Directors of the Tulare Regional Medical Center have handed its management company authority to find the money to finish its long-stalled tower.
In what it is calling “a landmark decision,” Healthcare Conglomerate Associates said in a statement it received a “green light” from its board, which met Wednesday, not only to seek financing but to execute an agreement for a $79 million loan without further approval.
“This is a significant positive step to securing the delivery of healthcare to our district and ensuring the long term economic stability of Tulare County,” Dr. Yorai (Benny) Benzeevi, chairman of HCCA and chief executive officer of TRMC, said in the statement.
“We have worked very hard to create a viable option for this long overdue tower project,” Benzeevi continued. “Our community needs and deserves this state-of-the-art facility and this 12-year project simply needs to finally get done.”
One member, Kevin Northcraft, one of two who opposed the action, said the board had handed Benzeevi authority to commit the hospital district to a loan without the board approving its terms.
The resolution the board approved by a 3-2 vote gives Benzeevi and HCCA’s chief financial officer and chief operating officer, Alan Germany, “absolute, full and complete power and authority” to execute “all documents required to consummate the loan.”
Two board members who supported the resolution said Northcraft was exaggerating what the board was being asked to do.
“This is just a process,” said long-time board member Dr. Parmod Kumar. “. . . We are not cutting our hands or our gut or our head off today, by voting for this.”
Board chairperson Linda Wilbourn agreed.
“My feeling on this is that this is an application for the HUD loan, this is the investigative part,” she said.
Also in support was board member Richard Torrez. Mike Jamaica joined Northcraft in opposition.
Much of the detail surrounding the issue was not made public aside from what was said at the board meeting.
The resolution the board passed was not included with the agenda released by HCCA prior to the board meeting, nor had it been posted on the TRMC/HCCA website by Friday. The Advance-Register and Times-Delta obtained a copy from another source.
The resolution said the loan was intended to provide money to finish the Tower and refinance some debt.
The $79 million HCCA is seeking is $24 million more than the $55 million general obligation bond issue it unsuccessfully asked voters to approve to complete the tower last August.
At the meeting, Benzeevi outlined in a Power Point presentation the uses of the loan proceeds.
But when hospital authorities were asked for copies of the presentation, HCCA refused.
When the Advance-Register/Times-Delta asked for a copy Friday, spokeswoman Kathleen Johnson responded: “You would need to place a PRA (Public Records Act) request for that information.” Agencies can take up to two weeks to respond to public records requests.
However, according to a report in the Valley Voice, Benzeevi said construction costs would be $57.7 million, $13.7 would be used for paying off bonds, $5.4 million for various fees connected with obtaining the loan fees and $2.9 million for contingencies.
The resolution referred to loans from both federal and state financing programs and to unspecified “alternative” financing. The federal and state programs grant mortgage insurance. HCCA would then seek financing from financial institutions.
The board’s action also referred to a possible loan through the state’s CalMortgage fund. TRMC had applied for a $55 million loan in September but did not file all required documents.
David Byrne, spokesman for the Office of State Health Planning and Development, which administers the CalMortgage program, said a borrower would not be eligible for financing from both the federal HUD 242 program and the state CalMortgage plan.
HCCA has still not filed all the documents, he said in answer to a question.