Supervisors Block Initiative From Ballot

Setting off a legal war over control of $260 million in tobacco settlement money, Ventura County supervisors refused Tuesday to place an initiative on the November ballot that would turn the money over to seven private area hospitals.

Immediately following the board’s unanimous vote, county attorneys filed a lawsuit against Michael Bakst, executive director of Community Memorial Hospital, which is sponsoring the initiative. The county contends that the measure violates the state Constitution because it interferes with the board’s budgetary powers.

“We have now drawn a line in the sand,” board Chairwoman Kathy Long said. “It’s a line we’ll all draw some criticism from, but I’m convinced voters will see through this . . . wrong, wrong, wrong initiative.”

Supervisors said the measure provides no legal assurances that the tobacco money would go to health care for the needy, as Community Memorial contends. Nor does it provide for any significant oversight of how the money is managed, they said.

“You grow up in a democracy; you think, ‘Power to the people,’ ” Supervisor Susan Lacey said. “But you take away that people power with this initiative.”

“I’d be derelict in my duty if I put this on the ballot,” Supervisor Frank Schillo added.

Bakst said his nonprofit hospital would “most definitely” file its own lawsuit on behalf of voters to get the measure on the ballot. He said the electorate should be suspect of public officials who attempt to deny them the opportunity to vote on how the tobacco money should be spent.

“If I cannot trust my supervisors to protect my right to vote, how can I trust my supervisors to protect my health care?” he asked. “I had respected these people as political adversaries, but [also] as people who would stay within the bounds of propriety.”

Bakst has argued that the tobacco money--about $10 million a year over the next 25 years--should be turned over to private hospitals around the county because they are taking care of increasing numbers of indigent and uninsured patients. He also points out that the county has failed to commit the tobacco money specifically for health care.

Community Memorial’s top legal advisor said Tuesday that the state Election Code prohibits supervisors from refusing to place the initiative on the ballot.

“Wonderful example they’re setting,” said attorney Steve Merksamer, former chief of staff to Gov. George Deukmejian and whose Mill Valley law firm has expertise in initiative law. “They tell people to abide by the law and, on the other hand, they themselves say, ‘We don’t like this law, so we’re going to violate it.’ ”

County Clerk Richard Dean, who oversees elections, said his lawyers may also consider litigation against the county.

The board’s action places Dean squarely in the middle of the legal fight between the county and Bakst.

“In my view, the board clearly exceeded its authority in ordering me not to place this on the ballot,” Dean said. “Recent court cases show only a judge can direct the county clerk to remove an initiative, and that can only be done after compelling justification is shown by the county.”

Dean said he also plans to ask his attorney if he has the right to defy the board’s direction and place the initiative on the ballot.

County Counsel Jim McBride and Assistant County Counsel William C. Moritz said the initiative would violate various provisions of the state Budget Act and the state Constitution, including one that prohibits gifts of public funds. They also note that the initiative would bind the fiscal powers of future boards and therefore interfere with essential government operations.

“Where an initiative threatens to disrupt government, the board has the authority to not put it on the ballot,” said Moritz, who crafted the county’s lawsuit.

McBride said that at least one case decided by the California Supreme Court serves as precedent for the board’s action. The 1994 case cited was Voters for Responsible Retirement vs. Board of Supervisors of Trinity County.

In that instance, supervisors had refused to place a referendum on the ballot that would have allowed voters to rescind the county’s decision to let workers join the state Public Employees Retirement System. The state Supreme Court upheld the board’s argument that the referendum was invalid.

But Merksamer said the state Supreme Court distinguishes between initiatives and referendums.

“This is not a referendum; it’s an initiative,” he said. “What applies to one does not necessarily apply to the other.”

The board’s action came a day after Chief Administrative Officer Harry Hufford issued a sweeping, 29-page denunciation of the initiative in a report to supervisors.

Hufford said the measure was a “transparent attempt” by Community Memorial to ultimately shut down Ventura County Medical Center, which it considers a threat to its business. The two hospitals are located within blocks of each other in Ventura.

The county manager warned that the initiative could be the “death knell” of local governments across the state if successful because it would open the doors for others to tap into county revenue streams.

“This initiative proposes to interfere with the county’s budgeting and appropriations process by carving off a piece of the county treasury for a special interest,” Hufford said in his report. “If it were successful, there would be nothing to stop any number of other special interests from doing the same thing.”

This is not the first time that the county and Community Memorial have gone to war. In 1996, the nonprofit private hospital waged a successful political campaign to block the county medical center from building a $56-million outpatient wing.

Community Memorial had placed a referendum on the ballot to rescind the board’s approval of the project and its issuance of bonds to pay for it.

In that case, the county agreed to put the referendum on the ballot, then filed a preelection challenge, said James R. Parrinello, another lawyer representing Community Memorial.

“They argued exactly the same kind of things they’re arguing now, and they lost,” he said.

With Measure X, the county “did the proper thing” in terms of how it tried to stop the referendum, Parrinello said. “This time, they violated the law.”