Board of Directors Special Meeting. December 4, :00 p.m. Agenda

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1 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, :00 p.m. Agenda

2 Board Members Susan Gerard, Chair, District 3 Mary Harden, Director, District 1 Mark Dewane, Director, District 2 Elbert Bicknell, Director, District 4 Terence McMahon, Director, District 5 AGENDA Special Meeting Board of Directors of the Maricopa County Special Health Care District Maricopa Medical Center Education Building Bora Bora Room 2611 E. Pierce Street Phoenix, AZ Clerk s Office Fax Tuesday, December 4, :00 p.m. If you wish to address the Board, please complete a speaker s slip and deliver it to the Clerk of the Board. If you have anything you wish distributed to the Board and included in the official record, please hand it to the Clerk who will distribute the information to the Board Members and Maricopa Integrated Health System Senior Staff. Speakers are limited to (3) three minutes. (NOTE: One or more of the members of the Board of Directors of the Maricopa County Special Health Care District will attend either in person or by telephone conference call or video communications.) Pursuant to A.R.S (A)(3), or any applicable and relevant state or federal law, the Board may vote to recess into an Executive Session for the purpose of obtaining legal advice from the Board s attorney or attorneys on any matter listed on the agenda. Pursuant to A.R.S (A)(4), or any applicable and relevant state or federal law, the Board may vote to recess into an Executive Session for the purpose of consulting with its attorneys to consider its position and instruct its attorneys regarding the Board s position regarding any contracts that are subject to negotiations, in pending or contemplated litigation, or in settlement discussions conducted in order to avoid or resolve litigation, and that are listed on the General Session agenda for discussion or action or both. The Board also may wish to discuss any items listed for Executive Session discussion in General Session, or the Board may wish to take action in General Session on any items listed for discussion in Executive Session. To do so, the Board will recess Executive Session on any particular item and reconvene General Session to discuss that item or to take action on such item. ITEMS MAY BE DISCUSSED IN A DIFFERENT SEQUENCE Call to Order Roll Call Pledge of Allegiance Agendas are available within 24 hours of each meeting in the Office of the Board, Maricopa Medical Center, Administration Bldg, 2 nd Floor 2601 E. Roosevelt, Phoenix, AZ 85008, Monday through Friday between the hours of 8:00 a.m. and 5:00 p.m. Accommodations for Individuals with Disabilities, alternative format materials, sign language interpretation, and assistive listening devices are available upon 72 hours advance notice through the Office of the Board, Maricopa Medical Center, Administration Bldg, 2 nd Floor 2601 E. Roosevelt, Phoenix, Arizona 85008, (602) To the extent possible, additional reasonable accommodations will be made available within the time constraints of the request. 11/27/2012 5:00 PM

3 Call to the Public This is the time for the public to comment. The Board of Directors may not discuss items that are not specifically identified on the agenda. Therefore, pursuant to A.R.S (H), action taken as a result of public comment will be limited to directing staff to study the matter, responding to any criticism or scheduling a matter for further consideration and decision at a later date. Oath of Office Ceremony: 1. Swearing In of the Board of Directors 20 min Honorable Norman J. Davis, Presiding Judge, Superior Court, Maricopa County District 1 District 2 District 5 Mary Harden Mark Dewane Terence McMahon General Session, Presentation, Discussion and Action: 2. Election of Vice Chairman for the Board of Directors 5 min Susan Gerard, Chairman 3. Welcome and Introductions from Susan Gerard, Chairman of the Board of Directors 15 min Board of Directors Senior Leadership 4. Overview of Arizona Revised Statutes Title 48, Chapter min Rory Hayes, Attorney at Law Bill Sims, Sims Murray, Ltd, Outside Counsel 5. Process of Developing Maricopa Integrated Health System Mission, Vision, Values Statement and Development of Strategic Plan 15 min Mike Cowley, Former Chairman, Special Health Care District Board of Directors 6. Overview of Open Meeting and Public Records Laws 60 min Bill Sims, Sims Murray, Ltd, Outside Counsel 7. iprotean Online Course Governance: An Introduction to Governance 30 min District Board Adjourn 2

4 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, 2012 Item 1. No Handout

5 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, 2012 Item 2.

