Local News

Tuesday, Aug 07 2012 05:56 PM

County supervisors deny hospital bigger loan

BY JAMES BURGER Californian staff writer jburger@bakersfield.com

Kern County supervisors refused Tuesday to approve a temporary $11 million increase in the cap on the revolving loan the county gives Kern Medical Center to keep the county-owned hospital in the black.

The loan has a $70 million cap and, KMC officials told the board, they won't be able to make payroll in August without exceeding it. The immediate problem is a chronic one -- the state and federal government being late making payments to KMC.

Supervisors, in a split decision, still refused to increase the cap. Supervisor Zack Scrivner said the county hospital had to make payroll.

There was a compromise motion to raise the cap by $8 million, but Supervisors Jon McQuiston and Mike Maggard voted against it. Passage required four yes votes, so the motion failed.

Kern Medical Center workers will not miss their paychecks, though. Kern County Auditor-Controller Ann Barnett is required by law to make those payments.

But it will force KMC to operate in violation of county policy -- at least until the hospital receives delayed checks from state and federal sources.

KMC would not be able to make vendor payments, though, Barnett said.

KMC Chief Financial Officer Robert Bainbridge said the $45 million in state and federal payments are expected to come to KMC between now and November.

Some of them have not come in yet, which is why KMC needed the increase in the loan cap.

Supervisors warned that they were getting tired of seeing the hospital come back to them asking for more money. They called for efforts to pressure state and federal officials to pay bills to KMC in a timely manner.

But they also want KMC leaders to work hard to get on top of the problem and try every possible idea for easing the financial burden the hospital places on the county,

Michael Turnipseed of the Kern County Taxpayers Association suggested the county acknowledge the fact that much of the loan to Kern Medical Center will never be paid off.

He suggested writing off the bad debt and moving forward with a real financial picture for the hospital.

"Figure out where we really are, rather than carrying a lot of bad debt from years ago," he said.

Assistant County Administrative Officer Nancy Lawson said that the debt is analyzed by the auditor-controller to determine if it is bad debt.

Kern County can't write off any more KMC debt than that analysis identifies.

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