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Due diligence for the proposed affiliation between the Tehachapi Valley Healthcare District and Adventist Health is proceeding – but without the urgency of impending financial disaster or a November ballot deadline.

The district board of directors voted 4-0 on August 7 (President Mike Nixon absent) to table the matter of how to word a ballot measure on the affiliation proposal, thus foreclosing the opportunity to place it on the Nov. 3 ballot for voter approval. The board cited the need for more time to investigate the complexities of an affiliation that involves a 25- to- 30-year lease of all district physical properties, the centerpiece of which is the new hospital.

Eighty-eight days advance time is needed for an item to qualify for a ballot.

"There wasn't a sufficient degree of certainty as to how the final contractual relationship would work out," district CEO Eugene Suksi told Forde Files on Aug. 12.

While the negotiations have made "great progress," he said, there are still hurdles.

"I was relieved. I don't want to get it wrong. You can't meet all the legal requirements in four or five months."

Suksi compared the current arrangement to being engaged but not married yet.

"I suspect they are as relieved as we are to get it right."

Adventist Health said in an Aug. 13 press release that they must be diligent in reviewing the Tehachapi hospital operations "so as we begin managing healthcare services we can ensure the best quality and service outcomes from the start. This takes time."

Construction bond funds approved by the voters of the healthcare district totaling $65 million to build the Tehachapi Replacement Critical Access Hospital – whose cost has risen to $95 million -- are due to run out in November. Adventist's offer of $25 million to complete the hospital was a tasty inducement to hurry up and get the matter on the November ballot, but the district's financial picture is looking better.

"The district has financial reserves we didn't have last year," Suksi said. "We have the ability to fund the [hospital] project into 2016 with reserve funds. We are looking at April, 2016 for the [special] election."

The financial urgency, he said, "Is not eliminated but eased. We have breathing room. We have had the ability in the past year to increase our financial reserves."

With the reserves accumulating, he said, funds in the form of loans would be easier to access from banks.

The district has more than $6 million in its coffers. A little more than a year ago, funds had been as low as $500,000.

The ballot language is an important milestone in the affiliation process, Suksi said.

"We could speed it up but not speed it up that much. We don't want to get boxed in with vague language with no time to change. How do we lock in on this without all the information we need?"

Voters in the healthcare district need to approve the proposed affiliation because it involves more than 50 percent of the physical assets of the district. A simple majority vote of 50 percent plus one would approve affiliation.

District counsel Scott Navé, in attendance at the Aug. 7 meeting by audio, asked the board not to act on a ballot statement yet. "It takes nine to 12 months for due diligence," Navé said. "We have now been working on it for four-and-a-half months.

"A deal this size is not complete until due diligence is done. In the interest of the board, the district, and the community, more time is needed for investigation. We will be ready by the end of September. That's a realistic time frame."

Adventist Health has 20 hospitals in California, Washington, Oregon and Hawaii, 13 of which are in rural areas.

"Adventist has been great to work with," Navé said. "They are professional. They are smart. It's not their first rodeo. In September or October we'll come back to you [the board] and be ready to go from there."