Budget Committee - Regular Meeting

Right. Good afternoon, everyone. I called to order the, budget committee here for, Wednesday, March 25. And let's see. Or do we have any, additions or corrections to the agenda? None. Alright. We'll go for a general public comment on any items that are not on today's agendas. Is do we have anybody online for that? I see nobody in the room. Raised. Nobody? Okay. And we'll move right along here to, the budget action committee minutes.

May go to the minutes?

Looks good for me too. I think we can approve those by consensus. I'll just see if there's any public comment on the minutes.

Nope. On the comments.

Nobody have the hands raised. And we'll move then to the consent agenda, which is some budget committee follow-up reports as well as the California Department of Finance bulletin. And I'll see first if there's any public comment on these.

No hands raised. I don't have public comment on

And I'm good

with the consent agenda. I am as well. So we will move consent agenda with consent. And move on to the regular agenda, item number four, which is to receive a report on the key capital improvement projects by public works facilities and parks for a period of 07/01/2025 through December 31. And is that you, Randy, doing this? Thank you very much, chair

and members of the committee. The department has a brief PowerPoint presentation for the committee and the public's reference, And our assistant director, Lindsay Larapel, will be sharing her screen and giving the presentation, and we thank you very much.

Thank you, director Ishi. Hello, committee members, chair Church, and supervisor Alejo. My name is Lindsay Larrabell. I am the assistant director for public works facilities and parks. And this is our biannual key capital report that we report to the committees, both the budget and the capital improvement committee, highlighting the key pack key capital reports, projects that our department work on. And I'm gonna I have a presentation I'll go ahead and share. We'd like to highlight some of the projects we have completed during this reporting period. Alright. Just confirming everyone could see that.

Yeah. We can see it.

Yeah. Great. Good. I'll go ahead. So this is, as mentioned, this is for fiscal year twenty five, twenty six. This is quarters one and two. During this time, the department worked on worked on 44 key capital projects. And a reminder, that's considered a project over a 100,100 thousand. And even at that, there's not we don't report on all of them. These are really some of our bigger, most more high profile projects.

We also cap capture and report on key cap or capital projects through the jock report that comes out in a later time. Like I said, there's 44 key capital projects. Total project cost as at around 72 point $728,700,000. Under the Rosen Bridges team under public works, there was 20 projects they worked on totaling 27 $273,200,000, and facilities worked on 24 key capital projects totaling $455,500,000. So what I'm gonna do is highlight projects that were completed during this reporting time starting with public works.

So we have the Elkhorn Road rehabilitation project. This was approximately six miles of Elkhorn Road, and this is from the Elkhorn Slough Foundation to the Slingus Road, South Of Pahoe. This was identified as a top prior to the Measure X program, and it was basically, it was the resurfacing it was resurfacing, road clearing, and pavement repairs. So we get to see on the top left is what it started out with. Here's work in progress, and here's the beautiful result in the bottom right hand side.

Next project was the San Arto drainage improvement. So this was to address chronic runoff puddling in the San Arto community during precipitation events. The project consists of installing an underground storm water infiltration facility. So you see that on the top left hand side. It was project cost of $958,000 and was funded by SB one.

Another project that was completed during this reporting period was the CSA pavement improvements. Project cost of 3,400,000.0 funded by TOT. And, again, this was identified as the local in the local road rehabilitation program to version two point year two point o, and the ten year local road remediation program. And this consisted of grinding and placement, grinding the existing road, placement of 2.5 inches of hot mixed asphalt overlay, approximately 4.3 miles within the Rancho Tio Grande subdivision in Carmel. And lastly, during this reporting period for public works, they completed the VAO slope road slope repair.

So the project cost of 1,600,000.0. It was funded by FEMA, Cal OES, and Measure X. This was a washout that happened during the twenty seventeen storms. And as you can see here, the the the top left is a result. This is the outcome. It will fill in with seating and whatnot, but you could see what they did. They put in drainage, cut it out, put in drainage, and then stabilized the the slope here. So and they also repaved the road that was affected by the slope. Alright. Switching over to facilities.

During this reporting period, they completed the generator replacement project. It was for for 1441 and 1448. What happened here is there was generators already on-site, and during routine inspection, it was determined that the generators no longer met the air quality standards. It had to be shut down immediately, so facilities rented a generator, got them put in a place to ensure sustainability and any power outages, did some repair works of the infrastructure, and ultimately had a replacement of the generators, diesel generators at both both sites. It was a cost of $5,000,000.

