Courtesy of Catalina Island Health
Catalina Island Health’s CEO Tim Kielpinski presented a bi-monthly update to the Avalon City Council during its meeting on Tuesday, January 20, 2026.
The following are the key topics Kielpinski covered.
Reminder of CIH’s key government funding sources
CIH benefits from several key local and county funding sources that support both daily operations and the long-term goal of constructing a new, seismically compliant hospital facility.
Measure C – Local Sales Tax
- Approved by voters: 2000
- Half-cent sales tax dedicated to supporting hospital operations
- Annual revenue: Approximately $750,000
- Use: General operations and community healthcare services
Measure H – Passenger Tax
- Approved by voters: 2020
- Passenger-based tax exclusively dedicated to the capital project of building a new seismically compliant hospital
- Annual revenue: Approximately $2.25 million
- Use: Restricted to capital expenditures for the new hospital project and monitored by an outside firm contracted through the city
Measure B – LA County’s Property Tax for Emergency & Trauma Services
- Established by Los Angeles County voters approximately 15 years ago
- Countywide property tax funding emergency medical services (EMS) and trauma care benefitting many LA County hospitals
- Countywide revenue: Approximately $420 million annually
CIH allocations
- April 2025: Board of Supervisors approved $3 million for FY 2026 to augment CIH’s emergency department
- July 2025: Two additional $3 million allocations for FY 2027 and FY 2028
Intergovernmental Transfer with the
city of Avalon
- Purpose: To leverage local Measure C sales tax funds to draw down additional federal matching dollars.
- Approximately $1 million
Expanding on the IGT, Kielpinski explained the city has received the funds and expects to transfer those funds to CIH this week. He reminded the council that the original funds sent by the city to Sacramento was then matched by the federal government. After the state took 20% as their fee for this service, the funds were sent to the city. The city will keep 4.5% of those funds (approx. $50k) and the remainder is then paid to CIH.
CIH had requested that the city not disburse Measure C funds in order to accumulate a large payment. To date, the city has held approximately $580k. The remainder owed by CIH is approximately $570k. Per the agreement, CIH has 18 months from the date the funds are received to pay it back. However, Kielpinski shared that CIH is forecasting full repayment by early July 2026. That would be just before the IGT process would begin again.
Hospitalist program update
This program has allowed CIH to expand inpatient care capacity in acute, observation, and swing-bed settings. It continues to be a resounding success! Its average daily bed census in Dec. was 8.9 out of 9, meaning that many more island residents have been able to be cared for and recover closer to home.
New replacement hospital – Financing
As a Critical Access Hospital, CIH benefits from cost-based reimbursement, a powerful mechanism, that allows Medicare to reimburse the hospital for actual costs rather than fixed rates. This reimbursement model is pivotal in determining how functional and financially sustainable a replacement hospital can be.
Relative to the new hospital, cost-based reimbursement means, in simple terms, that both depreciation of the new building and the interest on the loans become revenue sources available to help service the debt on the new building.
Kielpinski explained that when taking this all into account, CIH can afford approximately $160 million for the construction of the new replacement hospital.
New replacement
hospital – seismic compliance deadline
Although the state’s deadline for seismic compliance is Jan. 1, 2030, Kielpinski shared that the state is allowing small rural hospitals like CIH to apply for an extension.
CIH has applied for the extension, which would require completion by the end of 2032.
New replacement
hospital – site
comparison
CIH continues to evaluate multiple strategies to deliver a seismically compliant, financially sustainable replacement hospital that meets the healthcare needs of Catalina Island residents.
Kielpinski explained there are certain Department of Healthcare Access and Information deadlines coming up. Because so much work has been done for the Quail Canyon site, CIH is submitting plans related to that site to keep on track.
However, CIH is seriously looking into the triangle site across from the current hospital. That site would allow for a more phased approach that is cost-conscious. They are currently in talks with Geoff Rusack and the Catalina Island Company about that property.
New replacement
hospital – myths
Kielpinski also brought up a couple of myths and rumors that seem to be out in the community.
He adamantly assured the council and the community that the hospital has NO plans to subsidize plastic surgery. Instead, there are plans for an operating room for procedures such as endoscopy, orthopedics, GYN, and ophthalmology.
The addition of a helipad is NOT $40-60 million. If that ends up being part of the new hospital, it will be an additional $1-3 million.
Worries that the hospital is unaffordable. As explained earlier in the presentation related to depreciation and interest, CIH CAN afford to build a new replacement hospital.
To learn more about the project – including dispelling myths and rumors – visit CIHealthFoundation.org/new-hospital. That page will be updated regularly.
If you have questions about the current operations or new replacement hospital, CIH encourages you to reach out to Gail Fornasiere, director of Community Outreach at gfornasiere@ci-health.org or 310-510-0096 x233.
The next planned presentation will take place at a March 2026 City Council meeting.
About Catalina
Island Health
CI Health’s primary care physicians and family nurse practitioners provide the island community with a solid foundation of care. The medical clinic is located at 100 Falls Canyon Road, Avalon, CA, up the street from Avalon’s City Hall on the bottom level of the hospital.
Its hours are 8 a.m. to 5 p.m., Monday through Friday. Visit CatalinaIslandHealth.org or call 310-510-0096 for more information or to make an appointment. The emergency room is staffed 24/7 with a UC Irvine Emergency Medicine Physician and supported by the CI Health’s laboratory and diagnostic imaging departments to meet the acute medical needs of Catalina Island’s residents and visitors.
With the use of patient satisfaction surveys, patients consistently rank CI Health’s emergency services as one of the best in the nation. The hospital’s main number is 310-510-0700. For more information, visit CatalinaIslandHealth.org.
