HomeMy WebLinkAboutMINUTES - 02121991 - H.8 H. 8
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on February 12, 1991 by the following vote:
AYES: Supervisors Fanden, Schroder, McPeak, Torlakson, Powers
NOES: None
ABSENT: None
ABSTAIN: None
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SUBJECT: Merrithew Memorial Hospital Replacement Project
. Chairman Tom Powers convened the workshop on the Merrithew
Memorial Hospital Replacement Project.
Phil Batchelor, County Administrator, presented his report with
the recommendations contained therein. A copy of the report is
attached and included as a part of this document. Mr. Batchelor
listed three alternatives relative to the replacement of the existing
structure: closing the hospital, contracting out for hospital
services, and renovating the existing facility. He spoke on the
disadvantages associated with these alternatives which included
difficulty in controlling long-term costs for services; availability ,
of health services for psychiatric, inmate and indigent patients;
deficiencies in addressing the human services aspects of medical
services; and an obsolete facility that would continue to require an
escalating level of annual nainenance in order to function.
Speaking in support of replacing the existing facility, Mr.
Batchelor noted that Merrithew Memorial Hospital continues to receive
negative reports for licensing violations. Should the Board approve
the Option III construction procedure, Mr. Batchelor advised that the
.advantage of this option would provide for the inclusion of the
Maternity Labor/Delivery-Ward in the initial construction phase. He
spoke on the availability of SB 1732 funds and eligility procedures
for applying for these funds.
Mark Finucane, Health Services Director, advised that KMB.
Architects were selected through the competitive bid process. He
also spoke on the physical condition of Merrithew Memorial. Hospital.
Representatives of the architectural firm, Kaplan/McLaughlin/
Diaz (KMD) gave a slide presentation summarizing the options
available to the Board and the issues associated with replacement of
the existing hospital structure..
Supervisor Schroder spoke on the need for a new hospital
facility. However, he expressed concern with the limited funding
mechanisms that may be available to the County to finance the
construction project and advised of his interest in obtaining
financial information as soon .as possible. Supervisor Schroder also
advised of his disappointment with the medical and hospital community
who have not shown any interest or responsibility in providing health
care to the poor or disadvantaged county residents.
Mr. Batchelor advised that the medical community in Contra Costa
County .has indicated that health care for the poor, needy, and
disadvantaged is the County' s problem and. has offered no assistance.
He noted that there has been some good effort in getting some help
from a few hospitals in the County; however, there is the problem of
paying for these services. Mr. Batchelor advised that priorities may
have to be adjusted in order to make funds available for the hospital
replacement project.
Board members concurred on the need to pursue all options
feasible to address the health needs of County residents. Staff was
instructed to continue to meet with representatives of Brookside
Hospital and Los Medanos Hospital in the development of a
contractural arrangement to assist the County in the provision of
health care.
The following persons spoke in- support of replacing the current
County Hospital:
Mildred Beck, Antioch Committee on Aging., 2100 Buchanan,
B402, Antioch;
Dr. Alex Riskin, Central County Gray Panthers;
Jean Siri, West County Gray Panthers, El Cerrito;
Kate Olson, Central County Gray Panthers, Martinez;
Art Schroder, West County Gray Panthers;
Edith Feldman, Central County Gray Panthers, Martinez;
Ruth Lederman, Central County Gray Panthers;
Adeline Gunnerson, Central County Gray Panthers, Rossmoor;
Dr. Robert Feldman, Cambridge Community Center;
Eunice Kilkenny, 817 Slater Road, Pleasant Hill;
Karl Grossenbacher, West County Gray Panthers;
Jerry Buck, Director, Probation Department;
Paul Katz, Contra Costa Employees Association, Local I , .
P. O. Box 222, Martinez, 94553 ;
Jack McGervey, Vice Chair, Contra Costa Health Plan Advisory
Board, 23 Marlee Road, Pleasant Hill, 94-523 ; and
Harold Zuckerman., Juvenile Justice and Delinquency Prevention
Commission, 302 Cameo Drive, Danville 94526. .
Don Christen, Executive Vice President, Contra Costa Taxpayers
Association, advised that his organization could not support
replacement of the County Hospital but supports contracting out for
some of the currently available hospital beds in the County.
Mr. Batchelor spoke on the disadvantages with contracting out
for hospital services.
