LOS MEDANOS COMMUNITY HEALTHCARE DISTRICT

STRATEGIC PLAN

Attachment 1

Croskey Essay on
District Stewardship of Properties

(NOTE: This essay was written on May 23, 2000,
but the content remains pertinent today)

District Stewardship of Its Properties
by Dr. Bruce Croskey, President, Board of Directors,
Los Medanos Community Healthcare District

One of the many, and perhaps most important, roles played by the District Board is that of overseer and protector of the District’s assets. Without a doubt, the major asset of the District is the building and the attached real estate.

The building and attached real estate is currently under lease with Contra Costa County. This lease is for twenty years and contains options to extend it another ten years. The lease calls for no provisions for tenant improvements to be paid by the District. All improvements are to be done by the County at their expense. Like any other landlord, we are faced with the problem of a tenant improving our building. While this sounds like a great gift, there are some fundamental hazards that require close supervision.

The District’s building belongs to all the taxpayers in the District, and it is the responsibility of the District Board to safeguard these assets. The District is responsible to monitor all County activity within the building to ensure that it does not, in any way, erode the value or preclude the District’s ability to sell or encumber the property at a later date. If the District does not monitor this, who would? Who would perform this stewardship?

If properly maintained, the real estate currently owned by the District could be sold at some future date at a then fair market value. Exactly what this value would be is not within our purview but would be a substantial amount considering the lease could run for thirty years! This money could then be returned to the taxpayers as repayment for their investment of tax payments. Most likely this would represent a profit for all.

If the building is not maintained or modified in such a way as to devalue the asset, the taxpayers will lose. It is the responsibility of the Board to ensure that this does not happen. The building must be maintained and kept in a marketable condition. If the Board does not do this, the Board will not have fulfilled one of the basic responsibilities of any elected official, to take charge of the public trust. Besides, if the Board does not do this, who will look out for the interest of the District?

In addition to monitoring the lease of the building, the District is responsible for the legal compliance of the assets. We regularly receive compliance requests from both the City of Pittsburg as well as the County and State. The District is legal owner and is responsible for the correction and/or compliance with these requests. Some of these include weed abatement, construction of sidewalks, and toxic waste surveys as well as health related surveys from the State and County.

In addition to the real estate owned, the District is also responsible for the care and custody of all medical records of the former hospital. This is a great responsibility that the District must undertake and is further complicated by the fact that many of the records were damaged or lost during cataclysmic flooding during the State Trustee’s auction. Since a clear inventory of all records cannot be produced, no custodian will assume the care and control of these records fearing a major legal suit. The District has placed the records in storage and made arrangements for record retrieval by interested parties which occurs almost every day. The District has this liability and cannot pass it off to another as there is no one willing to assume it.