Race Prompts Scrutiny of Hospital Board

Times Staff Writer

The campaign for three seats on the South Bay Hospital District’s governing board is raising predictable issues about how the public agency is doing its job, which is to dispense money for public health programs in Redondo Beach, Hermosa Beach and Manhattan Beach.

Has the district--which has paid out or committed more than $4 million in grants since 1984--been generous enough? Is its grants-making process sound? Does it really know what the greatest health needs are? Is it initiating enough programs of its own and not simply waiting for grant proposals?

Answers from the five candidates range from a defense of the district’s record to calls for revamping the grants process and giving away more money.

Clashes Have Dogged District


But rumbling beneath these issues are charges and clashes reflecting the contentiousness that has dogged the district since it leased South Bay Hospital to the national for-profit health care corporation--American Medical International--for $3 million a year and became a foundation. Among them are assertions that some board decisions may be biased, grant recommendations are formulated partly in secret, and one candidate is misrepresenting herself on the ballot.

Candidates are incumbent board members Virginia D. Fischer, 62, a Manhattan Beach resident and president of a family electronics equipment manufacturing business; Mary Davis, 60, a Redondo Beach resident and former owner of the Portofino Inn, and Eva Snow, 69, wife of Redondo Beach City Councilman Archie Snow. Challengers are Steve Schlesinger, 44, a Manhattan Beach resident and certified public accountant, and Jack Shakely, 48, who lives in Manhattan Beach and is president of the California Community Foundation in Los Angeles, which administers many small funds and foundations. The three top vote getters will be elected.

Although her seat is not on the Nov. 8 ballot, board member Jean G. McMillan is a player in the race because of her membership on the board of an agency that has received money from the hospital district. She has openly campaigned for the election of Schlesinger and the defeat of Snow, who is seeking a second 4-year term on the five-member, non-salaried board. She calls Snow’s board attendance record “miserable.” In addition, Fischer contends that McMillan has targeted her for defeat, a charge that McMillan denies.

McMillan is being criticized for holding both a seat on the district board and membership on the board of the Wellness Community South Bay Cities, a support program for cancer patients that the district has granted $225,000. She was instrumental in bringing the program to the South Bay. The Wellness program was given $100,000 in 1987 to open, $75,000 this year and $50,000 for next year.


Fischer, who once was a McMillan ally and is seeking reelection after 16 years on the board, said that McMillan wants her out because of their split over the April vote on 1988 and 1989 grants to the Wellness Community.

McMillan had voluntarily refrained from voting on the Wellness Community before April. But she voted against the Wellness grant because she thought it was too little and indicated the board’s intention to end funding for the group in the future, she said. The Wellness Community had asked for $100,000 for 1988.

“Someone had to be an advocate for the Wellness Community,” she said, but on reflection added that she probably “should not have voted” on the issue.

Fischer said McMillan should choose between serving on the hospital board or the Wellness board because of the perception that the agency might get special treatment from the district.

The board in June adopted an ethics and conflict-of-interest policy that says, among other things, that no board or staff member “should” hold office in any organization seeking a grant or contract with the district unless authorized by the board. The policy is not legally binding.

McMillan said she is “not considering” resigning from one or the other group, but said that “if push came to shove” the choice between the two would be difficult.

Davis also holds office in an agency that receives money from the district and, like McMillan, believes there is no conflict. She is on the board of the Redondo Beach Salvation Army, which operates a meals program for shut-ins that receives district money. She said she has voted on the allocations, which have totaled $115,917 since 1984, according to the district. Unlike McMillan’s dual memberships, those of Davis have not been an issue in the campaign.

Schlesinger, too, is on the Wellness board but said he will resign if elected to the hospital board.


Shakely said that if he and Schlesinger are both elected, he will ask Schlesinger and McMillan to choose between the two organizations.

Shakely’s foundation presidency has prompted McMillan to assert that he “has a real conflict because he has the ability to either fund or withhold funding from agencies which the South Bay Hospital District may or may not fund.”

Replying, Shakely said he makes recommendations to his foundation’s board, but the board makes funding decisions. He said there would be no conflict unless “I asked the district to make a grant to the California Community Foundation.”

Underlying the argument about continued funding for the Wellness Community is a stated policy of the hospital district board that it fund organizations on a temporary basis, weaning them from support as they develop their own funding bases.

Snow has drawn the ire of most other candidates by listing herself as “nurse” on the ballot. Her ballot statement calls her “the only health care professional on the South Bay Hospital District board of directors.”

