AGENDA ITEM NO. 5.a REPORT TO THE MT. DIABLO HEALTH CARE DISTRICT TO THE CHAIR AND MEMBERS OF THE MT. DIABLO HEALTH CARE DISTRICT BOARD: DATE: October 9, 2012 SUBJECT: APPOINTMENT OF TWO CITY REPRESENTATIVES TO THE COMMUNITY HEALTH FUND BOARD Report in Brief This report presents a recommendation to make the appointment of two City representatives to serve on the Community Health Fund Board (CHF), one for a term of one year and the other for a three year term. Background As was identified in the report presented to the Mt. Diablo Health Care District on, (Attachment #1) the District is responsible for making three appointments to the John Muir/Mt. Diablo Community Health Fund Board, a tax-exempt 501(c)3 non-profit, public benefit corporation established to distribute grants funded by John Muir Health to community based, nonprofit organizations that provide access to health care within high-need, under-served populations within the boundaries of the original MDHCD (central and east Contra Costa County). The Community Health Fund exists as a result of the Community Benefit Agreement (CBA) adopted by John Muir Health and the Mt. Diablo Health Care District in 1996. Under the CHF Bylaws, the Board of Directors previously consisted of five members appointed by John Muir Associates and five members appointed by the former Mt. Diablo Health Care District. Pursuant to the terms and conditions of the reorganization, the District will now only appoint three CHF Board members, with two appointed by the City of Pleasant Hill, for three-year terms; however, some of the terms must be shortened initially, because new appointees will be filling seats for terms that in some cases have only one or two years remaining. Start-up term assignments are as listed below, with Councilmember Laura Hoffmeister already appointed to fill the three-year term per actions taken at the September 11 th meeting. Term Length Board Member Slots Appointment Expiration 1- Year Concord (1), Pleasant Hill (1) October 2012 December 2013 2-Year Concord (1), Pleasant Hill (1) October 2012 December 2014 3-Year Concord (1) October 2012 December 2015 Board members are not compensated for their service on the Board and must operate under the CHF Bylaws.
APPOINTMENTS TO THE COMMUNITY HEALTH FUND BOARD October 9, 2012 Page 2 Discussion The recruitment process for persons interested in serving as the City s representative to the Community Health Fund Board was conducted by the City Clerk s Division as appropriate for all City Board and Commission recruitments and appointments to outside agencies. The announcement to fill three openings on the Community Health Fund Board was made at the City Council meeting of by the Mt. Diablo Health Care District, setting Wednesday, September 26, 2012 at 5:00 p.m. as the deadline for receipt of applications. A press release announcing the openings was distributed to the media and announced at the September 25, 2012 City Council meeting. At the close of the recruitment period, the City Clerk s office had received eight applications. Applications were reviewed by the members of the Council Committee on Neighborhood, Community Services and Education, consisting of Vice Mayor Shinn serving as Chair and Councilmember Grayson serving as Committeemember, and interviews were conducted at a Special Council Committee meeting on Friday, September 28, 2012. Public Contact All applicants were invited to interview and have been notified of the appointment date. The agenda was properly posted. Council Committee Recommendation The Council Committee on Neighborhood, Community Services and Education recommends appointing two applicants to serve as the City s representatives on the Community Health Fund Board, one for a one-year term ending December 31, 2013 and one for a two-year term ending December 31, 2014. Recommendation for Action The Council Committee on Neighborhood, Community Services and Education recommends the appointment of two applicants to serve as the City s representatives on the Community Health Fund Board; one for a one-year term ending December 31, 2013 and one for a two-year term ending December 31, 2014. Valerie J. Barone City Manager Valerie.Barone@ci.concord.ca.us Prepared by: Mary Rae Lehman City Clerk/Administrative Svc. Coord. maryrae@ci.concord.ca.us Attachment #1: Report to Mt. Diablo Health Care District without attachments Attachment #2: List of Applicants
