Kaweah Delta Works To Improve Cash Flow
Visalia - They’ve got a big plan. Now they need to raise big money to carry out an ambitious multi decade expansion of Kaweah Delta Hospital in Downtown Visalia.
This week CEO Lindsay Mann laid out the plan that involves a sort of musical chair approach to relocate support services for the hospital - demolishing six buildings in the next few months - adding some 60 parking places and construction of a new 50,000 sq. ft. Support Services Building in July. This is all the “pre-lim” of the main event - adding a $100 million new hospital wing to the north of the existing complex - a project that itself means the demolition of another seven buildings in its path later next year. Construction of the new 6 story tower would begin in December 2004. But that’s just the start - Mann told the Visalia City Council this week - showing blueprints for five more towers to build in coming decades and replacement of the existing 311 bed hospital.
Already the biggest “business” in town, with operating revenue of almost $236 million, the district hospital has no problem spending all that money and even finds itself dipping into reserves in recent years.
Now to build this state-of-the-art medical complex spanning 15 blocks, they are counting on a strategy that (1) appeals to the good will of the community toward the town’s only hospital - tapping donations from the hospital’s foundation and asking property tax owners to approve a general obligation bond this November - with (2) improved efficiency in operations - not just to save up money - but to build up its credit rating.
In the past year the hospital has had to pay more for their bond financing because Moodys downgraded the hospital from an “AA” rated hospital to an “A” rated hospital. That was the result of poor performance benchmarks seen in 1999.
The tough financing picture is made clearer by the district’s annual investment report made public in recent weeks.
The cost of running Kaweah Delta Healthcare District every day has mushroomed almost 50% since 1999. That’s the sobering news from a February 4th Annual Investment Report penned by financial officer Gary Herbst to the board and heard at this week’s KD board meeting. The figure comes from the average daily operating expense at the hospital’s facilities that now have reached over $652,000 every day compared to just $421,000 in 1999. While the District’s costs have gone up - its “surplus” funds have actually declined a little from 1999 so that the hospital’s “liquidity” - its days cash on hand has fallen from nearly 180 days back in 1999 to 99 days in 2002. The hospital is working to emulate the Moody’s A rated hospital benchmark of 160 days and has actually made progress from 2001 when the cash on hand fell to just under 93 days. That resulted in Moody’s downgrading the hospital from AA rating down to its current A rating.
Herbst’s report suggests the hospital has had to run on reserves for the past two years to cover operating expenses, debt, service and capital equipment. For the past two years the District had budgeted $24 million in their budget but took in only $5.5 million falling $18.4 million short.
Even as the District’s expenses have increased that include labor costs, drugs and accumulated investment in programs like Cypress Mental Health, Quail Park Retirement Village and Sequoia Regional Cancer Center, the District has fallen behind on its accounts receivable funds, says the report. As of December 31, 2002 the accounts received was 103.1 days, 20% improved over 128.9 days reported a year earlier but below the Moody’s benchmark for an A rated hospital of 62.9 days. But CEO Mann says they are “steadily improving” the number.
The red ink comes just as the District is launching its Downtown expansion after budgeting nearly $5 million on Downtown improvements built or in the works in the past year.
Herbst notes in his report that the District “has always budgeted each year to achieve a break even cash flow” making it more difficult to build cash reserves.
CEO Mann says “we are optimistic” that improved collections and expense management now underway “will enable the district to be upgraded to AA rating at the end of this fiscal year” - by July. Further he points to the low debt ratio the hospital has - 23% debt to equity ratio - compared to an average of some 43% for other hospitals - that show its financial strength.
The district is also counting on the passage of a general obligation bond this November - a measure that must gain a 67% majority of voters in the district. To put that on the ballot the board of the hospital district must decide at the end of April whether to move forward.
"The backbone of our revenue will come from our own reserves and revenue bonds," says Mann.
