Measure J Frequently Asked Questions

Southern Inyo Healthcare District Residents:

You are being asked to approve Measure J in a mail ballot election on April 10, 2018. Please take the time to read the following frequently asked questions and answers. If you have further questions feel free to contact hospital administration or any member of the Board of Directors.

Brian Cotter, CEO and Chief Clinical Officer - (760) 876-1028
Jaque Hickman, Board President - jaquehickman (at) yahoo (dot) com
Mark Lacey, Board Vice-President - mjlacey (at) wildblue (dot) net
Carma Rpoer, Board Secretary - croper (at) sihd (dot) com
Chuck Carson, Board Treasurer - ccarson2401 (at) yahoo (dot) com
Richard Fedchenko, Board Member - (760) 876-1952

This is a Living Document. The current version will be shown below and noted. All versions are available to download at the bottom of the page.

Current version shown below: RevF

1. What is Measure J?
The Southern Inyo Healthcare District (SIHD) is asking you to approve a new parcel tax in the amount of $215.00 per parcel per year. The tax will expire after 15 years.

2. How much money will be raised?
This parcel tax will generate an estimated $602,000 per year, for a total of $9,030,000 over the 15 year term of the tax. The proceeds from the tax will be paid to the District as part of it's biannual tax disbursement.

3. How will the money be used?
First and foremost, the funds are needed to pay the Chapter 9 bankruptcy settlement, as directed by the Federal Bankruptcy Court. We may also be able to undertake some capital improvement needs at the hospital and clinic, and some funds may also be available for the costs of operating the hospital and clinic. All funds will be for the benefit of SIHD.

4. How will the settlement be paid?
The bankruptcy settlement will be payable over multiple years, as the tax money is collected and as negotiations with specific creditors allow. Some of the settlement debt will be payable in full upon the effective date of the debt readjustment plan. To pay this portion it may be necesary to raise a lump sum by selling certificates of participation (COP's) to investors, who will then be paid over time at an interest rate to be determined. This is similar to selling bonds to raise cash. It will be considered long-term debt, paid off by the 15 year sunset of the parcel tax.

5. Why not ask for a bond issue instead of a parcel tax?
It is not legal to use general obligation bonds to pay a bankruptcy settlement.

6. How does this relate to the existing parcel tax?
The new parcel tax will be added to the existing parcel tax, but will expire in 15 years. By then we expect to have paid all creditors involved in this bankruptcy action. The new total combined parcel tax for the typical resident parcel will be $365 per year, or $1 per day. Undeveloped parcels that currently pay a parcel tax of $50 will now pay $265 per parcel per year. Commercial parcels that currently pay $550 will now pay $765 per year. In the final analysis, this is a like having a low cost insurance policy to provide 24/7/365 availability of local healthcare. You are probably now paying health insurance premiums that are almost as much on a monthly basis as this is on a yearly basis. What good does health insurance do you if you don't survive the ride to the hospital?

7. What is a "parcel"?
A parcel is any piece of land that has been assigned a parcel number by the county assessor. Rights of consolidation remain in effect.

8. Why do we need this increase in our taxes?
Over the past decade and more it has become increasingly difficult for small rural hospitals like ours to survive. The current health system does not provide enough patient revenue to allow for meeting all operating costs. It is a problem that has been years in the making, and it slowly became more and more difficult to cover the costs of running the Healthcare District. Past administrations and boards have tried to find solutions, but turned to debt financing to keep the doors open. This approach finally caught up with us at the end of 2015, when the hospital became insolvent, the administrator and board resigned, and by early 2016 the hospital was closed. The clinic was allowed to remain open as a separate entity. Under a newly appointed board of directors in early 2016 the Healthcare District declared a fiscal emergency and filed for Chapter 9 bankruptcy protection. We have been operating under this protection for the past two years and are at the stage where the judge is considering our latest debt readjustment plan, after which it will be sent to creditors for approval. If it is approved, an effective date will be set, and we will be required to pay the lump-sum creditors as close to that date as possible, and we must being making monthly payments to other creditors. The parcel tax is the only mechanism allowing us to meet these requirements. Also, during the financially difficult years maintenance on the hospital and clinic buildings were deferred, and must now be addressed for the care and safety of our patients and employees. Further, it will take some time to increase patient revenues by offering additional patient services, and support for operating funds will be required.