6 ARTICLE VI OFFICERS Section 2. Election Within thirty days after an election creating the District, the Board of Directors shall meet and organize by electing a Chair and Vice-Chair, such officers shall serve until June 30 following their election as officers. Thereafter, at the first regular meeting of the Board of Directors in June of each year, the Board of Directors shall elect its officers, all of whom shall serve a term of one year, beginning on July 1 first following their election as officers and ending the next June 30. An election of officers shall be held at the meeting at which this Bylaw is adopted, or if necessary to satisfy the open meeting law, at the first meeting (regular or special) of the Board of Directors following the adoption of this Bylaw. The term of office of any officers serving when this Bylaw is adopted shall end immediately upon the election of such new officers and such new officers shall serve until the next June 30. If a vacancy occurs in the office of chair or vicechair following an election of the Board of Directors, the Board of Directors shall meet no later than 30 days after the general election and at such meeting shall elect an officer to fill the vacancy and such officer shall serve until the next June 30. All officers shall holdover until their successors are elected.

7 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, 2012 Item 3. No Handout

8 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, 2012 Item 4. Additional Information Presented at the Meeting

9 MARICOPA SPECIAL HEALTH CARE DISTRICT HISTORY AND CONTEXT

10 Howell Territorial Code of 1864 Every poor person who is blind, old, lame, sick or decrepit, or in any other way disabled or enfeebled, so as to be unable to maintain himself and who shall not be relieved or maintained by his relatives.. shall be maintained by the County in which he may be

11 EARLY FACILITIES AND PROVIDERS

12 EXPANSION TO DURANGO

13 DEVELOPMENT OF PRESENT HOSPITAL

14 SUCCESSFUL BONDS, DELAYED LOCATIONS Voters approved bonds in May of 1961 Papago Park site approved by Board in December of 1962 Lawsuit authorizes transfer from ASH in April of 1966

15 COMPLETION AND GROWTH Construction delays but opening in February of 1971 Bond passed in 1973: $15.8 earmarked for healthcare including new operating rooms and burn unit Bond passed in 1986: $41.4 for healthcare including primary care centers and remodeling and improvement to hospital

16 COUNTY RESPONSIBILITY FOR INDIGENT SICK A.R.S Section the board of supervisors has the sole and exclusive authority to provide for the hospitalization and medical care of the indigent sick in the the county...

17 ENACTMENT OF AHCCCS Congress enacts Federal Medicaid program in 1965 By 1972 all states have programs except Arizona Arizona begins Federally approved demonstration project for prepaid capitation plan in 1982 Coverage from and after the date determined eligible with a 48 hours retroactive period from determination

18 ONGOING ISSUES FOR HOSPITAL Competition for indigent patients Failure of bond of $ million for health care system Loss of $40 million in disproportionate share funds to state 1995 attempt to pursue privatization Use of private management team: Quorum Health Resources and FRGS

19 PASSAGE OF INITIATIVE PROP 204: 2000 Enlarged definition of eligible person for AHCCCS to any person who has an income level...between zero and one hundred percent of Federal Poverty Level Funding to come from the Arizona Tobacco Litigation Settlement Fund and supplemented as necessary, by any other available sources

20 2001: SB 1577 Implemented Proposition 204 Eliminated counties mandated responsibility for indigent sick Maintained existing claims until 2004 Required maintenance of existing county hospitals until 2006; thereafter 12 months notice to AHCCCS of closure Granted additional powers for operation of county hospitals

21 WHAT TO DO WITH THE MARICOPA INTEGRATED HEALTH CARE SYSTEM? Maricopa County Board of Supervisors in January 2003 creates Citizens Task Force on County Health Care System to balance needs and concerns and make recommendations.

22 MARICOPA COUNTY Fiscal impacts, including increasing pressure on county expenditure limitations Fear that maintenance of status quo would force closure

23 OTHER HOSPITALS Concerns about competition Loss of community resource, especially Burn Center Growth of uncompensated care costs if MIHS no longer providing services

24 GENERAL CONCERNS Loss of an important community healthcare resource Concern that continuance of MIHS with taxpayer support must be a clear decision of the electorate.

