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HomeMy WebLinkAboutRes2018-067Sponsored by: Administration CITY OF SEWARD, ALASKA RESOLUTION 2018-067 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING THE 2019 FEDERAL GRANT YEAR BUDGET FOR THE SEWARD COMMUNITY HEALTH CENTER AS REQUIRED BY THE CO -APPLICANT AGREEMENT BETWEEN THE CITY OF SEWARD AND THE SEWARD COMMUNITY HEALTH CENTER WHEREAS, the Seward City Council enacted Ordinance 2010-008 on December 13, 2010, establishing the powers and duties of the Governing Board of Directors ("Governing Board") charged with oversight of the Seward Community Health Center, as amended by Ordinance 2013- 013 on December 16, 2013, which agreement expires January 31, 2019; and WHEREAS, the City of Seward ("City") and the Seward Community Health Center ("SCHC") are co -applicants as a federally qualified health center in accordance with Section 330 of the Public Health Service Act (42 U.S.C. §254b); and WHEREAS, the City and the SCHC entered into a Co -Applicant Agreement dated February 20, 2014, and the City Council authorized submission of the previous Service Area Competition Grant application via Resolution 2015-080 approved on September 2, 2015, wherein the parties agreed that the SCHC budget would be submitted to the City Council after approval by the Governing Board and providing that "the City Council may not unilaterally revise a budget approved by the Governing Board or approve an alternate budget for the Health Center without review and final approval by the Governing Board, with subsequent follow-up by the City Council"; and WHEREAS, the Governing Board of the SCHC approved the 2019 Seward Community Health Center Section 330 (Year 5) grant budget at a board meeting held on July 26, 2018, and the Coordinating Committee ("Committee") of the CHC met to review the grant budget, and both the Governing Board and the Committee recommend approval by the Seward City Council f NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIIIOF THE CITY OF SEWARD, ALASKA that: < Section 1. The Seward City Council hereby approves the 2019 budget of the Seward Community Health Center ("SCHC"), representing the Year 5 grant budget for Section 330 funding through the Health Resources and Services Administration. Section 2. The Seward City Council approved a contribution in the amount of $200,000 for the 2019 grant year when it approved the City's 2018/2019 Biennial Budget. Section 3. This resolution shall take effect immediately upon its adoption. CITY OF SEWARD, ALASKA RESOLUTION 2018-067 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 131n day of August, 2018. THE CITY OF SEWARD, ALASKA Gx US A David Squires, May AYES: Seese, Towsley, Casagranda, Keil, Horn, McClure, Squires NOES: None ABSENT: None ABSTAIN: None ATTEST: Brenda J. Ballou, MMC , „ 9 c , y c / e x City Clerk (City Seal)imab,= S , 69 0�?.•• t 1 COUNCIL AGENDA STATEMENT Meeting Date: August 13, 2018 From: Eddie Athey, Acting City Manager Agenda Item: Council Co -Applicant approval of Section 330 Seward Community Health Center 2019 Budget BACKGROUND & JUSTIFICATION: The Seward City Council authorized the creation of the Seward Community Health Center ("CHC") and Board when it enacted Ordinance 2010-008 in December, 2010, formalizing the powers and duties of the board of directors charged with overseeing the Seward Community Health Center. The City of Seward and the CHC are co -applicants for Section 330 federal funding to operate a federally qualified health center in Seward; together, the entities comprise "the Health Center". The parties entered into a Co -Applicant Agreement ("Agreement") on February 20, 2014 approved by Council Resolution 2014-018, and subsequently amended in Resolution 2017-006 approved on January 23, 2017. This Agreement requires that the CHC budget be approved first by the Governing Board and then by the City Council, and includes the following language: §3.2.4 "The Governing Board shall approve the annual operating and capital budget