Worked ‘Without License’

Snow said she was trained as a nurse but never took the state licensing exam. However, she said that she worked “as a nurse without being licensed” at numerous hospitals and convalescent homes from the 1950s until 1984. She said she has “done everything an RN does.” Snow said she was never asked for her credentials but was hired on the basis of her work resume. “They were very lax in those days,” she said.

Schlesinger said he is “not happy” about Snow’s ballot designation because she holds no licenses. McMillan calls it “misleading, especially in a race like this.”


Snow “has never told me where she was a nurse,” David said. “I think she was never a nurse. If anything, she was a hospital volunteer.”

At the heart of the campaigning by incumbent Davis, and challengers Schlesinger and Shakely, are calls for a review of some of the district’s basic policies. Among the things they call into question are the formula that limits total grants to about $1 million a year and the process used to evaluate and make recommendations on grants.

Schlesinger and Shakely also say that programs should not be automatically cut off from district funding despite the policy encouraging them to that find their own long-term support. “Some take longer to take hold,” Shakely said.

Davis, Schlesinger and Shakely say that the district should give away more than $1 million a year and that the money is available. The agency keeps a $12-million reserve to assure services if it should have to resume running the hospital. Only Schlesinger goes so far as to say that there is no need for the contingency reserve.

“There is no possibility that it (the agency) will have the hospital again, so it does not need a reserve,” he said.

The three also favor an end to the two-member grants committee that is chaired by Fischer and includes Gerald Witt. The panel analyzes grant requests and formulates recommendations in closed meetings that do not include other board members.

They favor giving that responsibility to the agency’s staff.

They contend the process puts a key function of the public district “behind closed doors,” as Schlesinger put it, and puts too much influence in the hands of two people.

Davis said the committee does not adequately explain its recommendations and “resents questions” from other board members. Schlesinger said its recommendations sometimes reflect Fischer’s personal biases.

But Fischer, who said she is an “objective” person, counters that board members may ask questions and visit agencies that are requesting funds, but most do not. “It is all there for all who want to see it,” she said. The committee meetings are not held in public because discussions can be critical of agencies, she said.

Schlesinger and Shakely say they have expertise that will strengthen the agency. Schlesinger cites his knowledge of finance and investments and the experience of four years on the agency’s finance advisory committee. Shakely said his work with a foundation “provides the ability to see what others are doing, how we might fit into a bigger perspective. I would know what works.”

Shakely is critical of the attendance record of Snow and Davis, saying they should “rededicate themselves” to their board service. According to the district staff, Snow has missed 14 regular board meetings since December, 1984, and Davis has missed 16. They have attended 49 and 47, respectively. The board meets about once a month.

Snow, who said she has an inoperable disc problem in her back, attributes her absences to illness. Davis said she is “concerned” about her absences, which she said were primarily related to her business activities. She concedes that she is open to a charge of not caring about her work on the board, but said this is not true.

Snow and Fischer are the principal defenders of district operations, although Snow says board meetings “should be more open.” She advocates televising them on local cable channels and moving meetings from the district offices to a council chamber or community center in one of the three cities. She supports the current grants committee system.

Change of Heart

Fischer said she was not going to run for reelection but changed her mind because the district’s business plan--its investments, reserve and grants formula--was being attacked. She said she does not object to the board looking at new ways to do business but argues that there could be consequences.

Fischer said that the board has built a good record over the last four years. She cited such things as $1.6 million for a 5-year health program in the schools in the three beach cities, an $875,000 grant to aid frail and largely house-bound elderly people, $193,00 to help battered women, $143,000 for child-abuse treatment and prevention, and two grants totaling $90,000 for a residential treatment program for alcoholics. The agency also has just asked for proposals from developers for senior housing at a closed hospital site the district owns.

Other candidates also applaud what has been done, but are calling for more, notably in the area of child care.

Fischer generally feels the agency as a foundation has become a visible part of the three cities. However, the challengers and incumbent Davis say there is still not enough community involvement by the agency after four years as a grants-giving organization. Davis said Executive Director Philip Valera is “not getting out in the community like he’s supposed to.” Fischer says he is.

Schlesinger says the board has to initiate more projects of its own as it did with the senior housing.


Background: 62, Manhattan Beach; incumbent; president of family electronics equipment manufacturing business.

Background: 44, Manhattan Beach; certified public accountant.

Background: 69, Redondo Beach; incumbent; wife of Redondo Beach City Councilman Archie Snow.

Background: 48, Manhattan Beach; president of the California Community Foundation in Los Angeles.

Background: 60, Redondo Beach; incumbent; former owner of the Portofino Inn.