Southern Inyo Healthcare District told the Inyo County Board of Supervisors on Oct. 7 that the district faces an immediate cash shortage and asked the county to consider a near‑term loan to keep essential services running.

Dr. Kevin Flanagan, chief executive officer of Southern Inyo Healthcare District, told the board that “my accounts payable, I have about $2,000,000 in overdue invoices” and that the district typically carries only “between 1 and 12 to 13 days of cash available.” He said the district expects larger state supplemental payments beginning in January 2026 that would make the hospital financially viable in the longer term but that it needs a bridge to reach that point.

The district said it recently negotiated payment arrangements with several vendors and that staff and some clinicians had reduced work hours and accepted temporary pay cuts to lower monthly payroll costs by roughly $150,000 to $200,000. Flanagan said those measures have pushed an earlier projected out‑of‑money date from late September to mid‑November, but he told the board the district still needs additional support to avoid suspending service lines or closure.

At the meeting, Auditor‑Controller Amy Shepherd said the county had already advanced the district’s special assessment proceeds under the Teeter plan (about $385,000) and that county staff would prepare possible loan documents for the board’s consideration. The hospital’s board chair, Bruce Branson, and board member Mark Lacy described the local economic and workforce impacts of a closure and urged the county to act.

Supervisors discussed grant versus loan options. Several supervisors said they prefer a loan because it preserves some creditor position for the county if the district later enters bankruptcy, and one supervisor suggested the county could consider forgiveness after the district achieves specific financial milestones. County counsel and the auditor said the likely structure would be an unsecured loan with repayment expected in 2027 if the district’s projected supplemental payments materialize.

The board did not approve funding at the Oct. 7 meeting. It gave staff direction to draft a loan agreement (discussion referenced in the meeting as returning with documents “on the 20 first”) and to return to the board with proposed terms and any recommended conditions, including whether forgiveness should be considered at a later date. Dr. Flanagan asked the board for up to $500,000 “either as direct funding or as a loan” as the last‑dollar support to get the district through to the January payment stream. He also asked for a letter from the board stating its level of support to help persuade other potential funders.

Board members and public commenters emphasized the hospital’s emergency‑care role for southern Inyo County and the region — citing cases where a local emergency response and short time to care were credited with saving lives — and warned that closing or suspending emergency services would increase transport times by an hour or more to the nearest hospitals. Several local fire and EMS chiefs, hospital board members and residents asked the board to approve assistance.

Clerk/auditor staff said they would return with a proposed document for the board to consider at a future meeting and that, if a loan is approved, staff would recommend structuring repayment beginning after the district’s large supplemental payments are expected in 2027. The board also asked county staff to draft a letter expressing the board’s support that Dr. Flanagan could use to approach other funders and state officials.

If the board approves a loan at a later meeting, staff said the county would disclose whether the loan would be unsecured and how repayment conditions or potential forgiveness would be defined.

Ending

The board left the hospital’s request unresolved but directed staff to prepare a draft loan agreement and return to the board for a formal decision. County staff said they will also prepare a letter of support the hospital may use when seeking additional state, federal or private funding.