Editor’s Note: Some of the identities within the piece have been omitted out of privacy concerns, though the message conveyed
is important to the community of the North Coast, we felt it was a gesture of good faith in the spirit of general transparency.
By Brian Cameron
It all started with the unexpected resignation of three sitting board members
on the Nehalem Bay Health District (NBHD) and the subsequent fallout from having a number of publicly elected officials resign their positions.
First on the minds of many is the question of why. Why would three elected officials unexpectedly
resign, despite the fact of being voted in to fulfill a role on the taxing district? The answer still may be unknown but there’s a lot to consider with how the district, and their current tenants, move forward.
As it stands, the three members to resign from the NBHD were Joel Sacks, Dr. Larry Zagata and Ted Weissbach, as well an earlier stepping down by former board member Jennifer Angelus.
“This is the beginning of the end for the Health District,” said one former NBHD board member. “I really don’t think they understand what this stuff means for the near future.”
Nehalem Bay Health District is a taxing district within north Tillamook County that acts in a landlord/tenant fashion to the various properties it oversees. Those properties include the building that houses the Rinehart Clinic, the old Wheeler Hospital facility and the Nehalem Valley Care Center. The NBHD relies upon the annual revenue from the lease agreements
from these properties as part of the District’s general operating budget, in addition to the taxes accrued throughout
Historically, the NBHD has used these funds to facilitate landlord related issues like maintenance for structural items, water systems and building heating and cooling related concerns.
The NBHD decided these concerns to be primary and have worked over the years to provide that kind of service to their tenants. However, there is the secondary concern of the NBHD to work to have the old Wheeler Hospital building demolished,
as the structure has been deemed by the State of Oregon unsafe. Riddled with asbestos, the old building will be expensive to demolish, and over the years the NBHD has saved enough funds in order to have the building taken down, the amount in question rests at approximately $1 Million, give or take.
Recently the Rinehart Clinic officials proposed a reexamination of their lease agreement with the NBHD. They wish to have their monthly lease payment decrease from $5,724/month to just $1/year for a period of 50 years.
This dramatic change would effectively deprive the NBHD with nearly $70,000 of annual operational revenue. Revenue that has been used to fulfill the health district’s duties, but also goes into the coffers to eventually get the old Wheeler Hospital demolished.
According to the former sitting NBHD board member, the prospective loss of those funds could represent the beginning of the end for the health district and the way it fulfills its mission to the North Coast citizens.
“If the Health District gives the clinic building to the Rinehart Clinic for one dollar a year, then it takes away half of the district’s income and the long term survivability of the district is a few years at best,” said a former board member.
They estimate that with only half the operational budget
to work with, the NBHD would suffer severely, which would trickle down to the quality and conditions of care regarding the only remaining facility the Health District oversees; the Nehalem Valley Care Center, which employs 50 full time positions in north Tillamook County, not to mention provides skill-care for elderly patients amidst an aging demographic within the surrounding communities.
The fear on behalf of the previous sitting board members
is that if this new lease is adopted, then the fallout could be at the detriment of the Nehalem Valley Care Center, a number of full time, living wage jobs and the overall financial disintegration of the taxing district.
Last March, during the monthly NBHD board meeting,
a number of unexpected attendees showed up, which was open for the general public.
According to the former sitting board member, the nature of the guest’s concerns struck them as odd, in some cases misinformed, and in a few instances the comments the guests were fielding were borderline threatening.
The following month more people showed up, and the trend continued until some on the board simply felt they’d had enough and elected to step down.
“The going trend we saw with the meeting’s public attendees is that almost all seemed to have a close social or even personal relationship with people who are directly involved with the Rinehart Clinic.” Said a former NBHD board member. “Marc Johnson,
who was one of the listed attendees at the meetings, was recently appointed to the NBHD board by the Tillamook County Commissioners in the wake of the resignations, Johnson’s
wife Patricia currently sits on the Rinehart Clinic board.”
This concept brings to mind the idea that there may be a forming conflict of interest on the NBHD board, and the rules regarding this are crystal clear.
Oregon Revised Statute (ORS) 441.540 lays out the expectations
of publicly elected board officials throughout the State of Oregon. Subsection four of the law states “A director
is a public official subject to the requirements of ORS Chapter 244 based on actual conflict of interest or a potential
conflict of interest arising out of the director’s relationship
with a nonprofit corporation,
including employment with the nonprofit corporation or a relationship with a foundation
that provides assistance to the nonprofit.”
Following the laws of conduct
for an elected board member,
the definition of Potential Conflict of Interest clearly says “Any action or decision by a person acting in a capacity as a public official, the effect of which could be to private pecuniary benefit or detriment of the person or the person’s relative, or a business with which the person’s relative is associated.” If the situation is as such it does appear that the NBHD and the Rinehart Clinic are more than closely connected through the personal relationships of those on their respective boards.
Much of these assertions are based out of perception as nothing actually illegal has transpired, unless the notion of potential conflicts of interest can be shown between the NBHD and the Rinehart Clinic board. However, according to Camy Vonseggern, President
of the Rinehart Clinic board, a great deal of what has happened was unbeknownst to them and that she agrees that a constructive relationship
between the two entities is a preferred course moving forward.
“We don’t really want to focus on old business and issues,” said Vonseggern. “We feel that the payments to the NBHD are perhaps exorbitant on our behalf and that we would prefer to renegotiate the details of our lease.”
As far as the close relationship
by some of the board members with the two entities, Vonseggern suggested that if there was an actual conflict of interest then the due process was not followed at some point, but that this was not up to the Rinehart Clinic board to determine. However, she noted the relationship between Marc Johnson and his wife Patricia
was well known prior to his appointment to the NBHD board.
In response to the assertion that the Rinehart Clinic is acting
to populate the taxing district
board with pro-Rinehart Clinic individuals, Vonseggern was steadfast in saying that the clinic has never acted in such a way.
“We have never done this,” said Vonseggern. “In the past we’ve offered a liaison to the NBHD board to act as a voice for the Rinehart Clinic, but that’s all we’ve officially done.”
When there are a number of elected officials who resign from their positions due to no confidence; it’s a brow-raiser. And even more so when two opposing boards; one a public taxing district, another a private healthcare facility, rely off of one another, there are likely going to be conflicts that arise. To top it all off there’s a million dollars of taxpayer’s money sitting in the coffers of the NBHD, and the concern moving forward is that if the NBHD board is populated by people who act with pro-Rinehart Clinic concerns, then the money earmarked for demolition of the old hospital could be used up for operating costs if the rental agreement is altered with the Rinehart Clinic.
Which still leaves the impending question of what to do with the old Wheeler Hospital building, which according to the State of Oregon has to come down by June 2018, and it won’t be a inexpensive process.
As of the time of publication,
the Tillamook County Commissioners had not responded as to the potential conflicts of interest that may lie within the members of the two respective boards.