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Medical Center Budget Problems Prompt Calls For Oversight

By J. Douglas Allen-Taylor
Tuesday June 20, 2006

Health care advocates and labor leaders stepped up their pressure on Alameda County supervisors this week to help the Alameda County Medical Center close a $4.8 million budget gap by asking the county to cut loan interest and rent payments owed by the medical center. 

Final adoption of the 2006-07 county budget is scheduled for Friday. The medical center board of trustees is scheduled to review the 2006-07 medical center budget next Tuesday. 

At Monday’s Board of Supervisors hearings on the Alameda County budget, SEIU Local 250 representative Charlie Ridgell accused supervisors of operating a “three-card monte” game over health care Measure A monies, saying that the medical center “would not have a deficit except for its $200 million debt to the county, and that debt only came up for discussion after the passage of Measure A.” 

Measure A was a supplemental health care package passed by Alameda County voters in March of 2004. 

Ridgell charged supervisors that because the language of Measure A did not allow the county to dip directly into the measure’s funds. “You invented a reason to take that money away anyhow,” he said. 

Seventy-five percent of the Measure A’s sales tax money earmarked to supplement the budget of the Alameda County Medical Center and the other 25 percent going to local health care clinics and other supplemental health care services. Measure A sales tax revenues have been running above budgeted expectations, with the county received $95.8 million in Measure A monies in fiscal year 2004-05 and another $74.2 million as of the first eight months of fiscal year 2005-06.  

In a letter sent to Board of Supervisors President Carson prior to Monday’s hearing, SEIU Local 616 Executive Director Fran Jefferson asked supervisors to “forgive $6.6 million in ACMC interest payments to the county” and “$1.5 million in ACMC rent payments to the county for the Eastmont, Winton, and Newark health clinics.” Jefferson said that such a forgiveness of the debt and rental payments “should result in no impact on the county’s operating budget.” 

County staff members said that rental payment to the county for the use of the health care clinics was included in the original agreement with the medical center, and that the county must make the rental payments themselves to the owners of the clinics’ property. 

Board of Supervisors President Keith Carson prefaced the public comment period of the hearing by citing a list of past financial obligations that he said had been transferred from the medical center to other county departments. But giving indications that he might not support the proposed interest payment and rent payment forgiveness, Carson said that the past debt transfer process between the county and the medical center was “merely robbing Peter to pay Paul.” 

Carson also said that Medical Center CEO Wright Lassiter has pledged to cut the remaining $4.8 million medical center deficit, and said that he while he expected Lassiter to follow through with that commitment, he said he would also introduce backup measures to supervisors this week to close the center’s funding gap in the event Lassiter cannot make the necessary cuts. 

“County government is the safety net for citizen health care,” Carson said. 

But Vote Health chair Kay Eisenhower urged supervisors to come up with the deficit money without asking the center to do so, saying that the medical center is proposing cutting 100 additional staff positions on top of another hundred layoffs already in the works, a process she said would severely hurt the medical center. 

“There’s very little that Lassiter can do but more layoffs,” Eisenhower said, adding that it was “particularly distressing that most of the [medical center’s] budget problems comes from debt to the county,” which she said came from periods when federal or state funds to the medical center were late, and the county had to make payments for the center. 

Eisenhower called it “galling that the county is asking for interest on this debt,” and said that when county agencies such as the sheriff’s department come up short, “the county comes up with money for the department but doesn’t call that a loan to be paid back.” 

Eisenhower said that was a “backdoor way of getting Measure A funds.”  

She said that the issue of the medical center debt to the county came up during discussions of the “blue ribbon task force convened by Supervisors Nate Miley and Gale Steele” that eventually led to the writing of the ballot language that became Measure A. 

“When I first looked at the language that was in the measure, I asked the county counsel if the measure as it was then written would allow the county to get its dibs on the health care bond money even before it went to the medical center,” Eisenhower said. “Supervisor Steele said that wasn’t the intention of the measure, but the county counsel told me that yes, the language would allow that, and so that language was taken out of the measure before it actually went before the voters.”