Background

In 1994, the state of California enacted Senate Bill 1953, which established stricter seismic safety standards for general acute care hospitals in California. The legislature required all hospitals in the state to meet these new standards by 2013. In order to achieve this goal, Mills-Peninsula Health Services (MPHS), the current operator of Peninsula Medical Center, and the Peninsula Health Care District (the District) Board completed two independent studies. Both studies concluded that rebuilding the hospital was the best approach to meet the newly passed SB 1953. Although a retrofit was found possible, the cost was significant and there was no guarantee that the hospital could remain open during retrofitting, greatly limiting access to quality health care in our community.

Measure V

Last fall, after six years of negotiations and over 100 public meetings, the District Board voted to approve the agreement with MPHS to build a new $488 million modern medical campus on District land with no new taxes.

As part of this agreement, MPHS will pay $1.5 million a year to the District in rent for use of District land for the 50-year term of the lease, after which time the hospital will be transferred back to the District. The District will reimburse MPHS the book value of the new hospital (a substantial discount) at the time of this transfer.

After the Board approved the new hospital agreement on August 30, 2005, MPHS submitted the new hospital plans to the Office of Statewide Health Planning and Development (OSHPD) for approval. The District secured MPHS’ guarantee that they would not walk away from the hospital project before completion.

The agreement also allowed MPHS to defer or eliminate items up to 15% of total projected cost in order to stay within budget. MPHS provided the District with a list of such items, which fell far below the 15% and included the potential removal of conference rooms, business offices, three operating rooms, the fitness center and helipad, in addition to the removal of some exterior finishes.

A special August 2006 election for approval of the agreement was requested in order to keep the project on schedule and within budget. The agreement was forwarded to District voters as Measure V in a special mail-in ballot election on August 29, 2006.

Measure V passed with over 92% of the vote.