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Grand Jury Report Criticizes Now-Closed Lompoc Champion Center

Lompoc Valley Medical Center leaders say watchdog panel's assessment contains inaccuracies

Lompoc Champion Center Click to view larger
The Santa Barbara County Civil Grand Jury released a report critical of the now-closed Lompoc Valley Champion Center, a substance abuse treatment facility.  (Courtesy photo)

A government watchdog panel has released a report critical of the Lompoc Valley Medical Center’s handling of the now-closed Champion Center, but hospital leaders say the document contains inaccuracies.

In a report released late Monday and titled “Lompoc Valley Medical Center’s Champion Center,” the Santa Barbara County Civil Grand Jury reviews the history of the substance-abuse treatment facility, which closed last year.

The facility for chemical-dependency recovery opened in November 2014 at 303 South C St., the renovated home of the former Lompoc District Hospital. 

“The 2017-18 Santa Barbara County Grand Jury concluded that although the Champion Center began with a vision of community service and the prospect of generating additional income for the district, a combination of factors contributed to the Champion Center’s failure,” the panel said in its report. 

Those factors included relying on one chemical-dependency recovery hospital, Addiction Medicine Services in Hemet, to validate the decision to proceed, along with a failure to engage in market research to assess the potential number of patients, the report said.

The panel also blamed “the lack of a comprehensive risk assessment to examine what could go wrong, instead relying on a feasibility study to determine the district’s ability to repay the bond debt that based financial projections on the same sole chemical-dependency recovery hospital.”

Also cited was the decision to not seismically retrofit the old hospital building housing the Champion Center, leading to delays for licensing and insurance coverage.

“Furthermore, the jury found it disturbing that the Lompoc Valley Medical District leadership interviewed, who were involved with the startup process, stated that no mistakes were made and they had no need to explain the failure of the Champion Center to its voters,” the report said.

The grand jury noted the Champion Center startup costs totaled $2 million, with another $10 million in operating losses.

The district also must repay an $18.75 million loan for renovating the facility. 

Since the closure, the hospital district reportedly has tried to sell the building at an appraised value lower than the remaining bond debt, and also has considered leasing the facility.

In the meantime, the district’s debt service on the bonds adds up to more than $1 million per year until 2042, the report said.

Grand Jury members recommended the Lompoc Valley Medical board of directors report to constituents how it proposes to repay the Cal-Mortgage revenue bond, and how that repayment will affect existing operations.

While the hospital district will release a formal response to the report, officials claimed in a statement Tuesday that the Grand Jury's analysis was flawed.

“The recently released Grand Jury report regarding the closure of the Champion Center, which is owned and operated by Lompoc Valley Medical Center (LVMC), contained a number of inaccurate statements,” said LVMC Chief Executive Officer Jim Raggio. “LVMC disagrees with all of the Grand Jury’s conclusions. 

“Furthermore, LVMC is perplexed that the Grand Jury was unaware the three recommendations it made were all completed by LVMC between June 23 and Aug.1, 2017, a full three months prior to the start of the Grand Jury investigation.”

The report claimed the district’s decision to close the Champion Center “was a quiet one,” and that public notices were not issued. 

However, the district issued a statement in June 2017 announcing the decision to close, and citing the failure to meet financial goals and struggle to keep key staff jobs filled.

The statement led to several media stories about the facility’s closure.

The Champion Center had 34 acute-care hospital beds, 15 residential beds and 30 recovery residences, and had logged approximately 355 patient admissions before it shut down.

While most hospitals are owned by for-profit or nonprofit firms, Lompoc’s is operated by a special district, reportedly one of the first of its kind in California.

A five-member board elected by voters in the district oversees the facility.

Click here to read the full Grand Jury report. 

Noozhawk North County editor Janene Scully can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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