Attachment No. 1 REPORT TO MT. DIABLO HEALTH CARE DISTRICT TO CHAIR AND MEMBERS OF THE MT. DIABLO HEALTH CARE DISTRICT BOARD: DATE: SUBJECT: ADOPT RESOLUTIONS NO. 12-001, 12-002, 12-003 APPROVING DOCUMENTS THAT SUPPORT THE REORGANIZATION OF THE MT. DIABLO HEALTH CARE DISTRICT AND ITS OPERATION BY THE CONCORD CITY COUNCIL AS THE Report in Brief In April 2012, at the request of the Local Agency Formation Commission (LAFCO), the City of Concord submitted an application and operational plan, proposing the establishment of the Mt. Diablo Health Care District (MDHCD) as a subsidiary district of the City of Concord, with the Concord City Council serving as the MDHCD Board. On August 8, 2012, LAFCO approved the requested reorganization of the District and established the District as a subsidiary district of the City of Concord, placing the Concord Council into the role of the Board for the District. Council, in its role as the Board for the District, is requested to take the following actions on : Adopt Resolution No. 12-001 which establishes the District bylaws and authorizes acceptance and authority to appropriate District funds; Adopt Resolution No. 12-002 which establishes the Mt. Diablo Health Care District Grant Committee as a subcommittee of the Community Services Commission and defines its roles and responsibilities; Adopt Resolution No. 12-003 which establishes the process for appointing three people to the Mt. Diablo/John Muir Community Health Fund Board (CHF) to represent the District; Appoint Board member Laura Hoffmeister to a three-year term on the CHF Board; Open recruitment for the remaining two appointments to the CHF Board.
Page 2 Background The Mt. Diablo Health Care District ( MDHCD or District ), previously known as the Concord Hospital District, was formed in 1948, with voters approving the District formation and a special parcel tax to build the Mt. Diablo Medical Center. When initially formed, the District s boundaries included the cities of Clayton (portions), Martinez, Lafayette (portions), Concord, and Pleasant Hill (portions), along with the unincorporated communities of Clyde and Pacheco. MDHCD is funded primarily by property tax revenues (ad valorem). In 1996, District voters approved a Community Benefit Agreement (CBA) between MDHCD and John Muir Medical Center ( John Muir Health ). Under the terms of the CBA, MDHCD transferred all rights and title in the Mt. Diablo Medical Center to John Muir Health, including land, buildings and equipment, in exchange for certain assurances regarding healthcare services and funding to be provided within the District. Under the CBA, John Muir Health is required to operate and maintain the Mt. Diablo Medical Center for the benefit of the communities served by the District. John Muir is also required to contribute One Million Dollars ($1,000,000 million) per year to a Community Benefit Corporation, known as the John Muir/Mt. Diablo Community Health Fund ( CHF ), to provide monetary funding to programs and events that address health issues and promote a healthy community. Pursuant to the CBA, John Muir Health is also required to provide $25,000 per year to MDHCD for administrative activities. The CBA is effective until December 31, 2049, and may automatically renew for three additional successive 50-year terms unless terminated in accordance with the terms of the agreement. Under the existing bylaws of the CHF, five members of the CHF Board are appointed by John Muir Health and the remaining five members are appointed by the MDHCD Board of Directors. In 2011, the Contra Costa Local Agency Formation Commission ( Contra Costa LAFCO ) proceeded with a special study relating to governance options for the MDHCD. Thereafter, LAFCO encouraged the City of Concord to apply to convert the MDHCD into a subsidiary district governed by the City. The Commission noted that the advantages associated with a reorganization included: 1) ongoing allocation of property tax revenues directed at meeting the health care needs of the community; and 2) continued existence of MDHCD as a health care district and separate legal entity in order to preserve the provisions contained in the Community Benefit Agreement. In April 2012, the City submitted an application and operational plan, proposing the establishment of MDHCD as a subsidiary district of the City of Concord, with the Concord City Council serving as the MDHCD Board.
