From Whodunit to District Dissolution

The Mendocino Coast Health Care District (MCHCD) and its board of directors have sunk to new depths of dysfunction. At the February 24^th regular board meeting something of a whodunit arose after Board Chair Amy McColley revealed that on February 8^th she discovered multiple zoom recordings of board meetings had apparently been permanently deleted. The agenda came equipped with correspondence from the legal firm Best, Best & Krieger (BB&K), detailing a legal opinion on such activity. In a section titled “Destruction of District's Brown Act Meeting Recordings” the legal advice states, “Accidental destructions outside of an adopted record retention schedule presents very little liability, particularly with regard to records that are not related to litigation in which the public agency may be involved. When this happens, most often the public agency enacts additional or revised policies to ensure it does not happen again. However, purposeful and willful destruction of a record is a crime. Government Code section 6200 provides that “[e]very officer having the custody of any record...is punishable by imprisonment...for two, three, or four years if, as to the whole or any part of the record...willfully does or permits any person to do any of the following...[d]estroy...” (Gov. Code, § 6200(b).”

According to McColley's account, during the evening of February 8, she turned on her computer and almost immediately witnessed one zoom recording after another disappear. She indicated that her computer screen displayed another member of the MCHCD Board already logged into the zoom accounts. At the February 24^th meeting a lengthy discussion ensued, with the focus on a particular board member, some defensive excuses and an apparent alibi. Chair McColley agreed to follow up with a forensic investigation to find out exactly how the deletions occurred and precisely who was responsible for the actions. Whether that investigation will involve law enforcement or private investigation remains to be seen.     

Perhaps greater long-term impact derived from statements read by yours truly and Fifth District Supervisor Ted Williams, which cited more than a year and a half of ineffectiveness by the district's board. Despite the presence of some capable people on the board the situation might best be remedied through Dissolution of the district board and the district itself.

What would happen in such a dissolution scenario? Dissolution of a special district can be initiated by a petition from citizens of the district or by a resolution from the district's board. In either case the immediate governing body receiving the resolution or petition would be the Local Agency Formation Commission (LAFCo – sometimes written with all letters capitalized as LAFCO).

Mendocino County's LAFCo has seven regular Commissioners. These are: two members from the Board of Supervisors; two members who represent cities in the county; two members representing independent special districts in Mendocino County; and one member representing the public. The Commission also has four alternate members: one each from the aforementioned categories.

LAFCo has its own paid staff, which in and of itself separates the commission from MCHCD, which has been devoid of any support staff for much of its existence since the affiliation agreement with Adventist Health (AH) took effect on July 1, 2020.  A dissolution of the coast healthcare district is likely to be looked on favorably by AH. If the district does dissolve, Adventist Health's day to day operation of the hospital would essentially be unencumbered by district board oversight.

What would happen to the lease agreement with Adventist Health? The lease would continue in effect.

What about tax money that goes to the healthcare district? Mendocino County would become the other party to the lease with Adventist Health. Ironically enough, that answer comes from a memorandum authored by Best Best & Krieger (BB&K) the firm the coast healthcare district employs for much of its legal work. Citing California Government Code the BB&K memo states, “a city or county will become the successor agency for the district depending on which one contains the greatest assessed value of all taxable property within the territory of the dissolved district. A successor agency collects the dissolved district’s assets and is empowered to wind up the business of the district - ensuring that all debts are paid, distributing assets and all other lawful purposes for the benefit of the lands, inhabitants and taxpayers within the territory of the dissolved district, as far as practicable.”

If you think an action like dissolving a healthcare district might be unprecedented, think again. In the summer of 2020, the Palm Drive Health Care District in Sonoma County was dissolved by the Sonoma LAFCo, with the county becoming the successor trustee.

Near the end of MCHCD board meeting on February 24th, director Jessica Grinberg brought the Dissolution concept forward as one worthy of further discussion. Chair McColley appointed Grinberg and Director Norman deVall to research the matter further.