Proposal to redirect Chevron funds to DMC could cost 400 full college scholarships

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West Contra Costa Healthcare District

A proposal to use $15 million of the $90 million community benefits package tied to the Chevron Richmond Refinery Modernization Project to keep Doctors Medical Center open as a full-service hospital would come at the expense of providing about 400 local students with full tuition at a California State University, according to Councilmember Tom Butt.

In his e-forum Monday, Butt asked residents for feedback on a proposal at Richmond City Council to redirect the community benefits funds to the financially struggling DMC, which is slated to close down early next year due to a $18 million annual deficit. About $10 million of the $15 million would be taken from the $35 million earmarked for the Richmond Promise program, which aims to guarantee full tuition for all Richmond high school students over 10 years.

The $10 million could fully fund four-year college tuition for about 400 Richmond high school students, Butt said, while the same sum would keep DMC open as a full-service hospital for about a half-year.

“I would appreciate your opinion on how this $10 million would best be used, 400 college scholarships or  six months of DMC operation?” Butt asked his constituents.

In July, council voted on a $90 million community benefits package with Chevron Richmond that would be spent in the community once construction on the company’s Refinery Modernization Project begins. Aside from using $35 million for Richmond Promise, another $40 million was set aside for projects and programs to reduce greenhouse gas emissions, $30 million of which cannot be touched.

At the time, council voted against using the money for DMC after being told the funds would arrive too little, too late.

Earlier this month, council changed its mind and proposed to use $15 million from the $90 million to keep DMC open as a full-service hospital. It did so despite warnings from both Chevron and the West County Costa Healthcare District that the Modernization Project is facing legal challenges that could push back the start of construction from months to years.

DMC, which has already significantly reduced services, is slated to close in March, and the hospital needs an annual infusion of $20 million, not a one-time contribution, to maintain full services. And after construction begins, the $90 million in funding is set to be dispersed annually over 10 years, meaning only a portion of money set aside for hospital will be available up front.

Those who support redirecting the Chevron Richmond community benefits funds to DMC hope the $15 million will keep  DMC open for long enough that new funding sources will be identified.

According to the health district, a failed May parcel tax measure that would have provided the hospital $20 million annually ultimately doomed the hospital.

The 60-year-old hospital at one point provided about 80 percent of inpatient hospital capacity and nearly 60-percent of emergency-room care to about 250,000 West County residents. But after years of financial troubles, mostly related to the low reimbursement rates from DMC’s many MediCare and Medi-Cal patients, hospital services have been significantly reduced.

Last month, a group of health experts tasked with finding solutions to DMC’s financial troubles ruled out the possibility of preserving a full-service hospital, citing a lack of possible funding sources from the county and other agencies.

Council is scheduled to further consider reallocating $15 million to DMC at Tuesday night’s regular meeting at City Hall.

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