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Hospital opens wallet to save executives' pay

Courtesy of El Camino Hospital El Camino Hospital 

A Peninsula ballot measure that would limit the pay of executives at El Camino Hospital faces its toughest opposition from the hospital, which has donated three-quarters of the campaign funds to defeat the proposal. 

El Camino Hospital has contributed $149,000 in an attempt to defeat Measure M, which would cap the annual salary and compensation package for hospital executives, managers and administrators to twice the salary of the governor of California.

Gov. Jerry Brown makes $173,987 a year. Tomi Ryba, El Camino Hospital’s CEO, makes $695,000 a year, about four times as much as the governor. She also is eligible for a bonus of up to 30 percent if she meets certain performance goals.

At least nine other hospital executives also would see their compensation shrink if local voters approve Measure M on Nov. 6, according to hospital spokeswoman Chris Ernst.

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The hospital, which has campuses in Mountain View and Los Gatos, is by far the largest contributor to the “No on M” committee, which had received just under $200,000 in monetary contributions by the end of September, campaign finance fillings show.

Three of the five members of the steering committee for the “No on M” campaign have close ties to the hospital: David Reeder sits on the hospital board; Gary Kalbach serves on the governance committee of the hospital board and Claudia Coleman heads the board of the El Camino Hospital Foundation.

The ballot measure grew out of a labor dispute at the hospital. Members of a union representing some of the hospitals’ lowest-paid workers, the Service Employees International Union United Healthcare Workers West, gathered signatures to put the measure on the ballot earlier this year.

El Camino Hospital had imposed a contract on the unions’ members, requiring them to pay more for their health care benefits. The measure qualified for the ballot in April.

But since then, relations between union members and hospital administrators have improved. The two parties struck an agreement in September for a three-year contract, which offers the workers, among other benefits, a free health plan for themselves and their families.

Steve Trossman, a spokesman for SEIU-UHW, said that the union is now focusing its “money and people” on trying to pass Proposition 30, Brown’s tax measure, and defeat Proposition 32, which would limit unions’ political fundraising and donations. 

“That’s our focus, and as a result we’re not really focusing on Measure M,” he said. “It’s kind of dropped off our radar screen, because of these other measures.”

No campaign finance filings have been made in support of Measure M, according to the Santa Clara County Registrar of Voters.

The hospital is a not-for-profit corporation that is a wholly owned subsidiary of the El Camino Hospital District, which includes Mountain View and Los Altos, as well as parts of Cupertino, Santa Clara and Sunnyvale. Only voters who live within the boundaries of district may vote on the measure.

After World War II, the state legislature allowed local communities to levy taxes to support hospitals to bring them to rural and low-income areas. The district is one of more than 70 such districts in the state, some of which no longer run hospitals.

Established in 1956, the district, which has an elected board, today receives about $15 million in tax revenue each year. A 2012 audit and service review [PDF] of the district by the Local Agency Formation Commission of Santa Clara County found that it “receives the second highest amount of property taxes of any healthcare district in the State, two-thirds of which is spent on capital contributions and debt service and one-third of which is spent on community benefits.”

Hospital officials argue that cutting executive salaries would hinder their ability to attract and retain talented leadership. “The hospital feels that this ballot measure will have tremendous effects on our operations,” said Ernst. “In order to best protect those services that we provide and continue to act as a world-class hospital, we made the decision to take steps to make sure the voters understand Measure M and the potential consequences.”

Hospital officials say that no public funds have been spent to fight the ballot measure. The money the hospital donated to the anti-M campaign came from “the community relations budget for corporate communications,” Ernst wrote in an email.

Under California law, the hospital is allowed to make the donation. “It’s not illegal for them to take a position or spend the money, if no public monies were spent,” said Ann Ravel, chairwoman of the California Fair Political Practices Commission.

The El Camino executive who has the most to lose if Measure M passes was the same person who authorized spending money to defeat it.

In an Aug. 3 letter to the El Camino Hospital Board, Ryba, the hospital chief executive officer, wrote that if the measure passed it would have “incredibly detrimental impacts on the Hospital Corporation’s ability to continue effectively providing quality heath care,” and that “it is important for the organization to support the Committee’s efforts from a financial perspective to defeat the initiative.”

In the same letter, Ryba wrote that she had authorized “an initial contribution of $49,000 to the Committee” and that the “Hospital Administration intends to make significant additional contributions to facilitate the opposition campaign.”

In a statement emailed to The Bay Citizen, sister site of California Watch, Ryba defended the hospital’s bid to defeat the measure: “As a District Hospital, the residents of the district elect officials to provide oversight of El Camino Hospital. Measure M undermines their ability and authority to conduct business, such as setting executive compensation.”

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