Guest Column                                       Return to "News Stories about LHH and SFGH" Index
West of Twin Peaks Observer
June 2008

[Note: Material in bold, italic, red text is material originally submitted, but cut due to space limitations in the Observer]

General Hospital Rebuild Questions Remain
by George Wooding

The San Francisco Department of Public Health (DPH) has proposed a $887.4 million General Obligation Bond measure for the rebuild of San Francisco General’s Hospital and its Level 1 Trauma Center. The November 2008 hospital bond ballot measure will be almost three times larger than any other bond measure in San Francisco’s history. The bond measure requires a two-thirds (66.67%) majority vote to pass.

But the City Needs to Rebuild SFGH Responsibly

The DPH’s administration has already proven to be completely inept with the Laguna Honda Hospital (LHH) rebuild. Good doctors are not necessarily good stewards of public funds or public planning. The DPH has a sad history of misleading the public, changing bond projects, creating enormous cost overruns, favoring special interest groups, and disrespecting the will of the San Francisco voters. In 1999, the DPH told San Francisco voters that LHH was going to be a 1,200-bed, long-term care health facility for the frail elderly and severely disabled. The nearly completed LHH will only be a 780-bed facility for 90-day stay, short-term rehabilitation patients. At last report, the LHH rebuild budget is at least $152 million dollars over budget and they have not even completed two-thirds of the rebuild. After the LHH rebuild fiasco, it is difficult for voters to believe that DPH’s administration can be trusted to do a good job with the San Francisco General Hospital (SFGH) rebuild.

The actual costs of the SFGH rebuild are staggering. The City will spend $30 million preparing for the bond. The general obligation bond will cost $887.4 million. The hospital’s furniture, fixtures and equipment will cost approximately another $157 million. The debt service on the general obligation bond will cost an additional $640.3 million. Providing there are no project cost overruns and everything is perfectly planned, the cost for the 284-bed facility will be approximately $1.7 billion, at a minimum. Just based on the $887.4 million bond figure, the average cost of each room will be $3.1 million. Just four years ago, the Health Commission was told that the industry average was $1 million per room, not $3.1 million.

$7.M million Will Be Spent on an Art Enrichment Plan at SFGH

The costs of building the new 284-bed acute care facility and Level 1 Trauma Center will impose a substantial tax on San Francisco property owners and renters. The $887.4 million bond will feature a 50% pass through to San Francisco tenants. No matter how the City sugarcoats this bond measure, the SFGH rebuild bond will consume a large portion San Francisco’s future property taxes and rent increases. The City is claiming that the property taxes that will pay for general obligation bonds will be capped at the fiscal year 2005-2006 annual gross property tax rate of 12.0%. This may explain why this June’s Proposition A education bond is a parcel tax and not a general obligation bond. If Proposition A passes, homeowners will be paying $198.00 per year incrementally, but the parcel tax will not increase the annual amount of general obligation bonds paid by homeowners.

The City’s current general hospital and trauma center was built to a high seismic safety standard in 1974, but does not now comply with new California hospital seismic guidelines created in 1994 after the Northridge earthquake damaged hospitals in Southern California. The State’s new seismic standards require California hospitals not only be able to survive an earthquake, but must also be able to operate after an earthquake. San Francisco General must either have the new hospital rebuilt by 2013, or file for a seven-year extension to complete the acute care rebuild by 2020. The DPH dragged its feet for 14 years planning the SFGH rebuild.

The City was not able to attract any qualified general contractors in 2007 when the SFGH rebuild project was first put out to bid. The City then began negotiations with Webcor, a local, general contractor which is 70% owned by the Obayashi Corporation, a Tokyo-based global construction holding company. In 2008, WebCor signed an interim agreement with the City and has since been participating in project meetings with its subcontractors and the design firm Fong & Chan Architects to arrive at project costs for the SFGH rebuild.

The SFGH rebuild costs are just the beginning of the indebtedness cost increases to City voters. The SFGH rebuild is just one of three hospital projects proposed under the SFGH Institutional Master Plan Update. Other projects include the medical helipad proposed on the rooftop of the main hospital (Wing C), and the proposed installation of emergency generators for backup power supply to the entire hospital campus. The generators have to conform to the same seismic timetable as the hospital rebuild and their replacement costs were not included in this bond.

If accountability to the voting public were an issue, the San Francisco Department of Public Health’s administration would never be allowed to manage another dollar of a hospital bond rebuild. Only in government does failure lead to promotion.

Unlike private enterprise, there is no fiscal accountability nor fiscal responsibility at the DPH. So what if LHH is $152 million over its rebuild budget — let’s go to lunch. If DPH administrators had been fired or held responsible for what happened to the LHH rebuild bond, the public could begin to trust the DPH.

Instead of taking responsibility, the DPH has spent almost $250 thousand over the last 12 months on public relations salaries and a “soft-branding” public relations campaign [for Laguna Honda’s replacement project].

The DPH administration has lost the trust and respect of the voters If the DPH cannot take responsibility for its past failures and mismanagement of voter bond money, it is doomed to make the same failures with the $1.7 billion SFGH bond measure.

Beyond that, there is another looming problem with the SFGH rebuild, and it involves the City’s Capital Planning Committee meeting held about a month ago. DPH’s director Dr. Katz was in attendance and one of his chief aides described how DPH may be planning to short-circuit the environmental impact review (EIR) process on the SF General project by moving the issue to the Board of Supervisors before the mandatory comment period is over.

Before the EIR is finalized, voters should contact their district supervisors.

San Francisco voters really need to ask themselves if it is wise to hand $1.7 billion to the same group of DPH administrators who orchestrated the biggest general obligation bond disaster in the history of San Francisco.

George Wooding
Midtown Terrace Homeowners Association

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