Request for relief from Cal Mtg/update/bullying

Update: this letter was sent out after KVHD, CFO, Chet Beedle said we were unable to pay our bond debt payment of 1.7 million. His story changed on camera as a new CEO had arrived Tim McGlew. The new story was that he never said that even though it's on tape. We had the backing of Jean Fuller and the KVHD chairwoman, Kathryn Knight, but the whole negotiation was quashed as Beedle, former CEO Rick Carter and board member Brad Armstrong convinced the chairwoman by visiting her at work unnannounced, that it wouldn't be a good idea. Today KVHD is being audited by a management company HFS sent in by debt insurer Cal Mtg. They have been in default for 24 years and there have been at least 4 or 5 attempts to secure a general obligation bond to have the community pay off the debt in property taxes.)

Dear Mr. Morey and those who oversee the state Cal Mtg. office:

I have spoken to people in this community now and have come up with an offer that will pay back certain funds to Cal Mtg. but at the same time save our hospital. I hope that our community means something to you, and that the objective of the low cost loan program is not to simply make money, but to bring about growth and change.

At the bottom of the letter are comments from the community which will tell the story of what this Skilled Nursing Disaster has done to the image and potential life span of our hospital.

As I have said in my blog, Cal Mtg. shoulders some of the responsibility as to what has happened to our facility. For instance, when you sent Brim Management in to take over the management of the hospital when the payments weren’t forthcoming; you brought on someone who had bad credentials. Someone who is being sued in a civil suit right now, but will hopefully be brought to justice soon.

Here is the proposal for relief. We are asking for relief and we will fight to get it. Our belief is that this situation calls for action and we are asking that you take action immediately to avoid another disaster: losing healthcare in the Kern River Valley.

At the Finance Committee board meeting, the CFO, Chet Beedle painted a grim picture for this year. We have already dipped into the reserve account that we are required by you to keep, to the tune of 180,000, to help make our most recent payment.

Your next payment is up in the air at this point and it will be contingent upon the perpetuity of this hospital.

We have already discussed that the hospital building is run down; we have been short staffing and underpaying our employees; there are shortages of various equipment and services for the community. The Skilled Nursing disaster COULD happen again, if we don’t act now.

If this hospital had the almost 1 million a year it pays to your office, there could be some serious changes made that would save the hospital from being the pariah of our community. And keep frightened residents from driving down our winding canyon road to seek medical treatment.

This community will pay you back your money, and already has been for 17 years. But we have to change the program because of the emergency situation.

We could open an investigation and look at all the records, the old and the new; and truly review the success or lack of success of this program. But time is of the essence for KVHD. And hopefully, you will be able to enact this proposal very quickly.

The Proposal:

First, the original sum of the revenue bonds were 13 million dollars. Now revenue bonds are based on business projections, like in the case of KVHD, it was to put in that skilled nursing facility, the CFO says we can’t survive without.

Then I understand when construction problems occurred, your office threw another 9 million at the problem.

In the end, the estimated amount of beds in the SNF was half of the original business plan, so therefore, the payments were outside the original numbers. They couldn’t pay because they didn’t have a finished product that would generate the original projections for revenue.

Now 17 years later, the hospital limps by, always trying to make sure to pay your office, and less to make sure the facility is staffed, trained, and in touch with current standards and technologies. That’s why I can’t figure how your program is helpful?

Even if you shut them down you would never retrieve the money you loaned, because they do not have that kind of net worth.

The IRS, a voracious office, and other types of creditors, knowing that they cannot collect all monies owed, make deals. They reduce the amount so at least they can retrieve some of their losses.

Okay, here’s the numbers: after 17 years of payments will still owe 15 million dollars from the original 22 million.

We figure we have paid your office and the taxpayers 17 million dollars. Yes, there is no interest in this figure, but that is not the issue here. The issue is that you have received this money.

Since Cal Mtg. originally agreed to the 13 million dollar business plan we consider that paid in full.

We propose that Cal Mtg. reduce the debt to 5 million dollars and refinance it over 30 years with low payments the hospital can handle. Yes, that means lot’s of interest for your program. These payments should be no more than 250, 000 a year, compared to the 1 million dollar payment.

This would allow the hospital more than 500,000 a year to get the hospital upgraded and staffed.

However, with this agreement comes two years of deferred payments, meaning we pay you nothing for two years and reinvest the monies we would have sent to your office on the hospital.

Here would be the conditions the hospital would have to follow to obtain this relief:

The district would have to join JCAHO and become an accredited hospital. This would keep the SNF from ever sinking below standards of practice.
There would be no raises for administrative salaries for two years until the hospital has implemented certain requirements. And raises in Administration from this year will be reduced to the original amounts, but with just an inflation adjustment of 4%. (That’s the raise the seniors in our community are receiving from Social Security.)
The board will have two members who were involved in covering up the SNF disaster, removed and bring on two new members. That would mean, Bob Jamison and Brad Armstrong have to step down if they want to help the hospital. No charges will be brought against them regarding brown act violations, conflict of interest, and privacy violations if they agree to leave.
The current CEO and all administrators must have their credentials checked to make sure that they are in qualified for the job they are doing.
The hospital must make an effort to increase staff positions by 10% the first year and another 10% the second year to people who live in this community. And at least two of the administrative positions must be held by members of the community. This could include people already working at the hospital.
The hospital must use this deferred payment period to pay off all outstanding debts to suppliers and providers.
An outside regulator must be contracted to monitor that all of these conditions are met.
During the deferred payment period, a construction plan must be conceived to upgrade the ER, and seismically retrofit the acute care wing. The plans must be in line with the extra monies the hospital is receiving so that there are no more loans necessary.
The hospital must also use the deferred payment time to obtain technology that allows the insular facility to directly contract with doctors who can read, treat, and follow patients via new computer technology. The current radiologist is unable to keep up with the imaging, and this would bring in doctors without having to bring them here.
The board, with its two new members, must create a comprehensive plan to deal with billing issues, collections, and potential lawsuits stemming from this incident.
New legal counsel will be hired for the board so that there is a clean start after many illegal and unethical practices have taken place
A internal audit committee will be established where the board, community members, employees, and consultants can streamline and plan for success.

That would be the initial framework for our new “covenant.” There could be additions to this, but we start from here.

I am sending this out to our local officials, as well as up the political ladder, and asking that they agree to this relief package.

We need this hospital and we need it healthy. You need money. So, can we agree upon this deal?

Please send this to your attorney and supervisors and begin the process as soon as possible. I will call you on Monday, March 2, 2009 at your office to discuss details.

Here are a few excerpts of the public’s reaction to the KVHD arrests. After you read them, you must understand that this is only going to get worse for us. The employees were fleeing anyway; now they have a terrible resume to take with them.

Yes, I will blog this letter tonight so the community knows what is going on. And it will be easier to disseminate the information to the proper authorities that way as well.

Take care, and take care of us. Thank you, Laura Hart

Comments from community, Kern Valley Sun, website:
" This is what is happening all across the country:
1. Many of our elderly are taken over by courts,
2. Appointed a guardian,in most cases friends of the court,
3. The guardian then isolates the elderly person and then keeps them from family,
4. This upsets the elderly person, and they start voicing their wishes and wants,
5. So then the guardian, and doctors start medicating, the person is then easier to manage for the staff. " I hope justice is swift for these 3, no one deserves the kind of treatment those residents received on their watch. They will have to answer to their maker one day...murder is murder "
"They outta administer the same drugs to these 3 and see how it works on them!
Show no mercy, Fry em I say! "