The following excellent commentary is from Richmond Ciity Councilman Tom Butt's EForum for 10/8/14:
At last night’s City Council meeting, 40 people testified on an agenda
item that initially proposed reallocating $20 million in the Chevron Environmental
and Community Investment Agreement (ECIA) from various greenhouse gas (GHG)
reduction programs to some plan for saving Doctors Medial Centre (DMC) (Item
I-3 - DIRECT staff to send a letter to Chevron requesting an amendment to the
Community Investment Agreement to redirect a portion of the $90 million to Doctors
Medical Center - Councilmember Booze')
Specifically, the staff report stated, “In order to reinstate Doctors Medical
Center as a full service hospital, staff is directed to write a letter to Chevron
directing them to redirect a portion of funding earmarked for Marin Clean Energy,
Richmond Promise, Electric City and Easy Go to Doctors Medical Center. Only
$1 Million will be redirected from Richmond Promise. The total amount directed
to Doctors Medical Center is $20 Million. The City Council also directs the
City Manager to research potential funders to provide the $20 million up front.
The funder will be reimbursed according to the scheduled disbursements set forth
in the Community Investment Agreement.”
The Chevron Environmental and Community Investment Agreement (ECIA) can be found
at http://chevronmodernization.com/wp-content/uploads/2014/08/14_0804_Executed-Copy-of-ECIA.pdf.
The original proposal was fraught with complications, the first of which is
the challenge of reducing the amount previously allocated to greenhouse gas
(GHG) reduction. The ECIA has $30 million in cash committed to GHG reduction,
and that amount is included not only in the ECIA but also in the Final EIR and
its Mitigation Monitoring and Reporting Plan (MMRP). It would have to be agreed
to by both Chevron and the City, and it would open up the already certified
EIR and make it vulnerable to a new challenge. The time for legal challenge
has now lapsed without one, but that could change. The city attorney deemed
that reallocating the GHG mitigations would be risky, perhaps unacceptably so.
The second challenge is that the remaining $50 million in cash disbursements
from the ECIA can only be reallocated once a year, with a 2/3 vote, but year
one does not start until the program begins, which is not until 60 days after
all litigation is resolved. That could happen as early as the spring of 2015,
or it could take years. The City Council cannot actually reallocate the funding
at this time.
The third challenge is that with the $3 million recently directed from state
funds by the Assembly Member Skinner legislation, DMC has only enough cash to
keep open through February of 2015, and only on a substantially reduced basis.
It no longer receives ambulances, and Its 70 beds have been reduced to 30. The
outpatient clinic has been closed and the staff has been trimmed from approximately
598 full-time equivalents, to 391 full-time equivalents. That is what “keep
open” would mean in the near term. According to both the Health Care District
board president Eric Zell and the Interim CEO Dawn Gideon, it would take months
to staff back up to a full-service hospital even if funds became available.
The fourth challenge is in the timing for release of funds. The ECIA covers
ten-year period with annual releases as follows:
Year 1 $11 million ($ 8 million for Promise Program)
Year 2 $8 million
Year 3 $8 million, and so on
There is not enough money in the first year release, even if it went all to
DMC, to pay the approximately $18 million cost of keeping it open on even a
limited basis. And whatever funds might be made available probably would not
be there at the end of February. For funds to be available on March 1, all litigation
challenging the Chevron project would have to be resolved 60 days prior, or
the end of 2014, which is not going to happen because the hearing on the writ
that stopped the prior project will not be held, at the earliest, before late
January.
What the City Council eventually did is vote 6-0-1, with Booze abstaining, to
register its “intent” to reallocate, at a later date, $15 million
from $50 million of ECIA funds to DMC, but with the condition that the funding
is part of a plan that has the additional funding required to operate it once
again as a full-service hospital. The conditions also included instructions
to the city manager to try and convince Chevron to release more money earlier
and to try to convince other West County cities and Contra Costa County to make
up the balance of the funding needed.
A progress report from staff will be back on the Agenda for October 21.