in accordance with Section 330 requirements and City policies. The overall plan and budget shall be prepared under the Governing Board's direction by the Health Center's management team and the Finance Committee of the Governing Board. " §3.2.5 "The Governing Board shall submit an annual budget for the health center to the City Council for approval., as a co -applicant requirement of Section 330. The Board shall submit the budget no later than October I of each year, for the following year. If the Board unreasonably fails to approve an annual budget, the City may still submit the annual funding request under Section 330 of the Federal Public Health Service Act. No budget shall become effective without City Council approval. " §4.2.4 "The City Council shall be responsible for adopting the Health Center's annual operating and capital budgets as finally approved by the Governing Board; the City Council may not unilaterally revise a budget approved by the Governing Board or approve an alternate budget for the Health Center without review and final approval by the Governing Board, with subsequent follow-up by the Council in accordance with Seward City Code 2.40.030(a), " In accordance with Section 5 of the Agreement, the parties also agree to participate in a Coordinating Committee comprised of one member each of the Governing Board, the City Council, the Health Center executive director, and the City Manager or his designee. This group did not meet to review the proposed 2019 Seward Community Health Center budget due to staff turnover at the City, but the City administration has reviewed and recommends its approval. Further, Health Resources & Services Administration ("HRSA") issued Policy Information Notice 2013- 01 on March 18, 2014, requiring that health centers prepare and submit grant applications that contain a Kea total budget for the health center scope of services for 12 months, and the budget must include a separate budget breakdown for the section 330 funding proposed for the application period, showing costs supported by the grant and costs supported by other sources of non-HRSA-grant funds (i.e. patient service revenue, City grant fundiniz, other funding). CONSISTENCY CHECKLIST: Yes No N/A I . Comprehensive plan (document source here): 2. Strategic Plan (document source here): 3 Other (list): Co -Applicant Agreement dated 212012014; RES 2017-006; HRSA PIN 2013-01 . 5-6 X ATTORNEY REVIEW: Yes X No FISCAL NOTE: The City of Seward's 2019 Budget includes $200,000 in funding for the Seward Community Health Center. The current HRSA funding for the CHC for the year ending 1/31/19 is a base grant of $1,196,128 plus a Mental Health & Substance Abuse grant in the amount of $174,955. These funds will help to provide lower -cost primary healthcare services to Seward residents, helping to divert patients from much higher cost of care in the hospital emergency room. These healthcare dollars coming from outside the community provide significant economic benefits to Seward and its residents, as well as improved access to primary healthcare for our uninsured and under -insured residents. As federal grant funding increases, it is expected that the CHC will become less reliant on City funding for operations. T Approved by Finance Department: Y*w M "`c�u7 RECOMMENDATION: Council approve Resolution 2018- approving the 2019 Seward Community Health Center budget. 33 SEWARD COMMUNITY HEALTH CENTER Board of Directors August 1, 2018 Action Item Topic: 2019 Federal 330 Grant Budget Approval Recommended By: Finance Committee and Executive Director Action Requested: The Board of Directors is requested to approve the 330 Grant Budget for grant year 2019 and recommend approval to Seward City Council. Discussion: Every three years 330 grantees are required to submit a rigorous set of application materials through a funding announcement called a Service Area Competition (SAC). Our last SAC was submitted and approved in 2015 for the three year "Project Period" of February 1, 2016 through