At its Wednesday meeting, the Sonoma Valley Health Care District Board of Directors voted unanimously to establish a procurement policy giving preference to local businesses in awarding contracts.
“In these tough economic times, one of the things that is in our control is our buying decisions,” said Jennifer Yankovich, executive director of the Sonoma Valley Chamber of Commerce. “We know that business to business is the most important piece of ‘Shop Sonoma.’”
The board seemed to agree wholeheartedly with her sentiment and didn’t go into heavy discussion on the topic. Board chair Bill Boerum presented hospital CEO Carl Gerlach with a Shop Sonoma bag to hit the message home.
Gerlach introduced David Hill as the new chief of operations. “We interviewed quite a few people. David is the guy we wanted,” said Gerlach. “I love the fact that there’s a small hospital expert here who has been through a lot of these wars.”
Loss of surgery hits January bottom line
Gerlach said the impact of surgicenters that compete with the hospital for surgery business started picking up in December and hit with full force in January. He said that about 30 percent of that business has been lost.
The board had approved a new anesthesiology contract as one way of improving that situation, but Gerlach said its effects hadn’t kicked in yet. Partly as a result, outpatient volume was down $214,000 in January.
Boerum noted that gross operating revenues are down, as well as surgeries for February. “What I’m seeing here are maybe two bad months coming,” he said. Gerlach said the situation might not be as bad as it seems, due to a higher number of in-patient medical cases and improved cost management.
$12 million bond issued
CFO Jim Sweeney updated on the board on the issuance of $12 million in general obligation bonds. “The money is in the bank,” he said, pointing out that the bonds were sold at premium, so the net proceeds will actually be $12,480,000.
The cost of issuance was $152,070, about 1.22 percent. Of the total, $7,992,000 was deposited in Sonoma Valley Bank, and Wednesday morning, transferred to Local Agent Investment Fund (LAIF) through which the hospital will be seeing two percent interest on that money. However, that rate is not tied to the market, and Sweeney said it was likely it would go down even if the market rate goes up.
Facility planning moving along
The new COO will be working closely with the facilities committee on the planning of facility improvements. Gerlach said the master plan will be especially focused on defining a long-term solution for the central wing.
Gerlach also mentioned that the hospital qualified for a $2.1 million California Energy Commission Loan based on its energy audit, which indicates that many energy savings can be realized, whether or not it takes the loan. The audit itself and its recommendations were fairly basic, said Gerlach, so he believes the hospital could go even further to save energy and shave costs.
The facility advisory committee has established a request for proposal for a project manager and plans to award that contract by the end of March.
