Community Hospital’s Role Amid COVID-19

Fourth district Councilman Daryl Supernaw agreed to use $250,000 in Long Beach taxpayer funds, allocated but unspent to operate his council office, to pay for elevator repairs at LB’s unopened-Community Hospital to expedite its opening as a COVID-19 patient transfer facility with no commitment by its City Hall-chosen lessee/operator to reimburse taxpayers.

On April 14, the City Council will decide whether to approve spending the quarter million dollars as an advance to “MWN Community Hospital, LLC” and treat the sum as permanently spent with no guarantee of its reimbursement for LB taxpayers unless MWN or state taxpayers or some other sources do so.

The agenda item by Councilman Supernaw states that “The repairs are not associated with future use of the hospital as an acute care hospital and are solely to provide funds to MWN in making the Community Hospital available as a COVID-19 patient transfer center to better protect regional health and safety.”

In 2019, the council agreed to lease the city-owned facility to the for-profit MWN LLC for a smaller roughly 20-30 bed version of LB’s former Community Hospital. As a COVID-19 patient transfer facility, MWN would operate with up to 158 beds to handle overload from other area hospitals at capacity from COVID-19 patients.

“Our office was presented with the opportunity to expedite the early reopening of the hospital for a COVID-19 response, and I did not hesitate in issuing my approval,” Councilman Supernaw said in a March 29 response to our inquiry. Councilman Supernaw noted at that time that as part of the city’s 2019 lease with MWN Community Hospital, LLC, the city agreed to split up to $25 million [over 15 years] for the cost for a seismic retrofit and “as such, there will be a ‘true-up’ process at the end of the year if expenditures on the elevators are considered eligible for city credit against the seismic commitment. At the moment, we cannot say with certainty if this will be deemed eligible for that credit, but it will be considered as part of the negotiation.”

In an April 14 council agenda item, Councilman Supernaw writes:

“In response to the emergency declarations, leadership at MWN has offered to make Community Hospital available for COVID-19 emergency support to the regional area via a contract with the California Department of Public Health (CDPH), which will allow Community Hospital to coordinate inpatient transfers during the emergency.

“To prepare for patient transfers, MWN is required to expedite repairs and certifications at Community Hospital to handle the immediate workload anticipated for the COVID-19 response. Repairs include but are not limited to repairs to the elevators. The elevator repair cost alone is estimated to be $250,000. To support the effort to make the Community Hospital available for COVID-19, the Fourth Council District recommends allocating and transferring $250,000 of its One-time District Priorities Funds to immediately complete the elevator work. The city will then perform the required repairs through a city contract even though it is technically the responsibility of MWN.

“The repairs are not associated with future use of the hospital as an acute care hospital and are solely to provide funds to MWN in making the Community Hospital available as a COVID-19 patient transfer center to better protect regional health and safety. The city would be making these repairs effectively as an advance to MWN with the understanding that MWN and the city will work together to secure reimbursement to the city for these costs from the State or other sources. However, there is no assurance of reimbursement.”

Background

On March 18, 2020, state Senators Lena Gonzalez (D, LB-southeast LA County) and Tom Umberg (SE LB-west OC) and Assemblyman Patrick O’Donnell (LB) wrote Governor Newsom and CA’s Dept. of Public Health Director, telling them that Long Beach Community Hospital “is ready to immediately open the hospital to provide urgent care and serve those who need to be isolated and quarantined.”

Their letter stated that “in order to reopen the facility and ensure there is enough capital to pay employees and provide critical services, we strongly urge emergency state funding authorized by SB 89” to be allocated to Community Hospital. SB 89, enacted by the state legislature, provides roughly $1 billion that Governor Newsom’s administration can allocate for COVID-19 uses.

On March 19, MWN Community Hospital LLC, stated in a release that Community Hospital would reopen “for the specific purpose of accepting [COVID-19] transfer patients beginning this Saturday March 21.” As a “patient transfer facility,” it would presumably handle non-COVID-19 patients from other hospitals facing a surge in COVID-19 patients.

Community Hospital’s release said its 158 bed facility would include 10 intensive care beds and 10 ventilators. It quoted John Molina, a co-founder of Pacific 6 Enterprises which is a partnering entity in MWN Community Hospital LLC, as thanking the Governor, state officials and the City of Long Beach for “decisive efforts in the swift reopening of Community Hospital.”

