The Tulare Regional Medical Center board of directors is placing “justly deserved” blame on prior boards for problems with the hospital’s stalled tower project.
In its response to a report, called “Tower of Shame,” by the Tulare County grand jury, alleging that millions of dollars in public funds have not been accounted for, the board said:
“…if there is in fact blame to be imposed on anyone, it should be imposed where it is justly deserved, on the prior boards.”
The hospital’s reply is called, “Sins of the Fathers.”
“This [grand jury] report is long on conclusions, but short on facts. It is grossly incomplete, misleading and is based in part upon speculation and opinion,” the response states.
It carefully distinguishes between what it calls the “current board” and those of the past. The present board of directors is composed of Dr. Parmod Kumar (first elected in 1994), Richard Torrez (elected 2008), Sherrie Bell (elected 2012), Laura Gadke (appointed 2013) and Linda Wilbourn (elected 2014).
Evidence showed the district withheld information pertaining to the expenditure of public funds to which the district’s taxpayers were entitled, the report said.
TRMC’s response to the finding said “ … the current board has insufficient information to address the Grand Jury’s allegations regarding the actions (or failures to act) of any prior board.”
It also went on to say “there is absolutely no indication in its minutes that the prior boards were not forthcoming with information (with perhaps the exception of a four-month period at the end of 2012 where there was some disruption in hospital management.)”
For five of eight Grand Jury report findings, the TRMC board said the current board had “insufficient information” to address the Grand Jury’s allegations regarding the actions, or failures to act, of any prior board.
Grand Jury reports are typically released in late May or early June, however, Grand Jury foreman Chuck White said, “We believe that the facts, findings and recommendations of this report are so important and so long overdue that an early release was warranted.”
TRMC said the Grand Jury released the report early “knowing it would excite the media and inflame the general public, disappointedly shows unmitigated bias against TRMC.”
“We hope our response to the Grand Jury sets the record straight,” TRMC chairwoman Sherrie Bell said in a news release. “Despite numerous challenges, the district has righted itself and made dramatic progress toward a modern new hospital in Tulare. It’s a new board, a new management and a new accountable system to operate our public hospital. We get things done.”
HealthCare Conglomerate Associates, managed by chairman Benny Benzeevi, has run TRMC since 2014.
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In addition, the five-page report states the investigation was started in response to a citizen complaint alleging “willful failure on the part of the TLHCD Board of Directors to disclose details surrounding the expenditure of proceeds from the bonds.”
The TLHCD mentioned in the Grand Jury report refers to the Tulare Local Health Care District, the district’s proper name.
The Grand Jury report also cites claims of gross malfeasance in managing the construction of the tower project.
The grand jury is composed of private citizens appointed annually and serve as a public watchdog, investigating claims of malfeasance and irregularities by county and municipal agencies.
It interviewed hospital representatives and district residents and reviewed financial statements, board minutes, construction and expense data.
“By its own admission, the Grand Jury did not look at the four independent examinations performed and certified by two independent auditing firms covering the entire course of the bond expenditure that found no wrongdoing,” the response states.
When asked about the four independent examinations, a hospital spokesman said they were conducted in 2010, 2011, 2013 and 2015.
The report said 700 change orders during construction of the tower project amounted to more than $17.5 million in additional costs of construction.
The $85 million general obligation bond documents from 2007 estimated the tower cost at approximately $120 million, meaning the change orders brought the total cost to well over $137 million.
Despite knowing the available funds would be insufficient to cover the tower’s full cost, the county Grand Jury members say hospital officials opted to move forward with the construction.
“It appears that [hospital officials] 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. It further appears TLHCD attempted to justify their position by unsupported estimates of reserves and projection of future revenues,” the report said.
Bond documents dated 2007 show the cost of construction would be financed through a combination of proceeds of the bonds, proceeds from the issuance of additional general obligation bonds, operating income and cash reserves of the district.
TRMC’s board certainly made no attempts to justify the position of any prior boards, the report states.
“However, it can be noted that one of the most outspoken critics of the handling of the bond funds was actually on prior boards (from December 2002 through November 2008), which includes the time when the bonds were authorized and issued,” the report states. “If anyone should be answering to a Grand Jury, or to the community, it is her as well as the other members of the prior boards at that time.”
Former board member Deanne Martin-Soares served the district from 2002 to 2008.
“Nothing changes, another misstatement of facts to deflect from the real issues,” she said. “The 10 years of using district dollars to bully and blame has got to stop.”
The $85 million in bond money taxpayers approved in 2005 ran out in the fall of 2014 and the building sits unfinished and unoccupied. TRMC has since proposed a $55 million bond measure to complete the hospital’s stalled tower project.
As for the Grand Jury’s three recommendations, TRMC will not implement one, has implemented another and will vote on the third during its June board of directors meeting.
First, the Grand Jury said the board should “undergo training in aspects of governmental transparency and disclosure requirements pertaining to the expenditure of public funds.”
TRMC said it’s not warranted and/or is not reasonable. The board is aware of its responsibilities and undergoes annual training regarding its responsibilities.
Second, the report said the board should release how the $85 million in bond money taxpayers was spent. The recommendation has been implemented, the response said.
“Copies of the bond reports, which were prepared by two independent outside auditing firms, have been provided to the Bond Oversight Committee and to any member of the public who has requested same, and copies of the bond reports will be provided in the future to any member of the public who requests same,” the response states.
Lastly, the current Bond Oversight Committee should be disbanded and a new committee seated. The matter will be discussed at the next regular board meeting.
At its conclusion, the TRMC board says it’s clear this Grand Jury was unprofessional and deliberately biased and as a result, its report was a disservice to the community.
“The issues that it raised in the report are years old and have been addressed multiple times by professional independent outside reviewers,” the conclusion states. “Most importantly, is the past 28 months, the hospital has shown a dramatic and remarkable turnaround in its operations, governance and the construction projects that this report addresses. The failure here is on the part of this unqualified, overzealous Grand Jury in failing to see the dramatic positive transformational changes that have occurred in the past 28 months under the governance of the current board and its management team — changes recognized by several outside professional auditors and national rating agencies. The only this that has remained the same at the hospital is the address.”
June 1, 2016
Visalia Times-Delta
By Juan Villa
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