Out of the five residents who spoke during the public comments portion of the March 23 San Benito County Health Care District Board of Directors meeting, only one had anything mildly positive to say about the district’s performance. The grievances voiced by the others included incompetence, a lack of transparency and calls for the board to resign en masse.
The health care district governs Hazel Hawkins Memorial Hospital, which is on the brink of bankruptcy and has reported it has operational funds through ‘late summer.’
In a statement from Assemblyman Robert Rivas he said, “To date, our office has helped secure over $12 million for Hazel Hawkins in accelerated supplemental payments and loans.”
He added that he and Senator Anna Caballero submitted a letter to Anthem Blue Cross advocating for it to negotiate in good faith with the hospital to restore healthcare coverage to San Benito County patients.
The overshadowing spectra of a possible bankruptcy was not on the agenda but several residents voiced their displeasure on how it is being handled.
While Roxy Montana, who has ties with the San Benito County Grand Jury, said she appreciated the board’s apparent attempts to be transparent, particularly through news releases to BenitoLink, she asked them to cite their sources and to be even more transparent about their search for a strategic partner.
The other speakers were less appreciative. Rob Bernosky, a former Hollister School District Trustee and consultant who advises distressed companies in situations similar to what the hospital is going through, said the board has continued to mismanage the district and appeared to be “nonchalant” toward the community in its reaction to the pending bankruptcy. He said the entire board should resign.
“We’re being whipsawed by information: ‘We are going to close. No, we suddenly found $11 million. The only plan is to find a partner. No, there’s a plan to operate ourselves, but you can’t see it,’” he said. “My read is there’s no confidence in you except for a few friends of yours. I’ve never seen the community so concerned about a singular topic where this activity occurs and you are silent.”
When Mary Casillas, interim CEO and Mark Robinson, chief financial officer, gave their reports later in the meeting, they were models of the non-transparency their critics have claimed.
Casillas said there were weekly meetings with the county and business leaders.
Bernosky asked Casillas who the board was meeting with at the county level and which business leaders, adding that he couldn’t find anyone in the community who said they had met with her.
Casillas was evasive.
Casillas seemed reluctant to say who took part in the weekly meetings. Then Devon Pack, board’s newest member, said he would like to know. Casillas avoided saying exactly who she had met with. Pack asked if they were department heads and she said, “Yes, department heads.”
“That’s what we’re talking about,” said resident Elia Salinas about Casillas not identifying people as an example of lack of transparency.
San Benito County Counsel Barbara Thompson said the regular invitees to meetings with the hospital have been Health and Human Services Agency Director Tracey Belton, Sheriff Taylor, Office of Emergency Services Director Kris Mangano, County Administrative Officer Ray Espinosa, Auditor Joe Paul Gonzales, HR Manager Henie Ring, Dr. Wayne Clark, and additional staff from the County Counsel’s Office and the CAO office.
“However, not all attendees have been able to attend all scheduled meetings,” Thompson said.
During her presentation, Casillas also asked the board members what they thought were important attributes for a potential strategic partner.
Bernosky thought it was curious that Casillas asked for opinions at this late date.
“I found it to be very odd and seemingly an attempt to create a record today for what one would have thought would have happened before a search for a partner began,” he said. “This is just another indication of dysfunction and why I and many others are worried that we are leaving too much to chance by putting our trust in Mary Casillas and the board.”
Salinas also questioned Casillas’ authority.
“You’re all relying on your CEO,” she said, “but here’s the thing. The CEO works for you. You are failing to ask the right questions. You are failing to look at the financials. How many have you looked at the financials to follow the track to where you are today in this trouble? You failed in your responsibility to the citizens of this county.”
When it was Robinson’s time to report, he said $2 million in payroll taxes had not been paid and there would be significant penalties.
Pressed by Pack for clarification about potential liability, Robinson said, “We’ve asked that the penalty be waived considering our situation and we’ll wait for response since [we] initially requested the funding back in October. It could be from 10% to 15%. Fifteen percent could be $170,000.”
The most troubling of the three topics, in Bernosky’s opinion, was that the district had not paid its payroll taxes.
“This is huge,” he told BenitoLink. “Over $2 million in payroll taxes not paid and they received the nastiest letters from the IRS. You don’t use ‘not remitting payroll taxes’ as a means to fund your business.”
Bernosky said, “The CARES Act [for coronavirus relief], allows employers to defer employee’ and employers’ share of Social Security taxes from 2020, to be paid 50% by Dec. 31, 2021, and 50% by Dec. 31, 2022. Apparently, the district missed one or both of those payments and now is in arrears to the IRS.”
He said the district’s first mistake was taking advantage of the CARES program, effectively borrowing from the IRS, especially when in financial straits.
“Missing required payments makes the situation 100 times worse,” he said. “I would think that the board members and administrators would be very worried about any personal liability.”
He went on to accuse the board of making an “incredibly risky play of only seeking a buyer,” and added “If the buyer walks away and they run out of cash would they return to the county supervisors for a bailout and when they say ‘no’ then you get to say the county made the decision to close Hazel Hawkins Hospital.”
Dr. Nazhat Sharma, an ophthalmology specialist, who at one time served as a district board member, directed her comments at Robinson, saying she knew he was an “astute financial person,” but said, “What I wonder is, you knew three years before that you’re heading this way. What made you not take action? Not only that, [you] did not cut the expenses.”
Sharma asked him why the district continued to hire staff and buy buildings. She also wanted to know how many staff received salary increases and bonuses over the last three years. She said Robinson knew which way the district was headed and questioned his ability to lead the board.
Her questions went unanswered.
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