BY EMILY MIBACH
Daily Post Staff Writer
The race for the Sequoia Healthcare District board is split into two camps this election — those who want to ultimately get rid of the district and those who want to keep it as is.
However, the election this year is a little different than usual since the board switched to district elections. The three districts up for grabs this year are: Zone E (which consists of the district west of I-280), Zone A (the district east of Highway 101) and Zone C (San Carlos and Emerald Hills).
In Zone A, retired nonprofit CEO Michael Garb, incumbent Art Faro and former Foster City Mayor Art Kiesel are running against each other. In Zone C, incumbent Jack Hickey is facing off against physician Aaron Nayfack. In Zone E, incumbent Jerry Shefren and Belmont resident Harland Harrison are running against each other.
The district was formed by voters in 1948 to fund Sequoia Hospital in Redwood City and funded with property taxes. In 1996, the hospital was sold to Catholic Healthcare West (now Dignity Health), but the district continued to collect its tax. The district’s board now hands out those tax dollars (about $9 million each year) to nonprofits that provide health services.
In 2002, Hickey ran for the board with the promise to get other people onto it who would also want to dissolve the district. He also promised to halt the property tax. Hickey has long been looking for a slate of candidates to run to help him dissolve the health care district.
Hickey, Kiesel and Harrison are running as a slate across district lines in an attempt to create a majority in favor of dissolving the district — 16 years after Hickey was first elected to the board.
Hickey would like to see the Sequoia Healthcare District either be dissolved or consolidated with the Peninsula Health Care District, which covers San Bruno to San Mateo. Kiesel said he’d like to see the matter of dissolving the district go to voters.
It has become a “grant-writing center for taxpayer funds,” which was not approved by the voters, he said.
“We established the district by vote. We approved the sale of Sequoia Hospital by vote. It would seem to make sense that the district’s fate be decided by vote,” Kiesel said in an email.
Harrison said dissolving the district would be “easy.” He said the board can decline to take any more tax money, and once that happens, the county’s Local Agency Formation Commission would control the process of dissolution.
However, nearly all four of the candidates who oppose dissolving the district — Garb, Shefren, Faro and Nayfack — said the fees that are collected for the health care district would just be spread out among the other agencies that collect property taxes.
“The residents need to know that if the district was dissolved, their taxes would not be changed. Rather, that money would be distributed by the county or state, and not necessarily for health reasons,” Faro said.
Garb pointed out that the district only gets $72 from a $6,000 property tax.
“That is not much to contribute to the essential health services that the district provides to our most vulnerable citizens,” Garb said.
Nayfack said the district contributes more than $4 million a year to local schools for nurses and mental health programs.
Nayfack called the health care district “a model program that should be expanded, strengthened and hopefully replicated.”
Shefren, a former physician, said that while the focus of the district has shifted — from operating a hospital to funding programs — the main goal is the same: to keep the community healthy.
“We know that preventing health care problems and keeping people out of the hospital is the best way to make communities as healthy as they can be,” Shefren said. “So the district is continuing to do what it was always intended to do, invest a very small portion of property tax dollars to help residents lead as healthy a life as possible.”
The Sequoia Healthcare District has budgeted $12,500,000 for property taxes in 2018-2019, and $1,116,000 for overhead. Here are my answers to questions posed to me by Emily Mibach:
Q. Why did you decide to run for the health board?
A. In 2002, Dave Price, then with the Daily News, suggested in an editorial that I should run. I’m still running and have outpolled longtime incumbent Art Faro in the last two elections by more than 1,000 votes.
