Supervisors Blast Children’s Hospital for Bond Measure

By J. Douglas Allen-Taylor
Friday July 13, 2007

Officials from Oakland’s privately operated Children’s Hospital got an hourlong angry lecture from all five Alameda County Supervisors on Tuesday morning after supervisors learned that Children’s has begun circulating petitions to put a $24 parcel tax increase on the February ballot to help finance the building of a new hospital. 

The problem? If passed, the measure would add to the bonded indebtedness of Alameda County, possibly jeopardizing the ability of the county to finance the retrofit of its own hospital, Highland.  

Supervisors said they resented the fact that neither they nor other county officials had been consulted before the petitions were put out on the street, making it appear that they were against medical services for children by now raising questions about the bond measure.  

Petition signatures were being solicited over the weekend throughout Alameda County, including the Alameda County Fair in its last two days, by the private petition signature gathering company Scott Petition Management.  

Board of Supervisors President Scott Haggerty suggested that the hospital withdraw the petitions, submit them to the Alameda County counsel’s office for redrafting, and ask the county itself to sponsor the referendum. Hospital officials said they would consider the suggestions, but made no commitments. 

Harold Davis, chairman of Children’s board of directors, apologized on behalf of his board for the hospital’s failure to involve the county in advance, saying, “There was no malice intended on our part. If there is any ill-feeling that results from this, we hope we are able to heal them. We’re in the healing business, after all.” 

And a contrite Children’s Hospital President and CEO Frank Tiedemann also tried to mollify the supervisors, saying, “I apologize if we have not communicated well. We do a good job running a hospital, but not so well in the political process. We know you have serious questions, and we will try to give them serious responses.” 

Tiedemann said that the financing problem came when Children’s determined it needed to expand its capacity to meet the area’s growing need in pediatric care, and “it was a shock to find out how expensive it would be.” 

Tiedemann put the financing of the new facility at $600 million, with $75 million from a 2004 state bond, $98 million projected from an upcoming 2008 state bond, and $100 million to $150 million in projected private sources, “leaving us short.” 

That did little to hold off the supervisors’ fire, even after Supervisor Keith Carson noted that it was Davis who had originally brought him into politics, and particularly after Tiedemann insisted that he had earlier sent a letter to all five supervisors announcing the bond measure, a letter that all five supervisors said they never received. 

Accusing Children’s Hospital of “hitching a ride on Alameda County’s debt capacity,” Carson said that “there is written language in the bond measure that entangles the county in this measure, legally and financially. If anyone thinks they didn’t have to sit down with us early on to discuss this, I don’t understand. This is arrogance. We’ve got deep concerns. Deep concerns.” 

Carson said that he set up a meeting with Children’s officials nearly three weeks ago after Haggerty learned about the petitions second hand and wrote Tiedemann, asking for an explanation. Haggerty said that Tiedemann never answered that letter. 

“At that meeting, we expressed our concerns,” Carson said, “and we were told that the petitions would be held off until those concerns were addressed. Two days later, I heard that the petitions were being circulated.” 

Carson noted that the petition did not include language that the bond money, when collected, could only be spent by Children’s to rebuild a hospital in Oakland or Alameda County, even though he said that petition gatherers in Oakland were telling potential signers that “the bond measure will ensure that Children’s Hospital will stay in Oakland.” 

Carson also criticized the fact that the ballot measure language would not prevent Children’s from using the money to build a “scaled-down version” of the hospital smaller than the current facility. 

“What caught me off guard is that this has been going on for a long while and we were not made aware of it,” Haggerty told Tiedemann. “I don’t know how you can involve the county in incurring this level of debt without bringing us to the table. This is not about the fine work that Children’s Hospital is doing. Everybody on this board appreciates that and acknowledges that and supports that. Let’s not make this about the children. We get it. We spend millions on the needs of children in this county. It’s about process. It’s about not coming to us in advance. I don’t know how you operate like this.”  

Both Supervisor Nate Miley and Alameda County Counsel Richard Winnie said they had concerns about the legality of some of the language in the proposed bond measure, and its ability to withstand a possible legal challenge either from the county or from private citizens. 

“I’ve got major concerns about this,” Miley said, “and I can’t support this bond measure until these legal issues are resolved.” 

Miley said that among other problems with the petition language, it called for the taxes in the measure to be collected by the county assessor, even though the Alameda County charter gives that authority not to the assessor, but to the auditor and the tax collector. 

“Are you trying to change our charter?” Miley asked.  

That error alone, the supervisor said, could cause the bond measure to be declared invalid by a judge following the election. 

Winnie said he has sent hospital officials a letter asking them to resolve six of those legal issues, and suggested that any meeting between his office and hospital officials to try and resolve the issue be held off until that letter is answered and those legal issues are addressed. 

“The ball is in their court now,” Winnie said.