Saturday, December 31, 2011

CRISIS?(!)

The finance committee packet is out.  The bottom line numbers are truly alarming with a loss of 681k for the month of November alone.  This brings the YTD loss to just under 1 million dollars (combined loss of 995,000).  The impact on the District cannot be understated.  In addition, if the daily dashboard presented on the last page of the document is accurate (it is a sample for 12/29, but I assume that the numbers are actual numbers for that date), then December may be better, but not good enough to make up the difference and get the District to breakeven for the month.  In addition, the entire 750k of the Bank of Alameda line of credit authorized by the Board has been drawn upon.

Consequences:

1.  Current assets minus current liabilities is less than zero.  The current ratio is now less than 1.00 so unless this can be reversed in December to the tune of over a quarter of a million dollars (18,608,387 - 18,868,850 = -260,463), the District is in violation of the Bank of Alameda revised loan documents.

2.  The Net Assets line on the balance sheet is 7,746,083 which means that any future cumulative loss of $246,083 over and above the 995k already lost this year will put the total net assets below 7.5 million which is another violation of the Bank of Alameda loan agreements.

3.  Although I believe the District received an installment of parcel tax revenues in cash in December, this does not change the current assets picture (receivables decrease by the same amount that cash increases) so using the proceeds to pay off the Bank of Alameda LOC will just delay the inevitable when the District needs access to that liquidity again.

4.  This puts the development of the Wound Care center at risk.  Best case, another modification to the Bank of Alameda loan documents would need to be made.  Worst case, lack of financing will kill the project entirely.

5.  The working capital/management attention/state approval process for the the Waters Edge project will be seriously constrained by this development.

I must assume that something in December has changed to give Management optimism that the Hospital is not in imminent danger of default or, as a Board member, I feel blindsided by this development.  Even if December has resulted in a reversal (positive) of fortunes, I am staggered by the magnitude of November's loss and wish that I would have been alerted sooner.


Finance Committee Documents for 1/4 not Posted Yet

I do not consider the information I have official until it isposted on the website.   I expect they will be up ASAP.

UPDATE:  Here is the packet.

Thursday, December 29, 2011

Sanjiv Handa, RIP

I never knew the man except for one passing reference somebody made to him in a discussion about Alameda politics.  He was most commonly referred to as a gadfly, but, from all appearances, he cared a lot more about good government in Oakland than his many detractors especially his nemesis, Ignacio De La Fuente.

What he did not realize is that few people in Oakland (and Alameda?) really put a priority on doing right.  Sure, most want to do the right thing, but the priority is political allegiance, money, and sticking it to your detractors.  The goal of benefiting people only gets factored in after it makes it through those filters.  That's why people like Perata and De La Fuente have enormous power and Sanjiv Handa had none.  Because if you are not in it for yourself then like Eugene McCarthy said, "Being in politics is like being a football coach. You have to be smart enough to understand the game, and dumb enough to think it's important."

Saturday, December 24, 2011

Holiday Cheer

I hope that Alameda Hospital has been relatively empty this month, or, alternatively, people got in and out quickly because it stinks to be worried about your health or your loved one's health at this time of year.  And:

1.  For Kristen Thorson and the rest of the administrative staff who put together Board packets, update the website, and respond to special requests so quickly and efficiently.  Thank you.

2.  For Kerry Easthope who as far as I know is on good terms with everyone at the Hospital and has always graciously responded to my requests for information.  Thank you.

3,  For Jordan Battani and David Burton, who have sent an invitation both last year and this year to their holiday party.  (Unfortunately I could not attend either year.)  Thank you.

4,  For Michael McCormick and Stewart Chen who have at least paused to consider my arguments at times.  Thank you.

5.  For Denise Lai and Carol Gottstein who have publicly supported my position with regard to the District plus those who have privately reassured me that I am not crazy.  Thank you.

6. For Jim Oddie who has reached across a nasty political divide more than once.  Thank you.

7. For the commentors at Blogging Bayport especially Jack Richard where it seems to me the most engaging and engaged debates about Alameda issues takes place.  Thank you.

8.  For Action Alameda News which posts useful news and commentary about Alameda (often times first).  Thank you .

9. For all of the people at the Hospital and the various other facilities of the District who at the individual level provide care and support to patients.  Thank you.


Insert your favorite seasons greetings here.  Happy New Year too and keep an eye out next week for the Finance and Management Committee packet for the January 4, 2012 meeting.

Wednesday, December 14, 2011

Political Futures (navel gazing)

It's interesting that as of  10:00 this morning, you can buy at Intrade (I'm not sure if US citizens can) the chance that the Democratic nominee will be elected President for $5.12 and sell the chance that Obama will be re-elected for $5.16.  This would guarantee an arbitrage profit of $0.04 or about 0.8% which would be huge in the finance world.