Lump-Sum Payout of Tobacco Funds Weighed

Ventura County’s two most fiscally conservative supervisors expressed tentative support Friday for a plan to receive tobacco settlement money in one lump sum if it would kill a campaign by Community Memorial Hospital to seize a portion of those funds.

Supervisor Judy Mikels said the plan, under review by Chief Administrative Officer Harry Hufford, could put an end to a brewing legal battle with Community Memorial. The dispute centers on which agencies should share in an estimated $225 million the county is set to receive from the state’s tobacco settlement over the next 25 years.

Community Memorial officials last week announced plans to push a measure for the November ballot aimed at stripping the settlement money from the county and giving it instead to private hospitals.

County officials countered with talk of a court injunction to block the initiative.

Now county auditors have crafted a proposal that would allow the board to receive the settlement all at once, essentially tying up the money and keeping the issue off the ballot.

“On the surface of it, that sounds like a good idea because we have to get this silliness over,” Mikels said. “And it would be much better to [block the initiative] without a divisive, costly maneuver.”

Supervisor Frank Schillo, a financial analyst, said he is wary of the proposal because it could hurt long-term planning efforts. He said he doesn’t want to be bullied into a bad decision because of Community Memorial’s campaign, but he is open to alternatives to ensure that the money remains in county control.

“If that could be done, then I would think favorably about protecting it [from the ballot initiative],” he said.

While county attorneys haven’t rendered an official opinion on a lump-sum payout, Chief Assistant County Counsel Frank Sieh said Friday that the proposal could effectively kill Community Memorial’s initiative.

Under the proposal, the county would receive one cash payment of about $125 million by signing over the rights to the tobacco settlement for the next 25 years.

By doing that, Community Memorial’s access to the money would be blocked, Sieh said.

“That means that nobody can come in and tap an income flow,” Sieh said. Community Memorial Executive Director Michael Bakst said the county’s proposal was an attempt to keep voters from deciding how to spend the funds.

“To deprive the county of Ventura of the right to vote on how they should be spending the money is unconscionable,” Bakst said. “Whatever games the county wants to play, they cannot duck away from the voters of the county.”

County official have until Friday to respond to Bakst’s request to place the initiative on the ballot.

Community Memorial officials expect to start a drive this month to gather 35,000 signatures in support of the measure. They need 21,000 signatures to qualify the initiative for the ballot.

The measure is the brainchild of Bakst, who for years has been in a political war with the county’s public hospital, a competitor two blocks away.

Community Memorial stepped up the legal battle Wednesday with a letter to the county warning elected officials that they may face legal sanctions if they continue campaigning against the initiative.

The letter warned that state law forbids the county from spending public money to campaign in favor of, or against, a ballot measure. The letter also accused the board of violating the Ralph M. Brown Act, which governs which issues an elected body may discuss in private.

County officials reacted swiftly to the letter, which they characterized as a replay of scare tactics used by the hospital in a 1996 campaign to block construction of a new wing at the county hospital.