Frequently Asked Questions

On August 6, the Petaluma Health Care District approved a non-binding letter of intent providing for the sale of Petaluma Valley Hospital to NorCal HealthConnect, LLC, a secular affiliate of Providence St. Joseph Health. Below are Q&A about the sale.

Where can I obtain more information?

Below are the most commonly asked questions regarding the sale. You can find additional information, such as details on the proposed sale and upcoming public meetings, on our Hospital Updates page

If you cannot find an answer to your question or have an additional question, please submit your question using one of the following options

1. Submit a question via our online form: Question Submission Form; or

2. Email us at pvh@phcd.org. Please include your question, name and contact information; or 

3. Call us at (707) 285-2143 x136 and leave a voicemail with your question, name and contact information including email.  

General Questions

Is Petaluma Health Care District selling Petaluma Valley Hospital?

Yes, the District is recommending PVH’s sale to NorCal HealthConnect. The sale will be finalized, if definitive agreements are executed, and the public votes in favor of the sale. 

Who is the District selling the Hospital to?

NorCal HealthConnect, LLC, a secular affiliate of Providence St. Joseph Health (PSJH).

Who is NorCal HealthConnect and how do they relate to St. Joseph Health?

NorCal HealthConnect, LLC is a secular affiliate of PSJH.

Were there other parties interested in Petaluma?

Yes.

Historically, in 2017, following an RFP process that included both lease and sale options, the District elected to engage in negotiations with PSJH for a new lease. When the parties were unable to agree upon acceptable terms, the District engaged with another bidding party, but those negotiations failed. The District was then approached with a proposal to lease the Hospital to a joint operating company (JOC) formed by PSJH and Adventist Health. However, that did not proceed due to the Attorney General declining to consent to the JOC in October 2019.

Over the past several months, conversations and negotiations were held with several parties interested in leasing PVH. However, the terms for leasing were not as favorable as what the terms of sale with NorCal HealthConnect provide this community. All in all, NorCal HealthConnect presented the best opportunity to ensure continued operation of the Hospital and its current services (other than The Family Birthing Center), including its emergency department, for a minimum of 20 years. OB services will continue for a minimum of 5 years.

The District intended and worked diligently to promptly explore all viable options to secure an operator. While this process has taken five years, it is important to note that hospital services continued throughout this process as a result of the District’s ongoing work with PSJH.

Why did the District ultimately choose a Sale Agreement?

The District’s number one priority is to ensure continued access to a local acute care hospital with an emergency department.

The District agreed to a sale because it was the only option that assured the Petaluma community access to a local acute care hospital with an emergency room for a minimum of 20 years. As a result of the sale, NorCal HealthConnect will assume responsibility for deferred and ongoing maintenance, capital expenditures and seismic compliance.

Why a sale instead of a lease?

There are several additional reasons why the sale of the Hospital to NorCal HealthConnect is preferable to a lease from both The District and NorCal HealthConnect’s perspectives. A lease transaction is far more complicated and raises issues of who is responsible for ongoing capital expenditures (including substantial amounts which are anticipated to be required for seismic compliance), lease termination provisions, and how to determine fair market value at a future point in time for a purchase option.

Why did Petaluma Health Care District and NorCal HealthConnect cease negotiations for a lease?

The District had very deliberate discussions with PSJH regarding a lease of the Hospital. These discussions included either party’s right to terminate the lease at several intervals during the lease term, the earliest at year 8. If the lease ended at Year 8, the community would be required to restart the process to identify an operator as early as in 5 years. Importantly, there is a real risk that the community would be left without an operator in 8 years and the Hospital could close. Even if the lease was not terminated at Year 8, there were a number of milestones in later years that presented obstacles to ensuring sufficient funding to continue the lease. In addition, the new owner and operator was reluctant to make substantial capital improvements to PVH if it was not confident it would be operating the hospital for the long term.

Can NorCal HealthConnect close the hospital?

The District ensured that the terms of sale required the new operator to maintain the facility as an acute care hospital with an emergency department for a minimum of 20 years. If the public does not approve the sale, a PSJH subsidiary will continue to operate the Hospital for up to 30 months and then return the Hospital to the District. During that time, the District Board will re-evaluate its options to lease or sell the Hospital, if possible. If the public doesn’t approve the sale, it is possible the Hospital will close if no new operator is identified within 30 months after the election.