All persons desiring to speak were heard.
Supervisor Fanden advised that she would support replacement of
Merrithew Memorial Hospital which would include approval of Option
Three and the recommendations of the County Administrator.
Supervisor Schroder concurred but spoke on the need to develop a
financial program to fund the project.
Supervisor McPeak suggested that the County Administrator meet
with the Health Plan Advisory Board to solicit input on the Advisory
Board's suggestion for a fourth option that would. provide for
construction of a replacement outpatient clinic as part of the
initial construction plan. She also spoke on the need to explore all
financial options available to the County.
Supervisor Torlakson expressed an interest in participating in
discussions with the Los Medanos Hospital Board in the development of
a contract to assist the County in providing health services to
patients residing in the east county area.
Supervisor McPeak recommended that Supervisors Powers and
Torlakson be authorized to represent the Board in discussions with
representatives of Brookside Hospital -and Los Medanos- Hospital
respectively.
Supervisor Powers advised that he also would support staff' s
recommendations. He also spoke on the need to develop a financial
plan.
There being no further discussion, IT IS BY THE BOARD ORDERED
that the recommendations of the County Administrator as set forth in
the attached report are APPROVED.
IT IS- FURTHER ORDERED that Supervisors Powers and Torlakson are
AUTHORIZED to participate with the Health Services Director in
discussions with representatives of Brookside and Los Medanos
Hospitals to secure- a Joint Powers Agreement providing for certain
health services to residents in east and west County.
I hereby certify that this is a true and correct copy of
an action taken and entered on the minutes of the
Board of Supervisors on the date shown.
ATTESTED: /.Z, /`11�
PHIL BATCHELOR,dfork of the Board
of Supervisors and County Administrator
cc: County Administrator
Health Services Director By oeputy
TO: BOARD OF SUPERVISORS aE.-
Contra
Phil Batchelor, County Administrator ,,. ;� 'i'•
FROM: Mark Finucane, Health Services Director Costa
February 12 , 1991 County
DATE: TTq'couAtq .
SUBJECT:
Merrithew Memorial Hospital Replacement Project
SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&'BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. Acknowledge receipt of report from the County Administrator
and Health Services Director on the status of the Merrithew
Memorial Hospital Replacement Project.
2. Authorize the County Administrator to execute Phase II
architectural agreement with KMD Architects for preparation
of Schematic Plans for the Replacement Project in accordance
with the approved Master Plan Report, Alternate Number 3 .
3 . Direct the County Administrator and Health Services Director
to develop a financing plan for the Hospital Replacement
Project.
4. Direct that a project status report be provided to the Board
of Supervisors upon completion of the Schematic Plans.
FINANCIAL. IMPACT:
KMD Architects estimate that the schematic plan phase of the
project will require approximately $650,000 to $750,000 and seven
months for completion. Health Services has retained funds from
the NME transaction related to the sale of licensed bed capacity
to be used for Hospital replacement planning and funds from the
Tobacco Tax Capital' account sufficient to cover the cost of the
hospital replacement planning.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE UUU✓✓✓CCC X
APPROVE OTHER
SIGNATURE(S):
\ CTION OF BOARD ON, February 12, 1991 'APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I H BY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CO CT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERE THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS O HE DATE SHOWN.
cc: County Administra ATTESTED
General Servic Director PHIL BATCHELOR,CLERK THE BOARD OF
Health Serv• es Director SUPERVISORS AND COUNTY AD ISTRATOR
M382 (10 ) BY DEPUTY
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The continued progress of the schematic planning phase will allow
the County. to �stay within the timing requirements of the State to
qualify for funding under the SB 1732 reimbursement program and
will provide a greater degree of accuracy as to the projected
cost of the replacement facility.
BACKGROUND:
The completed room-by-room Program and Master Plan report
- prepared by KMD Architects and .Medical Planning Associates was
. given to the Board on December . 18, 1990. Copies of the report
summary have. been sent to County Mayors, City Managers, Chambers
of Commerce, Hospital Administrators Hospital, Chiefs of Staff,
the Project Oversight Committee, Unions, the Contra Costa Council
and Health Services Advisory. Boards inviting comments.
Very few written comments have been received. Staff discussions
with medical staff and other interested: agencies. have indicated a
high degree of support for the ,project.
Alternatives to Replacement:
Staff has once again reviewed the alternatives. to replacement of
the hospital. The alternatives are:,. .