In addition, Mann points to the hospital's "positive operating margin" of 3.8%, a favorable number compared to many hospitals who enjoy only a 1.9% positive cash flow.
The health care district's CEO says they will wait for the end of the fiscal year to determine "what scale" of development to move forward and points out that the North Expansion has been designed to be as few as 44 beds or as high as 135 beds depending on the hospital's resources. The project could range from $77 million to $105.5 million depending on how many of the upper stories are filled in. "That's why we haven't revealed exact numbers for our financing or how large an amount we will ask taxpayers for in a general obligation bond."
This week there was another idea raised at the council meeting that Mann says the district has and is considering - expand the boundaries of Kaweah Delta’s district broadening the tax base. “There are a lot of people coming to Kaweah Delta who have no stake in its financing,” says council member Don Landers.
Mann made an important point this week to city council pointing out that at the existing hospital work was underway to add 46 inpatient and 16 outpatient beds at the Downtown campus - probably the last internal expansion that will take place before the new North Tower opens in December 2006.
In other Kaweah Delta news Mann told the Voice this week that:
• Exeter School District will tour the Exeter Memorial Hospital campus Feb. 19 - now shuttered - to determine if they would proceed with a bid to buy the center.
• Cypress Mental Health is now on a firm financial footing and running near capacity.
• The district was asking the city to allow the re-zoning of some 30 acres on the land they own at Lovers Lane and Caldwell for a future ancillary service campus on the east side of the community “now that we have completely filled the Cypress campus” on the west side. The district will sell off the remaining 70 acres it owns out there.
Budget
Crisis
Planners Fear Loss Of $14 Mil For
198 Widening
Tulare County - If you are wondering where the state budget crisis - rubber hits the road - wonder no more. Tulare planners are hearing about the state budget impact on Tulare County’s transportation projects at the February 24 TCAG - Tulare County Association of Governments - meeting. Included in that update is the possible loss of $14 million for widening West 198 between Visalia and Hanford, says CalTrans representative to the TCAG, Alan McCuen.
McCuen says “engineering work, design and right of way acquisition for the project is already funded” and that the loss of the $14 million would the first of some $30 million necessary to construct the project. Before this snafu construction of the divided highway was set to take place in 2006/07. Now because of the government budget request the timetable on the project is up in the air.
McCuen says local agencies like TCAG will have an impact on what projects could be backfilled with other monies to keep their scheduled constructions. The Governor’s budget cuts includes the loss of a funds category - Transportation Congestion Relief Plan monies.
More than $17.5 million has been spent on the project so far but now what is considered a top priority project for the region could face more delay. The 10.5 mile, two lane highway is heavily used between Hanford and Visalia and remains one of the most dangerous stretches in the region used by some 14,000 cars every day.
That includes a possible move by TCAG’s to backfill half of $1.5 million in Transportation Congestion Relief Plan Funds already expended to improve Highway 65 between Porterville and the county line. Kern’s TCRP funds on the other hand are subject to loss if the Governor’s plans are adopted.
Other TCRP funds at risk are $850,000 earmarked to complete the project - Goshen pedestrian overcrossing funded through multiple agencies crossing Highway 99 connecting the local school with the other side of the community.
McCuen says analysis is going on statewide over the fate of multiple transportation projects, some of which be delayed and some simply put on hold until the state’s financial prospects improve.
TCAG meets February 24 at the Board of Supervisors Conference Room at 1 p.m. Connie Conway chairs the meeting.
Internet Sales Tax On The Way?
Sales tax on the internet is no longer just a distant rumble that could happen in the future, but is happening right now if you shop online at Walmart, Target or Toys R Us.
All three retailers are now voluntarily collecting sales taxes in most states.
The recently announced move by some of the country’s largest retailers adds to a nationwide momentum fueled by a 37 state agreement last November designing a simplified collection system for online sales.
