When Roron Chen went to a public clinic to try to see a doctor, she was put on the waiting list at the San Mateo Medical Center. A California state law requires counties to provide health care to people like Ms. Chen who cannot afford health insurance and have no other alternatives.

Ms. Chen, a homemaker from San Mateo whose husband lost his job three years ago, had to wait nearly a year to see a doctor through the program. Like thousands of other uninsured people in San Mateo County, Ms. Chen waited and waited because the county did not have the money to subsidize her health care.

At the time, the tax-supported Peninsula Health Care District held a $43 million reserve of current public assets to further its mission statement, which includes “responding to the local health needs and allocating resources for programs that enhance the health of the community.” The county had asked the district to dip into its reserve to contribute $4 million for subsidized health care for residents like Ms. Chen, but the district refused.

The Peninsula Health Care District is one of about 30 such health care districts, out of 74 statewide, that no longer run hospitals — a departure from their original mission when, after World War II, the State Legislature allowed communities to levy taxes to support hospitals because the state’s rural and low-income areas lacked access to basic hospital care.

An examination by The Bay Citizen has found that many of these districts stockpile vast reserves and divert money to administrative and operating expenses, including lawyers, election fees and board members who earn lifetime health benefits for part-time work.

Peninsula Health Care District officials said the county’s request for $4 million was rejected because “it was completely undefined,” said Cheryl Fama, the district’s chief executive.

However, in a letter dated April 6, 2011, county officials told the district: “A $4 million annual investment from P.H.C.D. would ensure 6,000 of the district’s uninsured residents could rely upon continued access to care and considerably reduce waiting times for primary care appointments.”

The Peninsula district, which serves residents of San Bruno, Millbrae, Burlingame, Hillsborough, San Mateo, and parts of Foster City and South San Francisco, collected $4.2 million in tax dollars in the 2010-11 fiscal year to support community health programs, according to its Web site. But last year it spent just 3.3 percent of its total assets, or roughly $1.8 million, on health-related grants. The rest of the district’s budget went mainly to administrative personnel, communications and lawyers — and into a reserve fund totaling tens of millions of dollars as of June 2011, according to financial reports.

“It makes no sense to have so much money being set aside while there are crying needs in this community,” said Margaret Taylor, the former director of the San Mateo County Health Department.

Oversight of these districts is inconsistent. Some Local Agency Formation Commissions, the State Legislature’s watchdogs over special districts providing municipal services, have failed to evaluate how these districts are being run as required by the state, the records show.

Critics say these districts do little more than manage real estate and distribute grants.

“The outrage factor is we have public agencies that are collecting money that is not being used for the purposes for which the agencies were originally established,” said Judy Nadler, a senior fellow in government ethics at Santa Clara University’s Markkula Center for Applied Ethics and a former mayor of the city of Santa Clara. “For a public agency to hold on to that money with the thought that it may be used at some point for some project defies explanation.”

“The question is,” Ms. Nadler said, “how are they helping the public right now by having that money in the bank?”

Many district officials, however, say they act as financial guardians, distributing money to crucial health programs and, in some cases, amassing district assets in case hospital operators fold. Over the years, health care districts have also been criticized by multiple county grand jury reports and by a state watchdog agency that monitors profligate spending. But change is slow.

For example, four grand juries over the last decade have called for the dissolution of the Mount Diablo Health Care District, based in Concord. The district has not run a hospital since 1996, yet it spent just 17 percent, or $527,686, of its $3.2 million in property tax and other revenue on community grants from 2000 to 2011, according to public records.

The Mount Diablo district also owes an estimated $800,000 for lifetime retiree health benefits for a board member and a former board member.

Earlier this year the Contra Costa Local Agency Formation Commission announced that it intended to dissolve or reorganize the district. The commission is scheduled to make a decision on Wednesday. If the plan goes forward, it would be a rare example of one of the state’s local agency commissions moving to dissolve a health care district.

Proponents of the districts say that without them, the health of the community would suffer. “Many of these districts provide services that no other agency provides,” said David McGhee, chief executive of the Association of California Healthcare Districts. “Some of them run clinics, some of them run ambulance services.”

At least three grand jury reports over the last decade about the Los Medanos Community Healthcare District, based in Pittsburg, have gained little traction. The district spent just half of its revenue in the 2010-11 fiscal year on community and health programs. The balance, more than $435,000, went to administrative and operating expenses, including stipends for the board of directors, travel and election fees and a board retreat.

The Eden Township Healthcare District in Castro Valley says on its Web site that it is “enabling local organizations to provide much-needed health care services to those in need.”

But the district suspended its grant program two years ago despite a reserve of more than $24 million in public funds. It spends about $450,000 a year on administration, including expenses for the board of directors. It has spent roughly $2.2 million on legal fees over the last three years in an effort to prevent the closing of San Leandro Hospital, which Sutter Health took over in 2004.

“Everything we spend is on community benefit,” said Dev Mahadevan, the district’s chief executive.

In 2000, the State Legislature attempted to tighten oversight of special districts by ordering Local Agency Formation Commissions to regularly evaluate how efficiently the districts operate. But at least a half-dozen commissions from Sonoma to San Diego Counties acknowledged that they have not reviewed health care districts as required.

“There is no state agency that is overseeing them to ensure they carry out their duties,” said William Chiat, executive director of the California Association of Local Agency Formation Commissions, which represents the state’s 58 commissions.

Peninsula Health Care District administrators say they must shore up a $250 million bankroll in case they have to buy Mills-Peninsula Medical Center, a Sutter Health-affiliated hospital whose parent company is leasing the property through mid-2061. But the value of the hospital facilities will almost certainly decrease, from more than $500 million today to $50 million after midcentury, according to estimates by a real estate consultant hired by the district in 2003.

In the last five years, the health care district has spent $13.5 million for four properties that are being rented to private medical practices, a commercial real estate firm and a cardiac rehabilitation center run by Sutter. District officials said the investment properties would help buttress the district’s finances over the next several decades in case the hospital folds. The district also plans to spend about $30 million to build an assisted living facility that would most likely be leased or operated by a corporation specializing in senior care.

Some public policy experts said the district’s endowment-like business strategy is at odds with a core part of its mission: responding to local health needs.

“Our mandate is not to be the safety net,” Ms. Fama said. “We are here to help provide for all the needs of the community.”

She added that investing in properties is consistent with that mission. “Anything we would invest in, they would all be health-related services,” Ms. Fama said. “We don’t treat it as an endowment at all.”

The district’s board of directors voted Feb. 23 to provide $4.5 million for health-related programs in public schools and a psychiatric residency training program.

Meanwhile, the number of uninsured residents in San Mateo County receiving subsidized medical coverage doubled to 28,000 over the last three years. An additional approximately 3,000 other people are on the county’s waiting list for low-cost medical coverage.

With so much unmet need, some officials suggested that health care districts may no longer be the best way to improve the community’s health.

“Health care districts have become sort of an anachronism in this county,” said John Maltbie, county manager of San Mateo County.

jgollan@baycitizen.org

kmieszkowski@baycitizen.org

Erica Marcus contributed reporting.