With GHG reduction funding off the table, the largest share of any redirected
funding would have to come mostly out of the Promise Program, which proportionately
would be reduced by $10.5 million. The typical tuition and fees for CSU is about
$6,500/year. See http://www.calstate.edu/sas/costofattendance/.
Cal is about $13,000/year. A four-year scholarship for CSU would cost about
$26,000, so a $10.5 million cut in the Promise Program would deprive about 400
students of a four-year scholarship.
If the DMC funding is front loaded, there may not be any funding available for
the Promise Program for three years or more, which means it would probably not
launch next year and would be severely cut back when it does.
However, there were 40 speakers supporting the DMC funding and not a single
one supporting the Promise Program, indicating that the public places a huge
value on DMC and virtually no value on the Promise Program.
Following are some articles from the last few days about DMC:
Richmond looks to earmark $15 million to save Doctors Medical Center
By Jennifer Baires Contra Costa Times
Updated: 10/08/2014
RICHMOND -- The City Council voted late Tuesday night to try to redirect $15
million from a $90 million Chevron community benefits package to help beleaguered
Doctors Medical Center stay afloat.
The money would come from the $50 million in funds that comprise the community
programs section of the Chevron package and would be given under the condition
that it go to support DMC as a full-service hospital. The money would be carved
out for the hospital by taking an equal percentage cut of all the programs in
the community program section, but the bulk of it would come from a $35 million
college scholarship fund for Richmond public school students.
The Richmond City Council voted Tuesday night to try to redirec
The Richmond City Council voted Tuesday night to try to redirect $15 million
from a $90 million Chevron community benefits package to help beleaguered Doctors
Medical Center stay afloat. (Kristopher Skinner/Bay Area News Group Archives)
As part of the resolution, the city will also lobby other West Contra Costa
agencies and cities to contribute to saving the hospital, which has drastically
cut services in recent months and is no longer receiving emergency ambulance
traffic.
The council directed city staff to meet with Chevron about reallocating the
money and report back on Oct. 21. Chevron had said previously that the city
could decide how to allocate the money from the community programs section of
the agreement, which was a condition of its $1 billion refinery modernization
project.
The vote came after pleas from community members and hospital representatives
to help the hospital sustain its operations in the face of a crippling financial
crisis. Some claimed that the diversion of ambulance traffic, which began in
August, has already resulted in the loss of lives.
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The infusion would come on top of $3 million in one-time funding from a bill
signed into law by Gov. Jerry Brown last month. But questions remain about whether
the money -- if and when it becomes available -- will change the long-term prospects
for the San Pablo hospital
A stakeholders group including local hospitals and health care experts is studying
the possibility of restructuring the hospital into a satellite emergency department
or, more likely, an advanced urgent care center, while many DMC nurses and doctors
push to keep it open as a full-service facility.
City Council members and the chairman of the West Contra Costa Healthcare District,
which manages and funds DMC, came under fire this summer for failing to earmark
any money from the $90 million Chevron investment package for the hospital,
and the exclusion led to finger-pointing about whom was to blame. The package
included funding for college scholarships, a solar farm and green transportation
programs.
Councilman Corky Boozé added the item to Tuesday's council agenda to
carve out $20 million for the hospital. The council ultimately voted on an amended
resolution to provide $15 million, with Boozé abstaining.
DMC is the only public hospital in West County but does not receive any subsidies
from the county.
The Chevron agreement mandates that $30 million go toward greenhouse gas reduction
programs. Boozé's item suggested redirecting money from some of those
programs.
Before the meeting, Dr. Richard Stern, DMC's chief of staff, had said a one-time
cash infusion of $20 million would at best provide the hospital with enough
money to stay open as a full-service facility for one year. But it would not
solve the problems of low reimbursement rates and need for a costly retrofit
at its current facility.
In an email Monday, Chevron spokeswoman Melissa Ritchie confirmed that the bulk
of the funding from the community benefits package would not be made available
until all legal challenges to the modernization project are resolved and Chevron
receives the go-ahead to begin construction.
Under the best-case scenario, Chevron would start construction during the first
quarter of 2015 -- which would mean that it would start paying out 60 days later
-- but pending litigation and the permit process could push that date back months,
or even years.
