Budget worries in Cambria health district spotlight

Can Cambria’s health district remain solvent and, if so, for how long?

Those questions came to the fore at the board of trustees’ meeting Wednesday, Nov. 15, when the district administrator said an audit showed the district might not be “around for the long pull.”

Many in the crowd of 30 people attending the Cambria Community Healthcare District meeting were interested in hearing about the budget challenges facing the district, while others expressed concern that the district might reduce its current level of ambulance service (it now keeps two ambulances in service around the clock).

Ambulance service

In 2006, district voters passed Measure AA, which quadrupled the annual health care assessment fee. Then-administrator Don Melendy described it as a way to “continue providing the level of service we have been providing for more than 20 years, having two ambulances ready for the community.”

On social media, however, community members raised concerns that “they are wanting to run 1 ambulance 24/7 and the other one only 12 hours per day.”

The board didn’t discuss the issue at the meeting. Board President Bob Putney said trustees couldn’t speak to concerns raised during public comment, on advice of legal counsel, because the district is in the midst of labor negotiations. In addition, because the ambulance item wasn’t on the agenda, trustees couldn’t legally answer audience questions.

In an email response to The Cambrian after the meeting, district Administrator Bob Sayers said he intends to research how Measure AA affected the district.

Budget challenges

In his monthly budget report, Sayers said the district paid out $11,000 more than it collected in October, partly because of a drop in the number of private insurance patients it served.

The district has collected just 19 percent of its budgeted revenues through the first four months of 2017-18, down from 26 percent at the same point in the previous fiscal year. Budgeted expenses, meanwhile, were roughly the same as last year at just below 40 percent, the district packet showed.

“There are alot of complicated issues involved in what we are facing and what steps we take to move the district forward to ensure we continue to deliver quality service to our taxpayers and members of our community,” Putney said in response to a follow-up email Thursday. “We did not arrive where we are now overnight and we will not clear these issues up in the near future.”

He referred specific questions to Sayers, who responded that he would be getting more information from the district’s CPA auditing firm “in the next week or so.”

In answer to a question at the meeting from trustee Barbara Bronson Gray, Sayers said the district’s annual audit had identified the district’s budget difficulties as a “going concern” issue, which he described as “when your auditor ... reviews your financial position and determines that there is a likelihood that you will not be around for the long pull.”

Sayers said he expected the auditor to request a management mitigation plan to address the issue, which he said staff had been working on for several months.

He added that such an issue “can affect things like financing, lending (and) possibly some issues with the state of California.”

Other possible outcomes are less apparent, Gray said in an email letter shared with The Cambrian: “It is not clear what would happen if the district becomes insolvent. Bankruptcy may be in the cards. Or the county or state may step in to take over our operations. Whatever happens, the result would be a loss of local control over the ambulance service and other CCHD activities.”

Sayers said the district expects an infusion of some $700,000 in property tax money during December. But, he said, the money collected during property tax season, much of which comes in during December and April, must last through lean periods such as the summer months, when little or no money comes in.

Citizens’ proposal

Audience member Iggy Fedoroff used his 3-minute comment period to resubmit a series of cost-saving proposals initially presented to the board Sept. 5, which he estimated could save the district some $130,000.

When Gray asked Sayers whether the $130,000 in proposed cuts presented by Fedoroff, Bill Rice and Laurie Mileur could get the district on firmer footing, Sayers responded: “I believe that’s a big enough number to weather the storm where we are.”

Under the citizens’ proposal, most of the savings would come from returning the district to 2016 staffing levels; adopting a new billing system; putting the operations manager back on full-time paramedic shifts; and reducing overtime.

No action was planned or taken on those items.

Request for funds

The board did, however, vote to send a letter to Project Heartbeat, an independent fundraising body run by Cambria dentist Frank Fratto and former district administrator Don Melendy, asking about the availability of some $171,000 in funds.

Gray suggested that the district could use some or all of that money toward the purchase of a used ambulance or remodeling the district’s Main Street property, which was damaged in heavy rains early this year.

Her motion to inquire about the funds passed unanimously.

Leaky roof

On the subject of the Main Street property, Sayers reported that CenCal Roofing, which bid to repair the facility’s roof, won’t be able to get to the project until February — potentially well into the rainy season.

This raised the possibility of that the district might need to adopt a stopgap solution such as putting a tarp over the roof while awaiting a permanent fix. In the meantime, trustees voted to solicit additional bids in hopes of getting the project completed sooner.

Audience member Wilbur Walker said the “tarp idea on the top of the CHC building is an absolutely horrible idea … the roof is in shambles, and it needs to be taken care of properly.”

House calls

Gray announced that Cambria doctor Dave Griffith, an emergency room physician at French Hospital, will begin making house calls Jan. 1.

Gray said Griffith will have a home-service business geared toward Medicare patients. Fees, she said, will be “charged solely to Medicare, with no charge to the patient.”

“He will give out his cellphone number, and he will have a black bag, so it’s kind of like 1920,” Gray said.

In an earlier interview, Gray said Griffith is a UC San Francisco-educated physician who won’t make any new diagnoses, but will assist with imminent or ongoing medical needs, such as diabetes. He won’t make night calls, but he will offer same-day house calls.

She added that First California Physician Partners was on schedule to move into the John Linn-owned Cambria Medical Building on Main Street in the East Village early next year,

This story was originally published November 17, 2017 at 12:22 PM with the headline "Budget worries in Cambria health district spotlight."