4-0 vote. Long time councilmember Dave Turner was absent, visiting Fort Bragg's sister city Otsuchi, Japan. Peters in turn nominated Will Lee, the top vote getter in the November city council election, to be vice mayor. The same 4-0 vote resulted. If anyone cares, Gressett applauded this move.

Mr. Lee provides something of a nexus between city government and Mendocino Coast District Hospital (MCDH), where he is employed as the medical staff manager. Lee's only role at the MCDH Board meeting of December 15th was to read the lists of temporary privileges and locum tenens coverage. One bright note there was the news that OB/GYN Dr. Amy Tomlinson has apparently signed on with MCDH at least into the early autumn of 2017.

New MCDH Board President Steve Lund promised some forward movement for a long promised and as yet undelivered ad hoc committee concerned with cutting into the nearly million dollar losses the obstetrics department has incurred for the last several years.

Lund won a four year seat on the MCDH Board of Directors in the November balloting after serving as an interim Board member following Dr. Kate Rohr's resignation in June. Lund is newly joined on the Board of Directors by Drs. Lucas Campos and Kevin Miller. Returning members are Kitty Bruning and Peter Glusker.

In “New Business” before the MCDH Board, Shin Green, a principal at Eastshore Consulting LLC, detailed the finalization of the process in which the hospital district's general obligation (GO) bonds dating to 2001 are being refunded at a more favorable, late 2016 rate with a gross savings over the next fourteen years of $579,367 for MCDH's long term debt service. Within this refunding system the overall debt principal MCDH is responsible for grows from $3,940,000 to $4,125,000; however, the total interest due drops from $2,228, 299.39 to $1,463,931.44. Keep in mind there are issuance costs for refunding these GO bonds. Among those are $42,000 to Eastshore Consulting and $62,000 to the bond and disclosure counsel (Norton Rose Fulbright).

In other money matters Chief Financial Officer (CFO) Wade Sturgeon announced that plans to float something more than $3.5 million in new debt revenue bonds has fallen through. That money would have been used to fund long needed capital maintenance repairs such as the HVAC (heating, ventilation, and air conditioning), a nurse call system, an automatic transfer switch (ATS) for more or less immediate change over to generator power in an electric outage, a new electronic medical records system, and more. Some of these repairs have been needed for more than half a decade. Failure to procure new debt revenue bonds means some other source of loan/debt must be sought. The Board gave CFO Sturgeon permission to apply for a Help II Loan through the California Health Facilities Financing Authority for a sum approximating $1.5 million.

Meanwhile Chief Executive Officer (CEO) Bob Edwards informed the public that the recently concluded negotiations between administration and the employees union will end up costing the hospital $768,000 more over the next two years than the previous contract. Cynical observers might tell us that Edwards released this figure so eagerly in order to use it against the employee union next time around at the negotiating table. Best guess is that is a correct assumption, but don't be too quick to condemn the CEO here. MCDH's employees have been getting a plum benefits package for ages. Some estimates put that benefit package at approximately 40% of the total dollars spent by the hospital district on each employee. Other hospital districts in the state appear to be paying out far less.

Of course, that is a matter for two years hence. Right now, MCDH has to be concerned with day to day, month to month financial viability and finding money for millions and millions in absolutely vital repairs.

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