Sequoia Healthcare District 170 Alameda de las Pulgas, Room 101 August 5, 2002 The Honorable Quentin L. Kopp Re: Response to 2001-2002 Grand Jury Report Dear Judge Kopp: The District's Board of Directors has carefully reviewed and discussed the Grand Jury’s report and recognizes the Grand Jury’s oversight responsibilities and its sincere efforts to render an informed opinion. The following is our response to the 2001 -- 2002 Civil Grand Jury’s three recommendations. Recommendation 1. "The Sequoia Healthcare District, through the various media available to it, should publicly correct misinformation previously disseminated to the public." We understand that the recommendation refers to the 1996 sale of the hospital to Sequoia Health Services, a nonprofit, nonsectarian, public benefit corporation and a statement previously on the Sequoia Healthcare Districts (District) website that the hospital would automatically revert to the District at the end of 40 years. There are two ways the hospital can revert to the District. First, the owner of the hospital is Sequoia Health Services, which is governed by a ten person Board of Directors, five of whom are chosen by the District and five chosen by Catholic Health Care West (CHW). If Sequoia Health Services Board ever voted to dissolve, the hospital would return to the District. Second, the District has the right of first refusal if Sequoia Health Services ever wants to sell or otherwise dispose of the hospital. The District has 50% control of the corporation that owns the hospital and therefore remains responsible for the scope and quality of the health services being made available to the community. The specific reference to the automatic revision was a misstatement and the District has removed the language from its literature and web site. Recommendation 2. "The District should disclose the tax apportionment that is computed for the District and its plans for the use of the accumulated reserves." In conformance with Proposition 13 passed in 1978, the Sequoia Healthcare District is allocated a portion of the 1% real property tax collected by San Mateo County for all government agencies. The exact proportion is calculated by the County Controller’s office annually and the specific amount received is based upon the assessed valuation of property located within the District’s boundaries. The average parcel of property in fiscal year 2001 was assessed $58.02 per year according to the County Controller’s office. District representatives provided documents and extensively discussed the District’s grant program when they met with the Grand Jury. We also published the information on our web site and in our newsletter. District grants have been used to fund Sequoia Hospital’s need for state-of-the-art diagnostic and treatment equipment that the hospital could not afford. Grants also were made for renovations to the 52-year-old physical plant that must be rebuilt to meet seismic regulations. Grants to support the District’s mission to foster a healthy community have gone to non-profit community based agencies such as Youth and Family Assistance, Jewish Family and Children’s Services, Child Abuse Prevention Center, Planned Parenthood, Pre to Three Children’s Initiative, and Samaritan House’s Redwood City Free Medical Clinic. Recommendation 3. "Each year the District should request that the County Controller eliminate the amount of tax apportionment computed for the District." We believe that a unilateral decision to stop the tax apportionment only on an annual basis would not be responsible or consistent with the legal and fiduciary duties of this publicly elected Board. If the District or the voters determined that the taxes should not be continued, State law stipulates that taxpayers would not see any reduction in the tax assessments as the dollars would be reallocated approximately as follows: State 55%, County 15%, Cites 20%, Special Districts 10%. The overwhelmingly favorable vote on Measure H in 1996 demonstrated that District residents want strong and viable local healthcare resources. Health Care District Law, which has been amended more than 150 times since Sequoia Healthcare District was formed, clearly authorizes the District to fund health care programs that are in the best interests of the community. The action called for in this recommendation would jeopardize the availability of health care and health promotion services to our community. However, as part of our strategic planning process, this issue will be considered.
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