In a strongly worded
report, the Tulare County grand jury said Tulare Local Health Care District
should release “without delay” a full accounting of how $85 million in general
obligation bond money was spent on a still-unfinished hospital project.
The district failed to
inform the public how the funds were spent, and a bond oversight committee
could not function because it was never given sufficient information, the
report said.
Millions of dollars were
spent on unplanned construction costs or matters not directly related to
construction, the report said.
The district’s board of
directors has three months to respond in writing.
In a statement, the board
said it “takes seriously” the grand jury report and “will conduct a thorough
investigation” before writing a response.
The grand jury’s report is
welcome, but it contains errors that create a negative perception of the health
care district and Tulare Regional Medical Center, board member Laura Gadke
said.
“There were some
substantial inaccuracies, and we will go into them” when the board issues its
response, she said.
(The health care district)
routinely withheld pertinent information and financial data from the bond
oversight committee, thus rendering the committee incapable of performing its
oversight function.
Tulare County grand jury report
Released last month with
the title “Tower of Shame,” the grand jury report comes out as the community
decides what to do about the unfinished hospital addition.
The building is up and has
walls, but it is not being used.
To finish the interior, the
health care district board of directors last year authorized putting a $55
million bond measure on the ballot, but so far no date for an election has been
set.
Meanwhile, in an unrelated
matter, a group of doctors at Tulare Regional Medical Center is suing the board
of directors after being stripped of its role governing the medical staff.
The doctors had been in
charge of the hospital’s medical executive committee, which oversees physician
credentialing and patient care issues.
But the board replaced it
with a new group after the federal Centers for Medicare & Medicaid Services
said the old one was not performing its duties and that it might decertify the
hospital, which would stop it from receiving payments, according to Dr. Benny
Benzeevi, chief executive of HealthCare Conglomerate Associates, the company
that operates the hospital for the district.
The lawsuit is in its early
stages, but a judge last month refused to reinstate the old committee and said
the doctors were not likely to prevail based on what has been shown so far.
There were some substantial
inaccuracies and we will go into them.
The grand jury investigated
the stalled hospital tower project after getting a complaint about “willful
failure” to disclose how the bond money was spent, and allegations of “gross
malfeasance” in construction management.
The saga of the unfinished
tower began in 2005 when voters approved the $85 million bond.
The tower went up but was
never finished after concrete on two floors started delaminating and the money
ran out.
The bond oversight
committee “repeatedly requested” information about expenditures but did not get
it, the grand jury report said.
Instead, the district
“routinely withheld pertinent information and financial data from the bond
oversight committee, thus rendering the committee incapable of performing its
oversight function,” the report states.
Minutes of the health care
district board meetings not only had little information but the information it
did have was incorrect, the report said.
Before construction began,
the hospital project was estimated at $120 million, the grand jury report said.
“It appears that (the
district) either intentionally or unintentionally failed to comprehend the
issue of the cost differential between the $85 million in bond authorization
and the total project cost estimated to be well in excess of $100 million,” the
report states.
It appears the board of
directors relied on “unsupported estimates of reserves and projection of future
revenues,” the report states.
It also appears that money
went for costs not directly related to construction, the report said.
The board twice hired and
fired a chief executive officer and had to pay severance costing hundreds of
thousands of dollars, the report said.
Litigation related to the
delamination was settled out of court “at an expense of $7.9 million to TLHCD
taxpayers” instead of being used for construction, the report said.
More than 700 change orders
and 5,000 requests for information resulted in additional costs of $17.5
million, the report said.
Additionally, no
independent construction manager was hired until well after construction began,
the report said.
The grand jury said the
board should get training in governmental transparency and disclosure, and the
bond oversight committee should be disbanded and a new committee formed.
April
14, 2016
The
Fresno Bee
By Lewis
Griswold
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