January 31, 2019. Each of these three grant years is called a "Budget Period." One major part of this multi -part renewal is our proposed 330 grant budget for the upcoming budget period. Our report is due to be submitted no later than August 15, 2018. Our Co -Applicant Agreement requires that the City Council approve the annual federal grant budget after it has been approved and recommended by the Board. The Finance Committee has reviewed, and our board approved the 2019 grant budget prepared by Administration and is recommending approval to the City Council. There are some unique requirements for submitting federal 330 grant budgets. The 330 grant budgets must achieve a $0 bottom line [2018 GRANT BUDGET HIGHLIGHTS AND ASSUMPTIONS FOLLOW] 34 2019 330 Grant Budget Hi2hli2hts and Key Assumptions SUMMARY: Following the required federal grant budget format, there are two sections/columns to the grant budget which when combined make up the total budget: • HRSA (Federal) 330 grant revenue $1,255,701 and • Other (Non -Federal) revenue of $1,396,052 The budget includes a breakdown of source for Revenue & Expenses. • Revenues [$2,651,753] o HRSA 330 Budget $1,255,701 o City of Seward contribution $200,000 o Patient Revenue $1,026,052 o Other/In-kind revenue $170,000 ($110k for 340B and $60,000 in -kind rent) • Expenses [$2,651,753] - Note: HRSA grant budgets require that expenses equal revenues o HRSA 330 used entirely for salaries $1,255,701 o Non -Federal Expenses (includes some salaries/benefits & operating) $1,396,053 ■ Salary & Benefits $827,191 Operating Costs $568,862 KEY ASSUMPTIONS: Patient volume totals 5,042 billable encounters. This begins with our targeted projection of unduplicated patients for 2019 which is 2,325. This is 75.0% of our HRSA target which is contained in our SAC application or 3,086 patients. This is a decrease from our prior budget and will accompany a reduction in our HRSA request of 2%. This decrease is based on our historical projection. The number of patient's assumption is then multiplied by an average of 2.17 visits/encounters per patient per year for a total of 5,042. Through June of 2018 we are averaging 7.5 patients per provider day worked. Our 2019 projection will increase this metric by 17% to 8.8 patients per provider day worked. Patient revenue/payer mix is based on estimated billable encounters per payor from our actual billing history and net income through June of 2018 (gross charges less discounts and allowances) per visit as follows: • 53% of encounters are Private Insurance @ $205. (Down from 55%) • 16% are Medicaid @ $310. (Down from 20%) • 20% are Medicare @ $181. (Up from 18%) • 11% are Self -pay @ $77. (Increase from 7%) The Staffing Profile, which includes 1.23 physicians, 2 mid -level (PA, NP), and 1 FTE for new grant funded Behavioral Health provider brings our FTE's. to (18.4) projected for 2019. This is an increase of (0.4) FTE's from the 2018 budget. These changes and a reduction in health insurance costs resulted in a 2% increase or $31,000 in salary and benefit costs over the 2018 budget. The increase is offset by the $83,000 additional grant funds for behavioral health. FTE's include: 0 4.13 providers (1.13 physicians, 2 mid -level and 1 BH clinician. 0 4.80 clinical support staff (RN's, medical and nursing assistants) W 0 3.1 front desk staff (registration, billing & medical records) 0 1.0 health educator/case manager/ clinic nurse 0 2.3 outreach & enrollment (1 social worker/1 coordinator) 0 3.1 admin staff (Executive Director, Accounting specialist, Executive Asst.) Usual and customary non -personnel expenses include: o Revenue Cycle manager services ($10,800) Billing services moved in-house o Electronic Health Records System and IT Support fees ($25,497) o CHC CFO/fiscal management oversight services ($10,800) — Private contractor o Independent Audit ($24,000) based on 2017 annual audit expenses o CHC technical consultation ($13,000) — Suzanne, 340B, APCA, others) o Travel for staff and board ( $35,500) for 