Eden director says talks over payment to San Leandro Hospital are ‘not friendly’

San Leandro Hospital and its emergency room remain open.

EDEN TOWNSHIP | As part of the settlement that ultimately saved San Leandro Hospital from closure in 2013, the Sacramento-based Sutter Health allowed the Eden Township Healthcare District, which lost the case, to divert payment from its defeat to the operating budget of the San Leandro facility.

Payments by the district would begin in the second year, according to the deal, which is now. But, the district, which no longer has any hospitals to oversee, say they cannot afford to make the payments.

The cry of hardship by the district, however, is not new and preceded the end of the lawsuit with Sutter Health in 2013. Members of the elected board of directors at the time resisted arguments it could sell off some of its holdings, primary a medical office in Dublin, in which it paid $82 million in 2007.

Alameda County Supervisor Wilma Chan, who helped forge the deal with Sutter to keep the hospital open, has reiterated the idea the district could use proceeds from selling the building to make its payments to San Leandro Hospital, according to media reports. “I’m disappointed,” said Chan to the board last month.

The board and its executive director, however, say such a financial maneuver is not that easy since the district has various loan obligations separately tied to the building, which was purchased seven years ago as a bargaining chip to block Sutter Health from closing Eden Hospital in Castro Valley and potentially moving to the Tri Valley.

In some ways, sacrificing the district’s cash cow to fulfill its part of the legal settlement, might also lead to it ceasing to exist. Dev Mahadevan, the health care district executive director, stresses the government body is not a tax-collecting entity. Instead, it relies solely on the revenue from its holdings to provide charitable grants to health care organizations doing work in the community.

Chan and others in social services say the county already provides some of the same services. “If that was always true then why were these districts created if there was no need?“ said Eden Township Healthcare District Director Dr. Vin Sawhney.

In addition, the Alameda County Board of Supervisors are also leaning in favor of dissolving the district. It has pushed the Local Agency Formation Commission (LAFCO) to determine whether the government body has a purpose any longer to the community it has served since its formation in 1948.

Mahadevan does not believe LAFCO will come down against the district. He cites the lack of precedent for such a move, along with a belief similar healthcare districts in the state will rally around the Eden Township’s defense.

“I don’t really see it,” Sawhney says of the county’s intent to snuff out the district. “I’m just hoping Sutter and the district can come to an agreement soon.”

Residual acrimony following the long legal showdown with Sutter over the past five years still exists, Sawhney said. He deemed the tenor of negotiations between attorneys for both sides as “not friendly.”

“Wilma Chan and the county supervisors are putting pressure on the district,” added Sawhney. “The pressure must go to Sutter.”