Med center owes Alameda County $191 million
Supervisors put cap on loan, want repayment plan in place; workers picket
By Rebecca Vesely, STAFF WRITER OAKLAND TRIBUNE
Article Last Updated: Wednesday, August 04, 2004 - 3:43:10 AM PST

The bill came due for the Alameda County Medical Center on Tuesday, as county leadership moved to cap a $191 million loan and quickly work out a repayment schedule.

The decision came just a month after a half-cent sales tax kicked in to underwrite the county hospitals and clinics -- and when, for the first time in years, the medical center has a small budget surplus.

The amount of the loan will be capped at $200 million.

"The cap is not up for negotiation," Supervisor Nate Miley told the medical center trustees at a joint meeting. "We're not making any more payments beyond that."

Members of both boards are expected to meet over the next several weeks to discuss a repayment plan, with payments expected to begin in September.

"Since the amount (owed) is so large now, we need to do a repayment schedule," county Controller-Auditor Pat O'Connell said. "Otherwise we'll have to book the loan as a write-off and will have to reduce other programs and services."

The county is transferring $6.5 million to the medical center every two weeks, and $3 million to $5 million to the medical center's accounts payable every week, O'Connell said. The medical center includes Highland and Fairmont hospitals, John George Psychiatric Pavilion and three outpatient clinics.

"I'm deeply concerned about the repayment issue because money that we shift over (to the medical center) means we're taking it from somewhere else," Supervisor Keith Carson said.

Medical center trustees said they agree to the loan cap imposed by the Board of Supervisors and pledged to work to rein in costs. The trustees have authority over how they spend the $70 million raised by Measure A.

"You're the bank," Trustee Richard Warren told the supervisors.

The move came the same day workers at county clinics in Oakland, Hayward and Newark walked off the job to protest imminent layoffs. About 150 workers walked out, with many picketing in front of the offices of the county Board of Supervisors.

About 200 jobs are expected to be cut, with negotiations between unions and administration ongoing.

Workers said voters approved the half-cent sales tax in March, known as Measure A, to make sure that cuts didn't happen. The tax will raise about $70 million annually for the medical center, and it sunsets in 15 years.

"When we pounded the pavement for Measure A, we said health care for all, not cuts to staff and services," said Lisa Mills, a licensed vocational nurse at Winton Wellness Center in Hayward who said she is on the layoff list.

But Jim Braley, a vice president of Cambio Health Solutions -- a consulting firm hired on an 18-month, $3.2 million contract in February to turn around the medical center -- said the cuts are necessary. The layoffs will save the medical center an estimated $12 million this fiscal year.

With the cuts, and about $20 million in revenue enhancement plans, the medical center will have a surplus of about $700,000 this year.

"Costs are not under control by any stretch of the imagination," Braley told the supervisors and the trustees. "I couldn't name one area where costs are completely under control."

Braley said without staff cuts and revenue enhancements in place, the medical center could have a budget deficit of $3 million to $4 million by December.

He added that the layoffs, which were approved by the trustees in April, needed to move forward.

"Employees know what's going to happen; let's get on with it," Braley said.

Contact Rebecca Vesely at rvesely@angnewspapers.com.