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Publication Date: Wednesday, October 23, 2002 Voter Guide: Healthcare district: To be or not to be?
Voter Guide: Healthcare district: To be or not to be?
(October 23, 2002)
By Renee Batti
Almanac News Editor
Although there are seven active candidates for the three open seats on the Sequoia Healthcare District board, voters will in essence be faced with one fundamental question: Should the health care district continue to exist?
The seven candidates include two incumbents, Art Faro and Dr. Gerald Shefren, who argue that the district serves a legitimate and important public role; a slate of three Libertarian candidates whose stated goal is to dissolve the district; David Rosner, a member of the San Mateo County Civil Grand Jury that blasted the district for continuing to receive tax revenue even after selling Sequoia Hospital in 1996; and Sonya Sigler, another Libertarian candidate, who says she has not yet decided whether the district should be preserved.
Two other names -- Arthur Bates and Philip Brattain -- will appear on the ballot; they say they are not actively seeking election, but didn't make that decision until it was too late to pull their names from the ballot. Both Libertarians, they support the slate of three Libertarians: Jack Hickey, Warren Gibson and Harland Harrison.
District history
Formed in 1946 to build and administer Sequoia Hospital in Redwood City, the Sequoia district was in deep financial crisis by about 1995 because of dramatic changes in the health care world.
In 1996, the five-member, publicly elected board asked voters to approve the sale of the hospital to the private Catholic Healthcare West (CHW) for $30 million -- an agreement that also required the district to provide oversight of the hospital's operation. Voters overwhelmingly approved the sale.
District revenue
Taxpayer funding of the district continued, based on a complicated formula that gives the district a tiny portion of taxes collected from property owners in the district, which includes Menlo Park, Atherton, Woodside, Portola Valley, Redwood City, San Carlos, Belmont, and surrounding unincorporated areas.
Cities and towns, school districts and other special districts also share in the small property tax "pot" that remains in the county -- which amounts to 1 percent of county property taxes collected.
A number of residents -- and the grand jury -- say the district should no longer receive tax money because it no longer owns and operates the hospital. The three-candidate slate goes further: Disband the district, refund existing district funds to taxpayers, and deduct the amount of annual tax revenue that would have otherwise gone to the district from property owners' tax bills, those candidates say.
But Martha Poyatos of the Local Agency Formation Commission (LAFCO), which has jurisdiction over key aspects of special districts, says both the reduction and the refund of taxes to property owners are not possible under the law. The tax burden, she said, would remain the same for property owners even if the health care district refused its relatively small share (nearly $4.5 million in fiscal 2000-01), and the money the district was entitled to would be distributed among the other districts and cities that also share the 1 percent tax revenue pot.
If the district were dissolved, the district's existing funds could not be refunded to taxpayers, Ms. Poyatos said. Instead, they would be distributed among other districts and cities within the health care district's boundaries, she explained.
Since 1997, the district has distributed about $500,000 annually to nonprofit groups that provide health-related services. It also gives grants to the hospital for capital improvements and equipment, according to district CEO Frank Gibson. It recently authorized grants -- $1.3 million annually for five years -- for the county's Children's Health Initiative, created earlier this year to ensure health care for all uninsured county children 18 and under.
The district also has more than $50 million in its coffers and in assets. Mr. Gibson and board members have said some of that money may be needed if CHW runs short of funds needed to seismically retrofit the hospital -- a state-mandated project that must be completed by 2008.
Candidates were asked their positions on key district issues. Their responses follow.
The slate of three
Jack Hickey, Warren Gibson and Harland Harrison are united in their resolve to dissolve the district -- a process that could be launched by a vote of the board, although it would ultimately require a separate vote of district residents.
All three criticize the district for granting money to nonprofit groups. "People should make their own decisions about charitable donations," said Mr. Gibson.
The three candidates also agree that no public oversight, such as that provided by the district, is needed for the hospital other than standard state and federal regulatory oversight now in place for all hospitals.
They also advocate that all district assets be disbursed among taxpayers, even if that requires enabling legislation.
The three candidates also oppose the use of district money to help pay for the hospital's seismic upgrade project. "It is wrong to spend public money to improve private property," Mr. Harrison said.