9. Can I be certain that the parcel tax is properly spent?
Yes - Measure J inclused provisions for a special bank account to be used for all deposits of money from the parcel tax, the preparation of an annual report from the Chief Financial Officer outlining where the funds were spent, and the appointment by the Board of Directors of a "Citizens' Oversight Committee" that will serve as a watchdog over any funds that are raised through the sale of COP's. (See Question 4)

10. What will happen if Measure J fails to pass?
The bankruptcy judge has the option of directing the District to prepare another plan, or he can reject the bankruptcy case. We have researched this extensively and cannot see another path that will allow us to discharge our obligations under the bankruptcy proceedings. In other words, we do not think there is a viable alternative plan. (See Question 12) If our bankruptcy case is rejected, it opens the doors for all secured creditors to come and remove the collateral for their debts- that is, they can come and claim the beds, medical instruments, drugs, supples; in short, everything we need to provide for the care and safety of our patients. It also could result in many of our key vendors refusing to deliver necessary goods and services. In the absense of the bankruptcy protection, many creditors would likely file lawsuits to claim as much of the district assets as possible to recover their overdue payments. The District would have no funds to defend against these lawsuits. The hospital almost certainly would close by the end of 2018, and probably sooner. There would be no emergency department, no services such as the lab, radiology and physical therapy, and no Skilled Nursing Facility. The SNF patients would all have to be relocated, adding to the turmoil in the residents' lives and inconvience for local family members. Any available tax revenues would then go to paying creditors, and the clinic would be in jeopardy of closing as well.

11. Why not close the hospital and develop an alternative plan for delivering healthcare?
First, the current Board has been responding to the will of the people as expressed very strongly in several board meetings since late 2015: Save the Hospital! Therefore all efforts have been focused on that goal. Second, because of the District's debt burden, it would not be able to fund an alternative. In order to reopen the hospital and keep it operating during the past two years, in response to the community pleas, even more debt was iccured. SIHD will not have the resources required to establish and run an urgent care center, for example. As mentioned earlier, even the clinic may be in jeopardy. The County has made it clear that they do not intend to establish or support an ambulance service. If Measure J does not pass, there appears to be no viable alternative. SIHD will not be able to provide for the healthcare needs of the community.

12. Why not close the Emergency Department and contine to operate the rest of the hospital?
We are licensed as a General Acute Care Hospital and we have the designation of a Critical Access Hospital. Without a 24/7 ER the State would cancel our license and the hospital would close- all departments. Note that ambulances can only deliver patients to an operational ER, so that if we replaced the ER with, say, an urgent care center, ambulances would bypass us for Bishop or Ridgecrest. Further, we can not operate a Skilled NUrsing Facility without a close-by emergency service, so no ER equals no SNF.

13. Why not close the clinic and let people get their healthcare at the hospital?
The clinic offers primary health care to residents of all ages within the Healthcare District and delivers quality walk-in/urgent care whenever possible to residents and visitors. Although the hospital can deliver emergency services when the clinic is not available, there are many services the hospital cannot deliver, and these would for the most part not be available within the district. Some of these services include:

Preventative Healthcare
Well-Baby/child exams
Routine health screenings
Pre-school physical
School physical
Pre-participation Sports Exam
Well-woman Exams
Family planning services
MediCare Wellness
DOT Commercial Driver exam
Employment Physical

Chronic Disease Management
Diabetes Care
Heart Disease
Stomach Disorders
Muscular/skeletal problems
School/Work notes

Other Services
Health Education
WIC requirements
Specialty referrals
Order routine labs
Order diagnostic exams
Acute illness care
Refill Prescriptions
Medical forms completed
Acute care/walk-in services

Clearly, the Rural Health Clinic is a key part of delivering quality healthcare to the District.

14. What will happen to the clinic if the hospital closes?
State and Federal regulations require the Rural Health Clinic to “Have arrangements with one or more hospitals to furnish medically necessary services that are not available at the RHC”. Currently any seriously ill clinic patient is quickly evaluated for more critical conditions by the ER physician on-call across the street at the Southern Inyo Hospital. Without our Hospital-Clinic partnership, the Rural Health Clinic cannot legally operate. Therefore if Southern Inyo Hospital closes, so does the clinic; and reopening the Rural Health Clinic will require successful application and approval for a new license (application for RHC). Financial pressures may make it impossible to operate the clinic without the hospital and SNF unit.