25 2003: HB 2530 Amended existing special health care district statutes to allow Maricopa County to create a district to operate the Maricopa Integrated Health System

26 VOTER APPROVAL Required voter approval for formation of the district and authorization of secondary property tax. Board of Directors to be elected by Supervisorial District. Voters approved in November, 2003, 58.42% to 41.58% First Board of Directors chosen General Election, 2004

27 LIMITATIONS Hospital must be located within 3 mile radius of existing hospital Limitations on construction and acquisition of specialty hospitals and surgical centers No ambulance service

28 MAINTENANCE OF EFFORT Medical education program Maternity, emergency and trauma services, burn center Maintenance of effort did not create a legal entitlement to services Requires Maricopa County to purchase $5 million dollars worth of services during term of tax

29 BENEFITS OF THE DISTRICT Self Governance/Autonomous from County Tax authority for operations No expenditure limitation Joint ventures with other parties/not subject to gift clause Bonding authority

30

31 Maricopa County Special Health Care District Board of Directors Special Meeting December 4, 2012 Item 4.

32 Format Document Definitions In this chapter, unless the context otherwise requires: 1. "Freestanding urgent care center": (a) Means an outpatient treatment center that, regardless of its posted or advertised name, meets any of the following requirements: (i) Is open twenty-four hours a day, excluding at its option weekends or certain holidays, but is not licensed as a hospital. (ii) Claims to provide unscheduled medical services that are not otherwise routinely available in primary care physician offices. (iii) By its posted or advertised name, gives the impression to the public that it provides medical care for urgent, immediate or emergency conditions. (iv) Routinely provides ongoing unscheduled medical services for more than eight consecutive hours for an individual patient. (b) Does not include the following: (i) A medical facility that is licensed under a hospital's license and that uses the hospital's medical provider number. (ii) A qualifying community health center pursuant to section (iii) Any other health care institution that is licensed pursuant to this chapter. (iv) A physician's office that offers extended hours or same day appointments to existing and new patients and that does not meet the requirements of subdivision (a), item (i), (iii) or (iv). For the purposes of this item, "physician" means a person licensed pursuant to title 32, chapter 13 or "Home health agency" has the same meaning prescribed in section "Medical clinic" means a facility that provides for physical evaluation, diagnosis and treatment of patients and that does not keep patients overnight as bed patients or treat patients under general anesthesia. 4. "Medically underserved" means populations that exhibit one or more of the following indicators: (a) Limitations on the availability of primary care providers, prenatal care or other health care services. (b) Residence in a health professional shortage area as defined in 42 Code of Federal Regulations part 5. (c) A standard of living at or below a designated federal poverty level. (d) Other factors indicative of being medically underserved, including levels of unemployment, incidence of infant mortality or low birth weights and the elderly. 5. "Nursing care institution" has the same meaning prescribed in section "Qualified electors" means persons who are qualified to vote pursuant to title "Special payments" means any payments made pursuant to section , subsection O to or on behalf of a county operated hospital, including a hospital that is owned or leased by a special health care district. 2:49:31 PM]

33 Format Document Establishment of special health care district A. In a county with a population of two million or more persons, the county board of supervisors may submit to a vote of the qualified electors the question of forming a special health care district. The board of supervisors may submit as a single issue the question of forming the special health care district with authority to impose a secondary property tax pursuant to sections and and bonding authority. A special health care district formed pursuant to this section shall be geographically coterminous with the county boundaries, and the qualified electors of the county are qualified electors for any election held pursuant to this section. B. If a majority of the qualified electors voting on the issue approves the formation of the special health care district, the board of supervisors shall order the establishment of the special health care district and shall serve as the board of directors of the district until directors are elected at the next general election as prescribed by section The order of the board of supervisors establishing the special health care district is final, and the special health care district is established on issuance of the order establishing the district. C. The board of supervisors may also include at the formation election or at any other election called for that purpose the question of issuance of bonds pursuant to section Any election that includes the question of issuance of bonds must be held on the first Tuesday following the first Monday in November as prescribed by section , subsection B, paragraph 1, subdivision (d). D. A special health care district is a tax levying public improvement district for all purposes of article XIII, section 7, Constitution of Arizona, to the extent of the powers, privileges and immunities conferred by this chapter or granted generally to tax levying public improvement districts by the constitution and statutes of this state. E. If a special health care district is established pursuant to this section, beginning in the fiscal year that county health care system operations are transferred to the district, the economic estimates commission shall decrease the county's base expenditure limit as provided by section by an amount determined as follows: 1. Divide the amount of the county's expenditures subject to limitation that pertain to the transferred health care system operations for the preceding fiscal year, as determined by the auditor general from the annual expenditure limitation report of the county, by the GDP price deflator, as defined in section , for that fiscal year used to calculate expenditure limitations for the fiscal year of the transfer. 2. Multiply the quotient by the GDP price deflator determined for fiscal year Divide the amount determined in paragraph 2 for the fiscal year of the transfer by the population of the county, as defined in article IX, section 20, subsection (3), paragraph (f), Constitution of Arizona, for the same fiscal year used to calculate expenditure limitations for the fiscal year of the transfer. 4. Multiply the quotient by the population of the county for fiscal year :49:45 PM]