It was funded from fund fund four seven eight. Another project related to this reporting period is 160 Hitchcock Road. This is the Slings Animal Services, so replacing some failing HVAC and then also the radiant floor heating units during that time. The project cost was a little bit south of 900 or $1,000,000, and then it was funded by fund four seven eight. This is a project at 1412 Natividad in Salinas here.

It's a sheriff's reentry resource modular project. It was a project cost of $1,800,000. This was actually a grant funded project by the Cal AM path pro grant program, and it was intended it is intended. It is used as a one stop resource hub to support those for pairing release and those who have recently been released as a resource center, and public facilities did the procurement installment and site related improvements related to this project. This is another great project at the 315 El Camino Real Greenfield Library.

The roof is leaking, and what we did is did an assessment and actually found out the clay or the the the roof tiles were in good repair. It was just the underlayment. So what we decided to do was to take off the original tiles and reuse them. So they took them all off, redid the decking and underlayment, stabilized, waterproofed it, and then reput back on and then relayed the clay tile here. So it has a nice authentic look to it as a result of the reuse.

This was a grant well, this is a this is the elections office at Schilling. They had some protective barriers up, but it wasn't security glazing. So between fund four seventy and a security of state secretary of state security grant allocation. This project was able to be mobilized at a cost of a $140,000 and able to install this ballistic glazing at the guest counter. And there's also an ADA accessible counter around the corner not pictured here, and that was also upgraded.

And then lastly, this is a project also at one six eight that's also up to security glazing. There was original there was glazing here, but we upgraded the the the rating of the security glazing. So that was funded at this project cost of 200 and $200,000 and funded by $4.70. And, again, that was the design fabrication installation of security glazing at the transaction window. And that concludes the projects that were completed during this reporting period. I will stop there and open it up to any questions. Thank you.

Questions? No. I I thought I thought they're all good good projects. So congrats to the entire team for getting those, done. Just going back to those generators, that was, I think, the most expensive project is 5,000,000. Were were they still functioning? Would they be under life, or were we having to spend so much money just because our laws changed and now they're more rigorous standards for emissions for generator that rarely ever gets used?

That is a great question. They were operational, they were old. I think they were original. I'll have to verify to the building when we acquired it. They were no longer meeting the emissions code. So and it was immediate. Like, we had to shut them down. So, unfortunately, that's yeah. And and the the thing about shilling is that it's entire this when power we lose power off the grid, these generators, you know, keep the entire facility running, so all all facets of the facility. So they're quite large.

Mhmm. And, of course, with the rental and all the infrastructure that goes into upgrading, it is quite an expensive venture. But these are great because, like I said, in the in the event of a power outage, these these facilities completely operational.

Yeah. No. I know they're imperative for our functioning of our of our building. What happens to those? Are they able to be resold, or do they just get dumped somewhere? Like, what what happens with that type of infrastructure?

That's also a great question. I'm gonna see if Florence is on the question to see if her team can answer that in more specifics. I don't have that detail. And if, Florence, are you on the call?

Maybe it was just so old because you said it was originally there with the HSBC. So it's been quite some time.

Yeah. Yep. So So, yeah, I'm not I if facilities does not answer, and I'd be able to answer after the fact, obviously, but, yeah, we can't

I can give a little bit of information.

A little bit about disposal of it.

Again, I would have to definitely confirm with the project manager. But in general, when we those generators are taken out of commission, and so we follow all of the proper protocol for decommissioning. So we work with the air quality board to decommission them, and they get disposed to the proper sites. So they wouldn't be re you know, if if and if they're reused, we would have to go through another permitting process. So that's the the case, but I'm pretty sure those got decommissioned. But we'll I'll confirm.

No. We have Tom Skinner with his hand raised.

I'm sorry.

What's that? Tom Skinner with Contracts Purchasing. He has his hand raised.

Okay. Yes. Hi. Please go ahead.

Hi. It's Tom Skinner, Contracts Purchasing. One of our functions is surplus. The two generators at the Schilling campus were were, auctioned off and sold to an out of state agency.

I don't I don't

know the specifics, but, yeah, we followed county protocol.

Thank you.

That's great to know because they could if they were still functioning and another state has different standards, they could be, reused somewhere else.

Correct.

Got it. And and do and do we know what what value they still had, or was that very de minimis? Or

It it it was let's just say it was a lot at least the county made money. It was gonna cost us, like, tens of thousands of dollars if we were to dispose of them internally here in California. So rather than charging to get to dispose of them, we made some money talk to them.