Who is responsible for this decision – the District or PSJH?

The decision to sell the Hospital is in the District’s sole discretion, contingent upon approval by the voters. However, the parties worked collaboratively to develop the most optimal long-term solution for the Hospital.

Is the District being forced to sell?

No, the District made the strategic decision to recommend a sale.

Can the District operate Petaluma Valley Hospital itself?

The District thoughtfully and thoroughly evaluated this as an option and determined that it does not have sufficient financial resources to provide working capital and other capital needed to be able to operate PVH. 

Did the District have another option besides a sale?

The District explored a lease of PVH but determined based upon its discussions with NorCal HealthConnect that a sale is a more favorable option for our community.

How long did negotiations take place before the decision to pursue a Sale Agreement was made?

This is the 3rd time the District has engaged with PSJH to negotiate a hospital operations agreement. A sale has always been an option under consideration. After the Attorney General declined the proposed JOC (job order contract) between PSJH and Adventist Health to lease the hospital, negotiations began again with PSJH directly and involving its secular affiliate, NorCal HealthConnect. Discussions shifted to a sale when the negotiations concerning a lease became more complex and a sale became a stronger, more viable option for both parties.

Do you anticipate any reason why the District or NorCal HealthConnect may not sign or consummate the Sale Agreement?

No. That being said, the term sheet is a non-binding agreement, the parties are negotiating and have to sign definitive agreements, and the public has to approve the ballot measure.

Do you anticipate any reason why the community might not support and vote yes on the Sale Agreement?

The proposal ensures the long term continued operation of PVH, emergency services, and the continuation of PVH as a large County employer. In these uncertain times, we believe the proposed transaction represents the type of investment in and commitment to the community that needs to be made.

When will the community vote on the proposed sale?

We anticipate a ballot measure in the general election, November 3.

If the community votes yes - when will the sale close?

The closing is expected to occur on or before December 31, 2020.

What will happen to the Hospital’s day-to-day operation until the sale close?

The hospital will operate its business as usual.

What happens if the ballot measure does not pass?

If the public does not approve the sale, a PSJH subsidiary will continue to operate the Hospital for up to 30 months and then return the Hospital to the District. During that time, the District Board will re-evaluate its options to lease or sell the Hospital, if possible. If the public doesn’t approve the sale, it is possible the Hospital will close if no new operator is identified.

When does the current PSJH lease-term end?

The parties have agreed that the existing PSJH subsidiary operator will continue to lease, operate and manage PVH for up to 30 months if the District and NorCal HealthConnect terminate the sale transaction or if the public votes against the transaction. Thereafter, the operations will be transferred back to the District.

What are the next steps to complete the transaction?

Definitive Agreements are being negotiated and need to be finalized and signed. The District will submit a ballot measure for approval of the Transaction to the County for a public vote in November, and the ballot measure will have to pass.

How do I vote on the ballot measure?

You must be registered to vote and reside in the District’s jurisdiction.

I read about the Nurses picketing - how will that impact the proposed Sale Agreement?

The District is aware of the concerns raised by the nurse’s union and the difficult negotiations process between the nurses and PSJH. We can’t comment on negotiations between PSJH and the nurse’s union other than to say PSJH has informed the District there is a good faith effort to close open contracts prior to the transaction closing.

The Hospital is one of our community’s largest employers. The District’s paramount concern is the continuation of the Hospital to serve our community. The proposed sale presents the best opportunity to achieve this goal. It secures the continued operation in the community of an acute care hospital with an Emergency Department for at least 20 years.

It is our hope the nurse’s union and PSJH will reach an agreement as soon as possible.

Proposal Details

Where can I access the Term Sheet/Board Presentation? Is it public?

The information can be accessed on our Hospital Updates page. A video of the board presentation can be viewed on that page, as well as the text of the resolution for approving the proposed term sheet for sale. The video can also be viewed at this YouTube link

Are there any unfavorable terms that the District is opposed to?

The District believes that the terms of the proposed sale are the most favorable terms currently available that ensure the long term continued operation and success of PVH.

Why is the Family Birthing Center only guaranteed to continue for 5 years?

