 We will be entering escrow next week for the final purchase of the hospital and closing all transactions by August 31st and turning the ownership of the hospital to the Paro Valley Healthcare District to the hospital to them on September 1. So very exciting news after a lot of effort over the past year. Can go to the next slide. So just to give a little bit of background, the Paro Valley Healthcare District project, this is a non-profit of which the county, the city of Watsonville, Salud Padlajente, Paro Valley Community Health Trust are all members of, was formed in November of 2021 to purchase the hospital and return it to community ownership and operation. In December, Watsonville Community Hospital declared bankruptcy and so not worn notices. February 2022, the bankruptcy court approved the Paro Valley Health District project that is the non-profit, which I am a member as the lead bidder and finalized the sale. That was a very big moment that we were able to finalize that sale agreement. And then urgency legislation was approved to form the Paro Valley Healthcare District. Thank you to especially Senator Laird and Assemblymember Rivas for leading that effort. Truly a remarkable effort to do such a quick turn around on that legislation. In March, the county board of supervisors established the Paro Valley Healthcare District and you appointed five district members and they have had, they have had a very robust schedule. I've already had 15 meetings to date. The Santa Cruz County, we are providing the staffing to that district. We are, we have fully stood it up, including providing the legal work, the accounting work and then all of course, all of the staffing work. So there's probably around 15 to 20 staff that have been working a lot on standing up this healthcare district in such a short time period. So the project and the district has developed a business plan with a number of very well thought of consulting firms to turn around the hospital in the next one to two years. That there's been a great deal of work in turn making sure that there's a viable and sustainable path forward for the hospital. It is going to be very difficult. It's a very difficult healthcare environment statewide, nationwide, but we have a plan that we think is going to be successful and it's the best plan that we could have developed and the county has contributed to that as of other community partners. On August 31, as I mentioned, the bankruptcy court has established the date to close the sale. We will be entering escrow, we believe next week and then the close will happen on the 31st. Go ahead and next slide. The hospital, we have set a goal of $67 million, which includes the acquisition price as well as the operating capital needs for the hospital for the first year of operation. The Potter Valley Health District project and other partners have come together and we have raised $60 million to date. This includes $25 million in a delayed state grant award, which is the subject of our meeting today, that $25 million. There's a $6 million remaining funding gap. This is mainly the operating capital needs. We do have the funds sufficient to close the acquisition and complete the purchase. So we anticipate getting the additional $6 million to cover the operating reserve by the end of September. And to come around to come together around the $25 million delayed state grant community and city partners have come together to create to create these loan agreements to serve as a bridge loan to get the money to the hospital. Next slide. So we have requested various city and community partners to lend the county $25 million each. We will guarantee those loans and then in return, we will turn those funds over to the health care district project to finalize the purchase of the hospital and return it to local ownership. The $25 million from the state grant, this was secured due to the efforts of Senator Laird and Assemblymember Rebus. There were some drafting errors when state budget staff wrote this up in the state budget in such that it is going to have to be amended the language in a trailer bill, which will not be approved until we think August 31st, at which point the governor will sign it. We have been touched with the administration. They said that they can get us the money within two weeks of the budget being approved, so that would be mid-September. The problem is, is the $25 million is crucial to the final purchase of the hospital. We have to have it before August 31st or before mid-September is when the money will come. So that is why we have asked our community partners and city partners who all have a key stake in keeping the hospital open and sustainable. The entire community does, and I'm really grateful for each of them stepping up and agreeing to do this. They each provide short-term loans of 60 days or less. They will charge a very low or no interest. The interest will be the local area investment fund rate, which is a state fund that most of them invested, which is about 1.2% right now. We could have gone out and got a private sector loan from a private bank, but the cost estimates were in the excess of a quarter million dollars for up to 60-day loan for $25 million. So that would have been really tragic to have to spend that kind of money just because of some errors at the state level with regard to how the language is written. So that's why we've done this. It'll be a very minimal cost and we'll be able to get the $25 million into escrow. Next slide. So this is our recommendation that the board approve these five million-dollar short-term loan agreements between the county and city and community partners to provide bridge funding for the purchase of Watsonville Hospital and that you authorize minor changes to be made to the cost and administrative provisions of the agreements with the approval of the county administrative officer and county council in order to accommodate any special requests from our partners and that you also approve the transfer of the loan funds to escrow to the escrow account established to close the sale of the hospital to the Bonneville Health Care District by August 31st. That concludes my staff report. Thank you very much. Thank you, CAO Palacios. Are there any questions or comments from members of the board? All right, seeing none. Is there any member of the public that wishes to address us on this item? Seeing no hands raised, if you do wish to make a comment, click the raise hand button at the bottom of the Zoom screen. All right, seeing no member of the public that wishes to comment, I'll return to the board for action. Mr. Chair, I'll move the recommended actions as you know, nothing that really matters in life is particularly easy. And I think that this is is a challenging situation. But I think we're doing everything we can to ensure the health access for our entire county for not just actually our county, but even Monterey County be preserved. So I'll move the recommended actions. And I believe Supervisor Caput seconded it. You bet. The only comment I'll make is if we take out the loan, five million dollars each, twenty five million total, everything looks good to me. But you also have to look at what if the deal falls through? What if we don't get the twenty five million, you know, what would happen then? Yeah, so the money has been approved in the state budget and signed by the governor. So it's there. It's just they made a minor drafting error in writing up the language at the state level, the state budget staff. And so they have committed to us that they're going to correct that language. And so I think this is about as low risk as you can get. There's always a risk, but, you know, it's less than one percent, that's a for sure. And I think we will have the money by mid September. Yeah, but to any time you're dealing with money, there's a better risk versus a better show. Thank you. All right. We have a motion by Supervisor Friend and a second by Supervisor Caput to accept the staff recommendations. Any further discussion? Most important health care issue we can address in Santa Cruz County. Congratulations and a big thanks to those who participated. Yeah, I'll also extend my thanks to staff for just constant level of creativity and overcoming these challenges. There's been numerous, but keep keep getting us over them. And it looks like we're close to the end here. And having met the management team at Watsonville Hospital, Stephen Sawyer and crew, I mean, it's clear that we've got a good mix down there of experienced turnaround artists like Mr. Sawyer himself, as well as long time dedicated employees of the hospital that just really know the community and the operations there. And I think we've got a really great opportunity to turn the hospital around and I'm excited to finally get to the moment where we truly transfer this organization. Yeah, one one more quick question. There's still a six million dollar gap, right? Even after the 25 million and is there a deadline on that? Yes, we have we do have the secure. We have secured the funds to actually to complete the purchase. So the purchase is going to happen. The question is that we wanted to have at least 10 million dollars of operating capital for the hospital to get through the first year of operations to give them time to turn around their operations to be in the black. We are short about six million dollars for that goal where we've set in a self-imposed goal by the end of September, raising that last six million, and we believe we will be successful. It's amazing the amount of community partners and businesses and nonprofits and statewide and local businesses have and individuals have all come forward to help us and we're confident we'll get there and by the end of September. All right, if there's no further discussion, please call the roll. Your eyes are friend. All right, Coonerty. Hi, Caput. Hi, MacPherson. Hi, and Koenig. Hi, item passes unanimously. Thank you. And that brings us to the end of our special meeting agenda. The next regular meeting of the Board of Supervisors will be next Tuesday, August 23rd at 9 a.m. Thank you, everyone. Thank you, sir. Thank you, everyone. We'll see everybody to this. Thank you. Thank you. Recording stopped.