COLUSA, CA (MPG) – Colusa County supervisors have directed staff to pursue a public sale process for the Colusa Medical Center property, signaling a shift toward greater transparency as questions mount over seismic retrofit costs, unpaid lease payments and the long-term stability of the hospital’s operator.
The discussion marks the first public session devoted to potential options for the East Webster Street campus, which includes the hospital building, emergency room and adjacent medical offices. The county owns the buildings and leases operations to American Advanced Management, or AAM.
County Administrative Officer Joshua Pack outlined two primary pathways: a negotiated transfer of the property to AAM or a public sale process open to other potential operators. No formal action was taken, but the board directed staff to move forward with the public sale option and to invite hospital representatives to address supervisors at a future meeting.
Pack said rural hospitals across the country face mounting financial pressure.
“Looking nationally, we’ve seen about 100 rural hospitals closed over the last 10 years,” Pack said.
He added that estimates suggest nearly one third of remaining rural hospitals are at risk due to financial challenges.
Colusa County is not immune. In 2016, the previous hospital operator entered bankruptcy. AAM later assumed operations, and the county amended its lease agreement to continue services. The amended lease included an annual rent requirement of about $24,000.
According to Pack, AAM has not made lease payments since the first year of the amended agreement. He estimated roughly $250,000 in back rent is owed.
Seismic compliance poses another looming issue. State law requires hospitals to complete seismic retrofits by 2030, with possible extensions to 2032 or 2033. Without compliance, the hospital could face closure within the next decade.
Pack cited broad cost estimates for similar facilities ranging from $30 million to $50 million.
“We don’t have a contingency fund or any sort of resources to deliver that,” he said. He added that nearly two thirds of California hospitals have at least one building out of compliance.
Supervisors repeatedly emphasized that maintaining a 24 hour emergency room remains their top priority.
“I just want to be clear that my number one priority is to keep this a hospital and to keep access to rural healthcare for our county and the outlying areas,” Supervisor Daurice Kalfsbeek-Smith said. “I want Colusa County to have a hospital.”
At the same time, Kalfsbeek-Smith questioned AAM’s track record.
“They have not paid a payment since 2017,” she said. “I have a really hard time with that.”
She also referenced a 2023 letter from AAM requesting that the county evaluate lease terms and consider transferring ownership of the property. Kalfsbeek-Smith characterized the letter as stating that if the county did not turn over the hospital, the operator would walk away.
“I have a really hard time with that and how they approached us with this,” she said.
Supervisor Merced Corona agreed that access to care is essential but raised concerns about transparency.
“If we don’t make this transparent and open to other business to come in and bid on it, it will look bad on us with the public because it’s going to look like we handed it over to AAM without exploring any avenues,” Corona said.
Corona noted that other rural hospitals in the region, including in Glenn County, have struggled or closed.
“We’re not in a unique position,” he said.
Supervisor Randy Wilson questioned AAM’s long term stability.
“The instability of AAM over the years, and then they’re asking us to transfer the property. What’s their outlook for 10 years down the road?” Wilson asked. “I would like them to answer questions directly.”
Hospital representatives were not present at the meeting. During the discussion, staff received an email from the Colusa Medical Center administrator stating that something unexpected prevented her attendance.
Pack said the county recently received a letter from the California Department of Housing and Community Development stating that if the property is transferred with a deed restriction requiring it to remain a hospital with emergency services, the transaction would be exempt from the Surplus Lands Act. That exemption would streamline the process.
Under the negotiated transfer option, the county would work directly with AAM to transfer ownership, reducing the risk of operational disruption. Pack said ownership could allow the operator to leverage the property to secure financing for seismic upgrades and other improvements.
Under the public sale option, the county would solicit competitive bids while requiring the facility to remain a hospital with emergency services. Pack acknowledged that market interest may be limited.
“It’s not exactly like folks are clamoring to enter into the rural hospital business,” he said.
Supervisors ultimately signaled support for the public process.
“Transparency is key. Public input is key,” Kalfsbeek-Smith said. “We should be doing our due diligence to ensure county owned property stays a hospital.”
Community member Richard Selover urged the board to explore all options.
“I don’t think you have a gun held to your head on this,” Selover said. “It’s the responsibility of the county to make sure we preserve health care for our citizens in this county.”
Selover warned against transferring ownership without safeguards.
“Don’t take the risk that it can be privatized into a rest home, senior housing, or turned into something because you’ve given up ownership,” he said.
Pack said staff can pursue the public sale process while also inviting AAM to present its perspective at a future meeting.
“We aren’t going to move so quick that there is going to be a formal action,” he said.