Okay. Got it. K.

Thank you. Alright.

And and then one one other project that you accomplished was our COVID memorial. So thank you for for all the team on on doing that as well. It came out beautiful.

Thank you. And I will be reporting on that the next reporting period. But, yes, those will be, all the projects between January 1 and June, of this year will be coming to the board later on, and that will be one of those. Absolutely beautiful.

Got it. Thank you. Thank you.

Yeah. I don't have any questions. Nice report. Thank you very much. It was really interesting seeing some of the pictures. The, the one, where the washout or the had gone. It was just when you look at scale with that excavator down there and the people, you realize how big of a hole that really is.

It's quite extraordinary. Yes. Public works, the scale of what they do is quite exceptional.

So Yeah. Yeah. That was

really really stood out. Yeah. And, Florence, on some of these, it'd be nice just to have some graphics for our social media just because people say, what are we doing? So those roads that we do or those clovers that we do repair, I think those are always worth highlighting, because nobody's gonna tell our story until unless we tell it. You know?

Yeah. Definitely. We're also working on a upgrade to the facility's website, so we hope to highlight a lot of projects on our website as well. So we'll definitely work with Nick to set up some kind of system where we're highlighting our projects, especially. So we'll work with Nick on that. And then, concurrently, we have our website that's gonna get revamped, and we're excited about that.

Thank you, Florence. Mhmm.

Thank you. So we'll go to public comment on this. Is there any public comment? And I see none. This is just info oh, there's Under sheriff. Yeah. Under sheriff. Please go ahead.

Supervisor, mister chair, I just wanna just rep again, thank Public Works for their work on the resource center. Came in within schedule, within budget. Great coordination and collaboration to finish the project that's that has a significant value to our community, the MA population, our community, and such. So just wanna thank them for their support and diligence on that project and really thank them for helping us keep it in budget.

Any other comment? Thank thank you, mister Sheriff. I see none. We'll close it. This is, just a presentation. No action on it. We will, then move on to, item five, which is, a semiannual report from the Tivadad Medical Center for, the same period, 07/01/2025 to 12/31/2025.

Thank you, supervisors. Good afternoon, committee members and attendees. The following report is, you know, for, again, semiannual, covering the pre period from July 2025 through December 2025, which is, you know, mid year of the fiscal year. We haven't we have been experiencing, as probably everyone's aware, a lower census, you know, over the the past, you know, six months. This is, of course, you know, probably related to all the market changes due to requirements and regulations and those kinds of things that it's been affecting individuals' insurance, you know, coverage.

So the number of admissions that we forecast against actual for the six months, actuals were lower by 18% or about a thousand admissions. In having lower admissions, that means that we had numb a lower number of patient days. Patient days meaning that people patients that come in and stays stay overnight or over a few days, you know, to take care of of their health care needs. We have on the forecast side, we expected about a 128 patients per day. But, actually, on the average for the six months, we only treated a 117 patients per day.

So that's about a 9% lower than the than the budget. Within the patient days, three areas, you know, that we saw fewer patients. NICU, these are NICU is our unit, you know, where take care of the high acuity of babies.

The

census on that on that unit, you know, were lower than budget by 20%. The other area is the intensive care unit. This is the adult adult unit taking care of patients with higher acuity. We saw or treated patients lower than than budget by 13%. And the unit that takes care of our pediatrics, you know, the younger adults, was lower than these page the census was lower than forecast by 39%.

So given the fact, the census and volume, you know, were lower. Total revenues, both for from patients, insurance, and other, you know, revenues that we collect from other services was lower by 3% against budget or $6,600,000. On the other on the other side of it, the expenses expenses, you know, were lower than budget, which it was good by 1%. So we spent lower than we spent expenses lower than budget by 2.3. However, as as I mentioned before, revenues were higher were lower by 6.6.

So overall, for the six months period, revenues were lower than expenses by $2,700,000, you know, for the six months ending December 2025. One of the things or one of the areas that actually had an increase from a volume perspective perspective, ideas with our pro trauma program where where thirteen hundred trauma cases were treated for the six months against a a budget that we forecast of seven hundred and eighty cases. So that was a seventy four seventy four percent increase on the services, you know, for trauma. However, because of the non trauma side of it, as I mentioned earlier, where census is lower, the the the financial results showed a 2.7 revenue shortfall against expenses. And that concludes the report the semiannual report.

Daniel?

Yes. Correct. Alright. Yeah. It's been

a while.