34 Format Document Board of directors; elections; officers A. The board of directors of a special health care district organized under this chapter shall consist of five citizens who are resident real property owners in the district and who are qualified electors in the district, and none of whom is an elective or appointive state or county official. B. The county board of supervisors may divide the district into five directorship districts, numbered respectively as districts one, two, three, four and five. The board of supervisors shall define the boundaries and limits of each directorship district and shall make each district equal or as nearly equal in population as is practicable. C. The board of directors is a body corporate, under the name "board of directors for special health care district" with the district's name inserted. 2:50:00 PM]

35 Format Document Term of office; election A. For a special health care district established pursuant to section in a county with a population of two million or more persons, directors shall serve staggered four year terms of office beginning on the first Monday immediately following the declaration of election to office. B. For all other special health care districts, directors shall serve nonstaggered four year terms of office beginning on the first Monday immediately following the declaration of election to office. C. Elections shall be held as prescribed in section If only one person files a nominating petition for an election to fill a position on the board of directors for which the term of office is to expire, the board of directors may cancel the election for that position and appoint the person who filed a nominating petition to fill the position. Vacancies occurring other than by expiration of term may be filled by the remaining members of the board of directors. 2:50:14 PM]

36 Format Document Officers of the board Within thirty days after an election the board of directors shall meet and organize by electing a chairman and a vice-chairman from its members. In addition, the board of directors may appoint a secretary who shall not be a member of the board and who may be paid a salary fixed by the board. 2:50:28 PM]

37 Format Document Compensation of directors Members of the board of directors shall serve without compensation, but each is allowed: 1. Necessary travel and incidental expenses actually incurred in performing official district business as approved by the board of directors. 2. Per diem determined pursuant to title 38, chapter 4, article 2, when away from the district on business of the district. 3. Per diem for attending meetings of the board of directors of the district not to exceed the amount prescribed by section :50:44 PM]

38 Format Document Reimbursement for county services Services provided by a county to a special health care district, including costs related to the formation of the special health care district, are subject to reimbursement pursuant to section :51:00 PM]

39 Format Document Dissolution of district A. A district that is organized under this chapter may be dissolved by the majority vote of all qualified electors voting on the question of dissolution at a special election called to vote on the question. The district shall not be dissolved if the district has outstanding debt unless adequate provisions have been made for the payment of the outstanding debt. B. The county board of supervisors shall call the election on either: 1. Application by the district board of directors. 2. Filing a petition signed by twenty-five per cent of the qualified electors of the district. C. If a district is dissolved, the board of directors shall: 1. Pay or make provision for paying all liabilities of the district. 2. Convey to the county all property, buildings, equipment and other items owned by the district. 2:51:12 PM]

40 Format Document Powers of special health care district A special health care district may: 1. Adopt and use a corporate seal. 2. Sue and be sued in all courts and places and in all actions and proceedings. 3. Purchase, receive, take, hold, lease, use and enjoy property of every kind and description in the district, and control, dispose of, sell, convey, encumber and create leasehold interests in property for the benefit of the district. 4. Administer trusts declared or created for the district, and receive by gift, devise or bequest and hold in trust or otherwise, property located in this state or elsewhere and, if not otherwise provided, dispose of trust property for the benefit of the district. 5. Operate and maintain, or provide for the operation and maintenance of, at one or more locations in the district, a hospital, freestanding urgent care centers, medical clinics, nursing care institutions, a combined hospital and nursing care institution, a combined hospital, nursing care institution and ambulance service when authorized to do so pursuant to title 36, chapter 21.1, article 2, a combined freestanding urgent care center and ambulance service when authorized to do so pursuant to title 36, chapter 21.1, article 2, a home health agency or any other asset of a health system as defined in section and any health system liability as defined in section that is owned or operated by the district. 6. Contract with an existing hospital, freestanding urgent care center, nursing care institution, ambulance service, city, town or fire district in the district to provide hospital, urgent care, nursing care and ambulance related services. 2:51:30 PM]