4 provider, 8 staff and 4 board trainings and conferences (approx. $2,000/trip). Includes contract provider travel. o Utilities & Services from Providence ($43,685) 10% inc over 2018 o Liability insurance packages (16,137) 0% increase o Medical, pharmaceutical and office supplies ($113,549) 12% inc over 2018 o Community Outreach and Enrollment ($13,800) o Minor equipment ($50,784) — this is where we adjusted expenses to get bottom line to zero per HRSA. o Training and education ($10,500) — (4 provider, 8 staff conferences and trainings @ $875/ea.) Q. Seward Community Health Center, Inc. 2019 Budget Draft WORKING BUDGET - NOT FOR SUBMISSION Year 1 HRSA Other TOTAL Federal Non -Federal Volume: # of Patients 2,325 Patient Encounters 5,042 Revenue: Federal BPHC 330 Grant 1,255,701 1,255,701 Applicant - State / Local - 200,000 200,000 Other Federal Funding - Other - 170,000 170,000 Program Income (Net Patient Revenue) - 1,026,053 1,026,052 TOTAL REVENUE 1,255,701 1,396,053 2,651,753 Expense: Personnel - Refer to Form 2 Staffing Profile Administration / Management 217,659 23,997 241,656 Facility and Non -Clinical Support Staff 181,863 - 181,863 Physicians 52,158 238,636 290,794 NP, PA, and CNMs 277,077 - 277,077 Medical 328,451 - 328,451 Dental - - - Enabling Services 126,402 - 126,402 Other Programs and Services - - - Total Salary Expense 1,255,701 262,633 1,518,334 Fringe Benefits: Health Insurance - 382,963 382,963 Housing Allowance 4,000 4,000 Medicare/SS 6.71% 101,814 101,814 AK SUI 0.97% 14,674 14,674 Retirement 3.00% - 45,550 45,550 Workers' Compensation quote - 15,557 15,557 Total Fringe Benefits 10.67% - 564,558 564,558 Subtotal Personnel and Fringe 1,255,701 827,191 2,082,892 Travel: Providers and Staff - 21,500 21,500 Board - 10,000 10,000 Other - Contracted Physician - 4,000 4,000 Subtotal Travel - 35,500 35,500 Supplies: Pharmacy / Medications $ 13.33 - 67,203 67,203 Medical Supplies $ 6.15 31,015 31,015 Office - 15,330 15,330 Minor Equipment (<$5,000) - 50,784 50,784 Subtotal supplies - 164,332 164,332 Contractual: 37 Seward Community Health Center, Inc. 2019 Budget Draft WORKING BUDGET - NOT FOR SUBMISSION Patient Related/Contractual Non -Patient Care: Accounting Audit Billing & Coding Legal Services - Electronic (HIT) Technical Assistance / Consulting Subtotal Contractual Other: Bank Fees Communications Dues & Subscriptions Equipment Maintenance Facility Janitorial Contract/PSMC Insurance - Malpractice Gap Coverage Insurance - Property Insurance - D&O O&E Supplies O&E Advertising/Promotion O&E Postage Patient Transportation Postage / Freight Rent: Clinic Repairs & Maintenance Training Utilities Community Health Education Subtotal Other TOTAL DIRECT COSTS Indirect Cost TOTAL EXPENSE Must = 0 for balanced budget Year 1 HRSA Other TOTAL Federal Non -Federal 22,740 22,740 - 10,800 10,800 24,000 24,000 10,800 10,800 25,497 25,497 23,000 23,000 116,837 116,837 6,000 6,000 26,760 26,760 - 12,500 12,500 - 1,000 1,000 10,560 10,560 - 10,414 10,414 1,741 1,741 3,982 3,982 1,800 1,800 10,000 10,000 2,000 2,000 1,200 1,200 - 1,000 1,000 - 60,000 60,000 - 42,651 42,651 - 14,500 14,500 - 43,685 43,685 - 2,400 2,400 - 252,193 252,193 1,255,701 1,396,053 2,651,753 0.00% - - - 1,255,701 1,396,053 2,651,753 0 0 0 38 40** aCOMMUNiTY l EALTH KENTER July 31, 2018 City of Seward City Council & City Administration PO Box 167 Seward, AK 99664 City of Seward Representatives, SEWARD COMMUNITY HEALTH CENTER PO Box 2895 / 417 First Avenue — Seward, AK 99664-2895 PHONE (907) 224-2273 FAX (907) 224-8501 www.sewardhealthcenter.org During its regularly scheduled monthly meeting on July 26, 2018, the Seward Community Health Center Board of Directors voted unanimously to authorize application to HRSA's Service Area Competition as a co -applicant with the City of Seward. We look forward to continuing to work with the City of Seward in ourjoint effort to expand and improve healthcare offerings in our community. Sincerely, 7: ..- Richard Cruse Board Chair Where your health matters