In this era, many community hospitals are closing their OB services. The District was able to secure a commitment to operate The Family Birthing Center for a minimum of 5 years.

Community Impact

What will the District’s role be now?

The Petaluma Health Care District will continue to serve as a local community health care leader, focused on improving the health of southern Sonoma county residents. The District works to ensure local access to acute care and emergency services. Utilizing a community health needs assessment, the District works with local, regional and state partners to identify community health priorities and takes action to engage in policy, system and environmental change to reduce health disparities and improve health outcomes. The District invests its money and resources in programs, services, initiatives and local organizations dedicated to supporting the health and wellness of southern Sonoma county residents.

What does the District plan to do with proceeds of the sale?

The District plans to undertake an in-depth process to develop a community involved strategic plan for investing in services and programs to improve health in southern Sonoma County. We will work in collaboration with our nonprofits, health, business and community leaders, and with input from our residents to develop the strategic plan.

We will invest in programs supporting our region’s most challenging community health priorities such as: health equity, education, mental and behavioral health, senior wellness, homelessness and housing.

How do I participate in the public Board Meeting(s)?

All Board meetings are public, and we encourage the public to participate. During the pandemic, we have been holding virtual meetings. At each meeting, there is an opportunity to provide public comment. Board meeting information can be found on our website here or by contacting our board clerk at: gstudebaker@phcd.org.

When are the scheduled public Board Meetings?

The Board has regularly scheduled board meetings monthly. Typically, the monthly meetings are scheduled the 3rd Wednesday of the month at 5pm. At times such as this, additional meetings are scheduled. We recommend the public access board meeting information here for specific dates and times. Anyone who would like receive board agendas can do so by contacting the District board clerk at: gstudebacker@phcd.org.

Will I still be able to use/access Petaluma Valley Hospital (PVH) as normal?

Yes, PVH will remain open and accessible, as normal. At the District, we remain committed to our trusted community members and have been working tirelessly to ensure that your health and safety is of utmost importance. It is because of this that we are making changes to safeguard your access to a quality hospital and emergency services.

Will I still have access to the same doctors and providers I am used to seeing?

Your access to physicians and other providers should not be affected by the proposed sale.

Why were you not more transparent during the negotiation process?

Transparency is important and we were transparent when the NDAs and negotiation process allowed. We have been involved in discussions with a number of potential operators concerning a lease or sale of PVH for more than four years. During the time period when the District believed it had negotiated a transaction that would benefit the community, it reached out to the community to explain and discuss the option and obtain community input. Its been a very long process. 

I have Kaiser, why should I care?

Kaiser-insured residents, like all community members, are to go to the closest Emergency Room when experiencing an emergency. PVH serves as a resource for all residents of Southern Sonoma County, regardless of insurance coverage. If you are a Kaiser patient and live in southern Sonoma county, PVH is your ER.

Are we going to end up like Sonoma-West or another closed community hospital?

There were many factors that impacted the sustainability of Sonoma West. Over 20 years ago the District Board engaged in a long-term lease arrangement with a health system to help ensure the financial sustainability of the hospital. The District is now proposing to the community of voters a sale which will help ensure continued access to their local hospital for a minimum of 20 years. 

Is the District concerned about the future of PVH?

The Board remains committed to ensuring this vital community asset is protected, enhanced and is correctly positioned to meet the challenges of evolving industry and regional dynamics. We are confident that the proposed sale is the best available alternative to achieve this goal.

Caregiver / PVH Employee Specific Questions

Is my job safe? Will I remain employed at PVH?

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for an answer to this question. 

How will this affect my daily job responsibilities/tasks/shifts?

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for a more complete and up-to-date answer to this question.

Is my job safe? Will I remain employed at PVH?

Yes. All active hospital employees who meet NorCaL HealthConnect’s  usual and customary hiring practices and policies will be offered employment by NorCal and continue to be employed by NorCal for at least six months following the sale. The District and NorCal are committed to and value the health care workers at PVH. We value and commend their continued commitment and service to their patients during the past four years of uncertainty. 

How will this affect my daily job responsibilities/tasks/shifts?

We do not anticipate changes to employees’ positions, daily routines, responsibilities and roles.

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for a more complete and up-to-date answer to this question.

How will my pay and benefits be affected? Will my compensation remain the same? Will I see a change to my overall benefit package?