41 Format Document Additional powers and duties of certain special health care districts A. This section applies only to a special health care district in a county with a population of two million or more persons. B. Notwithstanding section and except as provided in section , subsection B, the board of directors of a special health care district shall be elected pursuant to title 16 and shall consist of five members, one from each supervisorial district of the county in which the district is located. A member of the board of directors shall comply with all of the following: 1. A member shall be a qualified elector of the supervisorial district from which the member is elected. 2. A member shall not be an elected or appointed state or county official or a person who serves on a hospital board established pursuant to section and who is not a member of the board of supervisors of the county in which the district is located. 3. A member shall not be an employee of the special health care district or a director, officer or employee of another health care institution. C. For at least ten years after the date that the district first operates a general hospital and within three miles of the location of a general hospital operated by the county in which the district is located, the district shall provide the following services commensurate with good business practices: 1. Emergency and trauma services and shall operate a general hospital and a burn center, all at a level of service no lower than that which existed on January 1, Maternity services at levels required of public hospitals pursuant to title XIX of the social security act. D. Following the expiration of the ten year period prescribed by subsection C of this section, the district may provide any of the services or operate any of the facilities permitted under this chapter. E. This chapter does not establish a legal entitlement to services or reimbursement for services for any person or third party or obligate the district to provide programs or services that it cannot provide as the result of actions of third parties. The provisions of this section shall be included in any lease or management agreement for the general hospital of the district, and any sale, lease or management agreement shall not affect the status of the hospital as a public hospital or its licensure under section , subsection G. F. Until ten years after the date that the district first operates a general hospital, the following apply: 1. The district may not construct an additional general hospital outside the three mile radius of a general hospital operated by the county. After the expiration of the ten year period, the district may not construct a general hospital outside a three mile radius of the general hospital operated by the county without the approval of the qualified electors of the entire county pursuant to an election called by the board of directors of the district. 2. The district may not acquire or lease a general hospital that is situated beyond the three mile radius of the general hospital operated by the county without the approval of the qualified electors of the entire county pursuant to an election called by the board of directors of the district. 3. Except for a psychiatric hospital or a behavioral health facility, the district may not construct, acquire or lease a specialty hospital that is located outside the three mile radius of a general hospital operated by the county. G. Notwithstanding section , paragraph 5, for a period of ten years after the date that the district first operates a general hospital, a district may own, operate, lease, manage or maintain no more than three outpatient surgical centers if all of the following apply: 1. One of the outpatient surgical centers is located at the campus of a general hospital operated by the district. 2. Any other surgical centers are located at health care institutions as defined in section that were operated by the county in which the district is located on January 1, All surgical centers are operated in furtherance of the district's mission as prescribed by subsection H of this section. H. A district shall operate a general hospital for the term of any tax authorized pursuant to section , and the district's primary but not sole mission is as provided in this subsection and met by providing directly at its facilities or by contract 2:51:45 PM]

42 Format Document medical education programs, emergency and other services as required by this chapter, services to the medically underserved and facilities and equipment necessary for these services. The district's annual expenditures to satisfy the requirements of this subsection shall be to the extent of the amount of taxes approved by the qualified electors, authorized by the board of directors of the district and available pursuant to sections and I. The district and the county may not simultaneously operate a general hospital, and a district may not operate an ambulance service pursuant to section J. If a district chooses to acquire or lease from a county an asset of a health system as defined in section , the board of supervisors of that county, by a majority vote, may convey, sell, lease or otherwise transfer title to any such asset of a health system to the district and transfer any health system liability as defined in section to the district. K. A district may: 1. Raise capital, borrow and invest monies, create debt, assume debt and refinance debt to carry out the purposes of this chapter. 2. Issue tax anticipation notes pursuant to title 35, chapter 3, article Issue revenue anticipation notes pursuant to title 35, chapter 3, article Issue revenue bonds in a manner consistent with chapter 12, article 5 of this title. L. Notwithstanding section , a district shall not lease any general hospital that it operates to any entity other than a political subdivision of this state until two years after the receipt of any special payments. M. Subject to the other provisions in this chapter, the district: 1. Shall adopt administrative rules, including an employee merit system for its employees, and shall adopt and administer competitive procurement rules necessary to administer and operate the district's programs and any property. 2. May employ or contract with individuals or other entities, including the county attorney, to provide services in furtherance of the purposes of the district. 3. May establish or acquire foundations or charitable organizations to solicit donations, financial contributions, real or personal property or services for use solely to perform the duties and obligations in furtherance of the district. 4. Shall disclose and make available records and other matters in the same manner as is required of a public body pursuant to title 39, chapter 1, except that the district is not required to disclose or make available any records or other matters that: (a) Identify the care or treatment of a patient who receives services, including billing information, unless the patient or the patient's representative consents to the disclosure in writing or unless otherwise permitted pursuant to federal or state law. (b) Reveal proprietary information provided to the district by a nongovernmental source. For the purposes of this subdivision, "nongovernmental" means an entity other than the United States government or a public body as defined in section (c) Would cause demonstrable and material harm and would place the district at a competitive disadvantage in the marketplace. (d) Would violate any exception, privilege or confidentiality granted or imposed by statute or common law. N. A district is entitled to a lien for the charges for any services provided by a hospital operated by the district, for medical care and treatment of an injured person or for long-term care services, on any and all claims of liability or indemnity for damages accruing to the person to whom hospital or medical service is rendered, or to the legal representative of that person, on account of injuries giving rise to such claims and that necessitated the hospital or medical care and treatment. Recovery of charges pursuant to this subsection shall be in a manner as nearly as possible the same as the procedures prescribed in section :51:45 PM]

