At last night’s City Council meeting, 40 people testified on an agenda item that initially proposed reallocating $20 million in the Chevron Environmental and Community Investment Agreement (ECIA) from various greenhouse gas (GHG) reduction programs to some plan for saving Doctors Medial Centre (DMC) (Item I-3 - DIRECT staff to send a letter to Chevron requesting an amendment to the Community Investment Agreement to redirect a portion of the $90 million to Doctors Medical Center - Councilmember Booze')
Specifically, the staff report stated, “In order to reinstate Doctors Medical Center as a full service hospital, staff is directed to write a letter to Chevron directing them to redirect a portion of funding earmarked for Marin Clean Energy, Richmond Promise, Electric City and Easy Go to Doctors Medical Center. Only $1 Million will be redirected from Richmond Promise. The total amount directed to Doctors Medical Center is $20 Million. The City Council also directs the City Manager to research potential funders to provide the $20 million up front. The funder will be reimbursed according to the scheduled disbursements set forth in the Community Investment Agreement.”

The Chevron Environmental and Community Investment Agreement (ECIA) can be found at http://chevronmodernization.com/wp-content/uploads/2014/08/14_0804_Executed-Copy-of-ECIA.pdf.

The original proposal was fraught with complications, the first of which is the challenge of reducing the amount previously allocated to greenhouse gas (GHG) reduction. The ECIA has $30 million in cash committed to GHG reduction, and that amount is included not only in the ECIA but also in the Final EIR and its Mitigation Monitoring and Reporting Plan (MMRP). It would have to be agreed to by both Chevron and the City, and it would open up the already certified EIR and make it vulnerable to a new challenge. The time for legal challenge has now lapsed without one, but that could change. The city attorney deemed that reallocating the GHG mitigations would be risky, perhaps unacceptably so.

The second challenge is that the remaining $50 million in cash disbursements from the ECIA can only be reallocated once a year, with a 2/3 vote, but year one does not start until the program begins, which is not until 60 days after all litigation is resolved. That could happen as early as the spring of 2015, or it could take years. The City Council cannot actually reallocate the funding at this time.

The third challenge is that with the $3 million recently directed from state funds by the Assembly Member Skinner legislation, DMC has only enough cash to keep open through February of 2015, and only on a substantially reduced basis. It no longer receives ambulances, and Its 70 beds have been reduced to 30. The outpatient clinic has been closed and the staff has been trimmed from approximately 598 full-time equivalents, to 391 full-time equivalents.  That is what “keep open” would mean in the near term. According to both the Health Care District board president Eric Zell and the Interim CEO Dawn Gideon, it would take months to staff back up to a full-service hospital even if funds became available.

The fourth challenge is in the timing for release of funds. The ECIA covers ten-year period with annual releases as follows:

Year 1    $11 million ($ 8 million for Promise Program)
Year 2    $8 million
Year 3    $8 million, and so on

There is not enough money in the first year release, even if it went all to DMC, to pay the approximately $18 million cost of keeping it open on even a limited basis. And whatever funds might be made available probably would not be there at the end of February. For funds to be available on March 1, all litigation challenging the Chevron project would have to be resolved 60 days prior, or the end of 2014, which is not going to happen because the hearing on the writ that stopped the prior project will not be held, at the earliest, before late January.

What the City Council eventually did is vote 6-0-1, with Booze abstaining, to register its “intent” to reallocate, at a later date, $15 million from $50 million of ECIA funds to DMC, but with the condition that the funding is part of a plan that has the additional funding required to operate it once again as a full-service hospital. The conditions also included instructions to the city manager to try and convince Chevron to release more money earlier and to try to convince other West County cities and Contra Costa County to make up the balance of the funding needed.

A progress report from staff will be back on the Agenda for October 21.

With GHG reduction funding off the table, the largest share of any redirected funding would have to come mostly out of the Promise Program, which proportionately would be reduced by $10.5 million. The typical tuition and fees for CSU is about $6,500/year. See http://www.calstate.edu/sas/costofattendance/. Cal is about $13,000/year. A four-year scholarship for CSU would cost about $26,000, so a $10.5 million cut in the Promise Program would deprive about 400 students of a four-year scholarship.

