OLE Health made a rare move – it returned a $1 million donation.
Napa County gave the money in October 2016. Officials with the nonprofit asked for the county to contribute to its $15 million fundraising drive for a $30 million health care campus. The remaining $15 million would come from a federal loan program.
That 30,000-square-foot health center is under construction on Hartle Court near South Napa Marketplace. But it’s being built without the county’s gift.
At the Napa Valley Register’s request, the county released a July 18 letter from OLE Health’s then-Chief Executive Officer Tanir Ami saying the donation was no longer needed. OLE Health had exceeded its fundraising goal.
“Please find a check for $1 million enclosed,” Ami wrote to the county.
OLE Health spokesman Fernando Diaz said another factor was also involved in the donation return.
OLE Health sought a $15 million loan for the health campus under the federal New Market Tax Credits program. Among other incentives, the borrower receives approximately 25 percent loan forgiveness after seven years.
“We wanted to take advantage of that, because of the favorable incentives,” Diaz said. “We had to move quickly because of their deadline.”
Napa County government, like all counties, is subject to state prevailing wage laws for construction projects. Diaz said OLE Health would have had to spend the county donation using prevailing wages. OLE Health was uncertain how this would affect the project’s cost and timeline for the tax credits.
In June, OLE Heath’s Board of Directors decided that returning the money would be in the best interests of the other donors and the project’s timeline, he said.
Danny Bernardini of Napa Solano Building Trades Council said the group brought the prevailing wage issue up with OLE Health earlier this year. He said he thinks OLE Health should have kept the county’s money and paid the prevailing wage.
“It’s what’s right for working people,” he said. “Why would anyone pay an employee less than what’s considered a living wage?”
Diaz said Ledcor Construction – which has a Napa County branch—is the project manager. Forty percent of the project’s construction contracts are to local companies.
“We went into the project with a commitment to hire local,” Diaz said.
The California Department of Industrial Relations says the prevailing wage law ensures that companies bidding for public works contracts don’t win by paying lower wages than competitors. The department figures out the prevailing wage for the various crafts and classifications of workers.
Critics say the prevailing wage law adds costs to public projects at taxpayers’ expense. Supporters say it guarantees labor workers receive fair compensation. The law doesn’t apply to private development paid for with private money.
Diaz said the health care building should be completed in about a year-and-a-half.
“It’s on schedule; we’re on budget,” he said. “Everything is working out pretty nicely.”
Even though OLE Health returned the county’s $1 million, the donation may have served a purpose.
OLE Health officials in October 2016 told the Board of Supervisors that a $1 million county donation would help attract more fundraising dollars. At the time, the nonprofit had only about $4 million toward its $15 million target.
Diaz recently said that the county’s donation achieved this goal. It helped show OLE Health had a bigger force behind it, a coalition of different people headed toward the same goal of community health.
Napa County took the $1 million out of its Master Tobacco Settlement Agreement money that it receives annually from a lawsuit settlement involving 46 states and the tobacco industry.
Each year, the county hands out about $1.1 million annually in grants to nonprofit groups from the fund. It also saves $8 million as a hedge against the day the annual settlement money is reduced. The $1 million OLE Health donation came from these savings and, when returned, went back to these savings.
“We’re still committed to OLE Health and all that they do,” county Supervisor Brad Wagenknecht said on Tuesday. “We’ll figure out ways of supporting OLE Health in the future.”
OLE Health’s $30 million, three-story medical building is to have 22 exam rooms, nine dental chairs, a vision center, an in-house pharmacy, a laboratory, triage space, five classrooms and an outdoor patio overlooking wetlands.