San Benito County Supervisors on May 23 unanimously agreed to delegate authority to Ray Espinoza, county administrative officer, to sign a nondisclosure agreement with the San Benito Health Care District that could pave the way for the county to examine Hazel Hawkins Memorial Hospital’s financial records.
Supervisor Sotelo, whose husband works at the hospital, said she was free to discuss the resolution and vote on it as she had a letter from the California Fair Political Practices Commission stating there was no conflict of interest.
The county’s move to use a nondisclosure agreement was made after receiving an update from Cecilia Montalvo, a consultant the county hired to analyze how to keep the hospital operational.
Montalvo was also hired by the Pajaro Valley Health Care District in 2022 and was instrumental in turning around the failing Watsonville Community Hospital after it filed for Chapter 11 bankruptcy.
She revealed that a possible strategic partner for Hazel Hawkins had been identified but did not disclose a name.
“We have identified a party that is interested in working with us to see what’s possible, and that is the nature of the NDA,” she said via Zoom. “We aren’t able to fully disclose the name of that agency because there is a kind of simultaneous communications going on. I think, essentially, it could create a relationship or the county may have more input in the future direction of the hospital, and Hazel Hawkins could benefit from having the management expertise of a larger organization.”
The NDA, according to the supervisors’ agenda packet, will give the county access to all the financial records that have been shared by the hospital with prospective buyers or potential strategic partners.
According to Mary Casillas, Hazel Hawkins interim CEO, there have been at least 10 prospects but she has not disclosed who they were or how many have declined to partner with the hospital.
According to the agenda packet, the reason for obtaining the financial documents is for the county to be able to determine a future course of action if the health care district is unable to find a financial partner.
Montalvo said she believes it is very unlikely an outside party will purchase the hospital because now is not in an active time for mergers and acquisitions as the industry is not doing well nationally.
“My advice was that we, as the county, speak to more regional hospital operators that are known to us to see if the county representatives could bring one of them to the table in a partnership,” she said.
Supervisor Bea Gonzales said while she understood the rationale for filing for bankruptcy, she was hesitant to approve an NDA.
“I don’t want to be complicit, and I don’t want this board to be complicit in any kind of secret agenda that we are trying to perpetrate on the public,” she said.
Motalvo said the NDA does not prohibit the releasing of any documents that are considered public records.
Espinoza added he expected a joint news release about the partnership to be issued next week.
Supervisor Kollin Kosmicki, who has questioned the perceived secrecy by the hospital about its finances, said he was committed to transparency.
“I will be the first one to speak out and the NDA really is a mechanism just to get this process started,” he said. “Once this other potential entity is able to come forward, the community will have a better understanding of why you have to take this initial step [of an NDA].”
He added time was of the essence in getting something done.
“Balancing the difference between the delay and getting this process started, a lot of things can be derailed in a two or three weeks’ time,” Kosmicki said. “This is just too good of an opportunity to delay it, so we need to get started on it. I’m very excited about potentially where this may go.”
Resident Robert Bernosky, who has also been critical of the health care district board over the handling of the fiscal emergency, said it was important for the county to get involved to save the hospital and jobs of residents.
According to the hospital’s latest released data, it had 745 employees and 41 active physicians on staff in 2021.
The hospital board “is so uninvolved and non-responsive to what needs to be done,” Bernosky said. “Either that or they’re keeping it secret, which you all know is not good public policy. You guys are the senior legislative body in the county. We’re all counting on you. They’re probably counting on you. They just don’t realize it.”
Other actions
The supervisors unanimously approved not to move or destroy the controversial granite sculpture in front of the county’s administration building and approved up to $2,000 to place a bronze plaque to explain the significance of it. An ad hoc committee determined that it would cost as much as $30,000 to move the sculpture around the block to the San Benito County Historical Society building.
The supervisors also approved the appointment of Dr. Cheryl Scott as the county public health officer. Scott attended college at UC Santa Cruz and medical school in Boston, after which she worked for 20 years at the Center for Disease Control and Prevention eight of which were in California with the state health department.
Other BenitoLink related stories:
Healthcare District declares Chapter 9 bankruptcy | BenitoLink
Hazel Hawkins seeking $10-million line of credit | BenitoLink
Report: Hazel Hawkins among 200 hospitals in state facing closure | BenitoLink
Hollister residents say Hazel Hawkins Hospital lacks transparency | BenitoLink
Hazel Hawkins withdraws anticipated closure notice | BenitoLink
Hazel Hawkins has operational funds through ‘late summer’ | BenitoLink
Hazel Hawkins focused on finding a partner | BenitoLink
Hazel Hawkins signs non-disclosure agreement | BenitoLink
Hazel Hawkins to close down Home Health Department | BenitoLink
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