Q. What is the biggest issue facing your ward/district right now?
A. Resolving the “legitimacy” issue of the District. Status quo is not an option.
Q. How have things improved since you have been on the board?
A. Sequoia Hospital was successfully renovated and transferred out of the Districts responsibility.
Q. Do you wish to dissolve the district? If so, what steps would you take to do this?
A. It is my goal to gain control of the Board of Directors so that we can engage other affected agencies(stakeholders) in a dialogue addressing the “transitional” status of the Sequoia and Peninsula Healthcare Districts. It is my intent to have these stakeholders join in a petition to LAFCo seeking an election to resolve the issue. The “status quo” is not an option. The two districts must either:
1. be consolidated and expanded to include all of San Mateo county, or
2. be dissolved.
As a practical matter, funding for an expansion area(if called for by voters) must come from a share of the existing 1% general property tax as it currently does for Sequoia and Peninsula. That is, NO NEW TAXES! That requires enabling legislation. Voters would then decide whether Healthcare Districts are so important that they should be expanded countywide with dedicated funding from a share of the 1% General Property Tax, or whether the Sequoia and Peninsula Districts should be dissolved. If dissolution is the voter’s choice, the dissolved district taxes would be distributed to the surviving agencies within their Tax Rate Areas.
With control of the Board, we would have the power to suspend grants, slash overhead, and reduce or suspend collection of property taxes on an annual basis. This would result in direct savings to property owners. Such an action would bring stakeholders, with an interest in a share of the General 1% property tax, to the table.
Q. Since the district no longer operates a hospital, what do you see as the health board/district’s role in the community?
A. During the transition out of the “status quo”, the district should advocate on behalf of the worthwhile charities which will no longer receive grants of taxpayer dollars from the district.
Q. What do you think residents ought to know about the district/you?
A. District: They should know that much of what the district supports is redundant, and could be more economically run by the county, cities, school districts, San Mateo County Office of Education, fire districts, etc. Also, they should know that much of their grant money benefits non-residents of the district. More than $60,000,000 has been lost since Sequoia Hospital was sold in 1996.
A. Me: They should know that I am not in this for the health insurance premium reimbursement. I have spent much more than that financing the campaigns of like-minded candidates. They should also know that I think they should choose which charities to support.
John J. “Jack” Hickey
I would like to address some of the comments that Mr. Hickey made in his answers to questions posed by the Daily Post, specifically what residents ought to know about the district.
Having served on the Grants Committee for the last three years I have read many of the grant requests and the services are not redundant, rather provide additional funding to the organizations so more residents of the district can receive health and wellness services. I have been associated with nonprofit organizations for over 25 years and they operate more economically than government. San Mateo County contracts with nonprofit organizations because they operate more efficiently and at a lower cost.
The grants that the district provides do not benefit non-residents. Each grantee, in their request, identifies the number of residents they will serve. The Grants Committee compares the percentage of residents to be served to the percentage of the grant request to the total budget for the program. For example, the grantee may provide services to 45% of district residents but the grant represents only 35% the program budget. The district is leveraging other sources of funding that the grantees are utilizing to provide services.
Our schools did not have school nurses, mental health clinicians and wellness coordinators until the Sequoia Healthcare District provided $4.2 million in funding to the schools.
Who are the residents receiving these services? They are our children, our brothers and sisters, our parents!
Michael Garb is a candidate for a seat on the Sequoia Healthcare District Zone A in November’s election. He is Commissioner, First 5 San Mateo County (2012–current)
Board Member, Thrive, the Alliance of Nonprofits for San Mateo County (2012–current)and Retired CEO of StarVista.
The Sequoia Healthcare District majority Boardmembers have rejected my attempts to create an official, board approved policy regarding residency issues of grant recipients. The “de-facto” policy described in part by Michael Garb, has NEVER been approved by the Board of Directors. It can be found on the district’s website.
http://www.sequoiahealthcaredistrict.com/community-grants-program/information-timeline-for-prospective-applicants-grant-cycle-2018-19/
Former Sequoia Healthcare District CEO Lee Michelson provided the below explanation of how this scam works.