Yes. Yes. I remember you always giving these reports to us, but it's always concerning when our revenues are down that much and our census is down. Right? Because that's our that's our lifeblood, so to speak, or the hospital is making sure we're getting as many patients who are choosing Natividad. On that point, and maybe it's a question for doctor Harris, but, what's the plan, though? We we get the the news that the census is down. It's been down for the last six months. How do we what's what's the how how do we address how how we counter the the the significant decrease in our average, daily census?

Okay. So one of the things that we are, I guess, you're not attacking, you know, the revenues, you know, decrease, it's obviously on the expense side of it. You know, one of the things that we do pay attention on a daily daily basis, the number of, you know, patients that are that are in house. And if, you know, that if the number of census does not meet, you know, what we are projecting for the day, you know, we we put a we have a program in in terms of flexing, you know, some of the resources to help us on the cost side of it, and that continues on a daily basis. Currently, you know, we have, you know, two large initiatives in looking at, you know, looking at all the expenses, you know, overall from labors and labor and non labor.

In addition in addition to that, you know, looking at the, revenues opportunities, whether it's billing or chargeables and those type of things. Obviously, the last resource, you know, is if this continues, the trend the the trending in lower census continues, you know, we would have to, unfortunately, adjust, you know, resources, but that's kind of the last, you know, avenue. The the first thing is to continue to adjust as much as we can our operations to accommodate, you know, the lower sensors in order to to be able to offset some of the revenue decrease, to Verizon.

Yeah. I I get that. I get that. You know, for revenue is not coming in. I think you you reported a loss, a decrease of $2,700,000 in just the last few months. Right. Yeah. I get you we wanna mitigate expenses and stuff, but I think for for this committee and the full board, they they would wanna hear from, and I think also the activity at board of directors wanna hear what what are we gonna do here the next few months to turn it around. The reason if this is happening now, the worst is yet to come, right, with projected loss of for due to a HR one.

Right.

Significant cost for indigent care, significant numb thousands of our residents losing Medi Cal because of bureaucratic hurdles, artificial hurdles that were put in the the federal legislation. So that's what's concerning. It's it's if we have a trend even before HR one really kicks in and it's and as the the following year comes and the year after that, the the the costs are are gonna be even greater. In that context. That's why I'm saying this is very concerning, and we should have at least a plan to explain to the full board of supervisors and the board of directors of what are we gonna be doing to try to counter counter that and and bring the the census up.

Sure. The other question was just it was a question I always ask when I was on this committee previously, which is on how are we doing on accounts receivable. The money the collecting the money that is owed to the hospital, in the past, I don't see the right line item right in front of me. I got bad eyesight. But if you could just go over that, because I know that wasn't always an issue for the hospital having a significant balance of uncollected, revenue that was owed to Natividad.

Sure. The the the account receivable, it is in in on a reasonable, you know, label level. Currently, we're we are we have about $57,000,000 of receivables. The majority of that, if you can take a look at page number two, is that the about almost 50%, you know, of the receivables is in the commercial side of it, meaning commercial insurance, blue the Blue Cross and the Blue Shield, they are the ones holding the largest inventory of our receivables. And part of the reason is because number one is the trauma program that we have.

The requirements, you know, from the commercial insurance are very restrictive where, you know, they take a long time to pay, you know, for trauma our trauma claims. The the the other part of it is we're working closely with our our partners from the behavioral health in in expediting, you know, the short oil receivables. But overall, the receivables are in in a good place to to the extent of, you know, what we have sent out, you know, to the insurance companies to collect. Supervisory.

Oh, alright. And I I guess just, I mean, I'll talk to you separately about this, Daniel. Just trying to see get a get a trajectory over the last several years. Have have is that 57,000,000 where we wanna be, or is is that average compared to previous years? It would just for me, it'd just be good just to get get some of that more of that background, but I'll I'll I can meet with you separately on that.

Sure. I'll be happy to. Yeah. And also to your first question, I will relay and speak with doctor Harris about a plan that you discussed about reporting a plan. You know, what is NetEmDay doing with this, you know, sense low sense in terms of, you know, the losses. Yes.

And I talked I talked recently to doctor Harris, obviously, because we're all our counties association and the public hospital association, we're all collaborating to try to address the impacts of HR one. But we we just had to talk about the issues already going on in the hospital with significant revenue loss and and the downturn in the census. That was a separate issue that I think we we do need to have some some more discussion with the board about. But thank you.

Sure. Would you which in in related to the receivables, would you like me to schedule a meeting with you, or would you follow-up with

Yeah. Yeah. I'll have my my team reach out to you.