In California where the legislature and Governor are embroiled in a face off over the state budget crisis, a Gray Davis spokesperson recently suggested that he is now willing to consider a proposal that would force online companies in the state to follow Walmart’s lead - mandating a sales tax collection process.
“California’s fiscal climate has changed; the dot-com economy has changed,” Governor Davis’ spokeswoman Hilary McLean said. “While he didn’t favor it in the past, he is willing to review it in the bigger context.”
California Controller Steve Westly recently told the San Francisco Chronicle he supports the initial effort to tax online sales. He suggests the state might be losing $50 million a year. Online purchases account for just 3% of all sales but has grown rapidly in recent years. Retail e-commerce sales could amount to some $72 billion last year by one estimate - up from $25 billion in 1999.
Visalia’s interim financial officer Susan Merril says the city would welcome the tax monies that it now loses by online sales. But how the information will be collected will be complicated and the money doled out will be the question, she says. The former chief financial officer for Visalia, Robert Groeber, says he expects the state will get the money and have to hand it out probably by population to a jurisdiction.
Visalia’s sales tax receipts actually declined in the last fiscal year in part due to the growing popularity of online sales, but clearly the slow economy was a factor as well. But shrinking sales tax revenues may increase talk about internet shoppers “paying their fair share.”
Owners of brick and mortar stores who are hurt by online sales from competitors who don’t have to pay the tax are helping to fuel a movement nationwide to regulate internet sales. Partnering with big retail outlets are states and cities who feel the pinch of the lost sales tax as well.
A recent report by the Institute for State Studies suggests the estimated loss for California may be far higher than $50 million. The study says that local and state government’s loss combined in California is $1.75 billion in 2001 and will rise to $5.9 billion by 2006. That’s getting into serious money for a state whose structural budget deficit is estimated to be about $10 billion. Since sales taxes are the basis for the majority of a city’s general fund, the additional cash could help fund public safety in places like Visalia now threatened by loss of monies from Sacramento.
The US Supreme Court in 1992 ruled that internet retailers who don’t have a physical presence in a state can’t be required to collect online sales taxes. The court suggested a simplified approach to collecting taxes nationwide would be needed in order for a new law to be considered fair.
If California were to begin taxing retail sales it would apply to sales within the state, at least for now.
The knock against taxes could be that fewer shoppers will use the internet service. But others say people will shop online for the convenience since whether you buy online or over the counter in your home town - you can count on paying a tax.
Meet the Beetles
Dry Creek Rd. Project Waits Six Years To Solve Elderberry Bush Dilemma
Woodlake - It’s taken six years and a mountain of correspondence to widen a road east of Woodlake while regulators decided how to deal with six elderberry bushes that grew in the way. The bushes are habitat for the Valley Elderberry Longhorn Beetle so some 2000 ft. of Dry Creek Rd. could not be widened until Fish and Wildlife Service agreed to the plan.
While the county widened a few miles of Dry Creek Rd. north of SR216 up to the Artesia gravel mine, it left nearly a half mile unimproved while frustrated Tulare County officials tried to get somebody’s attention. The county was worried about the road because a larger number of trucks were using it daily to serve the mine. Now, ironically, the gravel mine is shut down since last summer when a new owner took the place over.
Resource manager staffer James Blair says they finally got Fish and Wildlife to agree that “there was a federal nexus” for the project since CalTrans had an encroachment permit and CalTrans did federal highway work in California. That nexus pushes the Fish and Wildlife agency to limit the time it takes to decide permit questions.
This past week the Tulare County Board of Supervisors agreed to a mitigation plan for the elderberry bushes putting $39,600 into a mitigation fund managed by the Center For Natural Lands Management who will replant the bushes somewhere.
Rancher John Doffelmeyer who has pressured the county to finish the road project for years had offered to plant the bushes himself on lands he owns along Dry Creek. But the county was worried that “we would have to care for the bushes forever” if they pursued that idea, says Blair.
Blair says he now expects the work to complete the road should begin in April and be complete by July 1.
