Sen. Ellen Corbett

Jan. 12, 2012 | A potential legislative road block to Sutter Health’s bid to take control over San Leandro Hospital passed a state Senate committee and raising the possibility of district voters deciding the fate of the facility.

“I’m here to talking about one of my most favorite subjects–keeping hospitals open,” Sen. Ellen Corbett told members of the Senate Governance and Finance Committee in Sacramento Wednesday morning.

Corbett’s bill calls for an independent auditor to appraise the fair market value of a health care district asset when the total accounts for over 50 percent of the transfer to a non-profit entity. The appraisal must be performed within 180 days of the transfer and offered for public discussion.

In such an occurrence state law says the matter must be decided by the voters of the health care district, Corbett said.

Calling it a “straight forward” bill, Corbett said the legislation is needed to allow taxpayers a better understanding of the district’s assets. “The information is crucial because health care district assets are owned by the residents of the district,” she said.

SB 804 passed, 6-2, and heads to the Senate Health Committee for further deliberation.

The bill is a reaction to the fight among residents of the Eden Township Healthcare District to save San Leandro Hospital, which Sutter Health moved to purchase in 2010. The non-profit hopes to convert the hospital into an acute rehabilitation facility leased to the Alameda County Medical Center.

Sutter’s purchase price for San Leandro Hospital, through credit for maintenance and capital improvements to the facility, would amount to a transfer of ownership without any money changing hands, according to Alex Briscoe, the director of Alameda County Health Services. Some believe the fair market value of the hospital runs closer to $30-35 million.

Corbett’s bill is supported by the California Nurses Association and received no official opposition during Wednesday’s hearing.

“I see this being a bill about transparency in government,” added Sen. Loni Hancock and committee member, who asked to be recorded as the co-author of the bill. “I think it is a very good bill and a needed bill.” Pending re-election to the state senate, Hancock stands to absorb the San Leandro constituency next year through redistricting.