Check back for updates to this story.
Contact Jennifer Baires at 925-943-8378. Follow her at Twitter.com/jenniferbaires.
Richmond council mulls using Chevron community benefit funds to help DMC
October 8, 2014 by Mike Aldax
Less than a month before the Nov. 4 election, the Richmond City Council voted
in favor Tuesday of using a portion of the $90 million community benefits package
tied to the Chevron Richmond Refinery Modernization Project to fund Doctors
Medical Center, even after multiple warnings that the money to save the financially-struggling
hospital would come too little, too late.
In July, council voted 5-0 against using a portion of the $90 million to fund
the San Pablo safety net hospital, which with an annual deficit of at least
$18 million has reduced
services and is set to shut down early next year. Mayor Gayle McLaughlin
and Vice Mayor Jovanka Beckles abstained from that vote in protest.
The council had voted against setting aside funds for DMC after being told by
officials with the county’s health district and Chevron that the money
would not be available in time to save the hospital and also that it wouldn’t
be enough.
Council instead voted to use $35 million of the $90 million to fund Richmond
Promise, a program aiming to fund full college tuition for all Richmond high
school graduates over 10 years, and to use about $40 million on various projects
and programs to reduce greenhouse gas emissions.
Only $50 million of the $90 million can be legally redirected to fund DMC. Funds
used for the hospital would cut into other programs, including the Richmond
Promise college scholarship program.
None of the funds, however, can be released until the start of construction
on the modernization project, which is being held up by lawsuits filed against
the project by environmental groups Communities for a Better Environment (CBE)
and Asia Pacific Environmental Network (APEN).
With the legal challenges, it could take two years or more before Chevron is
cleared to proceed with construction, according to Chevron Richmond officials.
And after construction begins, the $90 million in funding is set to be dispersed
annually over 10 years, meaning only a portion of money set aside for DMC will
be available up front.
DMC, which is scheduled to close down in March, would need funds by February
at the latest, Councilmember Jael Myrick said.
On Tuesday, several councilmembers called on city staff to urge environmental
groups to reconsider their lawsuits
If the legal challenges are dropped, Chevron Richmond pledged to expedite the
start of construction so that the community benefit funds can be released.
“We will work with the courts to lift all impediments to construction and
hope to have clearance to proceed with construction promptly,” spokesperson
Melissa Ritchie said.
How much should DMC get?
Should environmentalists agree to drop their lawsuits, questions still remain
over whether funds supplied from the community benefits package would be enough
to maintain DMC as a full-service hospital.
According to the health district, DMC’s doom was sealed after a May parcel
tax measure that would have provided the hospital $20 million annually failed
to garner enough votes. District officials warned multiple times in the past
that a one-time infusion of funds – even as much as $20 million –
would barely keep the hospital open for another year.
Last month, a group of health experts tasked with finding solutions to DMC’s
financial troubles ruled out the possibility of preserving a full-service hospital,
citing a lack of possible funding sources from the county and other agencies,
and said it will instead push for a scaled down version providing only urgent
care.
Myrick said he was nervous about earmarking community benefits funds for DMC
knowing there is no plan in place to ensure the survival of a full-service hospital.
Despite that concern, Mayor Gayle McLaughlin proposed a motion at Tuesday’s
council meeting to provide $15 million from the Chevron Richmond community benefits
package toward saving the hospital.
She also directed city staff to return to council Oct. 21 with a plan to expeditiously
release the funds to DMC once legal challenges of the modernization project
have been removed. Additionally, she asked City Manager Bill Lindsay to urge
county corporations such as other refineries, along with officials from neighboring
cities and the county, to identify more funding.
Lindsay warned that the Oct. 21 deadline given to his staff to solve DMC’s
problems was undoable. He reminded the council that experts from multiple agencies
have been unsuccessfully trying to save DMC for the last five months.
Still, the council voted in favor of the mayor’s motion, with several members
hinting that they were forced to vote in favor of finding solutions for DMC
with the Nov. 4 elections coming up. Myrick mentioned that a lot of the council’s
discussions on DMC have been “theater.”