43 Format Document Purchasing and leasing property and equipment The board of directors may: 1. Purchase surgical instruments, hospital equipment, urgent care equipment, medical clinic equipment, nursing care equipment, ambulance equipment and other property and supplies necessary for equipping the district's facilities and operations. 2. Purchase real property. 3. Erect or rent and equip buildings or rooms necessary for the district's facilities and operations. 4. Lease the hospital, any freestanding urgent care center, any medical clinic or any nursing care institution and their respective equipment to any person or corporation to conduct a health care facility on such terms and conditions as the board of directors considers to be beneficial to the district. 2:51:58 PM]

44 Format Document Lease provisions A lease of the hospital, a freestanding urgent care center, a medical clinic or a nursing care institution and their equipment shall: 1. Extend for a term of at least one year but not more than twenty years to be determined by the board of directors. 2. Be executed to a nonprofit corporation organized under title 10, chapters 24 through 40 for the purpose of conducting a hospital, a freestanding urgent care center, a medical clinic or a nursing care institution, combined hospital, nursing care institution and ambulance service or a combined freestanding urgent care center and ambulance service. 3. Provide for rent on terms and in an amount that are determined to be reasonable by the board of directors. 2:52:15 PM]

45 Format Document Cancellation of lease for failure to pay rent; authority to lease again; auction A. If a lessee of the hospital, freestanding urgent care center, medical clinic or nursing care institution and their equipment fails to make the payment of rental required by the lease, the board of directors, at its option, may cancel the lease for the failure. B. If there is no lease or the lease is cancelled and the board of directors is unable to again lease the hospital, freestanding urgent care center, medical clinic or nursing care institution and their equipment to a lessee qualified under this article at a rent that is sufficient to provide a fair return to the district, the board of directors shall: 1. At least annually at public auction, offer to lease the hospital, freestanding urgent care center, medical clinic or nursing care institution and their equipment to the highest responsible and qualified bidder for such term as the board of directors prescribes. 2. Lease the hospital, freestanding urgent care center, medical clinic or nursing care institution and their equipment to the bidder who bids the highest rental for the prescribed period. C. Notice of the auction shall be given in a newspaper of general circulation in the district at least once each week for four weeks immediately preceding the auction. 2:52:31 PM]

46 Format Document Deposit of district monies A. Except as provided in subsections D and E of this section, all special health care district monies from any source shall be deposited with the county treasurer to the credit of the district and shall be paid out only on warrants approved by the district's board of directors. All district monies shall be included in the county treasurer's investment pool. B. Except as provided in subsections D and E of this section, all private investment of the district's monies is prohibited. Warrants may be issued only to pay for necessary operational expenses, including, but not limited to, lawful claims against the district, district employee payroll and contractual obligations of the district. Warrants may not be issued for investment purposes. C. Except as provided in subsections D and E of this section, for banking purposes, the district shall use the same bank as the bank used by the county and county treasurer as their servicing bank. The district may not establish or maintain an account with any other bank. D. Notwithstanding subsections A, B and C of this section, the district may appoint a treasurer other than the county treasurer to hold, deposit into the district's banking account, withdraw and invest all district monies other than special payments pursuant to section , and may enter into contracts with servicing banks other than the treasurer's servicing bank if all of the following conditions apply: 1. The district may only use investment instruments under title All provisions relating to audit and reporting requirements applicable to the county treasurer shall, other than special payments made pursuant to section , also be applicable to the district treasurer. 3. If the district appoints a treasurer of the district other than the county treasurer, the county treasurer shall pay to the treasurer of the district all monies of the district, other than special payments pursuant to section , in accordance with an intergovernmental agreement between the treasurer and the district and shall take the receipt of the treasurer of the district therefor, which shall constitute the county treasurer's discharge from any further liability for the monies or the application of the monies. Interest earned on monies invested by the district is not subject to subsection A of this section. E. If the district elects to proceed pursuant to subsection D of this section, after each transfer required by section , subsection A, has been made, the county treasurer shall transfer any remaining funds as directed by the district board. The district board shall direct that any transfer pursuant to this subsection shall be to the district treasurer. 2:52:49 PM]

