Governor Signs Bonta Bill to Hold Eden Health District Accountable to the Public

Wednesday, September 21, 2016

(Sacramento, CA) – Today Assemblymember Rob Bonta (D-Oakland) is proud to announce that Governor Brown signed his bill, AB 2737, which holds the Eden Health District accountable for wasteful public spending and failing to fulfill its mission of directly providing health care to residents in San Leandro, Castro Valley, San Lorenzo, Hayward, and other near-by communities. 

AB 2737 requires the District spend no more than 20 percent of its budget on administrative costs.  The Eden Health District doesn’t provide any direct health services to the public. Instead it simply exists as a grant making entity disbursing funds to community non-profits that in turn provide healthcare services.

The Eden Health District generates revenue from various investments including real estate holdings.

“The Eden District now essentially functions as a commercial real estate management operation, rather than a healthcare provider for the public,” said Bonta.  “Unfortunately, the mismanagement of the district and failure to meet the stated mission has gone on for too long and has violated the public trust by spending a disproportionate amount of their budget on administrative costs and not on helping people.”

The Alameda Grand Jury investigated the Eden Health District and found 88% of its total 2015-2016 operating budget was spent on non-health care related expenses such as real estate activities, administration and consulting expenses. The remaining 12% went to indirect or direct health care programs.

“I want to thank Assemblymember Bonta for his leadership on this issue,” said Mayor Pauline Russo Cutter of San Leandro. “The basic foundation for a healthcare district’s existence is to provide direct healthcare services. The signing of AB 2737 supports this principle and helps ensure the health and well-being for the residents in San Leandro and the region.”

Historically, healthcare districts were established to help address the health needs of local communities. Due to the shortage of health care services and access to doctors in the 1940s, the Legislature enacted the Local Hospital District Law to give communities the ability to use local tax dollars to construct and operate hospitals and other health institutions. The districts were established and operated as public entities with locally elected governing boards.

In 1948, the Eden Township Healthcare District was established to serve the health needs of Castro Valley, San Leandro, San Lorenzo, Hayward and other nearby communities by building and operating Eden Hospital. In 1954, Eden Hospital opened providing direct healthcare services to the community. Currently, Eden Health District no longer owns or operates a hospital.

Assemblymember Bonta represents the 18th Assembly District, which includes the cities of Oakland, Alameda, and San Leandro. Bonta Chairs the Asian Pacific Islander Legislative Caucus, Assembly Public Employees, Retirement, and Social Security Committee, and the Select Committee on the Status of Boys and Men of Color.