“We have seen a lot of demagoguery going on tonight,” Councilmember
Tom Butt said. “I can tell you there are no heroes and no villains. If
you want this thing to work, most of the council is going to have to work together,
and Chevron is going to have to be a part of it, and probably CBE is going to
have to be a part of it. It is not a divide and conquer exercise. This is an
exercise in team building.”
Another lifeline for West Contra Costa County hospital proposed
By Jennifer Baires Contra Costa Times
Updated: 10/06/2014
Click photo to enlarge
http://extras.mnginteractive.com/live/media/site571/2014/0806/2
Doctors Medical Center pharmacy technician DeeAnn Barnes, right, and National
Union of...
RICHMOND -- The effort to save Doctors Medical Center from closure could receive
a significant boost Tuesday as Richmond city leaders weigh whether to redirect
$20 million from a community benefits package negotiated with Chevron toward
the moribund San Pablo hospital, which has drastically reduced services in recent
months.
The infusion would come on top of $3 million in one-time funding from a bill
signed into law by Gov. Jerry Brown last month. But even if the City Council
approves the expenditure at Tuesday's council meeting, questions would remain
about when the money would become available and the impact it could have on
the hospital's long-term prospects for survival.
"It'd be a tremendous short-term solution to basically give us some time
to find other solutions, get other components in place," said DMC's chief
of staff, Dr. Richard Stern, before cautioning that a one-time infusion is not
enough. "We still need the county, the community and philanthropic organizations
to be part of a long-term solution."
A stakeholders group including local hospitals and health care experts is studying
the possibility of restructuring the hospital into a satellite emergency department
or, more likely, an advanced urgent care center, while many DMC nurses and doctors
push to keep it open as a full-service facility.
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City Council members and the chairman of the West Contra Costa Healthcare District,
which manages and funds DMC, came under fire this summer for failing to earmark
any money from the $90 million Chevron investment package for the hospital.
The package was a condition of the city approving Chevron's $1 billion modernization
project and was negotiated between Chevron lobbyist Eric Zell, the chairman
of the health care district board, and Richmond council members Tom Butt, Jim
Rogers and Jael Myrick.
The council members said they were led to believe any money for the hospital
would be too little, too late to make a difference, but Zell disputed that,
saying Rogers and Butt showed no interest in helping DMC despite a proposal
by Myrick to fund the hospital.
Councilman Corky Boozé added an item to Tuesday's council agenda that
would carve out $20 million for the hospital, which is no longer receiving emergency
ambulance traffic and has closed some units. DMC, which runs an $18 million
annual deficit, is the only public hospital in West County but does not receive
any subsidies from the county.
"I want the hospital open," Boozé said. "Therefore, I
am willing to rework the contract. Chevron says they don't care how we spend
the money as long as they get the (refinery modernization) permit."
Butt, Myrick and Rogers say that while they support finding a way to keep the
hospital open, the money from the Chevron package cannot be cut from some of
the proposed projects that are required for reducing greenhouse gas emissions.
They also question whether the money would come in time to help the hospital,
which only has enough cash to run as-is through February 2015.
"I really think that the hospital is important," Butt said. "Having
said that, trying to get the money out of this Chevron agreement to guarantee
the hospital is going to stay open, well, there are very few ways that it'd
be effective."
The Chevron agreement mandates that $30 million go toward greenhouse gas reduction
programs. Boozé is looking to redirect funds from a solar farm project
and green transportation programs.
If the council passes the item, it remains unclear whether the $20 million could
be made available up front or spread over the 10-year span of the package. Boozé
suggested the city could advance DMC the money then reimburse itself from the
Chevron funds.
A one-time cash infusion of $20 million would at best provide the hospital with
enough money to stay open as a full-service facility for one year, Stern estimated.
But it would not solve the problems of low reimbursement rates and need for
a costly retrofit at its current facility.
In an email, Chevron spokeswoman Melissa Ritchie confirmed that the company
would not negotiate on changing the funding timeline for the benefits package.
"Distribution of the bulk of the funding will not be initiated until all
legal challenges to the modernization project are resolved and Chevron USA Inc.
is given clearance to proceed with construction," Ritchie wrote.
