Hospital rebuild project wins OK; public money decision delayed Hospital rebuild project wins OK; public money decision delayed (May 12, 2004)

By Renee Batti
Almanac News Editor

Now that the governing board of Sequoia Hospital has signed off on the plan to rebuild the medical facility on its current site, hospital officials are preparing to seek building permits from Redwood City in an attempt to break ground by the end of 2005.

The 10-member Sequoia Health Services board on May 5 unanimously approved a phased plan to reconstruct the hospital at Whipple Avenue and Alameda de las Pulgas in Redwood City. The hospital must be rebuilt or retrofitted by 2013 to meet state seismic requirements.

Officials will submit applications to Redwood City in July while also beginning an environmental impact report, said Glenna Vaskelis, Sequoia's president.

Governance of the new hospital, estimated to cost a minimum of $130 million, is still uncertain and could prove to be a point of contention. Sequoia has been operated by the private, nonprofit Catholic Healthcare West (CHW) since 1996, when CHW formed a partnership with the public, tax-funded Sequoia Hospital District -- now called the Sequoia Healthcare District.

The partnership involved forming a nonprofit corporation, Sequoia Health Services (SHS), to own and manage the community hospital; CHW and the Sequoia Healthcare District appoint five members each to the SHS governing board, meaning they have equal control.

But under the newly approved plan, CHW will finance the rebuilding through tax-exempt bonds it will back, contributions raised by the Sequoia Hospital Foundation and revenue from hospital operations.

Although CHW officials have said they are willing to finance the entire project if necessary, they have requested a $25 million contribution from the public health-care district. At the same time, CHW has made it clear it wants more control of the hospital since it will be investing more money in it.

"CHW has said all along that if they're going to take the risk of being on the hook for the debt, they'd like to have more control," said Ms. Vaskelis.

Art Faro, president of the health-care board, said board members "haven't yet made any determination" about the level of control the district should retain. He said that the amount of money each party contributes to the project may well determine how the level of control is divvied up, but, he added, "it's premature" to comment on it.

District's contribution

The health-care district's five-member board was primed to approve CHW's request for a $25 million contribution toward the rebuilding project at a quickly set special meeting May 3. The action was postponed until the board's regular meeting on June 2.

Board members begrudgingly agreed to the delay after the district's attorney revealed that spending such a large portion of the district's assets -- an estimated 42 percent -- requires an airing at two public meetings.

But before the attorney made that ruling, the board heard a plea from League of Women Voters representative Linda Craig, who complained that no discussion of the proposed $25 million contribution had taken place at a public district board meeting, and urged the district to delay acting on the proposal until it could be discussed at a regular meeting of the board.

She also requested, on behalf of the LWV, that the board delay another decision it was prepared to make at the meeting: authorizing the sale of both district-owned medical buildings.

"These are major decisions, and we do not see such an urgency that these issues must be made at a hastily called meeting," she read from a prepared statement.

Board member Jack Hickey said he fully supported the league's position, and also urged the board to delay action on both matters.

Board president Faro said last week that the board will take both issues up at its regular meeting on June 2. The board majority indicated at the May 3 special meeting that both proposals will be approved.

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