Contra Costa County Grand Jury
• 2007-2008
Should the Mt. Diablo Health Care District Be Dissolved?
⚠️ Aviso de traducción: Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 28 findings
F1
The District was formed in 1948, and in the early 1950’s, acquired the Concord Community Hospital, later known as Mt. Diablo Medical Center. The District owned and operated the hospital until 1996.
No recommendations for this finding
F2
The District boundaries encompass the cities of Concord, Martinez, portions of Lafayette and Pleasant Hill, and adjacent unincorporated areas.
No recommendations for this finding
F3
The District is governed by a five-member Board of Directors (Board) elected by the voters within the District.
No recommendations for this finding
F4
In 1996, under threat of financial insolvency, the District transferred the Mt. Diablo Medical Center and all related property and assets to John Muir Medical Center (now John Muir Health), a private, non-profit corporation. Mt. Diablo Medical Center is now operated as the Concord Campus of John Muir Health. 2
No recommendations for this finding
F5
Since 1996, the District has not owned or operated a hospital and has not provided hospital, physician or emergency medical services of any kind.
No recommendations for this finding
F6
The District has not had permanent, full-time employees for many years. In March of 2008, a part-time clerical employee was hired. The 2008 budget for this employee is $12,000. Board members have performed all District administrative tasks, and some Board members have been occasional volunteers disseminating health-related information and services in the community. John Muir Health provides the District with office, meeting, and conference space.
No recommendations for this finding
F7
The primary source of District income comes from property taxes levied on District homeowners and businesses. The District also receives an annual $25,000 subsidy from John Muir Health.
No recommendations for this finding
F8
The District’s total annual revenues are as follows: Year Property Tax Revenue Total Revenue 2004 $203,594 $236,783 2005 223,369 266,869 2006 255,649 296,638 2007* 241,000 266,200 2008* 241,000 266,000 Total five-year revenue: $1,322,490** *Budgeted **Total revenues include miscellaneous income; e.g., interest earnings
No recommendations for this finding
F9
District administrative and operating expenses have consumed nearly all of its revenues over the past four years. Expenses have included the cost of elections, legal and audit fees, Board member stipends, and the premiums for medical and dental insurance provided to current and retired directors. A percentage of expense summary, based on audited financial statements, follows: 2004 2005 2006 Post-Retirement Costs 0% 0% 46% 3 Election Costs 40% 0% 24% Insurance 17% 45% 14% Professional Fees 4% 20% 0% Legal Fees 27% 16% 9% Director Stipends 5% 7% 0% Other Expenses 7% 12% 7% Total: 100% 100% 100%
No recommendations for this finding
F10
In 2004, 2005, and 2006, the District did not spend any of its total revenues to provide or advance health care for the District’s taxpayers or residents. The District spent 100% of its total revenues for administrative and operating expenses.
No recommendations for this finding
F11
Budget projections and unaudited accounting statements for a part of 2007 reveal a similar pattern as that shown for 2004-2006; no money was spent for health care.
No recommendations for this finding
F12
Some District board members participated in volunteer activities during 2004- 2007 at no cost to the District. For example, volunteers distributed health- related brochures and conducted blood pressure screenings. They offered such services a half dozen times in 2007 at community activities such as farmers’ markets. District director volunteers also promoted an anti-truancy program for local students.
No recommendations for this finding
F13
The District claims credit for a single $5000 donation in 2007 to the nursing program at California State University East Bay. The purpose was a scholarship. The donation was not a budget item, but represented re-directed funds that reportedly had been set aside for a director’s stipend.
No recommendations for this finding
F14
The scholarship donation is the only expenditure the District has made for a health-related purpose since 1996.
No recommendations for this finding
F15
On February 8, 2008, the District’s Board adopted a budget for calendar year
No recommendations for this finding
F16
The parties to the 1996 agreement between the District and John Muir Health continue to perform their obligations pursuant to their agreement.
No recommendations for this finding
F17
John Muir Health created a Community Health Fund pursuant to the agreement, to which it has made contributions of $1 million annually intended for community grants to improve public health.
No recommendations for this finding
F18
The District contends that under the terms of the 1996 agreement with John Muir Health, it has continuing responsibilities. For example, the agreement provides that certain defaults by John Muir Health would result in termination of the agreement and permit the District to recover assets from John Muir Health, including the Mt. Diablo Medical Center building and property transferred by the District in 1996.
