June 3, 2020 Staff Report 6.2 Consideration of Determinations Supporting Dissolution of the Palm Drive Health Care District in Anticipation of a Proposal for Dissolution by the District

Analysis 

Staff has received a proposal from the Palm Drive Health Care District seeking dissolution of the District. The proposal has been deemed complete by Staff, and a hearing on the proposal will be conducted at a duly-noticed public hearing at the Commission’s July meeting.

The Cortese Knox Hertzberg Act allows the Commission to order dissolution of the District without confirmation of the voters within the District under proscribed conditions (§57103 and §57077.1).  One of those conditions is that the dissolution is consistent with a prior Commission action – specifically, a prior sphere change §56425, study §56378, or a Municipal Service Review, §56430.

Further action is required to meet this requirement.  The Commission adopted a Municipal Service Review of the District in 2016, and an addendum to that report in May 2019. Those reports made determinations that were relevant to two detachment proposals, and although dissolution of the District was countenanced as a possible reorganization option, it was not specifically addressed in the determinations that the Commission adopted.

Staff has prepared an additional Municipal Service Review determination, with supporting discussion, for consideration by the Commission. If adopted, the determination would support the dissolution proposal filed by the District, and would allow the timely dissolution without conducting a protest proceeding or election by the registered voters in the District’s territory.  Thus, this action facilitates the most efficient pathway towards dissolution.

Should the Commission consider adopting the determination, Staff has prepared a draft resolution.

Determination

Staff recommends that the Commission consider adopting the following determination:

Given that the Palm Drive Health Care District no longer provides two of its three authorized powers, and that the District has filed a proposal seeking dissolution, dissolution of the District is warranted.

Discussion

As noted in the Municipal Service Review conducted in 2017, the District was granted three powers upon formation in 1999 (voters approved the tax measure to fund the District in 2000). The District was authorized to provide “emergency, acute care and other medical services”.

As noted in the Addendum to the Municipal Service Review, adopted by the Commission in 2019, the District sold the health care facility to the American Advanced Management Group in 2019, after seeking approval from voters within the District’s territory. At that time, the District no longer provided emergency or acute care services, directly or through a management agreement.

The District has continued to provide limited community health services through grants to community organizations, an activity that could fall under the “other medical services” authorized power.

Whether the District could continue to operate, without exercising the powers to provide emergency and acute care services, has been variously discussed, but no determination on the matter has been entertained by Sonoma LAFCO to date. Generally there is some consensus within the community that the primary if not sole activity of the District was to support the provision of emergency and acute care services at the facility in Sebastopol.

Perhaps of most import however, is that the District Board has determined that the District should be dissolved, with a successor agency (the County) assigned to wrap up the financial affairs of the District. Fundamentally, this means managing the continued collection of tax assessments in order to pay off debt.

Recommendation 

Staff recommends that the Commission consider adoption of a determination indicating that dissolution of the Palm Drive Health Care District is warranted. A draft resolution has been prepared that would make this determination.

Alternate recommendation 

Staff is reticent to rely on previous determinations adopted by the Commission for the District to support a dissolution adjudication that would obviate the need to conduct a protest proceeding and potentially an election by the voters within the District. Therefore, staff does not have an alternate recommendation to present to the Commission.

Attachments 

1. Draft Resolution