15. Will Measure J provide for seismic upgrades to meet 2030 State standards?
The hospital must comply with State-mandated seismic standards by 2030 or it will lose its license to operate and close. We do not believe that Measure J funds will be sufficient to proceed with seismic upgrades. However, it is anticipated that we will be able to engage an engineering firm that does analytical surveys resulting in a definitive plan for seismic compliance that may be used to gather construction bids for the actual work. Until then there is no way to tell how much this work will cost. In January of 2017 new standards were adopted that will allow us to comply with a much lower cost than previously expected.

16. How important is the Clinic?
Our Rural Health clinic provides primary care to a large percentage of the adults and children in our District. Without it, there will no more physical exams for school, preschool, commercial driver’s licenses, Medicare wellness, working on the lake, etc. There will be no primary preventative care for cancer screenings, labs, X-rays, EKGs, or immunizations. Residents will not have access to assessment and treatment of chronic diseases such as diabetes, cardiac pulmonary, gastro-intestinal, muscular/skeletal, and more. There will be no walk-in treatment for acute illness, chest pain, breathing problems/asthma, attacks, off school injuries, flu, etc. Also disappearing will be counseling and help for ongoing or acute mental health problems such as ADD/ADHD, depression, anxiety, or schizophrenia. There will be no way to get prescription renewals or medical forms. Clearly, the hospital cannot provide all these functions and services, but a Rural Health Clinic can and does. Don’t let this be taken away. Consider what a hardship it would be to go to Bishop or Ridgecrest for these services- and the ones listed in Question 13.

17. How important is Southern Inyo Hospital?
We are the only hospital in a 135 mile stretch of Highway 395, with a location very close to the middle of that stretch. We serve the community from North of Independence to the southern and eastern Inyo County lines. Most residents would have much farther to travel if SIH were to close, and that includes trips for relatively minor needs such as taking a blood sample, as well as for emergency care. There are many residents who can testify to the care they or a loved one received that, in many cases, saved lives. We also provide exceptional skilled nursing care for as many as 33 residents in a location that makes it possible for family visits, in an environment of peace and beauty. What's more, we are in a strategically critical location to serve the many visitors who come to climb Mt. Whitney or explore Death Valley, and those on the many trails through our magnificent stretch of the Sierra. Many people have been served to treat high altitude sickness, broken limbs, heat exhaustion, cardiac events, and other life-threatning emergencies. Our location provides a perfect target for the ambulance and search and resuce crews when they have patients requiring immediate care.

18. What is the economic impact if the hospital closes?
The district currently employs over 90 people, most of whom would lose their jobs. That could be a devastating blow to families throughout the district and represents the loss of almost $2 million in annal payroll, much of which gets spent right here in the Eastern Sierra. Further, the los of purchasing of local goods and services by the hospital would be a major blow to local merchanges and service organizations.

19. What is different that will make this attempt successful?
There have been other attempts that missed the mark over the years to "save the hospital". We will not depend on whishful thinking. Our new hospital administration is working hard in several areas to make the hospital more successful. On the revenue side, efforts are ongoing to ensure that we are getting maximum reimbursement for patient services from Medicare, MediCal, and private insurance payers. Programs to increase the SNF unit population will be put into place. There are also plans being made for additional patient services, such as an infusion center, and the return of specialists on a regular basis. Managing the billing and collecting for patient services is a highly complex and specialized process that is going through a major improvement process and will result in significantly better cash flow. There are also efforts ongoing to reduce costs by engaging in group purchase plans and negotiating individual contracts for ER physician services rather than going through an agency. Our clinic has the capacity for far more patients and plans have been laid to encourage the return of many who have gone elsewhere for their medical appointments. Telemedicine also represents an area with growh potential, and will be pursued vigorously.

20. How much do we owe?
In the most recent filed plan, we show projected allowed claims at $1,943,950.65. This is a combination of multiple classes of creditors, including administrative and professional fee claims, pre-petition executory cure claims, post-petition accounts payable and accrued expenses, and general unsecured claims. This is considerably less than the debt of the District when the fiscal emergency was declared, as the result of the protection allowed under bankruptcy law as well as the legal challenge to several major creditors. If we prevail in these court actions, there will be significant funds available to apply to seismic upgrades.

All revisions are available for download shown below.

Mesure J - FAQ RevF (Added 02/23/2018)
Mesure J - FAQ RevE (Added 02/23/2018)
Mesure J - FAQ RevD (Added 02/14/2018)

If you have any questions that haven't been answered, please contact hospital administration or any members of the Board of Directors. Their contact information is shown at the top of this page.