Page 3 On August 8, 2012, Contra Costa LAFCO approved reorganization of the Mt. Diablo Healthcare District, subject to the following terms and conditions: A. The MDHCD, through the operation of the Concord City Council as the ex officio Board of Directors, will continue to provide health care services pursuant to the Health and Safety Code throughout the District s new jurisdictional boundary comprising the exterior boundaries of the cities of Concord and Pleasant Hill that are currently within the MDHCD, including unincorporated islands and pockets within the respective cities boundaries; B. Prior to August 9, 2012, the MDHCD shall negotiate a fully-funded, closed plan with its existing health care beneficiaries resolving any currently unfunded health care benefit liability, solely utilizing District assets. Should the District fail to comply with this condition as of August 9, 2012, the Concord City Council, shall, as the ex officio Board of Directors of the MDHCD, transfer any District assets, including property taxes and other revenues received in subsequent years, to a fund established specifically for the purpose of addressing any existing health care benefit liability. Any such transfer(s) shall take precedence over other District expenditures; C. All MDHCD assets and liabilities, real and fiscal, located within or identified with the areas being detached from the District, shall remain assets and liabilities of the MDHCD, a separate legal entity; D. Three of the five seats previously appointed by the MDHCD Board to the Community Health Foundation (Fund) Board will be assigned by the City of Concord, and the remaining two seats shall be assigned by the City of Pleasant Hill; E. The territory being annexed will be liable for the continuation of authorized or existing special taxes, assessments and charges comparable to properties presently within the annexing agency, if any; and F. From the time the reorganization is approved by the Contra Costa LAFCO until the date the LAFCO Certificate of Completion is filed and the City of Concord has become, ex officio, the Board of Directors of the District, the MDHCD is prohibited from taking the following actions: a) approving any increase in compensation or benefits for its directors, officers, employees or contractors; b) appropriating, encumbering, expending, or otherwise obligating, any funds of the agency for anything other than necessary and legally binding operating expenses and addressing the unfunded health care liability; and 3) appropriating any additional funds from the District s Community Action Fund.
Page 4 It should be noted that prior to the August 9, 2012 deadline established by Contra Costa LAFCO, the former District entered into agreements with its two existing health care beneficiaries. Both agreements involved the payment of a lump sum to the beneficiaries in return for a waiver by the beneficiaries of all existing or potential claims against the District, including claims for health care benefits. As a result of the reorganization of the District, the geographical boundaries of the District have been reduced to include only the territory within the exterior boundaries of the cities of Concord and Pleasant Hill, including unincorporated islands and pockets within the respective cities boundaries. Since the District is now a subsidiary district of the City of Concord, the Concord City Council serves, ex officio, as the District s Board of Directors. Discussion With the reorganization of the MDHCD as a subsidiary of the City of Concord comes the necessity to formally assume the responsibilities previously handled by the prior Board. Below is a discussion of recommendations related to many facets of operating the District, specifically: Proposed bylaws; Proposed budget for FY 2012-13; Proposed Establishment of a Mt. Diablo Health Care District Grant Committee; Proposed process for appointing representatives to the John Muir/Mt. Diablo Community Health Fund Board. Bylaws for the District Board Staff recommends that as its initial action, the Board adopt Resolution No. 12-001, which establishes the District Bylaws (Attachment A to the Resolution). Those Bylaws, in turn, set forth the following key components of the District: The purpose of the District and the scope of its obligations The composition and duties of the Board of Directors and other District officers The District Board s meeting schedule Staff also recommends that the Board adopt the Conflict of Interest Code, referenced as Attachment B to Resolution No. 12-001. Proposed Fiscal Year 2012-13 Budget At the time of the Districts transition to a subsidiary district of the City of Concord, the District s assets included approximately $187,760 of unallocated funds. Additionally, as shown on the table below, staff estimates that the District will receive revenues of $225,200 in Fiscal Year 2012-13. District expenditures in Fiscal Year 2012-13 are estimated at $170,209, of which $129,832 are nonrecurring costs resulting from the District reorganization. These nonrecurring costs include the costs of making the application to LAFCO, legal fees, County and State fees, costs associated with incorporating all of