Okay. Thank you. Mhmm.

Appreciate it. Bye. Just a couple questions for me here. And, you know, and as, you know, we look at those those revenues being down, of course, is, concerning. But I was curious on on patient load. Is are are we getting fewer patients in, or are they just doing fewer expensive procedures? I mean, if we had that kind of same kind of drop on number of patients coming in.

We have a fewer patient load, and the reason for that is what the other statistics, you know, is most of our volume majority of the volume that stays in, you know, in the hospital for additional care, they they come through our emergency room. And one of the statistics also that, on the ER side of it, the number of volumes, it dropped by 8%. So it goes back again. Fewer patients are coming through the emergency room for their, you know, for their needs. And depending on their acuity, they they tend to stay, you know, in house where it increases, you know, the average daily census.

So that's where, you know, the majority of the issues that we have right now. Patients in the community are not coming through the and through to the emergency rooms to take care of their their their needs.

So I get I guess the question then is, where are they going? I mean, are they going I, you know, I I can't see you know, they're not going to Slayers Valley Memorial. Are they going to just the clinics perhaps then, or are they just not going to, you know, At eighty percent eighty percent drops kinda significant that way on emergencies. So

a couple of things. This is kind of resembling the situation that, you know, the team that went through back in the 2010, 2011 when I arrived at this organization where individuals, you know, that do not have insurance because back then, less people were you know, had coverage through Medi Cal. So there's a tendency when people do not have insurance is not to take care of their needs because they don't have coverage. They do come through the ER. The problem is they wait until the condition, you know, it is of high acute, that's when they go and take care of, you know, their needs.

So that's one of the concerns that we have is that the community is taking care of their needs because, again, the our volume in the in the emergency room has decreased. The other factor of that is that from what we hear in the community, the other two other facilities, their volume also is, you know, down. So there's a sense about p individuals in the community that community that used to qualify for Medi Cal, perhaps, you know, no longer, you know, they they qualify for insurance, you know, benefits. So they are delaying their care their care their their health care needs. So they're not actually going to any clinics.

This is, again, our our opinion. It's not factual, but they're not going to any other clinics or we're done losing business. It is more about the the conditions, you know, due due to the new requirements, you know, for Medi Cal eligibility.

K. Thank you. My my last question there was on the payer distribution, and I thought we had I thought the majority of our payers were was coming from, Medi Cal, Medicare, you know, I mean, the such. When I look at this, it's showing almost 60% commercial. Am I reading that right, or am I

Yeah. Yeah. It's me. Point of clarification. Distribution pay order that you're reading, it is related to the accounts receivables rather than our business. The accounts receivable payor as I indicated. Right.

And then

It takes longer to pay us. So our inventory of receivables is is larger in the commercial side.

Okay. So so altogether, our payer mix could you just could you give me a a when we look at at revenues, could you give me a a breakdown on what is, what is private and what is public?

Sure. So our payer mix, meaning business overall, about 50 actually, 50 about 53% right now is Medi Cal. 21% is Medicare, and insurance about 4%. In commercial, it's about 18 to 20%.

Okay. Yeah. That's, that's about what I thought it was. So, thank you for correcting my, misconception here, and I missed out about the receivables. So I don't have any other questions on this. Do we have any public comment on this particular matter? I see nobody. So, with that, we will see Sure.

Just last thing for, Daniel is just, I think that the numbers that you just went over, fifty three percent of our patients are Medi Cal, 20% Medicare. Talk about the most vulnerable. That's seventy three percent. So so, Daniel, as we get these reports down the road, I I do wanna just keep monitoring, you know, the the impact that perhaps that people, if people are losing their Medi Cal, I think the census issue is gonna worsen. And as everyone knows, there there's new requirements.

There's double eligibility verification. So that's where a lot of this work from the the eligibility workers and Department of Social Services are gonna be so critical. But, this could really, you know, make make this problem a lot worse. So I just wanna make sure that we're monitoring our our, how, the eligibility issue ends up impacting, or worsening the the the census and revenues coming into the hospital. Because, as we know, the impacts, especially next year next fiscal year and the year after that are are only gonna become greater.

Yeah. You're you're correct. And moving forward, I will add an additional reporting on on on what you asked for, supervisor O'Leary.

Yeah. Thank you.

You're welcome.

K. Well, with that, we are done with the agenda. We can move to adjournment. Our next meeting is April 29 at 1PM, and, thank you everybody for attending today.

Alright. You're in a quick meeting.