Assemblymember Frazier Passes AB 903 to Dissolve Los Medanos Community Healthcare District

SACRAMENTO, CA – This week, Assemblymember Jim Frazier (D-Fairfield) passed AB 903 in the Assembly Local Government Committee.

“As all of you know, the COVID-19 pandemic has exposed critical shortfalls in healthcare and health services funding across the state. Communities of color have been especially impacted by the emergency,” said Assemblymember Frazier. “Now more than ever, we have seen the life-changing impacts of devoting every possible dollar to serving those we represent. AB 903 is a district bill that takes strides towards addressing this issue. The bill effectively creates hundreds of thousands of dollars in funding for badly needed healthcare services in the region.”

AB 903 will dissolve the Los Medanos Community Healthcare District and require the County of Contra Costa to be the successor of all rights and responsibilities of the district. AB 903 will also require the county to complete a property tax transfer process to ensure the transfer of the district’s health-related ad valorem property tax revenues to the county in order to operate the Los Medanos Area Health Plan Grant Program.

The Contra Costa Local Agency Formation Commission (LAFCO) has approved of the dissolution of the existing healthcare district, and Contra Costa County already serves the communities within district boundaries.

The Los Medanos Community Healthcare District (LMCHD) was formed in 1948 to operate the Los Medanos Community Hospital. In rural communities, such districts were created to provide for hospitals that otherwise would not exist. LMCHD operated the hospital until 1994 when the hospital closed due to bankruptcy. Since then, LMCHD has not provided any hospital, physician, or emergency medical services. Instead of providing direct services, LMCHD funds third-party agencies that provide health-related programs.

“This bill effectively creates hundreds of thousands of dollars in funding for badly needed healthcare services in the region. A lot of this funding comes from the savings on LMCHD’s extremely high administrative expenses, which topped 60% in some years,” said Assemblymember Frazier. “That is simply unconscionable.”

“Comparable programs in the county average at about 15% admin cost, and a nearby healthcare district runs at a maximum of 20% in admin costs. Rather than lose over half the funding to wasteful administrative expenses, AB 903 dedicates those dollars to the community,” Assemblymember Frazier added.

If approved by the legislature and signed by the Governor, a bill introduced by Assemblyman Jim Frazier (D-Fairfield) would dissolve the Los Medanos Community Healthcare District by February 1, 2022.

This comes after a 2017-18 Contra Costa County Grand Jury Report recommended dissolving the district as it pays more in administrative costs than it does administering grants. In 2019,  Lamar Thorpe, who is now the Mayor of Antioch, was appointed as the Executive Director of the Los Medanos Community Healthcare District. According to a District agreement, he is making $96,000 per year.

According to the 13-page Grand Jury Report:

• The Grand Jury also found LMCHD grant program administrative expenses are high compared to the amount spent on For example, in FY2016-2017, LMCHD spent 40% of its revenue on grants and 36% administering those grants, with the remaining 24% going to reserves. LMCHD’s FY2017-2018 budget allocates 42% for grant programs, and 51% for grant program administration.
• The FY2017-2018 budget shows a general fund revenue of $1.0 million. Of that amount,$0.5 million is allocated to administrative overhead, $0.4 million to community health programs, and $0.1 million to reserves.
• The Grand Jury found no evidence that LMCHD collaborated with the County, non-profit hospitals, or other local entities to avoid duplication of services. Several organizations received grants from both the County and This duplication of services occurred because the County grant administrator, Keller Canyon Mitigation Fund, supports some of the same programs funded through LMCHD. If the County were to assume administration of LMCHD grant programs, there would be no duplication of administrative expenses because the County grant process is already in place.
• LMCHD receives nearly all its annual revenue from property taxes. It uses this revenue to pay for program and wellness grants, as well as administrative expenses.

In 2017, the Contra Costa County Board of Supervisors voted 5-0 to dissolve the District with Supervisor Federal Glover stating the time for a health care district board of directors has come and gone. LAFCO has also rejected the bid for the District to stay open, however, a judge allowed it  Meanwhile, the hospital closed in 1994.

The District services Antioch, Bay Point, Clayton, Concord, Pittsburg and other local communities within the county.

Frazier’s bill (AB 903), which he has not responded to a request for comment, aims to put this debate to rest through State Law.

In response to the proposed bill:

Dear Assemblymember Frazier:

On behalf of the Los Medanos Community Healthcare District, I am writing to you in response to your introduction of AB 903

Given that 98 percent of our healthcare district does not fall within your assembly district, or the fact that you have never attempted to build a relationship with our board or programs, I am quite perplexed as to why you would introduce this legislation without attempting to understand how we serve eastern Contra Costa County.

This letter is not intended to be interpreted as an attempt to appeal to your reason or logic, as we are well aware of the fact that you are taking political orders from your top political advisor in an effort to turn our district into a political slush fund for one of your top allies on the Contra Costa County Board of Supervisors.

Let me be clear in stating that, although to you this is simply a political game, to our healthcare district, you are jeopardizing a critical healthcare prevention lifeline for many in our community. From free reading glasses for children to HIV/AIDS prevention efforts, many of the community members we serve participate in our programs because they do not feel that they have their needs met via Contra Costa’s public healthcare system.

Lastly, I have to state for the record that the manner by which you introduced this legislation has been interpreted to be highly disrespectful by both my board and community. I suspect that, if the makeup of our board were more in line with the makeup of the Oakley City Council, you would not have been as disrespectful as you have been to date.

Neither my board, nor my community will stand idly and accept to be treated in any manner less than the respect we deserve.

Sincerely,

Patt Young
President
Los Medanos Community Healthcare District”

AB 903 would:

Require the dissolution of the Los Medanos Community Healthcare District, as specified. The bill would require the County of Contra Costa to be successor of all rights and responsibilities of the district, and require the county to complete a property tax transfer process to ensure the transfer of the district’s health-related ad valorem property tax revenues to the county in order to operate the Los Medanos Area Health Plan Grant Program. By requiring a higher level of service from the County of Contra Costa as described above, the bill would impose a state-mandated local program.

According to the Bill: