Layoffs at Palm Drive Hospital

<p>Palm Drive hospital in Sebastopol has eliminated 10 full- and part-time positions and cut the hours for nearly 30 other workers in what officials describe as a necessary step for the publicly owned facility to emerge from bankruptcy protection.</p><p>The work reductions occurred as the number of the hospital’s patients recently decreased, though officials said that the counts are normally lower in summer than during winter flu season.</p><p>As well, the action comes days before Palm Drive is scheduled to ask the Sonoma County Board of Supervisors for a $3 million short-term loan. The loan would allow the hospital to pay off creditors, emerge from bankruptcy protection and issue revenue bonds that would allow for needed capital improvements.</p><p>“This is something that needed to be done,” hospital board President Linda J. Johnson said of the layoffs. “We can’t go three to four months with high staffing and low (patient) census.”</p><p>She acknowledged that it was hard to release workers who had “provided excellent service and care.” But she maintained that the layoffs wouldn’t affect hospital programs or patient care.</p><p>Palm Drive entered bankruptcy protection in April 2007 and owes creditors about $2.8 million. Officials said the hospital should be emerge from that protection this fall.</p><p>James Russell, the chief executive officer who came to the hospital this spring, said the cuts amounted to about 10 percent of the hospital’s total staffing. Before the reductions Palm Drive had close to 200 full- and part-time workers.</p><p>“These were very difficult decisions and we did not take them lightly,” Russell said of the layoffs.</p><p>Dan Smith, a high-tech entrepreneur and the hospital’s chief benefactor, supported the layoffs and said that Russell and his management team are providing the necessary leadership for Palm Drive’s future.</p><p>“He’s making all the right moves to bring the hospital into financial stability and long-term security,” Smith said.</p><p>On Tuesday the county supervisors will consider a request by the hospital for the $3 million loan. County administrators have noted the benefit of the proposed one-year loan, but recommended that the supervisors develop a policy for considering such requests.</p><p>Russell said the hospital seeks to issue up to $15 million in revenue bonds but cannot do so until it emerges from bankruptcy protection.</p>