West Contra Costa Healthcare District History and Governance
The West Contra Costa Healthcare District (the “District”) struggled financially for decades, experiencing increasing costs, declining reimbursements, and growing service demand from uninsured and underinsured populations. After emerging from bankruptcy in 2006, the District fell deeper into debt. In 2015, it closed its hospital, Doctors Medical Center, which was a full-service acute care facility with 124 general acute care beds.
On October 20, 2016, the District again filed for bankruptcy under chapter 9 of the Bankruptcy Code. Through the bankruptcy, the District sought the bankruptcy court’s approval of a plan that allowed the District to modify its debts and on-going costs, emerge from bankruptcy, and begin the process of repaying creditors. The bankruptcy court approved the District’s Plan of Adjustment on January 2, 2018, allowing the District to repay certain creditors over a series of years.
The District is currently governed by an elected board of directors, pursuant to Health and Safety Code sections 32100 et seq. To reduce expenses, the District will transition to an appointed board of directors because the cost of electing a board of directors can be substantial.
Effective January 1, 2019, the Board of Supervisors will become the appointed Board of Directors for the District. (Agenda Item D.3 on September 11, 2018 agenda.)
Financing Corporations
The District issued municipal securities over time to facilitate capital improvements to its facilities, specifically the former Doctor's Medical Center. During that period, the WCCHD Financing Corporation and WCCHD Financing Corporation II (collectively the "Financing Corporations") were formed to assist with the issuance of those securities. The Financing Corporations are nonprofit public benefit corporations organized under California Corporations Code section 5100 et seq. Pursuant to these corporations' respective bylaws, the District Board of Directors also serves as the Board of Directors for each corporation.
Since the Board of Supervisors has elected to become the District Board of Directors, effective January 1, 2019, the Board will by operation of law also become the Board of Directors of each corporation at that time.
Today's action ackowledges the the Board of Supervisors will also assume the role of the Board of Directors of WCCHD Financing Corporation and the Board of Directors of WCCHD Financing Corporation II. In accorance with the Board's responsibilities in these new roles, it also directs staff to make necessary filings with state and federal agencies that may require a change in governance as a reportable event on or after January 1, 2019. For example, the California Secretary of State requires filing of a Statement of Information (CA Form SI-100) to update business addresses, corporate officers, and contact information for service of process. Similarly, each corporation is required to file tax returns with the California Franchise Tax Board (FTB) and the Internal Revenue Service (IRS). Responsible party and address information will need to be updated for each agency.
Staff will return to the Board after January 1, 2019 to request that regular meeting schedules be adopted by resolution for each corporation. At that time the Board may choose to adopt the County Board of Supervisors' meeting schedule as the meeting schedule of each corporation, similar to special districts and other entities for which the Board of Supervisors serves as the governing board. This will allow maximum flexibility for staff and the Board to schedule agenda items from time-to-time as needed. According to District staff, the Boards of Directors for the Financing Corporations, generally meet one to two times a year for the purpose of accepting audited financing information and reports, and to take any other necessary actions. |