The Riverside Local Agency Formation Commission voted June 26 to begin an expedited municipal service review, or MSR, of the Palo Verde Healthcare District at the request of the City of Blythe after the district curtailed most hospital services.

The MSR will be accelerated from the regular schedule so staff can gather data and outline options, Gary (LAFCO staff) told commissioners. "This came to light quite frankly a few weeks ago," he said, noting that most services at the hospital had been curtailed except emergency and some clinic services and that residents must travel about 90 miles to the next hospital in California.

The review matters because the Palo Verde facility has been the City of Blythe's only hospital and the loss of services raises immediate public-safety and access concerns, commissioners and city officials said. Johnny Rodriguez, vice mayor of the City of Blythe, told the commission he had been appointed to the city's ad hoc committee on the hospital and said the city needs the review to inform decisions about keeping services open and identifying options.

Commissioners pressed for an MSR that goes beyond routine determinations and examines causes and remedies. "We need to know what led to all of this," Commissioner Steve Sanchez said. He listed possible contributors that the report should analyze: management, board decisions, tax assessments, and reimbursement rates from Medicare and insurers. Sanchez added that the MSR should identify specific options for the community, such as dissolution, contracting with a private operator, or transfer to another health-district entity.

Commissioner Manuel Perez described existing contingency work among the county, the city and other health partners and said the situation is urgent. "The hospital declared a fiscal emergency last night as a precautionary step," Perez said. "They have approximately 17 days of operating expenses on hand as of last night." Perez also said the county is preparing contingency plans for 911 services and that state-level discussions about short-term funding are underway.

Gary told the commission the MSR will include targeted data gathering and questionnaires for the district and the city and that staff will consult with county offices and other stakeholders. "This will be a little bit different," he said, because staff expects to present concrete options and recommendations rather than only determinations, given the district's condition.

Commissioners noted broader legal and fiscal constraints that could affect outcomes. Commissioner Sanchez asked staff to identify which actions are within LAFCO's authority after the MSR and to present feasible alternatives. Gary said staff will include potential actions LAFCO could take and other non-LAFCO options stakeholders might pursue.

The commission voted to proceed with the expedited MSR on a motion by Commissioner Manuel Perez and a second by Commissioner Steve Sanchez. The motion passed unanimously.

The commission did not set a final deadline for the report but commissioners said staff should move as quickly as possible and coordinate with the city's ad hoc committee and county offices. Gary said he will begin developing the MSR questionnaire and schedule and will involve other staff with expertise in healthcare district issues.

Background: LAFCOs carry out municipal service reviews and sphere-of-influence studies to evaluate local governments and special districts; commissioners said the district's situation and the potential lack of nearby hospital capacity justify accelerating the review. The MSR will examine service impacts, finances and governance and present options for the community and affected agencies.

The commission's vote directs staff to start the MSR process and report back with a proposed timeline and a questionnaire for affected parties so the commission can review progress and next steps.