If the DMC funding is front loaded, there may not be any funding available for the Promise Program for three years or more, which means it would probably not launch next year and would be severely cut back when it does.

However, there were 40 speakers supporting the DMC funding and not a single one supporting the Promise Program, indicating that the public places a huge value on DMC and virtually no value on the Promise Program.

Following are some articles from the last few days about DMC:

Richmond looks to earmark $15 million to save Doctors Medical Center
By Jennifer Baires Contra Costa Times
Posted:   10/08/2014 10:20:55 AM PDT1 Comment
Updated:   10/08/2014 11:17:21 AM PDT
RICHMOND -- The City Council voted late Tuesday night to try to redirect $15 million from a $90 million Chevron community benefits package to help beleaguered Doctors Medical Center stay afloat.
The money would come from the $50 million in funds that comprise the community programs section of the Chevron package and would be given under the condition that it go to support DMC as a full-service hospital. The money would be carved out for the hospital by taking an equal percentage cut of all the programs in the community program section, but the bulk of it would come from a $35 million college scholarship fund for Richmond public school students.

The Richmond City Council voted Tuesday night to try to redirect $15 million from a $90 million Chevron community benefits package to help beleaguered Doctors Medical Center stay afloat. (Kristopher Skinner/Bay Area News Group Archives)
As part of the resolution, the city will also lobby other West Contra Costa agencies and cities to contribute to saving the hospital, which has drastically cut services in recent months and is no longer receiving emergency ambulance traffic.
The council directed city staff to meet with Chevron about reallocating the money and report back on Oct. 21. Chevron had said previously that the city could decide how to allocate the money from the community programs section of the agreement, which was a condition of its $1 billion refinery modernization project.
The vote came after pleas from community members and hospital representatives to help the hospital sustain its operations in the face of a crippling financial crisis. Some claimed that the diversion of ambulance traffic, which began in August, has already resulted in the loss of lives.
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The infusion would come on top of $3 million in one-time funding from a bill signed into law by Gov. Jerry Brown last month. But questions remain about whether the money -- if and when it becomes available -- will change the long-term prospects for the San Pablo hospital
A stakeholders group including local hospitals and health care experts is studying the possibility of restructuring the hospital into a satellite emergency department or, more likely, an advanced urgent care center, while many DMC nurses and doctors push to keep it open as a full-service facility.
City Council members and the chairman of the West Contra Costa Healthcare District, which manages and funds DMC, came under fire this summer for failing to earmark any money from the $90 million Chevron investment package for the hospital, and the exclusion led to finger-pointing about whom was to blame. The package included funding for college scholarships, a solar farm and green transportation programs.
Councilman Corky Boozé added the item to Tuesday's council agenda to carve out $20 million for the hospital. The council ultimately voted on an amended resolution to provide $15 million, with Boozé abstaining.
DMC is the only public hospital in West County but does not receive any subsidies from the county.
The Chevron agreement mandates that $30 million go toward greenhouse gas reduction programs. Boozé's item suggested redirecting money from some of those programs.
Before the meeting, Dr. Richard Stern, DMC's chief of staff, had said a one-time cash infusion of $20 million would at best provide the hospital with enough money to stay open as a full-service facility for one year. But it would not solve the problems of low reimbursement rates and need for a costly retrofit at its current facility.
In an email Monday, Chevron spokeswoman Melissa Ritchie confirmed that the bulk of the funding from the community benefits package would not be made available until all legal challenges to the modernization project are resolved and Chevron receives the go-ahead to begin construction.
Under the best-case scenario, Chevron would start construction during the first quarter of 2015 -- which would mean that it would start paying out 60 days later -- but pending litigation and the permit process could push that date back months, or even years.
Check back for updates to this story.
Contact Jennifer Baires at 925-943-8378. Follow her at Twitter.com/jenniferbaires.

