Health Care Foundation of Greater Kansas City

Transcription

1 (HCF) Executive Committee Minutes of Meeting Held Wednesday, January 7, 2015 at 8:30 a.m. Location: 2700 East 18 th Street, Jonas Board Room, Suite 211 Kansas City, Missouri HCF Executive Committee Members attendance: Kenny Southwick, Ed.D., Board Chair Kimberly Young, Board Vice Chair Thomas Carignan, Board Treasurer Karen Cox, RN, Ph.D., Former Board Chair (non-voting member) Sheilahn Davis-Wyatt, Administration & Logistics Committee Chair Jon Gray, Board Secretary Juan Rangel, Jr., Audit Committee Chair Kenneth P. Stremming, Finance & Investment Committee Chair S. Marie McCarther, Ed.D., Program/Grants Committee Chair Alan Flory, At Large Member Bridget McCandless, M.D., President/CEO Committee Members unable to attend: None HCF Associates in attendance: Rhonda Holman, Vice President/COO Mark Flaherty HCF General Legal Counsel Karen C. Guile, Grants Manager Assistant Jessica Hembree, Program Officer Jennifer Sykes, Communications Officer Rick Zimmer, CFO/Asst. Treasurer Guest in attendance: None Kenneth E. Southwick, Ed.D., Chair, called the meeting to order at 8:30am, and welcomed all those in attendance. Report of Chair - Juan Rangel, Jr. made a motion to go into closed session. Kenneth P. Stremming seconded the motion. Juan Rangel, Jr. made the motion to return to open session, which was seconded by Sheilahn Davis-Wyatt. The motion to return to open meeting was approved by unanimous roll call vote. Kenneth E. Southwick, Ed.D. Kimberly C. Young Thomas C. Carignan Jon Gray Sheilahn Davis Wyatt Juan Rangel, Jr. Kenneth P. Stremming 1

2 S. Marie McCarther, Ed.D. Recused Alan Flory Bridget McCandless, M.D. Dr. McCarther rejoined the meeting after having recused herself from the closed session. Reports from Committee Chairs Administration & Logistics Committee - Sheilahn Davis-Wyatt updated the Committee that HCF was still in the process of performing due diligence regarding office space. Tours have been conducted of several buildings and, once the Administration and Logistics Committee receives a report of the outcomes, it will be brought to this Committee for review. The next meeting of the Administration and Logistics Committee will be held on Thursday, January 15 th, at 9:00am. Audit Committee Juan Rangel, Jr. reminded the Committee that, according to HCF Bylaws, Professional Service contracts must be competitively bid every 5-years to assure costs and services remain competitive. The Audit Committee issued an RFP to five CPA firms in October, including our current auditor, House Park and Dobratz. The Audit Committee reviewed all RFP s and compared their responses against critical selection criteria which included: fees, size of organization, foundation and not-for-profit audit experience, partner and staff participation in the audit, and other criteria. Mr. Rangel informed the Committee that it is the Audit Committee s recommendation to retain House Park and Dobratz as our external auditor through the 2016 audit with an opportunity for an additional two-years until the next required time to rebid the services. Per our policy and to ensure independence is maintained, the auditor manager must be rotated every five-years. The 2014 audit and 990 tax preparation fee will be $19,750 with annual increases not to exceed 3%. The next meeting of the Audit Committee will be held on Wednesday, May 6 th, 2015, directly following the Executive Committee meeting which begins at 8:30am. Finance & Investment Committee Ken Stremming stated that the Finance & Investment Committee had not met since the last Board meeting, though there were a couple of updates to share. As part of the periodic re-balancing of the Foundation s investment portfolio, 2M of our BlackRock US Equity Fund was sold in November. For the year, we have sold $46M in investments, reinvested $28M and used the balance of $18M for operating cash requirements. Of the $48M in investment sales during 2014, we have booked $13M in realized gains over cost or 37% over cost. The next meeting of the Finance/Investments Committee will be held on Monday, January 26 th, at 12:00pm. Program/Grants Committee S. Marie McCarther, Ed.D., informed the Committee that the Program/Grants Committee will meet the following week. The agenda will consist of brief reports on the eight (8) special initiatives that were approved by the CEO with consent from the Board and Program/Grants Chairs in December. The Committee will also review the draft of the 2015 Mental Health RFP, as well as the results from their annual self-assessment. 2

