Gov. Brown signs Palm Drive Hospital debt relief bill

Gov. Jerry Brown has signed into law legislation that will offer bond relief to the Palm Drive Health District, and possibly make available millions of dollars in bond escrow funds that could assist the district in reviving Sebastopol's Palm Drive Hospital in some form or another.

AB 582, by Assemblyman Marc Levine, D-San Rafael, places a statutory lien on the district's parcel tax revenue, committing the funds to bond payments. That assurance to bond holders would allow the district to seek an upgrade in its current junk bond rating.

"I hope this will help us get reopened," said Jim Maresca, a Palm Drive Hospital board member.

Maresca said the statutory lien will free up about $2 million in cash from a bond escrow fund. Refinancing the district's bond debt would mean another savings of between $3.5 million and $4 million in future interest payments, he said.

Marsha Sue Lustig, vice president of the hospital board, said the law will help the district pave a new route for future health services in the west county.

"Whatever health services we venture into in the future is how that money will be used," Lustig said.

Lustig said that the district board is conducting community outreach to local residents and medical professionals to determine what the health care needs are. A "community listening session" is scheduled for Monday, June 23, between 2 and 4 p.m. at the Fire House in Bodega Bay, 510 Highway 1.

Lustig said the end result at the former hospital site could be a hospital or "something completely different, some other types of medical services."

Meanwhile, the district has received two proposals to revive the hospital's Palm Drive Hand and Physical Therapy facility. The facility is located in a separate building at 968 Gravenstein Highway S. in Sebastopol.

One of the proposals comes from a group of physical therapists who worked at the facility in collaboration with the Palm Drive Health Care Foundation, which has also submitted a proposal to reopen the hospital.

The therapists hope to reopen the therapy facility by early September and are calling for the district to take over management after one year of operation. Palm Drive's physical therapists would seek a new license for the facility and start-up costs are estimated at $150,000.

A second proposal comes from Sonoma Valley Hospital, which also operates physical therapy unit.

Kelly Mather, Sonoma Valley Hospital CEO, said the Sonoma proposal would kick back 20 percent of revenues to the local district.

"We could make $20,000 to $28,000 a month if we get back a majority of the patient volume they had in the past," Mather said.

Levine said this week the bill he authored will give the hospital district more flexibility in bringing medical services of some sort back to the area.

"Palm Drive Hospital is currently contemplating its future," Levine said in a statement. "It is my hope that the hospital find a means to reopen and serve West County. The cost savings achieved by AB 582 will help make that a reality."

You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com.