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HomeMy WebLinkAboutRes2004-045 Sponsored by: Shealy CITY OF SEWARD, ALASKA RESOLUTION 2004-45 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE EXECUTION OF A SERVICE AGREEMENT BY AND BETWEEN THE CITY OF SEWARD AND HEALTH FACILITIES PLANNING AND DEVELOPMENT, FORAN AMOUNT NOT TO EXCEED $65,000, FOR PLANNING THE REPLACEMENT OF THE LONG-TERM CARE FACILITY WHEREAS, Seward City Code 6.10.120(8) exempts the City from the requirement of competitive procurement procedures for the provision of professional services; and WHEREAS, the City has previously worked with Health Facilities Planning and Development, as it relates to receiving assistance with hospital-related professional services; and WHEREAS, the administration is moving forward with plans to replace the long-term care facility in order to ensure the continuation of co-location of the acute care hospital and long-term care facilities, which together realize a significant cost savings sufficient to allow the co-located entity to operate in a positive financial position; and WHEREAS, there has been presented to the City a service proposal which will result in the following deliverables: 1) market analysis; 2) Letter of Intent to Department of Health and Social Services (DHSS); 3) pro forma financial statements; 4) business plan; 5) Certificate of Need filed with DHSS; 6) site selection process; 7) building programming, space, and staffing needs; and 8) determination of model of care. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The city manager is hereby authorized to negotiate and execute a services agreement with Health Facilities Planning and Development, Inc. for an amount not to exceed $65,000. Section 2. Funding in the amount of$65,000 is hereby appropriated from the General Fund fund balance account no. 101-0000-3050 to the General Services contracted services account no. 101-1180-5390. Section 3. This Resolution shall become effective immediately. CITY OF SEWARD, ALASKA RESOLUTION 2004-45 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this l2th day of April, 2004. THE CITY OF SEWARD, ALASKA ~1~~ Vanta Shafer, May r AYES: NOES: ABSENT: ABSTAIN: Dunham, Branson, Valdatta, Clark, Amberg None Brossow Shafer ATTEST: i L.",,~ /l:y.L Le. ,l -- ,'!-p/ ,,~' ) \. ./ ~,. J ean'tewis Citt Clerk ~",'"1f111" (~~;3j)il"C:El1/'" ;:.~~ ...1::.. ~~ '#, .$' U-~,,"'~Polti~..:1(:) ~ ~ ,t. .",^-, ~ ~.~ 'c~- =: -+-..- .. : SEAL : : :e: :e- - . . .. ~ \ ......... : = .... . .. .. ttll (0:. v", 'V.l ~ ~-~""'~~1 ,\9~,"~': ~" ~~ ......1.... "r ~ '''~ l$' OF j.\\.\X~'."~ "'''1111'''' I I I COUNCIL AGENDA STATEMENT Meeting Date: April 12, 2004 Through: Phil Shealy, City Manager From: Kristin Erchinger, Finance Director Agenda Item: Long-Term Care Facility Planning Process Contract BACKGROUND & JUSTIFICATION: As a result of attempts by the federal government to close the long-term care facility in Seward in 2002, the State of Alaska intervened to find a solution to enable the facility to continue operation. Ultimately, the City of Seward worked with the Women’s Division of Global Ministries, Providence Health System Alaska, and the Wesley board, to facilitate co-location of the acute care hospital and the long-term care facility. By co-locating the two facilities under a single operator, the concerns of the government were addressed, and the long-term care facility was allowed to remain open. In May, 2003, the City entered into a Management and Operating Agreement with Providence for the management of the co-located entity known as Providence Seward Medical and Care Center. The agreement was seen as a win-win for both parties. Prior to co-location, Providence had been losing between $500,000 and $1 million per year in hospital operations, over a period of approximately seven years. Under co-location, the new entity was able to end its first year (May - December, 2003) with a positive net income. This was the first time in many years that the hospital was able to cover its own costs, and it demonstrated the tremendous financial benefits of co-location. The cost efficiencies gained in terms of reductions of duplicated services such as laundry, administration, and dietary, combined with the reduction of duplicated staff, made it possible for the facility to operate in the black. Today, co-location remains the only viable option for ensuring the financial viability of the acute care hospital. In addition to the positive impact of co-location on the financial operations of the hospital, co- location is one of the most important economic drivers in Seward’s economy. The hospital facility is one of the largest employers in the community. Hospital revenues are derived primarily from outside the community (medicare, medicaid, health insurance), importing dollars into the community. Nearly all hospital employees live in Seward and raise their families here, having a significant impact on local businesses and the schools. The hospital is a significant attribute when attempting to attract cruise ships to Seward, or when recruiting new employees to the school system, the SeaLife Center, and other large local employers. It is not difficult to recognize the significant role that the hospital plays in the economic health of the community. In order to ensure the continued viability of co-location, the City must replace the long-term care facility. The current facility is in serious disrepair and according to environmental and structural reports, is not worth renovating for hospital purposes. In addition, time is of the essence in replacing the existing facility, in order to take full advantage of medicare and medicaid reimbursement rates. The reimbursement rates will be re-based in 2007, based on expenditures of the facility in 2006. If a replacement facility is in place by the end of 2006, the capital costs of construction will be included in the facility costs and enable the facility to recover significant capital costs through the reimbursement rates. If the new facility is not in place by 2006, the reimbursement rates – which cannot be adjusted for a period of five years – will not cover any capital costs of the new construction. Long-Term Care Facility Planning Process Contract April 12, 2004 Page Two The administration has been working diligently to plan the replacement of the long-term care facility. To assist us in that effort, we have engaged the services of Health Facilities Planning and Development. This is the same firm that assisted us recently with filing a Letter of Intent with the Denali Commission, seeking planning funds. A contract with this firm will include the following deliverables: 1) market analysis; 2) Letter of Intent to Department of Health and Social Services (DHSS); 3) pro forma financial statements; 4) business plan; 5) Certificate of Need filed with DHSS; 6) site selection process; 7) building programming, space, and staffing needs; and 8) determination of model of care. The contractor will engage the services of subcontractors to assist in various stages of the above deliverables, as necessary. Yes No N/A CONSISTENCY CHECKLIST: 1. Comprehensive Plan X 2. Strategic Plan X 3. Other X FISCAL NOTE: The administration recommends utilizing $65,000 of the $122,874.26 in sales tax proceeds that was originally set aside to cover potential costs associated with closing Seward General Hospital in 1996. This account was closed during the 2003 year-end closing process, increasing the City’s General Fund fund balance account by $122,874.26. In the past seven years, the City has not identified specific liabilities associated with closure of the hospital, and it is our intent to utilize these funds to begin the process of replacing the long-term care facility. Approved by Finance Department RECOMMENDATION: Council approves Resolution 2004-45 authorizing the city manager to in an amount not to exceed execute a contract with Health Facilities Planning and Development $65,000, and appropriating funds, for the purpose of planning for the replacement of the long-term care facility.