As for what happens to Artesia Ready Mix’s plant - the new owners California Portland Cement Co. - is in a legal battle with the former owner Al Oliver. The county has put restrictions on the reopening of the mine and Portland Cement spokesman did not return calls by deadline.
Water Storage Study Moves Forward
San Joaquin Valley - That giant omnibus spending bill that passed both the House and Senate last week has been lambasted around the country as heavy on the bacon - full of pork barrel legislation. But in these parts adding water storage is more equated with bread and butter. The bill authorized spending of $1.75 million on a study of additional water storage on the upper San Joaquin River. Altogether the legislation offers $23 million in federal funds for multiple CVP projects in the state.
Newly seated Congressman Devin Nunes had made the water storage study above Millerton Lake his top priority and scored an early legislative victory.
“The future of the Central Valley rests in the future of our water supply,” said Mr. Nunes, who is a member of the Agriculture and Resources committees. “Without the creation of new water storage, our parched landscape won’t be able to support a growing population and the most productive agricultural land in the world. I am very pleased to have accomplished this first step toward a lasting solution.”
An initial analysis of the area shows that using the wide, bowl-shaped geography of Temperance Flat for the construction of a reservoir could capture as much as 1.2 million-acre-feet of water before it enters Millerton Lake. Water would be released from Temperance Flat to Millerton Lake and diverted to the Friant-Kern Canal, the Madera Canal, and/or released to the San Joaquin River.
Rep. George Radanovich supported Mr. Nunes’ effort on securing authorization for the study.
“I was proud to support this effort, but Congressman Nunes deserves all the accolades for its success,” Mr. Radanovich said. “In January, he hit the ground here in Washington with a commitment to creating more water storage. Now, only a few weeks later, that idea is on its way to the President and he is going home with a great victory for the Valley.”
The proposed reservoir at Temperance Flat would be a beneficial solution for users of the river by creating a general increase of river water available to Friant Water Users, enhance flood protection to residence living inside the San Joaquin flood zone, and enabling the restoration of the fishery downstream of Friant. The study is expected to begin immediately.
Restoring the fishery on the San Joaquin River is a top priority of the Friant Water Users who have a settlement with NRDC over the restoration of habitat on the river. LA’s Metropolitan Water District could also be a player in this plan if a study leads to a project.
Supporters say a large dam doesn’t mean the central valley has to import more water from the northern part of the state - just keep what water we already have from flowing out to the ocean in some flood years. This particular bill uses the same language drafted by Senator Dianne Feinstein in earlier legislation.
Friant Water Users engineer Dennis Keller says while the news is good, “you have to realize this may be a 25 to 30 year deal.” Feasibility and costs of the project must be studied - that’s the first step, he says. “Look how long it took to raise Terminus Dam just 21 feet - 17 years,” he remembers. Allocating the cost for a water project like this will be important as well, he notes since flood control benefits to the new dam might be paid out of a different fund. Keller says he understands the Temperance Flat area also may contain some Indian petroglyphs and caves that will have to be mediated.
Besides the San Joaquin project other CalFed programs funded last week were:
• $2 million to study the enlargement of Los Vaqueros reservoir;
• $1.5 million to continue planning activities related to Sites Reservoir;
• $2.5 million to study the raising of Shasta Dam;
• $250,000 to continue evaluations of the Delta Wetlands project and other in-delta storage proposals; and
• $3.5 million to construct the Tracy Fish Test Facility.
Besides offering money for additional water storage, wildlife uses and water movement, the legislation also narrowed the farm disaster aid through the rest of 2003 requiring the damage be at least 35% of a farmers’ crop to get payment before any farmer living in a disaster county could qualify. Among others, Congressman Cal Dooley had complained about the more open ended disaster rule.