Page 5 the District s records into the City of Concord s electronic records data base, and costs associated with the transfer of fiscal responsibility and financial record keeping for the District. Once all transition steps have been completed, the City s annual costs for operating the District are anticipated to not exceed 20% of the District s revenues. The District is a separate legal entity from the City of Concord; as such, its revenues and costs are tracked separately from the City of Concord s revenues and costs. Additionally, the revenue and expenditure numbers presented in the table below are staff s best estimates at this point in time. This will be the City s first year of operations for the reorganized district, thus actual revenues and expenditures may vary from estimates and such changes will be acknowledged at mid-year or when closing out Fiscal Year 2012-13. Fiscal Year 2012-13 Mt. Diablo Health Care District Budget Totals Estimated Beginning Balance at August 8, 2012 $ 187,760 Projected Fiscal Year 2012-13 Revenues Property Tax $ 200,000 J. Muir Contribution 25,000 Investment Income 200 Total Projected Revenues 225,200 Projected Fiscal Year 2012-13 Expenditures Nonrecurring Transition Costs 129,832 Program Administration 40,378 Total Proposed Appropriations 170,209 Estimated Ending Fund Balance at June 30,2013 $ 242,751 Should the Board adopt Resolution No. 12-001, as recommended in the section above on the District Bylaws, it will be authorizing acceptance and authority to appropriate District funds. This step is necessary to establish a budget for the District and allow for the first year of District operations. Mt. Diablo Health Care District Grant Committee Staff further recommends the establishment of a committee which will review solicited applications and make recommendations to the District s Board of Directors, the City Council, for the granting of tax revenue dollars annually received by District. Staff is recommending that a subcommittee of five members of the Concord s Community Services Commission (CSC), along with two members appointed by the City of Pleasant Hill, serve as on this committee, which will be known as the Mt. Diablo Health Care District Grant Committee ( The Committee ). The proposed Grant Committee membership of five representatives from Concord and two from Pleasant Hill roughly represents the population distribution between the two cities.
Page 6 The Committee will be responsible to do the following: Prepare recommendations for grant funding priorities and presentation of same to the District s Board of Directors; Review applications for grant funding annually; Make funding recommendations annually to the District s Board of Directors. The Committee will be supported by the staff liaison serving Concord s Community Services Commission. The Concord Committee members may be either voting members or non-voting alternates to the CSC. Requirements for members appointed by the City of Pleasant Hill will be established by the City of Pleasant Hill. All members will serve staggered two-year terms. Start-up term assignments might be as shown below: Start Up Term Assignments: Term Length Member Slots Appointment Expiration 1-Year Concord (3), Pleasant Hill (1) September 2012 June 28, 2013 2- Year Concord (2), Pleasant Hill (1) September 2012 June 28, 2014 The Committee will follow all relevant existing City practices in terms of organization and conduct, specifically: 1. Elect the Chair and Vice Chair, 2. Operate in accordance with the Ralph M. Brown Act, 3. Operate in accordance with City of Concord Policy & Procedure 89, Council Appointments to Boards and Commissions, except where the MDHCD Committee Resolution specifically addresses a topic, 4. Operate in accordance with City of Concord Administrative Directive No. 43, Ethics, Training for Elected Officials; Appointees to Certain Boards, Commissioners, and Committees; and Designated Employees, 5. Comply with all State and local mandated conflict of interest/economic interest disclosure requirements, 6. Receive no compensation for service on the Committee.
Page 7 A typical Committee grant cycle may look like this: Schedule September October December December March April May June June July June July-August Duties Committee convenes Grant application period opens for funding for next fiscal year Grant applications are due Committee reviews applications in accordance with adopted program Committee makes funding recommendations to Board of Directors (Council) Grants approved by City Council Contracts are prepared and distributed for signatures City administers grants during funding period Committee takes recess The Startup Committee Schedule will be: Schedule September 2012 October 2012 November December 2012 January 2013 February March 2013 March April 2013 April 2013 May June 2013 June 2013 July 2013 July 2013 June 2014 Duties Select CSC members for committee. Pleasant Hill appoints two members to the Grant Committee Committee convenes. Begin to develop grant program, process and strategic plan Finalize grant process and strategic plan Prepare application. Board of Directors adopts the grant program, process and strategic plan. Committee receives progress report presentations from 2012-13 grantees at committee meeting.* Grant applications available for FY 2013-14 funding Committee reviews applications in accordance with adopted program Committee makes funding recommendations to Board of Directors (Concord Council) Grants approved by Board of Directors Contracts are prepared and distributed for signatures Special committee meeting: Committee receives yearend presentations from 2012-13 grantees.* City administers grants during funding period *Presentations will be made by grantees to Committee (rather than Board of Directors) during 2012-13 as stipulated in grant conditions. In subsequent years, reporting will be in accordance with the approved grant process. All other rules and regulations of the Committee are defined in Exhibit A to proposed Resolution No. 12-002.
