Unemployment spikes, while the boss rakes in millions.

Thursday, May 5, 2011

A friend who works for Monterey County government describes the atmosphere around his office these days: “Nobody’s making a lot of eye contact right now. There are a lot of whispered conversations. There’s a lot of, ‘Has so-and so talked to you? No? So-and-so hasn’t talked to you? That’s great, because if so-and-so hasn’t talked to you yet, you’re probably not being laid off.’” 

Who so-and-so is depends on the department where you work. Plug in the name of any one of dozens of human resources representatives; if so-and-so is coming your way with a sympathetic look on his or her face, chances are you might be packing your desk that afternoon. In all, more than 300 county employees will be having that chat with so-and-so. 

At the city of Salinas, meanwhile, layoff season launched on Tuesday, with 52 employees on the receiving end of some so-and-so’s delivery. Of those 52, 22 are sworn officers from the Salinas Police Department, and nine others are civilian employees of the department – the losses, says Police Chief Louis Fetherolf, will be crippling. 

And then there’s Salinas Valley Memorial Hospital, where hospital president and CEO Sam Downing just said goodbye to his $668,000-a-year salary – and hello to a $150,000-a-year pension. For 40 years of service that saw the hospital develop important partnerships, like the one with Stanford Hospital that brought a world-class heart center to Salinas, $150k seems reasonable. 

Far less reasonable, though, in a story broken by the Los Angeles Times, is the estimated $3.9 million in supplemental retirement benefits Downing’s former board of directors voted to give him. Cash! Health care for life! Fabulous prizes! Brought to you courtesy of Downing’s board buddies, Jim Gattis (real estate developer), Harry Wardwell (banker) and Nathan Olivas (ag businessman). I’m extrapolating here, because I don’t know if it was a 5-0 vote, but it’s a fair guess that the other board members, Patrick Egan (high school teacher) and Deborah Nelson (nurse), at least raised a whimper of opposition to the package. Regular working folks tend to be like that.  

“THE SENIOR ADMINISTRATION GETS MEDICAL CARE FOR LIFE. THE WORKERS GET SHOWN THE DOOR.” 

But all of them – Downing included – should have a sit-down with another friend of mine, a non-union member who, after closing in on two decades of work he loved doing at Memorial, was shown the door last Friday without so much as a thank you. No insurance, no pension, just a few thousand dollars (and by a few, I mean, far less than $10,000) to walk away, handed to him with an attitude of “Don’t let the door hit you on the way out.” They offered to let him stay until the third week of May, but had he done so, he would have left without those few thousand dollars, and he’s going to need that money. He has two daughters for whom he is the sole support, no more medical insurance, and he had to put some gas in the tank on Friday so he could drive down to the county and file for unemployment – something he’s never done in his life. He’s also going to have to drive his daughters down to the county and get them on Medi-Cal. Food stamps are a distinct possibility too. 

He describes the atmosphere at the hospital as unsettling. Nobody is eating in the cafeteria. Like the county, it’s become a place of no eye contact and whispered conversations. 

“The mood with the people who are left is, ‘Is this a place we want to stay? Is this somewhere we want to be when all is said and done? Am I going to be next?’” he says. “We all understand the economics of business, but things just seemed to fall apart. 

“The senior administration gets medical care for life, the worker bees get shown the door,” he adds. “It’s absolutely devastating. I thought this was the last job I was going to have.” 

These types of egregious payouts happen when nobody pays attention. Fortunately, the Times has become expert in these types of stories, recently winning a Pulitzer Prize for blowing open the that scandal plagued government and the overpaid officials of the tiny city of Bell.  

And because the Times paid attention, now the state government is paying attention. Assemblyman Luis Alejo (D-Watsonville) has proposed an audit of the hospital district, calling the Downing payout “unconscionable” and questioning the seemingly cozy relationships the board members’ various interests (Rabobank, the California Air Show) enjoy with the hospital. Joining him in the audit demand is Assemblyman Tim Donnelly (R-San Bernardino), who says the taxpayers deserve to know how something like the Downing package could happen. 

Hospital spokeswoman Adrienne Laurent says Alejo should have just called; the board would have clarified it for him.  

And if you believe that, you probably believe in fairy tales and the myth that a powerful board acted transparently as well.  

MARY DUAN is the Weekly’s editor. Reach her at mary@mcweekly.com.

Mary Duan is such a leftist tool – and a pedantic one at that. Mary, did you actually sit in on the board meeting where Downing was awarded his massive pension? If so, I’m sure you were able to record how everyone on the board voted. Right? Just because there’s a nurse on the board and so-called regular working person, they must’ve both voted against Downing’s big payout. What leftist dreamland narrative. You’re such a nitwit! Knowing the composition of that board it’s not hard to believe that the vote awarding Sam Downing all that lucre was 5-0. In fact, before you throw out baseless allegations, why don’t you make a PRA (Public Records Act) request and ask for the minutes of the SVMH board meetings so that you can see exactly how every member of the board voted and read their comments? Nah, that would be too much work and you’re far too lazy to make the effort.