National Park Goes Electric
By Elizabeth F. van Mantgem
Sequoia and Kings Canyon National Parks - For years, the National Park Service (NPS) has been cooperating with both private and public sector organizations to develop cleaner energy tactics within our parks. As a result, the NPS has become a showcase for several alternative energy technologies and minimized combustion emissions through the use of cleaner energy sources all over the country. California’s National Parks offer good examples of this long-term, national endeavor to clean the air, lower noise pollution, reduce our reliance on gasoline, and educate the public, all at the same time.
The clean air effort includes our very own, Sequoia and Kings Canyon National Parks, where electric vehicles donated via Ford’s TH!NK program are being put to use by bear technicians, campground rangers, and building & maintenance staff. The 2002 TH!NK program donated 500 electric vehicles to the 23 National Parks in California: 250 two-seat neighbors and 250 four-seat neighbors.
One dozen of these arrived at Ash Mountain headquarters and are used among Lodgepole, Cedar Grove, and Ash Mountain visitor sites. The electric “neighborhood” vehicles are actually replacing gasoline-powered vehicles and represent a donation of about $96,000 dollars per dozen.
“This donation from Ford Motor Company and the National Park Foundation will help protect the environment while enhancing the visitor experience at National Parks throughout California,” Gale Norton, Interior Secretary and NPF chairman, said of the program. “This type of innovative partnership is the future of National Park stewardship, and I am grateful to Ford for this gift” (American Woman Road & Traveler 2002).
The TH!NK vehicles are quiet, zero emissions, electric vehicles that can go up to 30 miles per hour. They can be fully recharged in any standard outlet in eight hours. The neighborhood model was developed for use in niche markets, like small towns and college campuses, to spare air quality and reduce noise pollution. Their initial development began during the 1970’s oil crisis, and improvements have been significant since then.
More recently, Sequoia National Park received four GEM vehicles (Global Electric Motorcars) issued through the National Park Foundation. The GEM vehicles came from the DaimlerChrysler Company in December 2002, and like the TH!NK cars, the GEMcars are zero emissions electric vehicles that will reduce air emissions and decrease noise levels in the Parks. DaimlerChrysler donated 500 GEMcars to National Parks and park partners, with 150 of the vehicles going directly to California National Parks and their in-park partners. Both Ford and DaimlerChrysler were motivated to donate zero emissions vehicles to obtain air emission credits.
As one of California’s 23 National Parks, Yosemite likewise received 12 electric neighborhood vehicles from the TH!NK program. Other alternative energies used within both Sequoia and Yosemite include solar panels. Sequoia National Park uses solar power in conjunction with wind power to completely electrify an air quality monitoring station on the Mineral King Road. Yosemite’s solar roofing panels can power 10% of the park’s El Portal administrative site. That’s approximately 47 kilowatts during peak usage hours.
In 1999, Yosemite National Park was one of the recipients of the Green Energy Parks program, sponsored by the Department of Energy partnered with the Department of the Interior. Through the Green Energy Parks program, 12 of Yosemite’s red shuttle buses were refurbished to run on propane (biodiesel) rather than on gasoline. Another California park to get biodiesel vehicles is Channel Islands National Park. A list of the many other projects completed through the Green Energy Parks program can be found on the Federal Energy Management Program (FEMP) web site, under Green Energy Parks case studies (www.eren.doe/gov/femp/techass/green_casestudies.html).
Other NPS showcased, clean energy technologies includes the use of fuel cells for electricity, like the one in California’s Golden Gate National Recreation Area, in their Kirby Cove campground. After reviewing recommendations from a National Renewable Energy Lab (NREL) advisory team, Golden Gate Park Service personnel chose to install a hybrid fuel cell system made up of a, “960-watt photovoltaic (solar) system connected to a 25-watt fuel cell supported by 9 kilowatt-hours of battery storage.” The cost of the hybrid system, “was only $47,000, about $113,000 less than the cost of a new, standard power line” (FEMP Focus Newsletter July/August 1999).
