Teetering on the brink of bankruptcy, Santa Paula Memorial Hospital lost one of its last lifelines this week when Ventura County withdrew from negotiations over a proposed partnership aimed at keeping the small community hospital open.
County supervisors said that the deal sought by the troubled hospital involved too much financial risk for taxpayers. They also expressed frustration over the hospital's refusal to release financial documents crucial to the deal that would have placed the facility in the public health-care system.
But Supervisor Kathy Long, whose district includes Santa Paula, said that the county would be willing to reopen negotiations should trustees of the hospital change their minds.
"I said I would do what I could to support them in other ways to keep the hospital doors open," Long said. "If they wish to reconsider or change their position, we would be willing to talk with them again."
The breakdown in negotiations further jeopardizes the Santa Clara River Valley's only emergency room and threatens the jobs of 160 employees. It comes nearly two weeks after administrator Mark Gregson resigned and the City Council asked the state attorney general to remove the volunteer hospital board.
"It's very unfortunate," trustee Carol Burhoe said of the county's decision. "We could have reached a deal if they [county supervisors] had wanted to."
Trustees said they would resume negotiations with Community Memorial Hospital in Ventura about a possible partnership, although previous talks between the two have faltered.
"Sometimes relationships change," said Phil Romney, chairman of Santa Paula Memorial's board of trustees. "We will move forward."
The county public health-care system stepped in four months ago in an attempt to save the 39-bed hospital, which has been staving off possible bankruptcy for nearly a year. The hospital provides the only emergency room to the 40,000 residents of the Santa Clara River Valley, one of the poorest areas in Ventura County. Awash in red ink, it borrowed $2.5 million this year to cover expenses while trying to find a way out of its financial hole.
Supervisors decided to withdraw from negotiations Tuesday, saying they were concerned that taxpayers would assume responsibility for the hospital's debts once the county signed a 10-year lease to operate the medical center. In addition, Long said the hospital's governing board refused to supply county negotiators with a record of bills the hospital owes creditors as well as its liability for employee pensions.
But Burhoe said this was not the case.
"The financial information has been provided," she said. "The only thing we didn't give to them was a detailed list of what we owe individual creditors. Everybody is ignoring that what we were discussing with the county was the lease of the hospital only. It was to be a landlord-tenant relationship. When you rent a house from a landlord, do you ask him for a list of his creditors? What financial risk do you take when you rent a house? They were not assuming any of our debts.
"We told them they were welcome to come and look at the documents at the hospital any time they wanted. They have the numbers from the auditor. They had a full accounting and full disclosure."
Two other issues the sides could not agree on, officials said, were a clause in the contract allowing the county to withdraw from its lease if losses were insurmountable and the amount of hospital property covered by the lease.
The county wanted to lease both the hospital and the adjacent property it owns. But trustees refused, saying they wanted to build an assisted living center on the vacant land.
They said the county essentially wanted to control all of the hospital's 25-acre hilltop property, without assuming any of its debts.
"They turned the whole idea of a landlord-tenant relationship on its head," Romney said.