Hazel Hawkins seeking $10 million loan from County

Supervisor Bea Gonzales is at odds with Supervisors Kollin Kosmicki and Peter Hernandez over whether the county should lend $10 million to the hospital, but their decision will likely be delayed until January.
Supervisor Bea Gonzales claimed Supervisor Kollin Kosmicki sent letter to Hazel Hawkins that amounted to him telling the hospital to "pound salt." Photo by John Chadwell.
Supervisor Kollin Kosmicki' entire response concerning his position on the county loaning Hazel Hawkins Hospital $10 million.
Supervisor Kollin Kosmicki' entire response concerning his position on the county loaning Hazel Hawkins Hospital $10 million.
Supervisor Bea Gonzales claimed Ray Espinosa, county administrative officer, and Barbara Thompson, county attorney, relegated the hospital to giving an information presentation rather than an action item to request the loan. Photo by John Chadwell.

On Dec. 7, San Benito County Supervisor Bea Gonzales told BenitoLink that she has been working with Fiona Ma, state treasurer, and Mary Casillas, interim CEO of Hazel Hawkins Memorial Hospital, to keep the healthcare district from filing for bankruptcy this month. It was revealed in November that the hospital is in serious financial straits. Despite Gonzales’ efforts, Supervisors Kollin Kosmicki and Peter Hernandez, along with County Administrative Officer Ray Espinosa and County Attorney Barbara Thompson made a move that she feels will defeat her goal of helping the hospital stay in business.

Chief Finance Officer Mark Robinson told the hospital’s board of directors Nov. 4 that several factors led the hospital to prepare for filing for bankruptcy—which include returning over $12 million to the state this fiscal year, the Anthem Blue Cross reimbursement dispute and the delayed supplemental payments totaling $13 million to the hospital from the state. 

Gonzales said the hospital was set to come before the Board of Supervisors Dec. 13 to ask for a $10 million loan.

She said she checked with County Clerk, Auditor and Recorder Joe Paul Gonzalez and was told there was $23 million in the county’s reserve funds as of June 30. “The hospital needs $25 million to get out of their position,” she said, “but the county obviously can’t give them that amount. But they’re asking for $10 million, so they put a proposal together. They submitted it to Ray (CAO Ray Espinoza).”

Gonzales said that she, Joe Paul Gonzalez, Espinosa, Casillas, Robinson, two lawyers and two financial people representing the hospital district met via Zoom on Dec 6.

She said she asked Espinosa to put the hospital’s request on the Dec. 13 agenda as an action item on which the supervisors would have to vote. She said Espinosa, Hernandez and Kosmicki decided against making the request for an action item and instead made it an informational presentation.

“That’s all that Ray, Peter, and Kollin are going to allow,” Gonzales said. “I told Ray it can’t be just a presentation. I said we have to be able to vote on it. And this is the reality of it: We would be changing bodies [new supervisors in January] around and it would require a 4/5 vote. Kollin is already dead-set against it. He said so in a letter to Mary Casillas on Nov. 21.”

She continued: “The message was ‘go pound salt.’ That’s what he basically said, and I was livid by that, so I called Mary (Mary Casillas, interim CEO of Hazel Hawkins Memorial Hospital).”

Gonzales said she asked Casillas not to listen to Kosmicki and that she would work with the hospital and the California Health Facilities Financing Authority, which State Treasurer Ma heads.

“I’m trying to make this happen,” Gonzales said. “We can’t lose this hospital. It will die if nothing happens. I’m trying to rally up the community so that they ask questions, and they make Peter and Kollin say no in public. But basically, they’re already saying no in private, and they don’t want the public to know that they’re saying no. This is a public meeting regarding public funds to help another public entity. This conversation needs to be in public. It can’t be decided behind closed doors between one supervisor that’s leaving [Hernandez] and one [Kosmicki] who wants to be chair.”

BenitoLink requested comments from the other supervisors, as well as Espinoza, Thompson, and Casillas. 

Kosmicki responded at length (see attachment for his entire response), stating that on Nov. 8 he requested the informational presentation “on the hospital’s financial situation in light of potential impacts on the community and county employees.” He wrote that the county has a clear policy on how specific items are placed on the agenda, saying, “Supervisor Gonzales could have spoken up and requested this to be an action item to consider funding support for the hospital, but she did not do so at that Nov. 8 meeting or the Nov. 22 meeting.” 

He wrote that he and Hernandez were following board protocol and described the hospital’s request for $10 million as “unprecedented,” and a “bailout from our cash-strapped county to give the district an ability to temporarily delay bankruptcy proceedings and keep up with existing payroll obligations for mere months.” 

He also said, to do so would be “incredibly irresponsible considering the very limited amount of information provided by the hospital and no real assurances of a payback” and the $10 million would “all but wipe out available county reserve funds; put the county in a serious financial bind itself; and prohibit the county from moving forward on essential planned infrastructure improvements.”

Espinosa responded: “We (administration) follow what the board requests. The board authorized SBC administration to have HHH provide an informational presentation. That’s what we are doing on the 13th based on Supervisor Kosmicki requesting a future item for a presentation on the situation with Hazel Hawkins Hospital. Supervisor Dirks seconded it to be put on the agenda.”

“We have a collaborative, professional relationship with the San Benito County Board of Supervisors and I appreciate the opportunity to present our request to the Board,” Casillas responded.

Supervisor Bob Tiffany declined to comment. 

On Nov. 4, the Board of Directors of San Benito Health Care District, the hospital’s governing agency, declared a fiscal emergency, which allows it to file a Chapter 9 bankruptcy petition. The Hospital has until Dec. 31 to file if it chooses to do so.

In 2018, then-CEO Ken Underwood said because of the continuing revenue losses, he saw no choice but to reach out to other healthcare organizations for a possible partnership. He said 10 organizations had been approached, and that of those, only Salinas Valley considered collaborating with Hazel Hawkins. Salinas Valley Memorial Healthcare System stated, “The timing wasn’t right,” and negotiations fell through.

“I have told Mary Casillas from the get-go that she needs to get transparency in her comments to make sure the community knows what’s happening because in the absence of any facts people are creating their own messaging,” Gonzales said.


Related BenitoLink stories:

Hazel Hawkins says it has not filed for bankruptcy | BenitoLink

Nurses, resident ask Hazel Hawkins for transparency | BenitoLink

Hospital says three factors led to financial emergency | BenitoLink

Hazel Hawkins Memorial Hospital terminates CEO Hannah | BenitoLink

New $250 million hospital for Hollister in the dream stage | BenitoLink

Hazel Hawkins health centers and labs consolidate services | BenitoLink

Hazel Hawkins Hospital approved for critical access designation | BenitoLink

Hazel Hawkins CEO resigns, but stays on as interim | BenitoLink

Hazel Hawkins banks on winning ‘critical access’ status | BenitoLink

Hospital board in knots over search for management company | BenitoLink

As partnership talks collapse, Hazel Hawkins financial picture shows serious stress | BenitoLink



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John Chadwell

John Chadwell is a freelance photojournalist. He has many years' experiences as a photojournalist, copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]