47 Format Document Special payments to a special health care district; transfers; county treasurer; state treasurer A. For a special health care district that is organized pursuant to this chapter and that constructs a general hospital or acquires or leases a general hospital from a county pursuant to section , the following apply: 1. Notwithstanding section , if the hospital receives special payments pursuant to section , subsection O, the county treasurer of the county in which the district is located shall withdraw monies from the monies of the district on deposit with the county treasurer and transfer those monies to the county general fund. 2. The amount of those monies transferred shall be determined by the staff director of the joint legislative budget committee based on the annual legislative appropriation for special payments and contained in a notice from the governor. The transfer shall be made on the date or dates specified in the notice from the governor. B. If the county treasurer for the county in which the district is located is unable to make any portion of the transfer of monies required by subsection A of this section, the county treasurer shall notify the state treasurer and the state treasurer shall cease to withhold any revenues of the county in which the district is located related to the distribution of special payments made pursuant to section , subsection O. C. If the state treasurer ceases to withhold revenues pursuant to subsection B of this section and if the amount of revenues previously withheld by the state treasurer exceeds the amount of transferred monies required by subsection A of this section, the state treasurer shall credit future amounts to be withheld from transaction privilege tax revenues of the county in which the district located in an amount equal to the difference. 2:53:06 PM]

48 Format Document Disposition and use of rental receipts from facilities and equipment Rental revenues, if any, received from the lease of a hospital, freestanding urgent care center, medical clinic or nursing care institution and their equipment shall be applied first against expenses of the district, other than for principal and interest on bonds of the district, and secondly to the payment of principal and interest on issued and outstanding bonds. 2:53:23 PM]

49 Format Document Budget and tax levy A. On or before July 15 of each year, the board of directors shall furnish to the board of supervisors a report of the operation of the district for the past year and a written statement of the amount of money needed to be raised by taxation during the next fiscal year for all operating purposes of the district, including maintaining and operating the district's facilities, payments for professional and other services to the district, debt service, including principal and interest on any bonds issued and outstanding pursuant to section and intergovernmental transfers in connection with special payments, and any other purpose required or authorized by this chapter. B. The board of supervisors shall thereupon levy on the taxable property in the district a secondary tax that, together with other monies on hand or that will accrue during the ensuing fiscal year, exclusive of reserves and taxes levied in connection with bonds issued pursuant to section , will provide sufficient revenues to meet the financial needs of the district as provided in subsection A of this section. C. The secondary tax shall be computed, entered on the tax rolls and collected in the same manner as other secondary property taxes in the county in which the district is located. Monies collected on behalf of the district shall be remitted promptly to and shall be handled by the county treasurer as other special district monies are handled. 2:53:36 PM]

50 Format Document Ambulance service; financing A. A special health care district may maintain and operate an ambulance service or pay the costs of an ambulance service contract if a majority of the qualified electors voting in a regular or special election approve the imposition of the tax necessary to defray the costs of the service. B. The continued imposition of the tax necessary to defray the costs of the service shall be approved by a majority of the qualified electors voting in a regular or special election at least every five years after the date of the initial imposition. C. Except for the initial year of imposition and any subsequent year in which the electors vote to approve or disapprove the imposition of the tax to defray the costs of the ambulance service, the cost to be incurred for ambulance services shall be included in the amount of the estimate of the district's needs submitted to the board of supervisors under section Otherwise, it shall be stated separately and included in the levy only if approved by a majority of the qualified electors. 2:53:54 PM]

