Bear Valley Healthcare District details Measure U results and hospital expansion plan; warns of federal funding risks

Bear Valley Community Healthcare District Chief Executive Officer Evan Rayner told the Big Bear Lake City Council on Sept. 10 that Measure U — a hospital parcel tax — passed with 79.8% approval and that the district is planning a staged hospital modernization and potential expansion of roughly 5.3 acres behind the current campus.

Rayner said Measure U revenue will largely support physicians, nurses and updated equipment and that about 82% of parcel owners will see a reduction while roughly 18% will see an increase in their parcel tax. He also warned the council that pending federal proposals (referred to in the presentation as "HR 1") are a “moving target” and could reduce funding streams that support California hospitals, including cuts that may affect Medi‑Cal enrollment and reimbursement.

"We are looking at limits to provider taxes, directed payments," Rayner said, and described estimates circulating among hospital associations that reductions could be substantial. He cited estimates presented by the California Hospital Association and others that California hospitals face multi‑billion‑dollar losses over a multi‑year horizon and emphasized that 42% of Bear Valley’s gross revenue is Medi‑Cal related.

Rayner described the district’s expansion concept: seismic upgrades to the existing 1974 facility under California’s SB 1953 requirements as an SPC‑4D project, modernization of operating rooms and radiology (the district has already committed $1 million to a radiology upgrade), conversion of some medical‑surgical beds to skilled nursing and the potential addition of an emergency department expansion, ICU beds and a new lobby. He said site constraints — including an 8‑foot grade difference on the 5.3‑acre parcel, overhead power lines that must be buried for a new helistop, and potential environmental reporting and nesting‑bird restrictions — will affect cost and schedule.

Rayner estimated hospital construction costs of approximately $1,800 per square foot and proposed funding coming from district reserves, a possible U.S. Department of Agriculture direct loan for rural hospitals, state and FEMA grants, and other sources, adding that the district intends to avoid returning to voters for a construction ballot measure. He said the district currently holds about $46 million in reserves and expects to invest roughly $26 million as part of the project while pursuing debt for the remainder.

On staffing and service forecasts, Rayner said about 60% of emergency department visits originate from local ZIP codes and 40% from outside the primary service area, and that the district serves about 19,000 people in its primary service area with monthly fluctuations. He acknowledged it is too early to quantify the precise financial impact of federal changes, and advised residents with Medi‑Cal to remain enrolled given potential eligibility changes.

During council Q&A, Council member Chuck Putz asked about the district’s reported reserves and whether funds held a year earlier would have been sufficient for construction; Rayner replied the district had reserves but would not exhaust them for a single project and plans to pair reserves with external low‑interest loans. Council member Rick Herrick pressed whether services planned for the facility were supported by local volume; Rayner cited 60 MRI referrals per month and said the district assesses service additions for financial viability.

Several council members pressed Rayner about the Mom and Dad Project’s space in district facilities. Rayner said Mom and Dad Project is currently part of the district’s workforce and payroll and that the district is discussing an amicable relocation that would not disrupt their grants or operations. Council member Perry Melnick asked directly, and Rayner said the hospital is not closing.

Rayner repeated that the district will continue to update the council as federal proposals and grant opportunities evolve. He also told the council the district wants public input on the expansion and plans a multi‑year schedule: one to two years planning, two years permitting with OSHPD/HCAI, and up to two years construction depending on environmental and weather conditions.

The council asked district staff for follow‑up briefings about potential fiscal impacts from federal changes; Rayner offered to return with updated financial forecasts when more detail is available.