None of these sorts of NPS projects will singularly achieve the broader goal of significantly saving energy, but the cumulative, actual effects, as well as the influence they have on their neighbors, should make a huge difference. As Kent Bullard, maintenance supervisor of Channel Islands National Park said for Alternative Fuels News (vol.6 no.2, October 2002), “National Parks are not islands. If we minimize our environmental impact, the beneficial effects spill over into the community."
Lindsay Thinks Big
Wellness Center Brings Big City Benefits to Small Community
Lindsay - Big things are coming to Lindsay. With a population of only 10,297, this agricultural community will soon be home to a $5.7 million state-of-the-art wellness center.
The proposed project is the culmination of two years of planning and collaboration between the City of Lindsay, the Lindsay Hospital District, the Lindsay Unified School District, area healthcare providers, and groups of interested residents.
Plans for the center feature first-rate fitness and health facilities, including a gymnasium, an indoor walking track, equipment for cardiovascular conditioning and strength training, an exercise pool, and space for activities such as aerobics, yoga, and dance. Visitors to the center will also enjoy upscale locker rooms, short-term daycare, and onsite dining.
But that’s not all. The center will feature a wide range of offerings, including community classes, after-school programs, recreation programs, job search and training services, housing assistance, senior daycare, and access to a diverse network of area healthcare providers. The center is also planning an adjoining youth center and an outdoor skate park.
“This is much more than a community center. It’s “a one-stop, active health-care facility,” says Ed Murray, Lindsay’s Mayor. Murray served as the chairman of the advisory committee that created the wellness center concept.
“What makes this project so remarkable,” continues Murray “is that it’s happening in a small, rural community like Lindsay. People associate this kind of center with big cities and expensive, upscale neighborhoods. But we’re doing it right here.”
Skeptics might point to Lindsay’s small population, its limited tax base, or its heavy dependence on agriculture as reasons why the community can’t afford this kind of center.
The success of the project stems from the collaboration between the City of Lindsay, the Lindsay Hospital District, and the Lindsay Unified School District. The three public agencies have entered into agreements to share the center—the facilities, the programs, the services, and the funding. Councilmember Pam Kimball said she was really pleased with the collaboration, knowing it was the result of a lot of work and meetings. She said despite the risk, this is “a chance to do something really extraordinary.”
The Lindsay Hospital District and the City of Lindsay are the primary funding agencies in the partnership. For nearly fifty years, the Hospital District sponsored the Lindsay District Hospital. The hospital closed in 2000 due to the financial pressures of rural healthcare. Now the District has shifted its focus from treating illness to preventing it. Board members cite statistics suggesting that eighty-five percent of illnesses can be prevented with changes in lifestyle. “We want to continue to make a difference in the lives of Lindsay area residents,” said Hospital Board President Stephen Boles.
The financing package for the center includes capital development contributions from the Lindsay Hospital District and the City of Lindsay. All three of the principal project partners pledged annual contributions to fund ongoing operations and maintenance. With these funds, the partnership has qualified preliminarily for $4.5 million in financing from private, state, and federal sources. Because of the funding available for the center, individual and family use fees will be lower than those of similar centers in other communities.
Jane Presnall, healthcare consultant to the project, estimates that the Lindsay Wellness Center’s reach will extend to a population base of some eighty thousand area-wide residents (those living within a 10 mile radius of the new center). Lindsay residents and adjoining communities will soon be able to enjoy first-class health facilities, programs, and services for the whole family. According to Presnall, “What Lindsay is doing could serve as a model for other communities, demonstrating how multiple agencies can join together in making a dream a reality.”
The architectural firm hired by the District and the City, Ohlson Lavoie Corporation from Denver, Colorado, is finalizing preliminary plans for the new center. Construction of the Wellness Center is expected to start at the end of this year or the beginning of 2004.
The above stories are the property of The Valley Voice Newspaper and may not be reprinted without explicit permission in writing from the publisher.
February 19, 2003
