From the desk of

John J. "Jack" Hickey, Minority Member
Sequoia Healthcare District Board of Directors
243 Ferndale Way
Emerald Hills, CA 94062-3905
(650) 368-5722 ph/fax

25 August, 2003

Honorable Gray Davis
Governor, State of California

Dear Governor Davis:

The attached Resolution forms the basis of a budget bailout program which I propose for your consideration.

The following excerpt from an article published in the Silicon Valley/San Jose Business Journal (Week of July 26, 1999) should refresh your memory regarding the issue.

Unfunded mandate to force tough calls
Peter Delevett
Business Journal Staff Writer

Thanks to a 1994 state law, almost every hospital in the South Bay could be torn down within the next 10 years.

That admittedly drastic scenario comes courtesy of SB 1953, which established strict seismic standards for inpatient facilities.

The California Healthcare Association, which represents the state's hospitals, estimates its members could be forced to pay a combined $10 billion by 2008, and an additional $14 billion by 2030, on seismic retrofitting.

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And, since you are a Member of the Little Hoover Commission, you must be aware of the nearly $20 Billion in assets accumulated by Districts which seem to have lost their charter.

I offer you this opportunity to "do the right thing", even as I campaign to be your successor. I am offering the same opportunity to my fellow candidates and also the elected members of the Legislature.

Sincerely,

John J. "Jack" Hickey

Whereas a $25 Billion unfunded seismic retrofit mandate has been imposed upon California hospitals by the state for highly questionable reasons; and,

Whereas many of the Hospital/Healthcare Districts are contemplating the expenditure of excess accumulated assets to comply with the mandate; and,

Whereas excess assets of these Agencies are near $20 Billion; and,

Whereas the Sequoia Healthcare District is one such district; and,

Whereas these assets belong to taxpayers and ultimately must be returned; and,

Whereas California’s budget deficit and credit rating issues could be resolved by bailout loans of those assets, to the State, by such Districts; and,

Whereas it has been intimated by Warren Buffet that proposed bond underwriting costs, paid for by California taxpayers, would earn $$$ millions for Merrill Lynch;

Resolved;