Photo from Doctors Medical Center.
Richmond council mulls using Chevron community benefit funds to help DMC
October 8, 2014 by Mike Aldax
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Less than a month before the Nov. 4 election, the Richmond City Council voted in favor Tuesday of using a portion of the $90 million community benefits package tied to the Chevron Richmond Refinery Modernization Project to fund Doctors Medical Center, even after multiple warnings that the money to save the financially-struggling hospital would come too little, too late.
In July, council voted 5-0 against using a portion of the $90 million to fund the San Pablo safety net hospital, which with an annual deficit of at least $18 million has reduced services and is set to shut down early next year. Mayor Gayle McLaughlin and Vice Mayor Jovanka Beckles abstained from that vote in protest.
The council had voted against setting aside funds for DMC after being told by officials with the county’s health district and Chevron that the money would not be available in time to save the hospital and also that it wouldn’t be enough.
Council instead voted to use $35 million of the $90 million to fund Richmond Promise, a program aiming to fund full college tuition for all Richmond high school graduates over 10 years, and to use about $40 million on various projects and programs to reduce greenhouse gas emissions.
Only $50 million of the $90 million can be legally redirected to fund DMC. Funds used for the hospital would cut into other programs, including the Richmond Promise college scholarship program.
None of the funds, however, can be released until the start of construction on the modernization project, which is being held up by lawsuits filed against the project by environmental groups Communities for a Better Environment (CBE) and Asia Pacific Environmental Network (APEN).
With the legal challenges, it could take two years or more before Chevron is cleared to proceed with construction, according to Chevron Richmond officials.
And after construction begins, the $90 million in funding is set to be dispersed annually over 10 years, meaning only a portion of money set aside for DMC will be available up front.
DMC, which is scheduled to close down in March, would need funds by February at the latest, Councilmember Jael Myrick said.
On Tuesday, several councilmembers called on city staff to urge environmental groups to reconsider their lawsuits.
If the legal challenges are dropped, Chevron Richmond pledged to expedite the start of construction so that the community benefit funds can be released.
“We will work with the courts to lift all impediments to construction and hope to have clearance to proceed with construction promptly,” spokesperson Melissa Ritchie said.
How much should DMC get?
Should environmentalists agree to drop their lawsuits, questions still remain over whether funds supplied from the community benefits package would be enough to maintain DMC as a full-service hospital.
According to the health district, DMC’s doom was sealed after a May parcel tax measure that would have provided the hospital $20 million annually failed to garner enough votes. District officials warned multiple times in the past that a one-time infusion of funds – even as much as $20 million – would barely keep the hospital open for another year.
Last month, a group of health experts tasked with finding solutions to DMC’s financial troubles ruled out the possibility of preserving a full-service hospital, citing a lack of possible funding sources from the county and other agencies, and said it will instead push for a scaled down version providing only urgent care.
Myrick said he was nervous about earmarking community benefits funds for DMC knowing there is no plan in place to ensure the survival of a full-service hospital.
Despite that concern, Mayor Gayle McLaughlin proposed a motion at Tuesday’s council meeting to provide $15 million from the Chevron Richmond community benefits package toward saving the hospital.
She also directed city staff to return to council Oct. 21 with a plan to expeditiously release the funds to DMC once legal challenges of the modernization project have been removed. Additionally, she asked City Manager Bill Lindsay to urge county corporations such as other refineries, along with officials from neighboring cities and the county, to identify more funding.
Lindsay warned that the Oct. 21 deadline given to his staff to solve DMC’s problems was undoable. He reminded the council that experts from multiple agencies have been unsuccessfully trying to save DMC for the last five months.
Still, the council voted in favor of the mayor’s motion, with several members hinting that they were forced to vote in favor of finding solutions for DMC with the Nov. 4 elections coming up. Myrick mentioned that a lot of the council’s discussions on DMC have been “theater.”
“We have seen a lot of demagoguery going on tonight,” Councilmember Tom Butt said. “I can tell you there are no heroes and no villains. If you want this thing to work, most of the council is going to have to work together, and Chevron is going to have to be a part of it, and probably CBE is going to have to be a part of it. It is not a divide and conquer exercise. This is an exercise in team building.”
Another lifeline for West Contra Costa County hospital proposed
By Jennifer Baires Contra Costa Times
Posted:   10/06/2014 06:42:56 PM PDT2 Comments
Updated:   10/06/2014 07:16:44 PM PDT
Click photo to enlarge