51 Format Document Tax levy for district expenses A. A special health care district shall certify to the county board of supervisors an amount to levy as a secondary property tax on all taxable property in the district for expenses of the district, for maintaining and operating the district's facilities and for payments for professional and other services to the district. B. Before the initial imposition of such a tax a majority of the qualified electors voting in a regular or special election must approve the initial imposition. The continued imposition of the tax must be approved by a majority of the qualified electors voting in a regular or special election at least every twenty years after the date of the initial imposition. C. The amount of a levy under this section shall not exceed the greater of: 1. Six hundred thousand dollars, adjusted annually from a 1989 base year according to the health services component of the metropolitan Phoenix consumer price index published by the bureau of business and economic research, college of business administration, Arizona state university, or its successor. 2. An amount equal to ten per cent of the district's total expenses for all purposes required or authorized by this chapter and incurred in the fiscal year ending immediately before the levy. D. Notwithstanding subsection C of this section, for a district that is subject to section , the amount of a levy under this section for the first year in which the tax authorized pursuant to sections and is levied shall not exceed forty million dollars. Thereafter, the amount of a levy under this section shall not exceed an amount equal to forty million dollars adjusted annually from the first year in which the tax is levied, based on a percentage equal to the rate of change in the levy limit between the current year and the prior year for the county in which the district is located as determined pursuant to section :54:08 PM]

52 Format Document Issuing bonds; election A. On the approval of a majority of the qualified electors, a special health care district may issue bonds to carry out any of the provisions of this article. If the board of directors determines that bonds should be issued, the board of directors shall apply to the board of supervisors, and the board of supervisors shall submit to a vote of the qualified electors residing in the district the question in the manner prescribed by title 35, chapter 3, article 3. The election must be held on the first Tuesday following the first Monday in November as prescribed by section , subsection B, paragraph 1, subdivision (d). B. If a majority of the qualified electors voting on the issue approves the issue, the bonds shall be issued as provided by law. 2:54:33 PM]

53 Format Document Reserves; tax to replenish reserve A. Bonds that are issued under this article may contain a provision requiring the establishment of a reserve or reserves in an amount that does not exceed the requirements of principal and interest payments for the two years during the life of the bonds requiring the largest amount of principal and interest payments. The district shall maintain the reserve during the life of the bond issue to protect against any deficiency in tax collections. B. If it becomes necessary to withdraw monies from the reserve to protect against any deficiency, the board of directors shall certify to the county board of supervisors and the board of supervisors shall levy a tax on all taxable property in the district in an amount that is sufficient to maintain the reserve fund in an amount equal to the original amount deposited in the reserve fund. In making the certification for the payment of principal and interest for the last year when the bonds mature, the board of directors shall take into consideration the amount of monies then in the reserve fund and shall certify an amount sufficient to pay the principal and interest on the bonds, less the amount then in the reserve fund. 2:54:46 PM]

54 Format Document Limit of bonded indebtedness A special health care district shall not incur a bonded indebtedness exceeding ten per cent of the secondary assessed value of all taxable property in the district as shown by the last assessment roll of the county. 2:55:24 PM]

55 Format Document Investment and reinvestment of sinking fund A. The board of directors, with the consent of the board of supervisors, may invest and reinvest all money belonging or credited to the district as a sinking fund. The investment shall be made for the best interests of the district. B. The monies may be invested and reinvested in any of the following: 1. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if the obligations are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States. 2. Bonds or other evidences of indebtedness of this state or of any county or incorporated city or town or a school district in this state. 3. Bonds, notes or evidences of indebtedness of any county, municipality or municipal district utility in this state that are payable from revenues or earnings specifically pledged for paying the principal and interest on such obligations, and for payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years before the date of investment, or, if such obligations were issued less than five years before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years before such investment. 4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property in the local improvement district. No such investment may be made if the face value of all such obligations, and similar obligations outstanding, exceed fifty per cent of the market value of the real property and improvements on which the bonds or the assessments for the payment of principal and interest are liens inferior only to the liens for general ad valorem property taxes. These investments may be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years before the date of investment, or, if such obligations were issued less than five years before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years before such investment. 5. Interest bearing savings accounts or certificates of deposit insured in banks doing business in this state by the federal deposit insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of this state. Security shall not be required for that portion of any deposit that is insured under any law of the United States. C. The purchase of the securities shall be made by the county treasurer on authority of a resolution by the board of directors that is approved by the board of supervisors. The county treasurer shall be the custodian of all securities so purchased. The securities may be sold on an order of the board of directors with the consent of the board of supervisors. D. All monies earned as interest or otherwise derived by virtue of this section shall be credited to the sinking fund. 2:55:39 PM]

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