LAFCO calls on voters to take action on health care district

Members of the Sonoma County Local Agency Formation Commission agreed there has yet to be any proof that the health care district serving west county has improved its governance — but instead of taking action, LAFCO placed the responsibility for change on the voters.

Mark Bramfitt, LAFCO’s executive officer, said in the case of the Palm Drive Health Care District, the governance problem is not about the quality of the decision-making but whether decisions are being made in a transparent and honest fashion.

“When I say governance, I want to point out that from a LAFCO perspective this is, ‘Are you abiding by the Brown Act?’ (the state act that guarantees the public’s right to attend and participate in meetings of local legislative bodies), ‘Are you doing your ethics training for board members?’ etc.,” he said.

While addressing the LAFCO commissioners, Bramfitt described the grim situation of the PDHCD’s board.

“One of the directors of the district has resorted to filing a public records request with the district in order to get information,” Bramfitt said. “I think that’s probably indicative that things are not going well from a governance standpoint.”

In September, LAFCO directed staff to prepare a written status report and a description of options that the commission might take to address growing concerns about the health care district.

During the Oct. 10 regular meeting, Bramfitt presented his report to the commissioners. The status review solidified what many members of the public already believed — the district is not adhering to the recommendations given to them by LAFCO in a previous review in 2016.

Jim Horn, the PDHCD director who submitted the public records request for information regarding a discredited toxicology program, addressed the commission about alleged fraudulent conduct by several healthcare district board members and staff.

Horn discovered the conduct in a series of emails he received last month after filing the public records request. On Oct. 23 Horn reported to Sonoma West Times & News that he sent out a package including the emails and information to the county district attorney.

The healthcare district email communications were between PDHCD board president Dennis Colthurst, board treasurer Gail Thomas, executive director Alanna Brogan and the district’s attorney William Arnone. Several emails show discussions regarding off-contract payments to a Florida-based personal injury lawyer, Aaron Durall, who managed Sonoma West Medical Center’s drug testing program.

Sonoma West Medical Center Inc. and Durall’s management company are now defendants in a multi-million dollar lawsuit filed by Anthem Blue Cross/Blue Shield for alleged fraudulent practices.

LAFCO places the question of dissolution in voters’ hands

During the LAFCO meeting, several members of the public requested the commission begin the process of dissolving the district. Fifth District Supervisor Lynda Hopkins, who serves on the LAFCO commission, questioned whether potential actions should be made by LAFCO or made by district voters.

“Where I sort of struggle with this is, ‘Is this something that should be initiated by LAFCO or is this up to the voters who ultimately elect these board members and did elect a pro-hospital majority who were committed to keeping the hospital open?’” she said.

After discussion, LAFCO commissioners stated they would leave the decision up to the people of the district.

LAFCO executive officer Mark Bramfitt said a lengthy process is required in order for the district to be dissolved by voters. The sequence of actions required to dissolve the district is similar to the process of detachment, which Russian River residents completed in February 2017. Residents gained LAFCO approval for detachment from the district after a two-year-long effort to gather signatures and support.

The group behind the effort, Taxpayers Against Unfair Taxes (TAUT), worked to detach the Forestville, Guerneville and Monte Rio school districts from the health care district that levies an annual parcel tax of $155 on property owners within the PDHCD boundaries comprising most of western Sonoma County. 

Bramfitt said the detachment of the Russian River area did not make a significant financial impact on the district as Sonoma West Medical Center was losing anywhere from $750,000 to $1 million a month.

“I just want to point out that, although the district did have a modest decrease in revenue from the detachment, in the grand scheme of things, when there’s that order of magnitude difference, that did not precipitate the challenges that the district is currently facing.”

Last month LAFCO received a notice from residents of the Bodega Bay Fire Protection District of their intention to gather signatures in support of detachment from the health care district. The applicants cited, “the ongoing demonstration of poor hospital management, resulting in ongoing fiscal failure, including the closure of the hospital emergency department,” as the reason of their proposal.  (Note: The Bodega Bay Fire Protection District is not affiliated with the potential detachment efforts. The applicants are using the fire district boundary to define the detachment area.)

In order to dissolve the district, a member or members of the district must first notify LAFCO of their intention to dissolve. Then they must gather the signature of 10 percent of registered voters within the district. There are currently 25,220 registered voters, making the requirement 2,522.

Because the Russian River area already successfully detached from the district, those residents would not be allowed to participate by signature or vote in the dissolution of the healthcare district.

After gathering at least 2,522 signatures and presenting them to the commission, LAFCO will have the option to approve or reject the dissolution. If they approve it, district residents will have the chance to vote on the question in a special election or during a regularly scheduled election. The applicants who want to dissolve the district will be responsible for financing the election process.

Bramfitt said residents interested in dissolving the district have contacted his office, but no formal notice has been submitted.

A simple majority vote is required to solidify the dissolution of the district. Bramfitt said the county assessor’s office would then be charged with the task of winding down the financial affairs of the district, which includes overseeing the district’s $22 million debt obligation.

The commission requested that Bramfitt continue to watch the development of the district and report back on a monthly basis.

The next LAFCO meeting is on Dec. 5 at 2 p.m. in the Board of Supervisor’s Chambers, 575 Administration Drive, Room 102A in Santa Rosa.