1. CLOSE THE HOSPITAL: The County Counsel has been asked
to review the legal implications of. such action.
While this option needs further legal research, there
are significant legal liabilities for, the Board for
indigent health care needs. . Without a public hospital
facility the Board would be faced with controlling
long-term costs for services, assuming any alternatives
could be developed.
2 . CONTRACTING: This option continues to be explored but
has not proven to be feasible.: Despite repeated
attempts over the last 5 years no serious contracting
offer, that would serve as an alternative to replacing
the County Hospital, has been made by any 'public or .
private hospital.
Particularly troublesome to. these facilities are the
psychiatric, inmate and indigent patients.
3 . RENOVATE THE EXISTING FACILITY: Some of the issues to
be considered in renovation include service
interruption during construction, revenue losses,
continued inefficient, outdated hospital layout, and
the high cost and short payback for the required
alterations. It is estimated to cost almost
$15,000, 000 plus financing costs to accomplish the,
improvements required to correct the immediate
licensing deficiencies. As noted above, such a
renovation .project would do nothing to improve the
existing physical limitations and inefficiencies of the
present facility. In addition, the physical plant
would continue to require an ever escalating level of
annual maintenance in order to function.
None of the potential alternatives address the human services
aspects of medical services.
Replacement Options:
The Master Plan Report given to the Board on December 18, 1990
contained three alternative options for construction of the
replacement facility. The alternatives to full replacement
provide for workable, lower cost phases that resolve most of the
hospital deficiencies, although complete replacement of all
components is deferred for up to 9 years.
Option One: Full replacement as a single project, includes a 192
bed new facility of 320 , 000 square feet plus retaining 40,000
square feet of renovated space. The project cost is estimated to
be $123 .7 million and would need 5 years for completion.
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Option Two: Requires three phases spread over 8 years for full
replacement. The first phase, major replacement component of
142,000 .square feet, includes 110 new beds but leaves Maternity
Labor/Delivery, Psychiatric Care and Outpatient Clinics in
existing spaces. The Maternity Ward requires a building addition
in order to comply with licensing requirements that would further
complicate the patient services problems and is not needed as
later phases of the project are completed. The physical
configuration of this option is considered inefficient and not
conducive to proper patient care delivery. Therefore, this
option is eliminated from consideration. The estimated cost for
the initial -hospital component is $69. 3 million and $144..7
million for full replacement.
Option Three: Requires four phases spread over 9 years for full
replacement: The initial phase of 171, 000 square feet includes
148 new beds and all departments except Psychiatric Care and
Outpatient Clinics. The estimated cost of the. initial hospital
component is $81 .6 million and $144. 9 million for full
replacement
The primary difference between options two and three 'is the
inclusion of the Maternity Labor/Delivery Ward in the initial
construction in option three rather than leaving the function in
renovated space with an addition as planned in option two.
Option three offers the best long-term solution in a phased
construction plan. Option two would create even more
complications with patient care, coordination and access to
necessary hospital services by leaving maternity care out of the
new hospital construction and widely separated from required
essential activities..
All options provide for renovation and reuse of approximately
40,000 square feet of existing buildings for various uses in
order to limit the new hospital construction to only those
functions that must be housed in that quality of space.
Reasons for Recommendation to Proceed:
The Merrithew Memorial Hospital continues. to receive negative
reports for licensing violations. Regulatory agencies have .not
moved to withhold funding as long as progress. continues toward
correction and/or replacement of the hospital facility. It is
essential to proceed with the next step of architectural planning
( schematic plans) in order to demonstrate progress toward
correction. In addition, the period of eligibility for
application for funding under the State SB 1732 program requires
that plans be completed within a - limited period of time. Our
County is one of several examining the feasibility of a major
hospital replacement project using the State SB 1732 funding
reimbursement.
Other Counties:
A recent survey by the California Association of Public Hospitals
reviewed the status. of medical facility. projects in other,
counties where SB 1732 reimbursement is being considered. The
findings of the survey are summarized below:
Alameda: Considering a new facility to replace two existing
ones in poor condition. May. consider a joint
facility with the U.S. Navy.
Fresno: Doing a feasibility study' for a -$300 to $500
million replacement facility ,. , Consideration is
being given to a limited shared operation with
UCSF and a community hospital.
