Prolonged effects of the Covid pandemic coupled with the pair of historical earthquakes that took place in 2019 have been identified as the root causes of financial challenges which now threaten the solvency of the Ridgecrest Regional Hospital.
In 2021, the hospital's board of directors began aggressively seeking solutions to bolster revenue streams to minimize the threats to our local healthcare system.
One of the options he directors are currently exploring is to have the community join a healthcare district or create one of their own. With annexation of the community by East Kern Health Care District (EKHCD) RRH would qualify for additional revenue that is unavailable to private, non-profit facilities.
The EKHCD voted at the April 16 board meeting to move forward with the plan to annex the Ridgecrest and surrounding areas into the district. The process will be headed up by LAFCO moving forward.
During a community information session held last Thursday at Springhill Suites, a panel of presenters outlined the annexation process and answered pertinent questions posed by the public.
Kern County has six health care districts including the proposed district, the East Kern Health Care District, which serves a portion of Eastern Kern County including California City, Cantil, Randsburg, and a small section in San Bernardino County.
Dr. Steven Goodwin, CEO for TurningWest, led the meeting with the assistance of Thomas Hayes, consultant for RRH, and Karen Macedonio, EKHCD president.
Health care districts are funded by general tax revenue from the parcels within its district. Each district receives a portion of the 1 percent collected annually.
"The portion that we receive is determined by the Kern County Board of Supervisors. Right now, we get about $200,000 in property taxes annually," Macedonio said.
The tax rates property owners pay, however, will not be increased if the hospital is annexed.
However, the annexation would give the hospital access to federal and state grants which could amount between $3.5 to $4 million in additional revenue per year.
"This is substantial especially with the current financial problems the hospital is going through," Hayes said.
What role EKHCD would play in the annexation would require additional action down the road.
Said Macedonio, "Right now, we are creating a vehicle - which is the resolution we are getting to. Then, we would began the process with the Kern County Local Agency Formation Committee (LAFCo) annexation."
This process of joining an existing district would take approximately six to eight months, Macedonio said.
According to Hayes, the LAFCo process alone will take six months.
One member of the public asked why the hospital doesn't create a district of their own instead of annexing with another district.
According to the presenters, this option is not preferably as it takes considerably longer to create a district - between two to two and a half years.
"The short answer to that is time. The hospital is running out of it so that is the problem," Goodwin said.
Another major benefit of the local area annexation with EKHCD would be a five-year extension in the seismic compliance deadline.
Said Hayes, "This is really important. In current dollars, that would be $20 million we would have to spend to bring the hospital compliant with the state's standards. The hospital is not going to fall down, so don't worry about that. It didn't fall down a couple of years ago. But, the state has stringent compliances that we have to meet by 2030."
The presenters were also asked what were the disadvantages of joining a health care district.
Said Hayes, "One of the disadvantages of coming under the district would be the government. You would only have five directors that govern the entire district. The hospital, right now, has 11 directors... You have the potential of people running for office that have an agenda rather than participate or serve based on really what is needed in the community."
Another question posed to the panel was whether or not the annexation would assist the hospital in restoring services it recently suspended such as labor and delivery. Hospital officials said they are hopeful that it will.
According to Macedonio, EKHCD is also looking towards the future of the district and is creating a 50-year strategic plan.
Said Hayes, "We are really lucky that EKHCD is willing to support us on this."
The public can address concerns or comment by emailing EKHCD at annex@ekhcd.com and/or to RRH via email at inquiries@rrh.org.
All questions, comments and responses will subsequently be published and made publicly available.
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