But Long Beach Community Hospital didn’t open on March 21. Through a spokesman, it states: “Right now, we are working around the clock to finalize the arrival of patients from local hospitals and to ensure that we have the necessary staffing, equipment and medical supplies to guarantee their safety and care. We did not accept patients today, however we expect to start accepting transfer patients in the coming days. We’re working with the state, specifically CDPH, on the necessary licensures for the hospital and will keep you updated with any developments…”

(By publication deadline, the governor’s press office and CDPH hadn’t provided us with the status or amount of any AB 89 funds for Community Hospital COVID-10 related purposes.)

Quarter Million In Long Beach Taxpayer Funds

On March 27, with Community Hospital still closed, Councilman Supernaw told recipients of his weekly emailed newsletter: “Last Saturday’s plan to begin accepting transfer patients from area hospitals ran into some glitches. The good news is that the issues are being resolved, and CHLB should be back on track in a matter of days. One of the issues involved upgrading of the elevators in order to pass inspection. Our council office was able to step up and provide the required funding of $250,000 to get the upgrade done immediately. It’s important to note that this money does not come from ‘one-time district priority funds,’ so there is no impact on CD4 infrastructure projects including street and sidewalk repair. All the funding for CHLB is a budget surplus from running our council office at a very efficient level. In FY 2019, our office operations came in $245,494 under budget. That amount, along with office operating budget savings from previous years, has been used to help reopen Community Hospital.”

On March 29, we asked Councilman Supernaw about this and quoted a portion of the city’s 2019 lease with MWN Community Hospital LLC, which states in pertinent part:

“Tenant acknowledges that it has not received and Landlord has not made any warranty, express or implied, or representation as to the condition of the premises. Landlord shall have no responsibility to bring the premises into compliance with any laws, rules or regulations (including but not limited to any building or occupancy codes, or certification or accreditation requirements) or to bring the premises into “move in” condition. Landlord shall have no liability to tenant and tenant shall have and make no claim against Landlord for any damage, injury, loss of use or loss of business caused by the condition of the premises. [Lease, Section 1, paragraph A, pp. 1-2]

We asked Councilman Supernaw if he or the city “have some agreement or understanding with MWN providing for reimbursement for LB taxpayers of that $250,000 sum, and whether or not there was such an agreement or understanding at the time, if you believe MWN should reimburse LB taxpayers for that sum?

Councilman Supernaw replied: “As stated in our weekly newsletter last Friday, I allocated $250,000 for repair of the Community Hospital elevators. It is an important distinction to note that these funds came from our CD4 office operating budget surplus. We did not use funds earmarked for items such as infrastructure repair, tree trimming or neighborhood services.

“The allocation was for immediate repair of the elevators is to expedite the use of the facility for a COVID-19 response. In the event that we are able to secure a reimbursement for the elevator repair from outside funding or from MWN, we will certainly do that. Additionally, the city has agreed to split (up to $25 million) the cost for a seismic retrofit. As such, there will be a ‘true-up’ process at the end of the year if expenditures on the elevators are considered eligible for city credit against the seismic commitment. At the moment, we cannot say with certainty if this will be deemed eligible for that credit, but it will be considered as part of the negotiation.

“Finally, if the premise of the question is whether or not the allocation was made on the condition of a reimbursement, it was not. Our office was presented with the opportunity to expedite the early reopening of the hospital for a COVID-19 response, and I did not hesitate in issuing my approval. My staff and I have worked very hard to build our office operating budget surplus, and it is very gratifying to see the funds go to such a worthy cause.”

On March 28, an MWN spokesman said in an emailed statement the firm has “been working with the city and the state to ensure Community Hospital is ready to accept patients. We’re optimistic that these pieces will come together within this next week.”

On April 9, 3rd district Councilwoman Suzie Price sent a mass emailing stating that: “As of the CDPH’s last visit on April 4, hospital officials are expecting the contract and license will be approved within the next few days. Once these are approved, Community Hospital will join other area hospitals on the frontline of caring for residents and the community.”

Bill Pearl publishes LBREPORT.com, now in its 20th year.