Council Approves Funding for Survey on Health Care District

By Shawn Raymundo

Residents will soon have an opportunity to weigh in on a medical operator’s funding plan to reopen San Clemente’s shuttered hospital by creating a new tax on property owners and forming a health care district in the city.

The council on Tuesday, Sept. 1, approved a $45,000 allocation to fund a community survey meant to gauge local support for the proposal from Palomar Health, a San Diego County-based medical system that expressed interest in expanding its hospital district in San Clemente.

Expressing his support for the survey, Councilmember Chris Hamm said it was “high time” that San Clemente “get an emergency room back.” He added that the poll would help the city “determine whether or not we want to put our money where our mouth is.”

This past February, Palomar submitted a proposal as part of the city’s ongoing process to find a hospital operator interested in taking over MemorialCare’s former medical campus on Camino de los Mares. That process had been put on pause because of the pandemic, but it was reinitiated this past July.

In its proposal, Palomar said that to pay for the relaunch of the hospital, it was interested in issuing a general obligation bond, which would be funded through local property taxes—a strategy, it said, was successfully used in San Diego County.

“Not only would this provide initial funding for the relaunch of San Clemente’s hospital, it would also create strong ties from the community to ‘their’ hospital,” Palomar said in its proposal. “This could be coupled with the formation of a new Healthcare District, or used as a stand-alone approach to provide the startup funding boost.”

Health care districts are voter-created and funded through tax dollars. In California, there are currently 78 health care districts, which are governed by locally elected boards of directors, according to the Association of Healthcare Districts.

The city has previously estimated costs to renovate the hospital at about $62.81 million, while the construction of a whole new facility is anticipated to cost $163 million.

During Tuesday’s discussion on the survey, the council voted, 3-1, in favor of its approval, with acting Mayor Laura Ferguson opposed. Ferguson questioned whether the city could afford a $45,000 contract for a survey given the state of the city’s finances amid the coronavirus pandemic.

While praising Palomar Health as a “great medical institution,’ she had hoped a medical provider would come forward that was willing to pay for the hospital.

“I’m pleased to see (Palomar) wanted to be here, but they just don’t want any skin in the game,” Ferguson said, later adding: “I’m not going to be able to support this item at this time. I hope a provider-operator comes forward that is willing to help pay for this, but at this time it’s not prudent.”

The bulk of the funds for the survey—$35,000—will come from the city’s Council Contingency budget, while another $10,000 will comprise professional services monies, according to the city.

San Clemente hasn’t had a hospital since 2016, when MemorialCare closed its Saddleback Memorial Medical Center. MemorialCare wanted to turn the facility into an urgent care location. However, residents and the city council at that time rejected that plan, advocating instead for an emergency room and hospital facilities.

The disagreement eventually led to the city rezoning the parcel for emergency services, prompting a years-long legal battle, as MemorialCare sued the city over claims that the city’s “spot zoning” was unfair and made it difficult financially to support the hospital.

The two parties reached a settlement agreement in June 2019. Since then, the city has intended to reopen the hospital, providing inpatient acute care, as well as surgical, out-patient clinical and emergency-room services.

The city said the due diligence survey of San Clemente’s residents would be the “first step in determining the feasibility of Palomar Health’s proposed model.”

Shawn Raymundo
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.