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Sierra Kings Board Unanimously Approves Plan for Hospital, Clinics to Join Adventist Health

Community Partnerships

REEDLEY – Sierra Kings District Hospital and its five rural health clinics came a step closer to joining Adventist Health / Central Valley Network on Thursday, when the Sierra Kings Healthcare District Board of Directors unanimously approved a letter of intent confirming an agreement with the not-for-profit network.
The agreement will allow the struggling hospital and clinics to stay open by joining a growing network of Valley hospitals and clinics that is focused on improving access to quality care in rural communities. Adventist Health / Central Valley Network opened the new Adventist Medical Center in Hanford in 2010 and more than 20 additional sites across the Valley in the past five years.
The letter is a binding agreement for the parties to proceed to a final document for approval of both the district and Adventist Health Boards of Directors.
The agreement also must be approved by district voters and regulatory authorities. The ballot initiative, Measure G, goes to district voters in a June 7, 2011, special election.
Community members and leaders at the meeting Thursday praised the board for its unanimous decision and said they are eager for the transfer to be completed.
The agreement also was endorsed by the board of directors of the Greater Reedley Chamber of Commerce, who voted earlier Thursday to support it, said Valerie Pieroni, chamber executive director.
Agreement terms, which were based on an independent fair-market analysis, include:

  • A 15-year lease at $800,000 a year, subject to an increase adjustment. The estimated value of the lease payments over the term of the lease is $12 million.
  • Purchase of rural health clinics for $4.6 million, paid on the closing date.
  • Purchase of equipment for $3.7 million, paid on the closing date.
  • An amount equal to the adjusted working capital reflected on the district’s balance sheet, currently $4.5 million. The actual amount will be determined based on the balance sheet at the closing date.

A portion of the proceeds will be used to retire the district’s revenue bonds, an amount estimated at $7.5 million. The remaining funds will be available to satisfy claims in the District’s Chapter 9 Bankruptcy, including those of employees.
Adventist Health also agrees to offer employment to district employees subject to its employment policies and benefits. 
Adventist Health / Central Valley Network operates Selma Community Hospital and Community Care clinics in Reedley and Parlier, which are part of the Sierra Kings district, as well as more than 40 other locations in southern Fresno, Kings and eastern Tulare counties. The network is part of Roseville-based Adventist Health, a not-for-profit health system operating 17 hospitals in California, Oregon, Washington and Hawaii.
Sierra Kings Healthcare District comprises the 49-bed Sierra Kings District Hospital and Birthing Center in Reedley as well as rural health clinics in Reedley, Parlier, Dinuba and Orange Cove. The district filed for bankruptcy protection in October 2009.