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State Won't Intervene in Santa Paula Hospital Talks

Attorney general rejects a city request to force trustees of the cash-strapped facility to accept a merger with the county health system.

November 25, 2003|Gregory W. Griggs | Times Staff Writer

The state attorney general has rejected Santa Paula's request to intervene in its attempt to force the trustees of Santa Paula Memorial Hospital to speed up development of a rescue plan for the financially troubled facility, city and agency officials said Monday.

The City Council filed a complaint last month with the attorney general, alleging that trustees have failed to take appropriate action to preserve the 42-year-old community hospital. The hospital had been negotiating with Ventura County for four months about a possible merger, without success. The county has since withdrawn from negotiations.

After reviewing the city's complaint, the attorney general's office notified Santa Paula officials last week that they should consider other legal options rather than try to force the hospital's board to conclude a deal with the county. The agency is responsible for reviewing possible violations of laws governing nonprofit corporations.

"It didn't seem necessary for the attorney general to get involved in this one," said Rodney Lilyquist, chief of the attorney general's unit responsible for issuing legal opinions.

Meanwhile, Santa Paula and Fillmore officials said Monday that they may hire a mediator to help get the hospital and county officials back to the negotiating table.

The cities are willing to spend up to $25,000 to have a neutral third party sit down with both sides to attempt to iron out their differences and get the 39-bed private hospital some much-needed financial assistance. Earlier this year, the near-bankrupt facility borrowed $2.5 million to cover ongoing expenses while it worked on a long-term economic rescue plan.

Santa Paula City Manager Wally Bobkiewicz said that he expected his council Monday night to approve spending up to $15,000 for a mediator. The Fillmore City Council tonight will consider a $10,000 expenditure for the same purpose.

"They are not as substantially apart as they think they are," said Bobkiewicz, who spoke late last week with hospital officials and with Supervisor Kathy Long, whose district includes Santa Paula. "No one's at fault. It's not one side not being cooperative or noncommunicative. It's just that they weren't hearing each other very well, and that was on both sides."

County officials complained that the hospital would not release enough financial information to permit an informed choice about whether to include Santa Paula Memorial in the county's health-care system. The hospital has more than $3 million in debt and a $200,000 biweekly payroll for a staff of about 160 employees.

On Monday, Long said the county is willing to reopen negotiations, even without a mediator.

The supervisor suggested that Bobkiewicz and Fillmore City Manager Roy Payne review the financial information provided by the hospital to determine whether they agree with the county that the data is incomplete. Additionally, Long recommends that each city select one representative to sit in on future bargaining sessions.

"The offer by the two cities is admirable, but I think it can be done without spending more taxpayer dollars," said Long, who has discussed her plan with the city managers and is set to attend tonight's Fillmore council meeting.

Gene Kaberline, the hospital's chief financial officer, said hospital trustees believe they have provided the county with all the financial documents it had requested, except specific names of creditors. Additionally, he said, trustees offered to allow county employees to review the lists on the hospital's computer system.

"Our position is that we didn't break off negotiations, and we thought we had provided them the numbers they wanted," Kaberline said. "We have the feeling that we've not withheld a thing."

Kaberline, who will become the hospital's interim chief executive Monday, said he had not been informed of the attorney general's decision and that he would defer to trustees to comment on Long's offer. He did say, however, that he was encouraged by the cities' efforts.

"Anything that the city puts forward in this regard is positive," he said. "It establishes a new option or keeps an old one open."

Other sticking points in the earlier negotiations included the county's request for a clause allowing it to withdraw from a 10-year hospital lease if losses became too extensive. The county also wanted control over the hospital's entire 25-acre hilltop campus, but trustees wanted to build an assisted living center on vacant land next to the hospital.

"If it isn't going to work, it isn't going to work," Bobkiewicz said of a possible merger, "but we don't want communication to be the stumbling block."

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