The purpose of my articles is designed to provide facts and information to the public about healthcare challenges facing our hospitals. I believe that the residents of Imperial County are quite able to take these facts and make their own assessment and decisions about what is taking place. The funny thing about facts is that they can get in the way of the goals and agendas of some. Sometimes facts are an inconvenient truth!
Let’s take a look at some facts based on the published study by LAFCO commissioned by the county of Imperial. The following information is taken from the BAE feasibility study. The second study referenced in AB 918 is the Kaufman Hall feasibility study sponsored by ECRMC. While we would like to use it for a comparison, it has not been made public. We do note that the Kaufman Hall report is cited as a source document for the BAE study and understand some components of the Kaufman Hall were made available to LAFCO. The BAE study provides for two scenarios. The first, all three healthcare entities and the entirety of Imperial County, and the second excludes ECRMC and the property base of the residents and businesses within the city limits of El Centro.
BAE Study Flaws
- Does not include Assets/Liabilities, only operational costs
- Includes increased debt services for PMH Capital upgrades which have not been incurred. This would have to be done with a construction bond, by the new healthcare district.
- Excludes ECRMC debt service, bond obligations and pension liabilities
- UCSD Synergies Expense, $7.5 million. This assumes that IVHD will continue contracting for their services. This limits IVHD to negotiate for other options
- UCSD $20 Million IT upgrades. This is an assumed commitment and is built into the PMH capital upgrades. IVHD may want to negotiate for other options.
- Built-in assumption that UCSD will have an integral part in the financial future of the new district.
- PMHD/ECRMC Administrative Costs
- Specific ECRMC Admin costs are missing
- Cites ECRMC Est. of 2023/24 Admin cost of $8.9 million
- PMHD Admin Costs are itemized
- Cites PMHD Est. of 2023/24 Admin costs of $8.5 million
This makes no sense given that ECRMC is a larger hospital with larger costs than PMHD. However, without the details on ECRMC admin costs, this appears to be guesswork.
Both scenarios make conclusions on proposed property taxes needed to support two scenarios. It was never the intent of AB 918 to have a single healthcare district with one hospital. It has always been and will remain that this merger will only work with a two-hospital campus. Option 2 is a misrepresentation of the facts and may scare people into voting out of fear rather than with facts.
Assemblyman Garcia has stated that the PMH effort to expand the district will result in exorbitantly high property taxes. If the ballot initiative passes and the ECRMC acquisition is successful, then the property taxes remain low. If the ECRMC acquisition is unsuccessful, then property taxes will be higher. This is not a desirable outcome and defeats the purpose of developing a single healthcare district. However, AB 918 did not provide for a means to address this should the ballot initiative fail. This is an area that needs correction in any future legislative corrections.
Apparently, Calexico has been promised a new hospital in AB 918. While this is not impossible, there has to be funding identified to support three hospital campuses. The original intent of AB 918 was to create a single healthcare district with two hospital campuses. The BAE study did not include any data on the construction and operations for a third hospital. This would require additional bond funding to accomplish this task and additional property tax assessments beyond what is proposed in the BAE study. Such a venture would require several hundred million to construct and $40-50 million per year to operate.
Based on this information, I believe that the estimates on property tax are incorrect and improperly calculated to give taxpayers and voters the actual amount of tax revenue needed to fund both hospitals. I would advise the interim board for IVHD to send this study back for revision to include appropriate and relevant data in order to get better estimates on funding needs.