New bond measure will keep emergency room and hospital in business

The mood in the City Council chambers last week approached celebratory as the Sonoma Valley Hospital board unanimously accepted – and agreed to vote on at a special meeting August 6 – Chief Executive Officer Carl Gerlach’s plan to go for a $35 million general obligation (GO) bond in November.
Community member Carl Rogge summed up the feeling in the room, saying, “I’m proud of our community and particularly proud of you guys. I think this is pretty good! I think it’s saleable!”
Gerlach proposed a 21-year GO bond measure to upgrade the current site infrastructure only. He emphasized that no land, no new separate facility planning and no prior planning costs will be included. He said the bond will give the community continued hospital emergency room services, the use of the central wing until 2020, the use of the west wing until 2030, and the use of the east wing indefinitely. It will upgrade the aging systems. It will also provide for a new, relocated central utility plant. The tax impact on property owners will be $15.49 per $100,000 of assessed value. “You’re talking about a nickel a day,” said boardmember Mike Nugent, “That’s all it will take to keep a hospital in this community.”
Gerlach outlined the bond budget as follows:
Central utility plant (CUP) and components – $20.4 million;
HVAC upgrades (air handling, and air conditioning)  – $2.3 million;
West Wing seismic upgrades – $2 million;
Electrical panels – $700,000;
Master Plan required by SB306 (to satisfy requirements of legislation that would allow the hospital to defer any building to 2020) – $600,000;
Medical equipment – $400,000;
Information technology (IT) (Gerlach noted that GO bonds can’t pay for servers or software, but can pay for the server room. – $1 million;
Prior infrastructure debt – $4 million (He explained that next April, the hospital will expect an operating debt of $4 million and it makes “good operating sense” to refinance that to provide needed working capital).
Concluding his presentation, Gerlach said the finance committee had reviewed and approved this plan at the June 29 meeting.
Boardmembers praised Gerlach for his clarity and his precision in presenting the plan. Board chair Dick Kirk praised him for his receptiveness to all input. “I’m aware also that you have included comments and suggestions that people gave at the last meeting,” he said, “such as Peter Hohorst’s suggestion of the 21-year bond period. So you have responded to people’s concerns.”  Gerlach said, “We figure it’s a good principle to have your debt simply match the useful life of your assets.”
Boardmember Bill Boerum said, “I think Carl and the staff have done a terrific job. Outstanding work. Which I fully support…The board will be doing everything it can possibly do to get this passed.” Gerlach, accepting the praise, said, “I look out into this room and there are a lot of people here who have helped us with this. The facility upgrade group, FUG, has been working on some incredibly challenging issues to make sure our thinking covered the bases. The finance committee did a great job. I think we got a lot of community expertise and input.”
“This is as good as it’s going to get,” said boardmember Arnold Riebli. “If this doesn’t happen, there’s probably going to be no tomorrow. We can’t get 67 percent of this community to agree to build a new hospital,” he said, referring to the failed Measure F. “We have to accept the facts as they are, and work with what we have, and look each other in the face – and I have to look at each of you and say, I’ve done the best I can.”
The board agreed to support this measure and to defer a formal vote to allow time to refine the language to make sure the description of the plan is absolutely clear to the voting public. They were due to conduct their formal vote at a special meeting in the City Council chambers on Wednesday evening this week.