Two struggling East Bay hospitals may need the help of voters next year with a parcel tax. The embattled Eden Township Healthcare District is taking the first steps toward exploring whether a district-wide parcel tax is feasible — and whether it has the legal authority to pursue a ballot measure. Although the Eden Township District no longer oversees any hospitals, the parcel tax proceeds would benefit one of the hospitals it used to run: San Leandro Hospital. The district, which stretches between San Leandro and Union City and includes portions of unincorporated Alameda County, also used to operate Eden Hospital in Castro Valley.
In recent months, Alameda County Supervisor Wilma Chan and the San Leandro City Council have urged the Eden Township District to pay more toward helping the financially strapped San Leandro Hospital. Officials from Alameda Health System, which now operate the hospital, said the facility lost $12 million last year and expects another shortfall of around $4.7 million this fiscal year. San Leandro Hospital Administrator James Jackson, though, boasted recently to the San Leandro City Council that he would improve on estimates for this year, a fact that may undermine the need for taxpayers’ help next year.
Last week, Chan said her office is currently seeking local and state legislators to sign on to her plan calling for Sutter Health and the Eden Township Healthcare District to contribute a yearly total subsidy of $4 million over five years to San Leandro Hospital.
But a split among members of the Alameda County Board of Supervisors over how to prop up the hospital was revealed at an Eden Township District board meeting Wednesday when Supervisor Richard Valle offered strong support for pursuing a potential hospital parcel tax. Any parcel tax, however, must be evenly split between two hospitals: San Leandro Hospital and St. Rose Hospital in Hayward, said Valle. In fact, St. Rose is arguably in worse financial shape than San Leandro Hospital and still owes the Eden Township more than $1 million for short-term loan to replenish its cash flow. “I think at the end of the day, if we all know it will benefit these two hospitals,” said Valle, “I think we’ll stand up because we know it’s going to be a big lift, we all know that.”
The notion of a parcel tax helping fund operations has been floated in the past, particularly in the case of San Leandro Hospital. However, little momentum followed. The Eden Township District briefly discussed a parcel tax in 2012. It hired well-known Oakland political consultant Larry Tramutola to study the feasibility of a ballot measure. The results, though positive, also raised some questions.
Tramutola found that 88 percent of district voters supported the general idea of a parcel tax for hospitals, but the support dropped when specifics were added to the polling. Hayward residents were more open to a parcel tax than any other jurisdiction, including San Leandro. In addition, Tramutola’s polling found 55 percent of respondents had never even heard of the Eden Township Healthcare District.
The future pricetag for a potential parcel tax is also a factor. Three years ago, Tramutola told the Eden Township District that support for an annual $50 parcel tax was palatable to voters. However, with just around 25,000 taxable parcels, such a tax would only generated $1.5 million a year, a sum unlikely to help much for two hospitals hemorrhaging losses.
But Alameda is a local example of residents taxing themselves to keep a hospital open. More than a decade ago, Alamedans approved a $298 a year parcel tax for Alameda Hospital, although the additional revenue has still fallen short of keeping the facility in the black. Like San Leandro Hospital, it is now operated by Alameda Health System.
San Leandro Councilmember Jim Prola said a successful hospital parcel tax would need strong coordination between all the elected officials in the area. “It’s going to be tough. That doesn’t mean it can’t happen,” he said. Prola also worries about the previous polling numbers being too close to the two-thirds majority needed for passage possibly in November 2016.
San Leandro Mayor Pauline Russo Cutter, though, is skeptical about the Eden Township District’s plans for a parcel tax. In a statement, Cutter said she believes a parcel tax by the Eden Township District is premature. The healthcare district should deal with its commitment to San Leandro Hospital first, she said. Earlier this month, Cutter blasted the healthcare district for its unwillingness to provide a subsidy for San Leandro Hospital. During the council meeting she called on the Eden Township to “pay its fair share” for the hospital’s operations and questioned the $150,000 a year salary of its CEO Dev Mahadevan.
Valle acknowledged the mayor’s reticence but said that there is much time before 2016 election. “Perhaps over time we can win people over?” said Valle. “Perhaps there’s an element of trust that needs to be brokered?”