Under the best-case scenario, Chevron would start construction during the first
quarter of 2015 -- which would mean that it would start paying out 60 days later
-- but pending litigation and the permit process could push that date back months,
or even years.
While the $20 million redirect might not be possible, Butt and Myrick said the
council is considering other options.
"I think when this thing comes up, there may be some alternative plans
floated out and something ultimately supported by the council," Butt said.
"I don't think it's going to be $20 million, and I don't think it's going
to be a slam dunk."
Contact Jennifer Baires at 925-943-8378. Follow her at Twitter.com/jenniferbaires.
If You Go What: Richmond City Council meeting
When: 6:30 p.m. Tuesday
Where: Community Services Building, 440 Civic Center Plaza
Barnidge: That $3 million for Doctors Medical Center won't go very far
By Tom Barnidge Contra Costa Times Columnist
Updated: 10/06/2014
http://extras.mnginteractive.com/live/media/site571/2014/0806/2
Doctors Medical Center pharmacy technician DeeAnn Barnes, right, and National
Union of...
The headline was uplifting -- "Hospital given reprieve" -- and Assemblywoman
Nancy Skinner's comments conveyed hope: "I would like to see the hospital
remain open."
But the state legislation enacted last week that provides $3 million for Doctors
Medical Center was like tossing water wings to a guy drifting toward Niagara
Falls.
"The $3 million basically gets us two months of operation," said Eric
Zell, board chairman of the West Contra Costa Healthcare District. "Before
this, we felt we could keep the hospital open through the end of the year. The
new money would get us until February."
Don't misunderstand: DMC welcomes any help. It's begging for help, in fact.
But when a hospital operates at an $18 million annual deficit -- nonpaying patients
and low Medicare and Medi-Cal reimbursements are largely to blame -- one-time
funds only slow the bleeding. Band-Aids on an ax wound, if you will.
"Over the seven years I've been on this board, what's kept this hospital
open has been one-time money," Zell said. "Kaiser gave us $12 million
over three years. John Muir Health gave us $1 million. The state medical assistance
commission, which no longer exists, gave us $36 million over three years.
"Until there's some sustainable source of funds to address an $18 million
annual deficit, we're constantly faced with the same problem."
DMC, which formerly handled 40,000 emergency room patients annually, is downsized
now. It no longer receives ambulances. Its 70 beds have been reduced to 30.
The outpatient clinic has been closed and the staff has been trimmed.
Two Hail Mary passes have already fallen incomplete. A legislative effort to
designate the hospital a "public health" facility -- qualifying it
for the increased Medicare and Medi-Cal reimbursement rates afforded county
hospitals -- failed in the face of opposition by the California Association
of Public Hospitals and Health Systems.
"It's a zero-sum game," Zell said. "If we got that designation,
the available dollars would be spread to an additional hospital."
DMC's attempt to become a less costly free-standing emergency room -- which
requires legislative approval -- appears unlikely to succeed because of opposition
from nurses and doctors.
What now appears to be its last-ditch survival effort is as what Zell calls
a "Hub" urgent care facility. It would have ER physicians on its staff,
with specialists on-call, and beds available solely for outpatient services.
An ambulance would be on site to transport patients requiring overnight care
to a hospital.
"I think of it as urgent care on steroids," Zell said. "It has
a lot of the qualities of an emergency room, but by not calling it that you
no longer need state approval and you don't need to operate under a county license."
The good news is that it would supply direly needed services at a reduced cost.
The bad news is that one funding source might dry up. A 2011 parcel tax that
provides the hospital with about $5.7 million per year is in jeopardy.
"That parcel tax was contingent on there being either a hospital or an
emergency room in place," Zell said.
Hospital officials now are grinding numbers to see if this hybrid solution pencils
out. Privately, they are also saying a prayer that an unforeseen benefactor
steps forward.
Maybe the $3 million will be of some help. Maybe it'll keep the hospital afloat
until it finds a way to keep from going over the falls.
Contact Tom Barnidge at tbarnidge@bayareanewsgroup.com.