Page 8 Staff is recommending the City Council adopt Resolution No. 12-002, defining the Purpose, Composition, Responsibility, Selection Criteria, Term of Office, and Committee Organization for appointments to the Community Services Commission Subcommittee entitled Mt. Diablo Health Care District Grant Committee. John Muir/Mt. Diablo Community Health Fund Board City of Concord Appointments The District Board is also responsible for making three (3) appointments to the John Muir/Mt. Diablo Community Health Fund Board. As noted above, the Community Health Fund Board (CHF) was established to distribute grants funded by John Muir Health to community based, nonprofit organizations that provide access to health care within high-need, under-served populations within the boundaries of the original MDHCD (central and east Contra Costa County). The Community Health Fund exists as a result of the Community Benefit Agreement (CBA) adopted by John Muir Health and the Mt. Diablo Health Care District in 1996, and is a tax-exempt 501(c)3 non-profit, public benefit corporation. Under the CHF Bylaws, the Board of Directors previously consisted of five members appointed by John Muir Associates, and five members appointed by the former Mt. Diablo Health Care District. Pursuant to the terms and conditions of the reorganization approved by Contra Costa LAFCO (with input from the City of Concord) the District will now only appoint three CHF Board members, with two appointed by the City of Pleasant Hill. Newly appointed members will replace the members currently serving from the former Mt. Diablo Health Care District. The terms are for three years, however, some of the terms will be shortened, because the new appointees will be filling seats for terms that in some cases have only one or two years remaining. Start Up Term Assignments: Term Length Board Member Slots Appointment Expiration 1- Year Concord (1), Pleasant Hill (1) October 2012 December 2013 2-Year Concord (1), Pleasant Hill (1) October 2012 December 2014 3-Year Concord (1) October 2012 December 2015 The Board members will not be compensated for their service on the Board and must operate under the CHF bylaws. Board Member selection criteria for the three members appointed by the City of Concord will be as follows: a) All members shall be at least 18 years of age and reside within the City of Concord or Concord s Sphere of Influence.
Page 9 b) Members may be members of the elected Concord City Council, but limited to only two members of the City Council. c) Members may not be employees of the City of Concord, nor may they be a vendor, contractor or consultant with active contracts or agreements with the City of Concord. d) Members may be a member of one of Concord s Boards and Commissions, but may not be currently serving as a member of the Community Services Commission Subcommittee serving as the MDHCD Grant Committee. e) The City Council serving as the Mt. Diablo Health Care Board may elect at any public meeting to appoint up to two of its members to serve on the CHF Board prior to the opening of a recruitment for the remaining members. The recruitment process for members appointed by the City of Concord MDHCD will be conducted by the City Clerk s Division as appropriate for all City Board and Commission recruitments and appointments to outside agencies. Applications will be reviewed by the members of the Council Committee on Neighborhood, Community Services and Education who will make a recommendation to the full City Council at a regularly scheduled meeting for their appointment. The initial selection process will be as follows: Council approves the Board member selection process September 12, 2012 Recruitment process begins September 26, 2012 Last day to submit a written application September 28, 2012 The Neighborhood & Community Services Council Committee reviews the applications, interviews the candidates, and develops their recommendation for the Council October 9, 2012 Council reviews the applications and makes their appointments The specific recruitment and appointment process to the CHF for the two City of Pleasant Hill members will be conducted under the criteria and selection process established by the City of Pleasant Hill. Staff is recommending the Mt. Diablo Health Care District Board adopt Resolution No. 12-003 and announce the opening of a recruitment period for applicants to serve as representatives of the City of Concord on the Community Health Fund Board, and setting the deadline for receipt of applications as Wednesday, September 26, 2012 at 5:00 p.m. Interviews with applicants are currently scheduled before the Neighborhood, Community Services and Education Council Committee for Friday, September 28, 2012 with appointments scheduled for the Council meeting of Tuesday, October 9, 2012. Ad-Hoc Council Committee Recommendations The Council appointed Councilmembers Helix and Hoffmeister to serve as an Ad-Hoc Committee advising staff on the City s LAFCO application. This Ad-Hoc Committee has stayed involved as staff developed the proposals contained in this report and support the recommendations being presented to Council.