Secondly, it wasn’t the L-A Times that uncovered Downing’s big pay and benefits – it was a local guy named Mark Dierolf who is a member of a Salinas-based taxpayer advocacy group called City Watch. It was Dierolf (who made PRA requests) who back in 2008 uncovered Downing’s pay et al. He also discovered that SVMH had established shell corporations to funnel benefits and bonuses to Downing. One of those shell corporations was CCI – “Concentrated Care Incorporated”. Once knowledge of CCI was made public, SVMH shut it down, forming other shell corps to take CCI’s place and offer the same functions.

All of this info about Downing’s pay and benefits came out during the 2008 campaign for Measure “W” – a parcel tax that would’ve raised nearly half-a-billion dollars for Downing and SVMH to spend on a seismic retrofit and renovation of the hospital. City Watch produced a 3x5 four-color card with one side detailing the excessive pay and bonuses of SVMH’s top brass, while the opposite side showed homeowners how much their property taxes would be increased by passage of “W”. The card worked and helped defeat “W” with nearly 80% of the votes cast being “No”. By the way, this reflexively leftist, high tax-loving newspaper endorsed Measure “W” and would not even look at any material that was critical of the tax or the motives of the hospital. Like I said, the Monterey County Weekly is nothing more than a tool for the establishment and the status quo.

I think the media is missing the main story. It isn't Sam's retirement package. It is why Sam, after 40 years of major leadership and high visiblilty in the Salinas community chose to have someone else announce his precipitous retirement (2 weeks??) and then have no comments to the media about that announcement. There must have been a major disagreement between Sam and the BOD for this to occur. And interestingly, to have someone so handy in the wings, the interim CEO (for $10,000 per week) who happens to have most recent experience as hired gun in another tax district hospital. There is more to this than the media eyes are seeing. Something does not sit "right" here. Carol Voss Prunedale

Universal Generosity and a Perfect Storm are the True Issues at SVMH

For 15 years I have been a non-union employee at SVHM, I received a buy out package letter last summer and I live in fear of losing my job everyday. I have seen many of my fellow workers let go from the bottom to the top. But I have also seen some things that have got us into the situation we are in. It may seem easy for me to say some of these things, because I still have my job, but they need to be said

I have just about had it with irresponsible journalism that is running ramped through this county and obviously in our local papers. Mary Duan is no exception and I suggest she research more, before writing article that can be such a powerful influence. Here are some of my truths. While the cafeteria has slowed because of some layoffs, it is still a busy place. Unless the employee mentioned is a per diem he has a nice pension package coming at 65, if he has 20 years with SVMH. He was given $7000 not a couple of thousand to leave early. Most financial advisors recommend you have 6 months living expenses encase you lose your job. I know that sounds a little cold, but we have to take on some responsibility for ourselves.

I believe that most of the information coming out of the media has been instigated by a newly elected union that is using SVHM as a pilot program to establish itself in California. They want to look tough and are not compromising and looking for support. Everything I have seen is that SVHM is in a serious financial situation and they need to make cuts to survive and be competitive with other hospitals. The biggest mistake the board has made, is that they have waited to long to implement these changes.

It is true these are difficult times for SVMH and it’s employees. As the newly elected Union would have you believe this is an isolated incident, that the board, Sam , interim CEO and the administration has decided out of the blue to really start making some real money by screwing it’s employees and lining their own pockets.

Read More -What Really Brought SVMH to a Place of Despair

What Really Brought SVMH to a Place of Despair

Generosity to Employees It may be that Sam was over compensated by the board, but some of these benefits were set up decades ago, with a cash out instead of money payments. You can say the same thing about Sam and the administration being too generous towards their employees and the community. Most of the service employees at SVHM are paid double what there counterparts are paid on the peninsula. Nurses are paid handsomely as well. Long-term union employees make more than some managers. All benefited employees have enjoyed a huge benefit package, with full medical for work done at SVHM, a great DB pension and 8 weeks vacation per year. Other benefits include a subsidize cafeteria, free meals on some holidays. Years past the employees were treated to many free extravagant events. It is true that admin is looking into taking some of these benefit away, because they can’t afford it and stay competitive.

Generosity to the Community SVHM over the years has put on many community events and been a sponsor to some great causes. They have traveled to other parts of the world to set up clinics and train staff how to use the equipment they have donated. It would take thousands of pages to describe what SVMH has done for this community and the world. Money well spent?

Government Forces SVMH to Spend Million of Dollars in Retro Fit Without the Bond passing this has put a huge drain on SVHM operating funds and without a the bond passing, thing are even worse

Patient Census Before the meltdown in 2008, patient census averaged between 160-220. For the past two years it has been at 100-150. Revenues and been cut dramatically. It takes a census of 166 to break even.

Charity Care The economic downturn has brought many more people to SVHM for help. Charity Care has gone from $2 million to $15 million per year

Medicare and Insurance SVHM receives less money from Medicare. Insurance companies are directing people to less expensive hospitals in the Bay Area and LA.

There are more reasons for the shape SVHM is in. I think is sad how fast our community has turned it’s back on SVHM, considering what it has doing for our community and it’s employees. The rumor mill and the blame are creating smoky mirrors and I suggest you find the truth before you condemn a hospital that for over a half a century has been financially sound and has been a neighbor that truly cares. These are difficult economic times for the whole county and SVMH is not the exception.

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Layoffs, Payoffs