Santa Paula Hospital Board Outlines Efforts To Restore Hospital Services

Santa Paula Memorial Hospital board members on Wednesday released a letter outlining their efforts to restore hospital services and to seek cooperation with the cities of Fillmore and Santa Paula, the Ventura County Star reports (Wilson, Ventura County Star, 4/15). The hospital's board of trustees in December filed for Chapter 11 bankruptcy protection in federal court in Santa Barbara, three days after the board closed the facility. Documents filed with the court listed no claims or creditors, but board members have said that the not-for-profit hospital has debts of about $7.5 million and about 400 creditors. Last month at a bankruptcy hearing, hospital trustees said that they plan to offer Santa Paula Memorial and its property for general sale in less than 90 days unless a party comes forward to reopen the hospital. In addition, the Santa Paula City Council last month said that unless an agreement to reopen the hospital is reached by May 3, the council will consider takeover options, including the removal of the hospital board and condemnation of the land (California Healthline, 4/9). The hospital board and the Ventura County Board of Supervisors have been negotiating since June 2003 in an effort to make Santa Paula Memorial -- a 49-bed facility that operated the only emergency department between the cities of Santa Clarita and Ventura -- part of the county health care system to allow the hospital to remain open (California Healthline, 3/23). While hospital trustees said that they still consider a deal with the county "the No. 1 prospect," they have begun exploring partnerships with other parties because "negotiations with the county have dragged on for so long," the letter said (Romney et al., Ventura County Star, 4/15). Three "serious" health care organizations "with the wherewithal" to operate the hospital have expressed interest in running the facility on an interim basis, according to Phil Romney, chair of the hospital board (Wilson, Ventura County Star, 4/15). All are in the process of preparing proposals for the hospital board (Romney et al., Ventura County Star, 4/15). In addition, four development companies have expressed interest in purchasing the hospital's 29-acre site; the board will have the property appraised before making a decision on bids. County Supervisor Kathy Long said the county is still interested in negotiating a leasing agreement with the hospital board, and the county health care system's administrators are preparing a business plan detailing how the deal might work economically. Negotiations have been stalled over the length of the lease, control over how the hospital site is used, an escape clause that would allow the county to withdraw from the lease with six month's notice and the amount and duration of lease payments.

Hospital board trustees also suggested ways in which Santa Paula and Fillmore could work more closely with the hospital to "reach our mutual goals" to reopen the facility and serve the community. The board invited Santa Paula Mayor Gabino Aguirre and Fillmore Mayor Evaristo Barajas to nominate people to fill three vacancies on the facility's board and asked the two cities to appoint two representatives each to attend hospital board meetings and any negotiations with potential partners. However, Santa Paula Council member Mary Ann Krause said the offer was "too little, too late" (Wilson, Ventura County Star, 4/15). The hospital board also addressed Santa Paula's proposal to create a new not-for-profit corporation to manage the hospital, saying that because the hospital was in bankruptcy and was trying to develop a debt restructuring plan, it is doubtful that the Bankruptcy Court would approve the city's plan. The city also is considering an eminent domain action to acquire the hospital property. However, the hospital board wrote that such an endeavor "could take well over a year to conclude" in court, and in the meantime, "the property would be tied up in litigation" and "no progress would be made to reinstate hospital services to the valley." In addition, the board wrote that it is unlikely the Bankruptcy Court would approve such a plan. "We recommend that the city use its energies and resources in a more constructive way and join with us to reach our mutual goals," the letter said (Romney et al., Ventura County Star, 4/15).