Governor signs bill limiting Eden Health District’s administrative spending

EDEN HEALTH DISTRICT | Legislation that could be the first nail in the Eden Health District’s coffin was signed last week by Gov. Jerry Brown. The new law, authored by East Bay Assemblymember Rob Bonta, requires the struggling Eden Health District to allocate a minimum of 80 percent of its operating budget for health-related expenditures. The narrowly-tailored bill only pertains to the Eden Health District, which covers much of Central Alameda County.

Following a years-long legal battle with hospital provider Sutter Health over ownership of San Leandro Hospital, the healthcare district’s financial situation has been precarious in recent years. After losing the lawsuit, Eden Health District was ordered to pay $20 million in damages to Sutter Health spread out over 10 years.

In addition to no longer overseeing a hospital, which was its original duty when voters created the district in 1948, its grant-giving ability has also been severely limited in recent years. Much of its income comes from medical office properties the district owns in Castro Valley and Pleasanton. The healthcare district is not funded by any taxes. Nearly two years ago, Eden Health District spent just 12 percent of its budget outside of administrative costs.

“The Eden District now essentially functions as a commercial real estate management operation, rather than a healthcare provider for the public,” said Bonta. “Unfortunately, the mismanagement of the district and failure to meet the stated mission has gone on for too long and has violated the public trust by spending a disproportionate amount of their budget on administrative costs and not on helping people.”

Bonta’s bill faced little opposition through the legislative process before being signed by Brown on Sept. 21. Hayward Assemblymember Bill Quirk also offered legislation related to Eden Health District this session. Quirk’s bill would have been far more punitive and ask for an immediate dissolution of the healthcare district. That bill, however, was shelved, in favor of Bonta’s legislation.

But the push by Alameda County officials and local mayors to dissolve Eden Health District may only be beginning. The Alameda County Local Agency Formation Commission (LAFCO), which oversees the boundaries of jurisdictions in the region, is currently discussing the district’s future, including the possibility of dissolution. A final report commissioned by LAFCO is scheduled for January 2017, according to a timeline offered last month. LAFCO’s next meeting is Nov. 10.

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