To tax, or not to tax – and at what rate – those were the questions at the Dec. 6 board of directors meeting of the Sonoma Valley Health Care District.
After about an hour’s worth of discussion and public comment, the board voted unanimously to seek voters’ approval on March 6 for a five-year property tax of $195 per parcel to help fund operations of the Sonoma Valley Hospital.
The tax. which needs two-thirds’ approval to pass, would extend and increase a current property tax of $130 per parcel that voters overwhelmingly approved in March of 2002 – but is set to expire in June, 2007.
If the parcel tax expires, so will the hospital, officials warned.
“Our predictions are the hospital won’t make it,” said hospital CEO Robert Kowal.
Jim McSweeney, the hospital’s chief financial officer, handed out copies of a cash-flow projection chart that showed the hospital burning through all of its savings by June, 2007, if the “low volume” of patients experienced in the past four months continues.
But questions arose: Hospital board member Mike Smith wanted assurances that the financial picture really was that dire. If not, Smith thought the parcel tax could be put before voters in June to give its supporters more time to campaign.
“I can tell you the difference between a 3-month campaign and a 6-month campaign is a hell of a lot,” Smith said. “I think we should buy ourselves the time.”
And some of the roughly 30 people in the audience questioned whether voters would support $195 per parcel tax, suggesting it might be a safer bet to seek an extension of the $130 per parcel tax, instead.
Voters don’t want to pay more than $150 per parcel, said Kathy Barnett, who’s tallying results of a voters’ survey being done by the Sonoma Valley Health Care Coalition.
The coalition, a group that formed to keep some sort of hospital going in the valley after the failure in May of the Measure C bond to build a new hospital, sent out 19,000 surveys and has gotten close to 20 percent of the surveys returned, to date.
“I think you really need to… try to change the number. Because the survey is not going over $150 right now,” Barnett cautioned the board. “I think you really need to listen… because you want the hospital to stay open.”
Convinced about low cash flow
Smith questioned whether the cash flow would keep dropping due to a lack of patients, as predicted in McSweeney’s chart.
“I’ve been around for a while and I do know it never goes like this,” he said. “Usually, our census goes up. I really want to be convinced on this.”
Kowal replied, “We are down 11 percent in admissions. We know why: Doctors have left, they’re not being replaced.”
Kowal said it’s not possible to recruit new doctors due to uncertainty about the hospital’s future.
Smith was convinced, saying that the loss of doctors, which resulted in fewer patients, is “not the normal thing.”
“Then I can see why we have to do it in March,” he said.
$195 makes sense, board says
Longtime hospital board member Mike Nugent addressed the question of whether to seek $195 or $130 per parcel.
“Five years ago, we faced the same political conundrum. We had surveys. The number that we came up with that had the greatest chance… was a lot lower than the ($130 per parcel) number our financial projections told us that we were needed,” he said.
Nugent said that the $65 difference between $195 and $130 only comes to 17 cents a day.
Barnett replied that a lot has changed since over five years, including an increase in the number of valley residents who have Kaiser Permanente Health Insurance.
“I’ll be waving the flag (in support of $195), but I’m telling you, the (survey) numbers are not coming in from the Kaiser people,” Barnett said.
Newly elected board member Arnold Riebli said that he’s personally had to convince friends to support the parcel tax.
“I am against taxes,” Riebli said. “But tonight, I can stand here and tell you there’s going to be no other alternative to get this done.”
Riebli didn’t think the parcel tax should be used to help the hospital build up a cash surplus.
He thought the hospital board should “state unequivocally, that we will review the numbers on an annual basis… and if we don’t need (the full $195), it won’t be charged.”
But audience member Steve Paige thought building up a cash reserve wasn’t a bad idea.
“Given how low to the ground this hospital flies financially,” Paige said, “the idea of using parcel tax to build cash reserves seems like a reasonably good plan.”
After asking for the parcel tax, hospital officials anticipate seeking voters’ support June 2007 for a tax to fund a multi-million dollar construction bond to build a new hospital.
