Report 2011-113 Recommendations and Responses in 2014-041

Report 2011-113: Salinas Valley Memorial Healthcare System: Increased Transparency and Stronger Controls Are Necessary as It Focuses on Improving Its Financial Situation

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of 2013-041 Response Not Implemented as of Most Recent Response
Salinas Valley Memorial Healthcare System 2 15 1 1 1

Recommendation To: Salinas Valley Memorial Healthcare System

To help reduce its operating costs and improve its overall financial situation, the Health Care System should continue to try to modify its employee benefits, such as paid time off, so they are aligned with industry practice.


As a first step in addressing Recommendation 3, effective Fiscal Year 2011-12, SVMHS altered benefits available to non-represented employees by terminating the existing pension plan and creating a new plan (a 403b plan) with decreased costs accruing to SVMHS.

During Fiscal Year 2012-13, SVMHS focused on putting in place a new Chief Executive Officer (hired in April 2013) and a new Administrative Team (completed in August 2013). Since coming on board, the CEO and Administrative Team have devoted significant attention to building relationships with employees and their representatives that will facilitate making the changes required to better secure SVMHS's future.

This team also has further refined and continues to implement a strategy to carry forward additional cost savings related to benefits provided to all employees. In addition, the strategy addresses overall operational efficiencies through various labor and non-labor initiatives.

During fiscal year 2013-2014, SVMHS initiated contract bargaining with the California Nurses Association (CNA) and International Union of Operating Engineers, Stationary Engineers Local No. 39 (Local 39).

SVMHS provided proposals to CNA (~600 employees) and Local 39 (~20 employees) to better align the employee health plan and Paid Time Off (PTO) accruals with industry standards over a 3 to 4 year period.

Negotiations with CNA are ongoing.

Agreement was reached with Local 39 and ratified with the union's 21 members at SVMHS. The Agreement includes reduction in PTO accrual, dependent on implementation with CNA, and transfer of the SVMHS Local 39 employees to the Local 39 group health plan.

In fiscal year 2014-2015, the health plan and PTO changes were outlined for the non-represented staff (~300 employees). Once changes are implemented with CNA, commensurate changes will be made with non-represented staff.

Current Status of Recommendations

All Recommendations in 2014-041