By Mary-Justine Lanyon
After careful consideration, the members of the Mountains Community Health board of directors unanimously approved placing a bond measure on the Nov. 3 ballot.
But before they took the measure to a vote, CEO Mark Turner said he wanted to “go back in time to refresh your memories as to why we are doing the project and how we will pay for it.
“If this hospital didn’t exist,” he said, “EMS would have to take patients off the mountain for care and then come back for the next one.” The existence of MCH, he added, “keeps residents from having to travel down the mountain.”
MCH has served the mountain communities since 1951; currently they serve 40,000 patients a year. “Without this project, the future of local access to healthcare is at risk. MCH cannot continue operating in a 75-year-old building for much longer,” read one of the slides in Turner’s PowerPoint presentation.
The seismic upgrade – which is mandated by the state – will bring MCH into compliance with California safety requirements. That upgrade must be completed by 2030 and will keep the hospital’s license intact.
In addition to completing the seismic upgrade, the construction project also includes a new acute care wing, a new emergency department, an expanded Skilled Nursing Facility and an improved arrival area with a required covered drop-off area.
“We are working in outdated facilities,” Turner told the board. “We won’t meet future healthcare standards.”
One thing that will be added to the facility is better climate control. The patient rooms currently do not have air conditioning; its addition will be good for infection prevention as well as comfort.
“It’s a competitive world out there,” Turner said. “We will be able to attract and retain additional high-quality staff by having modern, safe facilities for them to work in and care for their patients.”
Disaster readiness is healthcare access, he added. Noting that hospitals had collapsed in the Sylmar and Northridge earthquakes, Turner said MCH will be required to not only remain standing but be fully functional. “People will need healthcare services so we will have to be open,” he said.
To prepare for making the upgrades, MCH had a financial feasibility study done. That study showed they could afford to borrow and repay $48.5 million. The study also showed they would be able to raise the funds to pay the other $23.5 million of the project for a total estimated cost of $72 million.
They had obtained a USDA loan for $48.5 million at the low interest rate of 3.5 percent.
That was the plan two years ago. “We felt comfortable and didn’t feel the need to go to the taxpayers,” Turner said.
But then, in 2025, the federal government passed HR1, also known as the One Big Beautiful Bill Act. That bill, Turner said, cut nearly $1 trillion in Medicaid funding over 10 years.
“It took us a few months to figure out how this would impact us,” Turner said. “Pre-OBBBA we had a comfortable margin, which the USDA liked.” But following the passage of the bill, MCH determined they could expect to lose $4 million in revenue beginning in fiscal year 2028.
“We determined we would not generate sufficient operating cash to meet the annual USDA principal and interest obligations,” Turner said. “We asked our financial advisors for ideas on how we could continue with the project and keep the USDA funding in place.”
With the proposed bond, the cost and USDA loan remain the same. The $61 million to be raised by the bond would be used to pay the principal and interest payments on the USDA loan.
And, yes, this more than needed to repay the loan. There may be a $12.5 million cushion to cover any unforeseen project costs or any new projects that hadn’t been anticipated.
MCH had conducted a survey last March of likely voters, asking for their reaction to a bond. The results were favorable – 72 percent in favor even with some negative arguments presented.
The funds generated by the bond, Turner noted, can only be used to pay the debt service.
The wording of the bond resolution
So, what will voters be voting on in November? This is the wording that will appear on the ballot:
To repair and upgrade 75-year-old Mountains Community Hospital including: fixing deteriorating
roofs, plumbing, electrical, and safety systems; upgrading/expanding emergency department, medical technology, and treatments; and maintaining local access to life-saving emergency medical care for
accidents, heart attacks, strokes, and other emergencies, shall San Bernardino Mountains Community Hospital District’s measure be adopted authorizing $61,000,000 in bonds at legal rates, levying $25 per $100,000 assessed value ($3,500,000 annually) while bonds are outstanding, with independent oversight and all money locally controlled?
Each August, the tax levy would be calculated based on the assessed value provided by the county for the coming year.
Director Barry Hoy said that, doing the math in his head, the amount collected each year would increase as assessed values go up. “That indicates to me we would be able to retire the request for money earlier than 30 years.”
Financial advisor Adam Bauer of Fieldman Rolapp said that “you will only collect what’s available for debt service. The intent is for the tax rate to be lower than $25. Down the road, when you refinance, 10 years after the bond is issued, you can take the savings and apply them to the later years and prepay.
“This is a very typical outcome with a general obligation bond,” Bauer added. “Toward the tail end, the tax rate is lower or you pay it off early.”
A campaign committee will be formed and will share additional information with the community prior to the Nov. 3 election.
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