No recommendations for this finding
F19
There is no suggestion by the District in the public record, including the District’s submissions to LAFCO, that there is any reasonably foreseeable possibility of default by John Muir Health under the 1996 agreement that would trigger the rights reserved by the District to recover the hospital. John Muir Health recently began a major addition to its Concord campus, an event that makes such a default highly unlikely.
No recommendations for this finding
F20
The District controls neither the board of directors of John Muir Health nor the Community Health Fund established through the 1996 merger agreement.
No recommendations for this finding
F21
The District and John Muir Health are currently negotiating another agreement. This proposal would establish a conduit to provide grant funds to the District to be passed through the District to selected organizations. A one- year agreement is likely. The District would incur administrative expenses in its role as a conduit for the grants.
No recommendations for this finding
F22
As part of the arrangements to secure the grant contract with John Muir Health, the District’s 2008 budget line item entitled “Community Activities” was increased from $70,000 to $130,000, effective May 1, 2008. The District 5 also has plans to hire a part-time executive director to administer the anticipated grant program. A new budget line item, also effective May 1, 2008, allocates $39,996 for a “CEO/Administrator.” As of that date, the District had not created a job description for the new position.
No recommendations for this finding
F23
The District’s revised budget, as of May 1, 2008, calls for a total annual operating budget of $328,300. Anticipated 2008 revenues remain unchanged, at $266,200.
No recommendations for this finding
F24
The Contra Costa County Local Agency Formation Commission (LAFCO) is responsible for studying special districts and the services they provide. LAFCO accomplishes this by completing periodic Municipal Services Reviews (MSR). Typically, the MSR process is completed every five years for special districts such as the Mt. Diablo Health Care District.
No recommendations for this finding
F25
In August 2007, LAFCO completed its MSR for the District. While it did not recommend dissolution of the District, LAFCO recognized that additional scrutiny was warranted and directed the District to provide it with an interim report in 2008 on its activities and expenditures.
No recommendations for this finding
F26
Dissolution of the District may be initiated by either Board action or a petition of District voters.
No recommendations for this finding
F27
Upon dissolution, the District’s rights and obligations, both existing and contingent, would have to be taken over by another agency.
No recommendations for this finding
F28
The District has never adopted a plan for its dissolution, nor has the Board ever proposed a study of how to accomplish the District’s dissolution. CONCLUSIONS
Related Recommendations (2)
R1
of this report, the District’s Board of Directors drafts a written plan for the dissolution of the District. The dissolution plan should include: a. A detailed task list, including time estimates for completion, of all steps required to complete the dissolution in an orderly and efficient manner. b. Identification of problems related to District obligations to provide health insurance benefits to present and former District Board members, and recommended solutions to those problems. c. Identification of all possible future events that likely would be necessary to create either rights in, or obligations of, the District under the 1996 agreement with John Muir Health or any other long-term contracts. d. Evaluations of other public agencies that are qualified to act as successors to the District in connection with any possible future events or transactions, and corresponding rights and obligations.
R2
of this report, the District submits the dissolution plan to LAFCO as part of the report required by that agency during the District’s 2007 Municipal Services Review. 7
Conclusions 4
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CL1 Page 6Since the last Grand Jury report in 2003, the District has not contributed any significant financial support to benefit the health and welfare of its residents. It has collected and spent over $1.3 million of taxpayer money, virtually all of 6 which was used to pay for administrative and operating expenses--to perpetuate the District’s existence.
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CL2 Page 7The proposed grant donation agreement between the District and John Muir Health, which is likely to result in new administrative costs, including the salary and benefits of new staff, will not benefit the District. The District’s 2008 budget allocations for staff expense and its “Community Activities” appear to be unrealistic, especially since budgeted 2008 expenses exceed anticipated revenues by $62,000 (23%).
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CL3 Page 7During the course of its investigation, the Grand Jury did not find any instances of malfeasance, and does not imply that any such culpability exists. Volunteer activities are commendable, but they do not require the cachet of a government agency.
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CL4 Page 7Public officials who preside over obsolete organizations like the Mt. Diablo Health Care District need to act responsibly and provide for the agency’s demise, including the orderly and efficient transfer of assets to, and assumption of liabilities by, successor agencies.
No Responses Found 1
Government entities assigned to respond to this report. No response documents have been linked in our database.
Concord/Pleasant Hill Health Care District
Special District