The incumbents
Incumbents Faro and Shefren challenge the grand jury's recommendation that the district stop receiving tax revenue, noting that taxpayers would see no relief. "Taxpayers won't save anything, as the county will redistribute the money, and it may not go to health," Mr. Faro said.
Dr. Shefren said that the district lives up to its mission to improve community health "by focusing on programs that have a preventive-medicine approach to disease and social issues."
Both incumbents point to programs district grants have helped make possible, such as a free clinic at the nonprofit Samaritan House.
The incumbents also defend the district board's decision to squirrel away money in case CHW can't afford the total cost of the seismic upgrade -- estimated by CHW to cost between $76 million and $160 million. CHW must retrofit more than 20 of its hospitals by 2008.
Mr. Faro said if the district helps with the project, it would be in service to its original charge, "to keep Sequoia Hospital alive."
Candidates Rosner, Sigler
Mr. Rosner said voter authorization to form the district was for the "construction, maintenance and operation of a hospital." That hospital was sold in 1996, he said, so there is no longer any justification for the district to continue to receive tax revenues.
But Mr. Rosner said the district still serves a legitimate purpose by providing public oversight of the hospital's operations, and he does not support dissolving the district.
"It would be better to leave the assets in the local community and have the board (with community input) develop a plan for the utilization of these assets for the health-care needs of the community," he said.
Although he says public money should not be given outright to CHW to retrofit the hospital or make other capital improvements, he said that "if it is necessary for the community health and welfare that these capital improvements are made, then loans that would be paid back would be appropriate."
Ms. Sigler said she would make decisions on the key issues based on the district's charter, which she would study as a board member.
Regarding the grand jury's recommendation that the district stop receiving tax money, Ms. Sigler said: "If the charter of the board was to operate the hospital, and it no longer does, then it makes no sense to keep collecting taxes for a hospital it no longer controls. If the charter was more broadly related to addressing the health-care needs of the county, then its tax collection and expenditures need to be re-evaluated."
Ms. Sigler said she believes public oversight of the hospital is not needed.
Arthur Faro
Residence: Redwood City
Profession: Retired hospital CEO; retired as Sequoia Hospital CEO after sale of hospital to CHW.
Education: BA, University of Vermont; MBA, George Washington University.
Civic experience: Board member and current president, Sequoia Healthcare District; board member, Sequoia Awards (past president); board member, Association of California Healthcare Districts; past chairman, Board of California Affiliate of American Heart Association.
Age: 64
Warren Gibson
Residence: Belmont
Profession: Retired engineer; co-founder of CSA Engineering, Mountain View; now teaching at Santa Clara University.
Education: Ph.D., engineering, Case Western Reserve University.
Civic experience: Member, Belmont Planning Commission, past two years; board member, San Juan Canyon Preservation Trust, past three years; board member, Psoriasis Research Institute, 1996-2001; board member, Masterworks Chorale, 1995-1998.
Age: 59
Harland Harrison
Residence: Belmont
Profession: Computer programmer
Education: Alumnus, University of California, Berkeley
Civic experience: None
Age: 52
Jack Hickey
Residence: Emerald Hills
Profession: Retired research scientist
Education: Extensive training, Navy Electronics School
Civic experience: Candidate for numerous political offices; involvement in many political efforts, including defeat of San Mateo County Measure A.
Age: 68
David Rosner
Residence: Woodside
Profession: Retired tax attorney
Education: BBA, City University of New York; JD, Brooklyn Law School; LLM (Taxation), New York University Law School.
Civic experience: Foreman pro tem, 2001-02 San Mateo County Civil Grand Jury
Age: 60
Gerald Shefren
Residence: Portola Valley
Profession: Physician
Education: Medical degree, University of Illinois; residency, George Washington University, OB/GYN.
Civic experience: Board member, Sequoia Healthcare District.
Age: 60
Sonya Sigler
Residence: San Carlos
Profession: Attorney
Education: BA in philosophy, music minor, University of California, Berkeley; JD, University of Santa Clara.
Civic experience: Board member, Nova Vista Symphony and Women in Technology
Age: 39
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