ICBOC citizens group issues report on hospital bond expenditures
A volunteer citizens group that is overseeing how the Grossmont Healthcare District (GHD) is spending millions of dollars in voter-approved public financing for construction projects at Grossmont Hospital in La Mesa has issued a special report on construction progress and how action was taken to protect $85 million in taxpayer dollars.
The group, called the Independent Citizens’ Bond Oversight Committee (ICBOC), began meeting in September 2006 following the successful passage in June 2006 of Proposition G, a $247 million bond measure that is financing various capital construction projects at Grossmont Hospital. As specified in the ballot measure, ICBOC members include East County residents who are experienced in project management, large-scale construction operations and finance. ICBOC members also include representatives from Sharp Grossmont Hospital, as well as designees from the San Diego County Labor Council and San Diego County Taxpayers Association. Prop. G passed by more than 77 percent, well above the two-thirds required.
The ICBOC’s special “Mid-Year Report to the Community” is available on the Internet at a publicly accessible website, http://icboc.gafcon.net/Annual Reports/2008 ICBOC Mid-Year Report.pdf. Gafcon, Inc., a San Diego-based construction management firm, is managing the website, as well as providing administrative support to the Committee.
The Mid-Year Report gives an update on the first construction project covered under the bond measure, which involves the addition of 90 new beds to the hospital’s emergency department (ED) and critical care unit (CCU) tower. The Report says the $41 million ED/CCU project, which began in late 2007, was originally scheduled for completion by the end of 2008, and is now currently scheduled for completion in Spring 2009.
In addition, the Mid-Year Report explains how the GHD board of directors recently took action that resulted in protecting about $85 million in taxpayer dollars, which were generated by the August 2007 sale of general obligation bonds. The monies had been initially invested with Citigroup, the financial giant that has suffered billions in write-downs due to losses from the mortgage crisis. Due to concerns over Citigroup’s financial condition, the GHD board opted for early termination of its agreement with Citigroup and, subsequently, reinvested the funds in safer government-backed securities and bond funds with Union Bank of California. The Report states that Citigroup not only returned the remaining balance of the $85 million but also paid an additional $3 million in termination fees and interest.
In a letter that appears in the Mid-Year Report, ICBOC chair Ernest Ewin explains the ICBOC’s purpose is to inform the public of District expenditures of revenues received from Prop. G bond proceeds. “Our Committee has been assigned with the task of overseeing bond proceed expenditures to ensure that taxpayer dollars on infrastructure construction are spent effectively and efficiently, as well as to inform taxpayers,” Ewin wrote.
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