Doctors Medical Center pharmacy technician DeeAnn Barnes, right, and National Union of...
RICHMOND -- The effort to save Doctors Medical Center from closure could receive a significant boost Tuesday as Richmond city leaders weigh whether to redirect $20 million from a community benefits package negotiated with Chevron toward the moribund San Pablo hospital, which has drastically reduced services in recent months.
The infusion would come on top of $3 million in one-time funding from a bill signed into law by Gov. Jerry Brown last month. But even if the City Council approves the expenditure at Tuesday's council meeting, questions would remain about when the money would become available and the impact it could have on the hospital's long-term prospects for survival.
"It'd be a tremendous short-term solution to basically give us some time to find other solutions, get other components in place," said DMC's chief of staff, Dr. Richard Stern, before cautioning that a one-time infusion is not enough. "We still need the county, the community and philanthropic organizations to be part of a long-term solution."
A stakeholders group including local hospitals and health care experts is studying the possibility of restructuring the hospital into a satellite emergency department or, more likely, an advanced urgent care center, while many DMC nurses and doctors push to keep it open as a full-service facility.
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City Council members and the chairman of the West Contra Costa Healthcare District, which manages and funds DMC, came under fire this summer for failing to earmark any money from the $90 million Chevron investment package for the hospital. The package was a condition of the city approving Chevron's $1 billion modernization project and was negotiated between Chevron lobbyist Eric Zell, the chairman of the health care district board, and Richmond council members Tom Butt, Jim Rogers and Jael Myrick.
The council members said they were led to believe any money for the hospital would be too little, too late to make a difference, but Zell disputed that, saying Rogers and Butt showed no interest in helping DMC despite a proposal by Myrick to fund the hospital.
Councilman Corky Boozé added an item to Tuesday's council agenda that would carve out $20 million for the hospital, which is no longer receiving emergency ambulance traffic and has closed some units. DMC, which runs an $18 million annual deficit, is the only public hospital in West County but does not receive any subsidies from the county.
"I want the hospital open," Boozé said. "Therefore, I am willing to rework the contract. Chevron says they don't care how we spend the money as long as they get the (refinery modernization) permit."
Butt, Myrick and Rogers say that while they support finding a way to keep the hospital open, the money from the Chevron package cannot be cut from some of the proposed projects that are required for reducing greenhouse gas emissions. They also question whether the money would come in time to help the hospital, which only has enough cash to run as-is through February 2015.
"I really think that the hospital is important," Butt said. "Having said that, trying to get the money out of this Chevron agreement to guarantee the hospital is going to stay open, well, there are very few ways that it'd be effective."
The Chevron agreement mandates that $30 million go toward greenhouse gas reduction programs. Boozé is looking to redirect funds from a solar farm project and green transportation programs.
If the council passes the item, it remains unclear whether the $20 million could be made available up front or spread over the 10-year span of the package. Boozé suggested the city could advance DMC the money then reimburse itself from the Chevron funds.
A one-time cash infusion of $20 million would at best provide the hospital with enough money to stay open as a full-service facility for one year, Stern estimated. But it would not solve the problems of low reimbursement rates and need for a costly retrofit at its current facility.
In an email, Chevron spokeswoman Melissa Ritchie confirmed that the company would not negotiate on changing the funding timeline for the benefits package.
"Distribution of the bulk of the funding will not be initiated until all legal challenges to the modernization project are resolved and Chevron USA Inc. is given clearance to proceed with construction," Ritchie wrote.
Under the best-case scenario, Chevron would start construction during the first quarter of 2015 -- which would mean that it would start paying out 60 days later -- but pending litigation and the permit process could push that date back months, or even years.
While the $20 million redirect might not be possible, Butt and Myrick said the council is considering other options.
"I think when this thing comes up, there may be some alternative plans floated out and something ultimately supported by the council," Butt said. "I don't think it's going to be $20 million, and I don't think it's going to be a slam dunk."
Contact Jennifer Baires at 925-943-8378. Follow her at Twitter.com/jenniferbaires.
If You Go What: Richmond City Council meeting
When: 6:30 p.m. Tuesday
Where: Community Services Building, 440 Civic Center Plaza
Barnidge: That $3 million for Doctors Medical Center won't go very far
By Tom Barnidge Contra Costa Times Columnist
Posted:   10/04/2014 10:05:09 PM PDT1 Comment
Updated:   10/06/2014 04:41:27 AM PDT
Click photo to enlarge

