Supervisors want funds reimbursed
By Guy Ashley, CONTRA COSTA TIMES
Posted on Sun, Aug. 01, 2004

OAKLAND -Fresh from a battle with labor groups over an annual budget that calls for eliminating nearly 200 jobs, Alameda County Medical Center trustees are about to enter a new fray this week with top county officials.

This time the battle concerns the county's demand for an estimated $173.5 million it claims it pumped into the financially troubled medical center during the past three years.

According to county auditors, the debt has accumulated from up-front payments the county provides the center, which repeatedly are not repaid fully.

County officials will meet Tuesday with medical center trustees to press their pay-back demands, which have sharpened as financial problems have forced the county to cut hundreds of jobs and reduce services in law enforcement, social services and other areas.

County officials say they wanted the medical center to first pass a balanced budget before demanding repayment. But patience was tested in recent weeks, as protracted medical center budget talks included references that seemed to challenge the county's debt claims.

"I have yet to see an invoice detailing exactly how this reported debt has accrued," Ted Rose, the medical center board's vice president, said as he addressed a July 19 meeting to discuss job cuts and other budget reductions.

Such remarks mortified county Supervisor Gail Steele, who said the county has consistently provided a financial lifeline to the medical center to keep it from crumbling financially.

"Folks don't seem to think the debt is a real debt to the county," Steele said. "Nor does it seem they want to acknowledge that when you siphon money off from the county, you're jeopardizing other programs."

County concerns were amplified last week by some last-minute budget moves by medical center trustees. Moments before passing a final 2004-2005 budget, trustees reduced the number of proposed job cuts by 37 full-time positions. The move all but wiped out a projected budget surplus for the medical center, a financial cushion county leaders had hoped would provide the medical center enough financial breathing room to begin repaying its debt.

As it is, the budget passed by trustees does produce a surplus of about $528,000, thanks in large part to other last-minute adjustments that reduced medical center expenditures for the coming year.

These adjustments weren't too pleasing to the county, either, because the biggest spending reduction came when the trustees withdrew a proposal to reimburse the county for the $1.7 million it is slated to pay to lease medical center facilities in Oakland, Hayward and Newark.

The proposal had drawn the anger of organized labor, whose officials accused Alameda County of trying to siphon off proceeds from the half-cent sales tax passed by voters in March. The increased tax is supposed to bring the medical center about $70 million in the coming year.

Critics said the medical center is obligated to pay only $1 a year to lease its facilities from the county under a 1998 agreement. County officials say, however, the agreement extends only to county-owned facilities, not buildings leased for the medical center's use.

Patrick O'Connell, the county's auditor-controller, said the debt at issue has accrued largely through a fund-swap system the county and the Medical Center put in place shortly after the Medical Center split off from the county in 1998.

While income from patients and government sources continues to be deposited in a county checking account, O'Connell said, the county routinely fronts the medical center millions of dollars to fund payroll and other obligations, relying on delayed pay-back made necessary by the lag time all health care providers see between billing and receiving payment for services.

The system seemed to work without problem for several years, O'Connell said. But it has left the county squeezed for funds during the past three years, as the county's up-front outlay has invariably exceeded medical center deposits.

Reach Guy Ashley at 510-763-8045 or gashley@cctimes.com.