“We fund a great number of programs that serve both residents and non –residents. Since our funding is geographically restrictive other funding that does not place the same limitations can then be used to provide services to non –residents. We have never had a problem with that and in fact always encourage them to raise other money to cover the non- District residents. We review spending to make sure that our funds do not exceed the amount that the organization spends on District residents. In the case of Ravenswood, they spend significantly more than $700,000 a year on District residents so we are comfortable that the money that they give them is used for our residents. To indicate that Ravenswood would be serving some of our residents anyway without our funding is a non –issue. Ravenswood like all other organizations have to piece together income from a great number of resources. Some are restricted like ours and others are non –restricted that can be used at will. Our funding allows Ravenswood to serve many more people than they would be able to serve without our help including many more of our residents. Why after all these years that Mr. Hickey does not understand our basic funding principles is beyond me and certainly inconsistent with the thinking of all of the other Board members, our staff and our legal representative.”
SHD grants are nothing more than a reimbursement for services already being provided by Ravenswood. Fungibility is the operative word for the transaction. The Grants Committee has recommended grants to many countywide non-profits which have historically provided services to district residents. St. Vincent de Paul, Second Harvest Food Bank, Peninsula Family Services, are but a few examples.
The $4.2 million subsidy of financially strapped school districts(thanks to the budget-breaking defined-benefit pension plans brokered by teacher unions) was never intended by voters when they approved the creation of Sequoia Hospital District in 1946. School nurses, mental health clinicians and wellness coordinators should be funded from school district budgets. If they need more money, they know how to ask for it.
Michael Garb is a candidate for a seat on the Sequoia Healthcare District Zone A in November’s election. He is Commissioner, First 5 San Mateo County (2012–current)
Board Member, Thrive, the Alliance of Nonprofits for San Mateo County (2012–current)and Retired CEO of StarVista.
Michael says “The grants that the district provides do not benefit non-residents.” He is mistaken. Since the sale of Sequoia Hospital in 1996, more than $60,000,000 has gone to benefit non-residents.
He then summarizes the de facto district policy:
“The Grants Committee compares the percentage of residents to be served to the percentage of the grant request to the total budget for the program.”
The de-facto policy of the board, which has NEVER been approved by the Board of Directors, can be found here: http://www.sequoiahealthcaredistrict.com/community-grants-program/information-timeline-for-prospective-applicants-grant-cycle-2018-19/
Former Sequoia Healthcare District CEO, Lee Michelson, explained the de facto policy thusly:
“We fund a great number of programs that serve both residents and non –residents. Since our funding is geographically restrictive other funding that does not place the same limitations can then be used to provide services to non –residents. We have never had a problem with that and in fact always encourage them to raise other money to cover the non- District residents. We review spending to make sure that our funds do not exceed the amount that the organization spends on District residents. In the case of Ravenswood, they spend significantly more than $700,000 a year on District residents so we are comfortable that the money that they give them is used for our residents. To indicate that Ravenswood would be serving some of our residents anyway without our funding is a non –issue. Ravenswood like all other organizations have to piece together income from a great number of resources. Some are restricted like ours and others are non –restricted that can be used at will. Our funding allows Ravenswood to serve many more people than they would be able to serve without our help including many more of our residents. Why after all these years that Mr. Hickey does not understand our basic funding principles is beyond me and certainly inconsistent with the thinking of all of the other Board members, our staff and our legal representative.
SHD grants are nothing more than a reimbursement for services already being provided by Ravenswood. Most of their funding comes from voluntary contributions, many of which come from district taxpayers. Fungibility is the operative word for the transaction. In the case of Ravenswood, district taxpayers are getting less than 20 cents on the dollar!
The majority on the Board have blocked my requests to “officially” adopt a policy.
School nurses, mental health clinicians and wellness coordinators should be funded in the school district budget. The $4.2 million subsidy to school districts, whose budgets have been compromised by unfunded pension liabilities, was never intended by voters who created Sequoia Hospital District in 1946. If the school districts need more money, they know how to ask for it.