Doctors Medical Center pharmacy technician DeeAnn Barnes, right, and National Union of...
The headline was uplifting -- "Hospital given reprieve" -- and Assemblywoman Nancy Skinner's comments conveyed hope: "I would like to see the hospital remain open."
But the state legislation enacted last week that provides $3 million for Doctors Medical Center was like tossing water wings to a guy drifting toward Niagara Falls.
"The $3 million basically gets us two months of operation," said Eric Zell, board chairman of the West Contra Costa Healthcare District. "Before this, we felt we could keep the hospital open through the end of the year. The new money would get us until February."
Don't misunderstand: DMC welcomes any help. It's begging for help, in fact. But when a hospital operates at an $18 million annual deficit -- nonpaying patients and low Medicare and Medi-Cal reimbursements are largely to blame -- one-time funds only slow the bleeding. Band-Aids on an ax wound, if you will.
"Over the seven years I've been on this board, what's kept this hospital open has been one-time money," Zell said. "Kaiser gave us $12 million over three years. John Muir Health gave us $1 million. The state medical assistance commission, which no longer exists, gave us $36 million over three years.
"Until there's some sustainable source of funds to address an $18 million annual deficit, we're constantly faced with the same problem."
DMC, which formerly handled 40,000 emergency room patients annually, is downsized now. It no longer receives ambulances. Its 70 beds have been reduced to 30. The outpatient clinic has been closed and the staff has been trimmed.
Two Hail Mary passes have already fallen incomplete. A legislative effort to designate the hospital a "public health" facility -- qualifying it for the increased Medicare and Medi-Cal reimbursement rates afforded county hospitals -- failed in the face of opposition by the California Association of Public Hospitals and Health Systems.
"It's a zero-sum game," Zell said. "If we got that designation, the available dollars would be spread to an additional hospital."
DMC's attempt to become a less costly free-standing emergency room -- which requires legislative approval -- appears unlikely to succeed because of opposition from nurses and doctors.
What now appears to be its last-ditch survival effort is as what Zell calls a "Hub" urgent care facility. It would have ER physicians on its staff, with specialists on-call, and beds available solely for outpatient services. An ambulance would be on site to transport patients requiring overnight care to a hospital.
"I think of it as urgent care on steroids," Zell said. "It has a lot of the qualities of an emergency room, but by not calling it that you no longer need state approval and you don't need to operate under a county license."
The good news is that it would supply direly needed services at a reduced cost. The bad news is that one funding source might dry up. A 2011 parcel tax that provides the hospital with about $5.7 million per year is in jeopardy.
"That parcel tax was contingent on there being either a hospital or an emergency room in place," Zell said.
Hospital officials now are grinding numbers to see if this hybrid solution pencils out. Privately, they are also saying a prayer that an unforeseen benefactor steps forward.
Maybe the $3 million will be of some help. Maybe it'll keep the hospital afloat until it finds a way to keep from going over the falls.
Contact Tom Barnidge at tbarnidge@bayareanewsgroup.com.

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