OCEANSIDE -- Lawyers disagreed Tuesday on whether Tri-City Medical Center's board should have given the hospital's top executives notice and a chance to hear the issues before placing them on paid leave last month.

An attorney for eight sidelined executives insisted that her clients' rights were violated when four board members voted Dec. 18 to put the administrators on leave without 24 hours' notice. However, an attorney for the hospital board said no notice was required because leave is not a form of discipline.

On Monday, Tri-City's elected board of directors held a raucous standing-room-only meeting to address concerns about the Dec. 18 meeting in which four directors -- RoseMarie Reno, Kathleen Sterling, George Coulter and Charlene Anderson -- voted to temporarily remove eight high-level hospital administrators, including chief executive Arthur Gonzalez.

At that same December meeting, the board hired accountant Michael Williams to conduct a "forensic investigation" of the hospital's finances.

Little has been said about what led to the meeting or what specifically the investigation will entail.

However, on Tuesday the North County Times requested a copy of a letter, allegedly sent to the hospital board last month, that raises questions about Tri-City's finances and suggests a scenario for dealing with the issue that is much like the one that has unfolded.

Tri-City officials said the letter would be released if it is determined to be a public document.

Meanwhile, the hospital's sidelined executives voiced their concerns publicly for the first time Monday when their attorney, Leslie Devaney, told the hospital board it broke the state's open-meeting law by placing the employees on leave without warning.

"If you don't give 24 hours' notice, then it's null and void and against the law," Devaney said at the meeting.

Julie Biggs, the board's recently-appointed attorney, said Tuesday that she disagreed and has not advised the board to reinstate the executives or issue a public apology, as Devaney demanded Monday night.

Biggs said the decision to put administrators on leave came during a discussion of potential litigation in closed session. She said the board would only have to give prior notice and list allegations if it were taking a disciplinary action against the employees.

"No complaints or charges have been taken up," Biggs said. "This is not a disciplinary action."

Devaney said that she believes any action, not just a disciplinary one, against an employee requires the same advance notice.

"Putting them all on leave, that is an action," she said.

"The obvious thing is to say (now) is 'whoops, we goofed, we'll put you back,' " Devaney said. "Whether or not my clients want to go back in that environment, I would have to ask."

The attorney said she plans to meet with the sidelined executive team Wednesday or Thursday to discuss "next steps" if Tri-City's leadership declines to meet her demands.

The board was also set to discuss in closed session Monday whether the Dec. 18 meeting complied with the open-meeting law, but officials reported no action on that issue when the meeting ended late Monday night.

Board member Ron Mitchell, one of three board members who demanded the meeting's agenda be redrafted and all actions be voted on again, said he received a memo from Biggs that did not address his concerns.

"It mostly had to do with me not drafting (my request) correctly," Mitchell said. "I'm not a lawyer, but I disagree with her reasoning."

Mitchell said he could not share Biggs' memo or its conclusions because they were provided in closed session, but added that he may take the matter to court if the San Diego County District Attorney does not investigate.

The sidelined executive team -- which include Gonzalez, chief operating officer Suellyn Ellerbee, vice president of strategic services Allen Coleman and human resources director Doreen Sanderson -- have declined to comment or have not returned phone calls.

Tri-City's tortured bond refinancing problems also got a public airing from Williams at Monday night's meeting. The accountant said he saw no illegalities in the hospital's 2007 decision to refinance $62 million in outstanding revenue bonds used to build the hospital's Pavilion building in 1996.

The hospital chose auction-rate bonds to get what it thought would be a 3.5 percent interest rate on the debt, but that move backfired when investors started demanding a higher return, causing interest rates to hit 14.5 percent.

At 3.5 percent, Tri-City expected to pay about $2.1 million per year in interest. At the 14.5 percent, with fees and other costs, the hospital has paid more than $1 million in interest in just the last five weeks, Williams said.

Board members have asked Williams to examine buying back some of the debt as allowed by the Securities and Exchange Commission. The board will schedule another special meeting to delve further into its efforts to get a lower interest rate.

Much of Monday's meeting was also spent discussing whether to select an interim chief executive to step in until Gonzalez returns and/or the forensic investigation is completed. Williams is now in charge of the hospital, but has no experience in healthcare field.

At the request of board members Ron Mitchell and Larry Schallock, who were both absent from the Dec. 18 meeting, the board interviewed four candidates in public Monday, foregoing the custom of conducting all interviews in closed session.

After interviewing the candidates, who offered to guide the hospital for a fee ranging from $32,000 to $55,000 a month, director Sterling said she was ready to make an appointment.

But many in the audience, and some on the dais, objected. Board member Madeline Rodriguez said she was still not sure why it was necessary to hire an interim CEO given that no one knows how long Gonzalez and his team will remain on leave.

"Will it be two, months, three months, six months, a year?" Rodriguez asked.

Williams did not respond to Rodriguez's questioning. Eventually the board voted 4-3 to create an ad-hoc committee to check the references of the four candidates.

Contact staff writer Paul Sisson at (760) 901-4087 or psisson@nctimes.com.