3 The next meeting of the Program/Grants Committee will be held on Tuesday, January 13 th, at 8:00am. Bylaws Committee Dr. McCandless brought a question before the Executive Committee regarding whether it was time for the Foundation to conduct a Bylaw review. She informed the group that it has been three (3) years since the last review of the bylaws and that Missouri will be having a new Attorney General, who is not as familiar with the Foundation as the former attorney general. She stated that she felt that mid-summer would be a good time to start reviewing the bylaws and the Committee members concurred. Nominating Committee Alan Flory stated that there was nothing new to report regarding the Nominating Committee since the last Board meeting. He reminded the Committee that the Board will conduct elections of Board Officers in February and that Board members were all aware of the nominees. Ken Stremming stated that the Finance/Investments Committee is always in need of persons with expertise. He requested that Committee members keep this in mind when they are voting on Board nominees in February. Treasurer s Report Tom Carignan reviewed the November 2014 Financial Statements with the Committee. Investments earned $4M in November to bring year-to-date investment revenue to $25M, which is equal to our budgeted target of $24.7M after eleven-months. If we include the $2.4M in CHG contributions received during the year, our year-to-date revenue increases to $27.5. Annually, our budgeted revenue target for 2014 is $32M for a 6.5% return. December revenue is expected to be flat to +2M which would leave us short of our budgeted target. Regarding HCF s Operating Budget, Mr. Carignan informed the group that Grant and Program Expenses of $17M for the year is currently favorable to budget by $2.1M, though this is simply a timing variance. Grant approvals of $5.4M in December will eliminate the positive variances for the year. Administrative expenses of $3.5M for the year is unfavorable to budget by $(338k) due to Professional Services which are unfavorable to budget by ($454k). The Board has approved a ($800k) unfavorable variance to Plan for the year. In terms of a forecast for the year, Mr. Carignan informed the Committee that December revenue is expected to be flat to +2M. Therefore, it is doubtful we will reach the $32M revenue target for the year or a 6.5% return. Due to Grant approvals of $5.4M, total expenses for December is expected to be approximately $6.5M, which projects to a Net Loss in December of ($4.5 - $6.5M). Since we ended November with Net Income of $7.3M for the year, a best guess forecast for the year is a Net Asset increase of $1-3M for the year. Update on Tobacco Tax Jessica Hembree updated the Committee regarding movements in both Kansas and Missouri to increase the tobacco tax. In Missouri, the Alliance for Childhood Education is advocating for a tobacco tax increase from $.17 to $.67 per pack. This would put Missouri behind the national tobacco tax average by $1.54. Advocates are proposing that revenues from such a tax increase be disbursed to counties, who would then conduct a grantmaking process to award funding for early childhood issues. An informational session regarding this advocacy endeavor was held on December 17 th at the Greater Kansas City Chamber of Commerce and was attended by several Board and Staff members. There are currently a lot of questions regarding this proposal. For example, is a $.50 increase sufficient to make an impact on smoking or on early childhood education needs? Ms. Hembree reminded the Committee 3

4 that this effort is not being led by HCF, but by the early childhood education community. However, those interest groups recognize they will need public health messaging in order to make this bid successful, therefore they are requesting the backing of organizations such as HCF. Ms. Hembree informed the Committee that, simultaneous to the early childhood education s effort to increase the tobacco tax, there is another effort being led by Dave Spence, candidate for Governor and sponsor of Ferguson 1000 Jobs. Spence s effort is focusing on raising the tobacco tax in Missouri to $.70, with proceeds going to job programs. Ms. Hembree stressed that, because HCF is not spearheading a tobacco tax increase initiative, the Foundation does not get to make decisions regarding the appropriate amount for the proposed tax increase or where tax proceeds should go. Perhaps the ability of HCF to influence the process would be proportionate to the amount of funding the Foundation contributed to the effort; however, Ms. Hembree felt that the early childhood education group was very doubtful that any tax increase over $.50 would be approved by the public. There has been one round of public opinion polling conducted thus far regarding the appropriate amount for an increase and how tobacco tax proceeds should be spent if such a ballot measure would pass. But extensive polling on the application of the tax proceeds to a broad array of causes has not been performed to date. More public polling will occur once more focus groups have been conducted. In Kansas, there is the sense that revenue shortfalls will make officials more apt to accept a tobacco tax increase as a way of increasing state revenue. Kansas advocates are coalescing to push for a $1.50/pack tax increase. (The tobacco tax rate is currently $.87/pack in Kansas.) The proceeds of such an increase would go to the General Fund, though some may be designated for the KU Cancer Center. If approved, this type of increase would create a substantial difference between the cost of tobacco in Kansas compared to Missouri. Ms. Hembree reminded the Committee that the Kansas Legislature has the authority to pass such a tax increase without a public ballot vote. Report of the President Dr. McCandless directed the Committee s attention to additional documents included in the meeting packet for their information. The first is an article regarding a Blueprint for the Early Childhood Education Initiative that Missouri Wonk is proposing to fund through an increase to Missouri s tobacco tax. The second document is a letter from Senator Roy Blunt in response to a letter Dr. McCandless sent him to thank him for sponsoring an excellent Mental Health bill. The third document is an article entitled, Life, Liberty, HEALTH and the Pursuit of Happiness, which was published by the RWJ-sponsored initiative, Partners Investing in Nursing s (PIN) Future. The article describes a case-study selected from all the projects that RWJ funded through the PIN initiative. The case-study was a Bi-State Nursing Innovation Workforce Center developed by Children s Mercy Hospital through a partnership with HCF, REACH and RWJ. The project has become a replicable model and is currently being implemented in several different cities. Dr. McCandless reported to the Committee that the Missouri Dental Director has resigned. She updated the group that HCF has discussed filing under the IRS h election in order to simplify the tracking and reporting of the Foundation s lobbying expenses and funding. Dr. McCandless reported that an overview of HCF s legal proceedings will be included in new Board members orientations, and she welcomed established Board members to 4

5 attend those sessions if they would like a refresher on the history of the legal proceedings. Dr. McCandless announced that the HCF Board/CAC Reception will be held on March 31 st, 2015, and the GIH Annual Conference will be held in Austin, TX on March 4-6 th. Dr. Southwick thanked the Committee Chairs and HCF Associates for their updates. Juan Rangel, Jr. made the motion to adjourn, and Sheilahn Davis-Wyatt seconded the motion. There was no further business. The meeting adjourned at 10:20am. The next meeting of the HCF Executive Committee will be held at 8:30am on March 4, 2015 in the Jonas Board Room, Suite 211, 2700 E. 18 th St., Kansas City, MO