CEO fired amid KMC fiscal crisis

Rebecca Neipp

News Review Staff Writer

The recent discovery of some $64 million in fiscal liabilities for Kern Medical Center led the Kern County Board of Supervisors to fire Chief Executive Officer Paul Hensler last Monday.

According to Kern County 1st District Supervisor Mick Gleason, the board’s action came on the heels of an independent audit that yielded revelations of misreported revenues of $36 million and another $28 million in overpayments from the state.

“This decision was made in closed session, so I am not free to discuss that,” said Gleason. “What I can tell you is that the motivation behind this action was a complete loss of confidence in [Hensler’s] ability to successfully manage the demands of that hospital.”

Gleason said he did not suspect any fraudulent actions on Hensler’s part, only incompetence. “The problem is these issues went on for years and were never addressed.”

Kern Chief Administrative Officer John Nilon said that the county is on the hook to make up the shortfall, but noted that payments can be made over the course of several budget cycles.

“We don’t owe everything this year, and all the numbers right now are estimates. We know the potential of what we owe, and we are working with the KMC auditor-controller to determine exactly what that number is,” said Nilon.

“Here is the immediate impact: we believe we are going to have to pay somewhere in the neighborhood of $19 million this fiscal year, because we believe they overestimated their revenues this year as well. And since we are required to have a balanced budget, we will bring this back to the board to discuss how we can absorb that kind of offset.”

Among the options that will be presented before the board is a 2-percent salary reduction in all departments funded through general fund dollars.

According to the State Controller’s website, which publishes the most recent salary information of public employees, KMC employees take up the 26 top-paid positions on the list — with the top earner making more than $700,000 in 2011.

Although current data is not yet available online, the CEO position paid $347,361 in 2011. Over the next seven months Hensler will reportedly collect $227,000 plus benefits.

Gleason said that he directed Nilon during the previous meeting to present an analysis of KMC salaries.

“ We are looking at whether those salaries are in line, whether those staffing numbers are in line,” said Nilon. “There is obviously a much fuller and deeper action required here beyond adjusting the budget.”

He said that the county will look at comparable counties for the analysis, but noted that at first blush the numbers appear to be in line with similar positions.

Nilon expected the board to discuss the appointment of an interim CEO in yesterday’s closed-session meeting. “Then we will come back on the 24th and ask for direction on how the board would like for us to recruit for a long-term replacement.”

Although last week saw another high-profile termination — of Kern County Animal Control Director Jen Woodard — Gleason said the two were unrelated.

Previously published reports claim that Woodard was abrasive with supporting agencies and unable to build the necessary alliances needed to further the mission of animal control.

“We needed a change in leadership. There were several sessions where she was counseled to take certain actions and she did not take the directives toward implementing corrective processes which we felt were necessary,” said Gleason. “But that was not about any kind of fraudulent activity, it was about identifying a need for communication and building a strategic vision.”

Gleason said he believed the shake-ups were healthy in maintaining functionality and accountability in the county.

“There has been nothing more refreshing to Kern County than having three brand new supervisors coming together with an attitude to try and correct wrongs that have been going on a long time.”

Story First Published: 2013-09-18