Los Angeles: Completed a master plan for $2. 3 billion of health
care improvements. Constructing a $7 million
Aids clinic. In final planning for a $200 to $300
million San Gabriel Valley 200-bed facility.
Three other clinics are„ planned, totalling over
$90 million.
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Merced: Concept approval for a replacement facility.
Riverside: Sold $20,0 million in bonds in July 1989 . Have
acquired a site and in design development for a
new facility.
San 300-bed replacement facility in schematic
Bernardino: design. Estimated cost of . $200 to $225
million.
San .Diego: Sold hospital to UC in 1981. Exploring
alternatives which can qualify for
SB 1732 funding.
San Francisco: Entire system under review. No solid plans at
this time.
San Joaquin: Planning for a replacement projectestimated at
$50 million.
San Luis Planning a. project to replace an acute care
Obispo: facility estimated to cost $40 million.
Santa Clara: Expanded facility in 1985. Future expansion under
study.
Stanislaus: Project for psychiatric ward renovation and
hospital expansion with an estimated cost of ..
$100 to $124 million.
The two projects closest to receiving approval of SB 1732 funding
are: 1) Los. Angeles County' s Aids clinic and 2) Riverside
County' s Moreno Valley General Hospital. San .Mateo and other
Counties are doing analysis on their facilities.
Although some counties no longer operate hospitals, almost all of
the urban counties in the state still maintain public hospital
facilities. The counties that have sold, ;leased or transferred
their hospital all did. so prior to 1980. With the exception of
Sacramento, Orange and San Diego, all ,of which sold to UC, almost
all were smaller, more rural counties. All, of the larger
counties, except as noted above, still operate hospitals with
. ever increasing workload demands. Over 89% of the population of
California has access to a public hospital facility.
Future Funding:
The planning for the project envisions use of bond funding for
the construction in one or more issues. The. terms of SB 1732
allow for reimbursement for capital expenditures and debt service
in proportion to the level of Medi-Cal patient percentage. The
County has a Medi-Cal percentage of approximately 50%. In
. addition, MediCare allows for percentage pass-through of capital
costs which can provide up to 12% of the debt service. .
Sources for the remaining debt service requirements are the
cigarette tax, general obligation bonds, parcel tax or other
special tax, enterprise fund or the general fund. At present it
is estimated that the unreimbursed debt service requirement will
be approximately $2.5 to $3 million per year. Future state bond
issues or other program changes could decrease or eliminate the
unreimbursed portion in the future.
Alternatives have been under study to reduce the impact of
planning costs, interest expense and overall costs. The
financial consultants have suggested that a sale/leaseback of an
existing asset be used to obtain the funds necessary to complete
the plans and all work preliminary to construction. The
sale/leaseback allows for interest earnings on any funds borrowed
as well as a favorable bond rating since, .the borrowed funds are
secured by an existing asset with no construction risk.
If the asset. transfer procedure is used to finance the
preliminary work, a second issue of securities would be used to
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finance' 'the principal construction project at the appropriate
time. The plan would provide funding to meet timing deadlines,
allow for arbitrage earnings of as much as $2,000,000 and could
be structured with no budget impact for two fiscal years. The
later issue would not require debt service payments until after
the three or four year construction process.
This plan and others will be given more complete analysis during
the period of time the architects are working on the next phase
of the architectural plans. We will keep your Board informed of
any other developments that impact the financing of the project.
RECOMMENDATION•
It is recommended that the architects be directed to proceed with
preparation of the Schematic Plans for the project that .provides
148 new beds estimated to cost $81. 6 million (option Three) , as
described in the Master Plan Report.
Although not without its shortcomings, Option Three will resolve
the outstanding license problems, provides new bed wards
including the high priority obstetrics unit and can be
accomplished without major disruption and relocation of on-going
services. A new 8-bed adolescent psychiatric ward will be
included in the initial construction phase.
The later phases of the project will . provide for replacement and
upgrade of the Psychiatric Unit and the Outpatient Clinic. Those
units can be constructed in accordance with. the Master Plan at
the time funding is available. All options require the move
off-site of administrative space and some storage areas as well
as .extensive reuse of some of the existing buildings.
. The County needs the complete project now in terms of service
needs. Even when the later phases of the project are complete
there will be a continuing need to maintain contractual
arrangements with other health care providers in the County. .
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