(Riverside County) Grand jury concludes investigation of hospital

BY DAVID JAMES HEISS - Record Gazette

A grand jury believes that San Gorgonio Memorial Hospital is culpable for not accurately projecting the costs of retrofitting and construction projects that were supposed to have been paid from $108 million in Measure A bond funds, based on findings that were released June 21.

According to the grand jury’s report, Measure A, which was approved via mail-in ballots in 2006, was to fund the seismic retrofitting of facilities, finance a new intensive care unit, an emergency department, a helicopter pad, an updated information technology system, a central plant, and a six-story patient tower.

The report states that the original estimate for the combined projects would be $126 million; yet a $108 million bond was pursued with the expectation that the difference would be funded by the Hospital Foundation.

“In 2007, after many months of planning, it was apparent the $108 million bond issue would not cover the scope of the project as it was presented to the voters,” the report declares. “It is currently estimated that an additional $184 million will be needed to construct the six-story patient tower and complete the project.”

The jury’s investigation determined that the hospital’s projection shortcomings were the result of an “inability to acquire necessary funding to prepare detailed construction plans, that led to inaccurate cost projections, and appears to have played a significant role,” and acknowledged that the hospital was forced to commit “expenditure of additional funds to meet newly expanded state regulations by California’s Office of Statewide Health Planning and Development.”

The grand jury offered a few recommendations to the hospital.

“In the event a new bond measure is pursued … the district must review its goals, growth patterns and predictions to see what expansion is necessary; pursue every avenue of funding before asking voters to pass another bond; include verifiable estimates for the actual cost and scope of the project,” and made a point to single out, “Ensure care is taken not to inflate the projection of the final project to be covered by the bond.”

The grand jury expressed concern that “the district does not adequately account for taxpayer monies separately from the hospital operating revenue stream, and as a result does not show in sufficient detail that tax monies are used for their specific designated purpose,” which “makes it difficult for the public to determine precisely how its tax monies are being spent.”

It also advised against the hospital’s practice of having CEO Mark Turner participate on the hospital’s board as a voting member, since the grand jury indicated that having Turner being anything more than an advisory member to the board “presents a conflict of interest.”

So far, the hospital has built its central plant, which holds the backup infrastructure for the hospital, and ensures life-support systems and operations can continue in the event of a disaster or emergency. It is about a year away from completing its new intensive care unit and emergency room.

The six-story patient building’s plans are under review by the state. Once built, it will increase the number of beds from 77 to 151. The hospital hopes to have patients occupy the building by fall of 2017.

CEO Turner said that “The grand jury identified five areas for improvement that we agree are important to operating the hospital more effectively and communicating better with our community. In fact, all five recommendations were already being addressed — or had been addressed — prior to the report’s release,” and assured that “more detail will be provided in our written response to the grand jury.”

Since the hospital will still need to finance the construction of its inpatient tower, which is going through the permitting process, “We are researching all possible sources of funding to help us construct our last remaining patient care building, including a new bond measure,” Turner says. “At this point, no decisions have been made, as we are still very much in the research phase of this process.”

Despite what could be perceived as solid support for the hospital — most recently with 72 percent of voters approving an extension of the Measure D parcel tax last May that provides a $1.7 million annual lifeline specifically for the hospital — Turner declined to “speculate on how the grand jury’s report may affect voter’s attitudes towards a new bond issue at this time.”