Memorandum
Date: September 10, 2024
To: The Honorable Bruno Sabatier, Chair, Lake County Board of Supervisors
From: Benjamin Rickelman, Deputy County Administrative Officer
Subject: 2:00 P.M. - Consideration and Discussion of a Resolution of Intention to Form the Lake County Hospital Improvement District and Setting a Date for a Public Hearing
Executive Summary:
The Lake County Hospital Improvement District ("District") would be a business-based assessment calculated by net patient revenue of the two hospitals in Lake County - Sutter Lakeside Hospital and Adventist Health Clear Lake ("Hospitals"). These two Hospitals petitioned the County to form the District by utilizing the Property and Business Improvement Law of 1994. The Hospitals anticipate the assessment would boost their Federal Financial Participation ("FFP") reimbursement from the Federal Government for Medi-Cal patients. The Hospitals plan to utilize the increase in FFP for both financial stability and increase in services. Medi-Cal currently reimburses the Hospitals at below the cost of providing healthcare services to Medi-Cal patients. A majority of Lake County residents are enrolled in Medi-Cal. Two rural hospitals closed in California in 2023 and an analysis of California hospitals by Kauffman Hall in 2023 stated 20 percent of California hospitals are at risk of closure based on operating margins, debt-capitalization ratio, and days cash on hand.
The assessment would have a five-year term with the County managing collection and administration. The County would assess a 1% management fee of the District assessment. Based on the Property and Business Improvement Law of 1994 the City of Clearlake also needs to approve the District. If the Resolution of Intention is approved by the Board of Supervisors, ballots will be mailed to the Hospitals, a public meeting would be held, and then a Resolution of Formation considered by the Board of Supervisors to form the District.
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