NorCal HealthConnect has committed there would be no downward change to employee’s salaries for at least twelve months and benefits and collective bargaining agreements would be assumed by NorCal HealthConnect.

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for a more complete and up-to-date answer to this question.

How will this change affect my patients and our community?

We do not anticipate any changes to the care and well-being of PVH patients. We believe that the community will see added benefit and services as a result of this sale and the long-term viability of PVH.

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for a more complete and up-to-date answer to this question.

As a hospital employee, how should I respond if someone asks me about this announcement?

If you receive an inquiry by any member of the press/media, please do not comment and instead refer them to Ramona Faith, CEO of PHCD. If you receive an inquiry from a colleague, you may inform them that their employment status doesn’t change at PVH and direct them to NorCal HealthConnect at norcalmarcomm@stjoe.org for further information.

Where can I direct people to find additional information regarding this announcement?

Please direct all inquiries to Ramona Faith, CEO of PHCD at rfaith@phcd.org or to NorCal HealthConnect at norcalmarcomm@stjoe.org.

You can also direct people to visit phcd.org to find out more about the proposed sale.

Will additional assistance be provided to PVH employees?

As employment questions are under NorCal HealthConnect’s purview, you can reach NorCal HealthConnect by contacting them at norcalmarcomm@stjoe.org for an answer to this question.

What does this mean for the unions? Are union contracts still in place?

Yes. The union contracts remain in place and NorCal HealthConnect will assume such contracts as the new owner and operator. 

Are there any other changes I need to know about?

Not at this time. However, as a public entity, we will remain transparent and communicate any new information or updates, as we move through this process.

About Petaluma Health Care District

How long has Petaluma Health Care District (PHCD) existed?

Petaluma Health Care District was formed in 1946 when we operated Petaluma General Hospital. Petaluma Health Care District was able to open Hillcrest Hospital in the hill of West Petaluma in 1957. In response to increased public need, Petaluma Valley Hospital was build in 1980 in Eastern Petaluma.

What is Our Mission, Vision and Values?

The Petaluma Health Care District's mission is to improve the health and well-being of our community through leadership, advocacy, support, partnerships and education.

The Petaluma Health Care District envisions

  • A healthier community
  • A thriving hospital
  • Local access to comprehensive health and wellness services for all

The Petaluma Health Care District's Core Values are: Collaboration, Commitment, Dignity, Excellence, Innovation, Integrity, and Social Justice.

Is Petaluma Health Care District a Non-Profit Organization?

No we are a government entity and therefore tax-exempt. We operate to fund and deliver services related to our mission.

How does PHCD operate?

The Petaluma Health Care District is governed by a publicly elected five-member board of directors to serve Southern Sonoma County. These volunteer directors serve a four-year term and may serve consecutive terms. The CEO provides strategic direction to managers and administration. The District consistently works towards improving access to health services as well as serving as a catalyst to bring additional services to our community, and advocates for health-related issues for Southern Sonoma County.

 


Who Are We?

We are your Public Agency Dedicated to Health in Southern Sonoma County.

What is a Health Care District?

Health Care Districts are public entities that provide community-based health care services to residents throughout the state. They respond to the needs in the District by providing a range of services, which may includes a hospital, clinic, skilled nursing facility or emergency medical services; as well as education and wellness programs. Each of California's Health Care Districts is governed by a locally elected Board of Trustees who are directly accountable to the communities they serve.

Health Care Districts were formed in the mid 1940's to address a shortage of hospital beds in California. They are governed by Local Health Care District Law that allowed communities to form these special districts to build and operate facilities and programs to meet the health needs of their residents. To help subsidize these healthcare services, communities can impose property tax assessments, with voter approval. To date, the Petaluma Health Care District does not operate with any tax assessments and relies on revenue produced through our Lifeline Program, real estate investments, and portfolio. To date, the Petaluma Health Care District does not operate with any tax assessments and relies on revenue generated through hospital lease payment, direct services and investments.

The Petaluma Health Care District is your public agency managed by a publicly elected board of directors. We serve the residents of Petaluma, Penngrove, Cotati, and a select area of Rohnert Park. Our service area includes 85,000 residents in Petaluma, Penngrove, and a select area of Cotati and Rohnert Park.