El Centro council approves term sheet to transfer hospital property and license to Imperial Valley Healthcare District

The El Centro City Council on March 4 approved a term sheet outlining the proposed transfer of El Centro Regional Medical Center's real property and operating license to the Imperial Valley Healthcare District (IVHD), advancing a negotiated sale that includes a one-time city payment and follow-up conditions.

The term sheet approved by the council calls for the city to make a $5,000,000 cash payment to IVHD at closing, to pay $1,500,000 in closing costs and for ECRMC to enter a $15,000,000 three-year line of credit prior to closing that will remain in place after the transfer. The agreement would transfer all hospital assets and liabilities to IVHD and requires IVHD to maintain at least $5,000,000 in cash on hand at closing.

Why it matters: IVHD was created by state legislation (AB 918) to combine the county's two acute-care hospitals to improve Medicare reimbursement and reduce duplicate administrative costs. City leaders and health-district officials said the consolidation is intended to stabilize local acute-care services and preserve access for Imperial Valley residents.

Interim Finance Director Elizabeth Putem introduced the cityfinance presentation; contract financial consultant Andy Heath presented a five-year general-fund forecast and reserve analysis. Heath said it is "anticipated that the city will have a surplus in the general fund of just over a million dollars" in the midyear fiscal 2024-25 forecast but warned that a one-time payment of $5,000,000 to $6,500,000 (including…