Page 10 Additionally, the Ad-Hoc Committee is recommending that the Council appoint one councilmember to the CHF Board in the startup three-year term slot. Specifically, the Committee is recommending that Councilmember Hoffmeister serve in this capacity given her knowledge and involvement in the District and with John Muir over the last decade. Subsequent to the Council meeting, this Ad-Hoc Council Committee will terminate. Fiscal Impact There is no general fund impact to the City of Concord associated with the actions before the MDHCD Board. The District is a separate legal entity and all costs associated with the City s taking on the role of operating the District as a subsidiary of the City will be borne by the District. The District is anticipated to incur approximately $130,000 in non-recurring transition costs this fiscal year and program administration costs of approximately $40,000. The District has adequate funds to support these costs in Fiscal Year 2012-13. Future annual operating costs will be approximately 20% of revenue and likely fall between $40,000 and $45,000. Public Contact The agenda has been posted in accordance with the Brown Act. The Agenda has also been e-mailed to John Muir Health and the City of Pleasant Hill. Recommendation for Action Staff and the Council Ad-hoc Committee are recommending the following actions: 1) Adopt Resolution No. 12-001, entitled A Resolution Adopting the Bylaws of the Mt. Diablo Health Care District; Confirming the Chair, Vice-Chair, Executive Director, Counsel, Secretary, and Finance Officer of the District; Adopting a Conflict of Interest Code; and Authorizing Acceptance and Authority to Appropriate Existing District Funds 2) Adopt Resolution No. 12-002, entitled A Resolution Defining the Purpose, Composition, Responsibility, Selection Criteria, Term of Office, Selection Process and Committee Organization for Appointments to the Community Services Commission Subcommittee Entitled Mt. Diablo Health Care District Grant Committee 3) Adopt Resolution No. 12-003, entitled A Resolution Defining the Purpose, Composition, Selection Criteria and Process, and Term of Office for Appointments to the John Muir/Mt. Diablo Community Health Fund Board 4) Appoint Councilmember Laura Hoffmeister to the start-up three-year term on the John Muir/Mt. Diablo Community Health Fund Board.
Page 11 5) Open recruitment for applications from residents interested in serving as a Concord representative on the John Muir/Mt. Diablo Community Health Fund Board to fill the two remaining open City of Concord seats, and setting Wednesday, September 26, 2012 at 5:00 p.m. as the deadline for receipt of applications. Prepared and Approved by: Valerie J. Barone Interim City Manager Valerie.Barone@ci.concord.ca.us Reviewed by: Mary Rae Lehman City Clerk Maryrae.lehman@ci.concord.ca.us Mark S. Coon City Attorney Mark.Coon@ci.concord.ca.us Attachment #1 Resolution No. 12-001 with Attachment A - Bylaws, and Attachment B Conflict of Interest Code Attachment #2 Resolution No. 12-002 with Attachment A Organization of the Mt. Diablo Health Care District Grant Committee Attachment #3 Resolution No. 12-003 with Attachment A Organization of the John Muir/Mt. Diablo Community Health Fund Board, and Attachment B Application to Serve as Concord s Representative on the John Muir/Mt. Diablo Community Health Fund
Attachment 2 List of Applicants to serve as the City s Representative to the Community Health Fund Board Ernesto Avila Kenneth Edgecombe Bill Gram-Reefer Jeannette Green Kandi Lancaster Carol Longshore Vivian Miller Mark Weinmann Architect Business Representative Self-employed Telecommunications Teacher N/A N/A Project Consultant