Hospital Experiences Growing Pains

AAMG Response: Dear Coalinga Residents…

By Mary Blyth Jones
Coalinga Press


Coalinga’s Hospital continues to move toward re-opening. A promising preview was presented at the CRMC August Board meeting, however there have been a few milestone items which still needed attention.

A hearing had been scheduled with the bankruptcy court on September 12 to approve CRMC’s Disclosure and Plan of Settlement. It has been postponed because AAMG (CMC) has been dilatory (late) in performing some milestone tasks in reopening the facility. The hearing would include a presentation of CMC’s accomplishments in reorganizing the hospital. The hearing has been rescheduled to allow the necessary performance of these tasks. A letter of default has notified CMC that there is a time frame for the milestones, to satisfy the bankruptcy court that appropriate actions are being taken to revitalize and open the hospital.

At a specially called meeting of the Coalinga Regional Medical Center board on September 12, it was determined that a letter of default would be sent to American Advanced Management Group doing business in Coalinga as Coalinga Medical Center LLC due to a lack of timely activity on the reopening of Coalinga’s only hospital. The board meeting on September 12 was to inform the public that a notice of default had been sent to CMC LLC on September 9. Continued on page 3.

In theory, CMC was supposed to have taken over all financial liabilities of CRMC in April. The reality is that CRMC has still been paying many of its own bills such as utilities. It was estimated by the CRMC Board and counsel that CMC has invested roughly $100,000 on the project thus far. Manpreet Singh, who heads the team working to reopen the hospital stated that CMC has spent roughly four time that amount: $400,000.
One month ago, Peter Zeitler, CRMC’s legal counsel, sent a letter requesting certain deficiencies be corrected.

When Coalinga sent the default letter, CMC responded immediately and promised to begin making payments. On the positive side, CRMC’s license is now current and facility painting is underway. Several other tasks related to opening the hospital are in process.
Zeitler outlined work on the premises that is in progress. They started painting. “That’s good” Zeitler said. “But they need to reimburse the money that we’ve paid, and they need to resolve the issue about the equipment.”

There is still haggling over the purchase of equipment at the hospital. CMC did not like the fair market value as appraised but want to purchase it at a lower amount. Also, the utilities need to be switched over to CMC.

“You, as a board, have an obligation under government code to get ‘fair Market Value.’ We could reasonably negotiate a lower amount if they give us a valid appraisal; a reasonably lower amount. But we can’t do anything based on what we have,” Zeitler explained.

“We are at a point where we need to make a decision. If we are going to terminate the lease with CMC, we need to give them a formal notice of default. Then they have 30 days to cure. And that’s a hard date. That puts a hard deadline on them. And if they can’t cure in that time frame, that will be a time when will have to discuss if we will move forward with an actual eviction.”

We need to be able to go to the bankruptcy court and tell that we have a valid tenant who can perform. If we need to start over again, we will go to plan B. This will hold their feet over the fire. Of course, we hope this works out. The AAMG (CMC) has had some other issues to deal with, but Coalinga needs to be their focus right now.

CRMC has a negotiation committee of Bill Lewis, Linda Balling, Wayne Allen and Peter Zeitler. That group has met to discuss options and needs. The committee takes no action and only submits options to “set the stage” for board action. They suggested the letter of default be sent to CMC. The letter itself has no consequences except to offer a specific time limit for a number of actions.

“We got this great presentation at a Board Meeting two weeks ago,” said CRMC Board President William Lewis. “Our Mayor was enthralled. And yet I knew that there was a gray shadow on this until we get them to step up.”

Once the Adventist Clinic Project zoning request was denied by Coalinga planning Commission, the CRMC board hoped that action would increase at the hospital. They have stepped up a little bit, but not enough to satisfy the board.

The board still has faith that AAMG / CMC can perform the task of reopening the hospital.
“We wish they would communicate better,” said Zeitler. “We are not taking formal action. We are setting the stage.”

If AAMG / CMC fails to complete necessary tasks or ‘cure’ within 30 days of a default notice, the board then has the option of filing a formal notice of default. That is the action the board will need to decide after 30 days if there is no cure.