HomeMy WebLinkAboutRES2023-093 Providence Operating Agreement CITY OF SEWARD,ALASKA Sponsored by: Regis
RESOLUTION 2023-093
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A
MANAGEMENT AND OPERATING AGREEMENT WITH PROVIDENCE
HEALTH & SERVICES WASHINGTON DB/A PROVIDENCE HEALTH
& SERVICES ALASKA
WHEREAS, the City owns certain real property consisting of land, a hospital, and a
nursing home facility, Seward Mountain Haven ("SMH"), which together with improvements
thereon, but exclusive of any space occupied or used for purposes of operating the Seward
Community Health Center Inc's federally qualified health center, shall be referred to collectively
herein as the Providence Seward Medical Center("PSMC"); and
WHEREAS, Providence has administered hospital and primary care clinic operations in
Seward since June 28, 1996, and long-term care operations since April 28,2002; and
WHEREAS,effective February 15, 2014,the primary care clinic operations was assumed
by a newly formed 501(c)(3) organization, Seward Community Health Center, Inc., operating a
federally qualified health center under Section 330 of the Public Health Service Act as a co-
applicant with the City of Seward, and PSMC will no longer include the provision of primary care
clinic services within its prescribed scope of work or have responsibility for any aspect of the
management or operation of the FQHC; and
WHEREAS, the City desires to continue quality, affordable health care for its residents;
and
WHEREAS, the City desires a single delivery service for acute care and long-term care
services; and
WHEREAS,the City desires cost effective health care services with emphasis on reducing
duplication and inefficiencies in the delivery system; and
WHEREAS, the City desires to engage a company with sufFicient.healthcare knowledge
and expertise,and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002; and
WHEREAS, Providence owns and operates a number of health care facilities that are
operated in keeping with its philosophy,mission and values.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
CITY OF SEWARD,ALASKA
RESOLUTION 2023-093
Section 1. The City Manager is authorized to enter into a Management and Operating
Agreement with Providence Health& Services Washington d/b/a Providence Health& Services Alaska.
Section 2. This resolution is effective upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th
day of August, 2023.
THE CITY OF SEWARD, ALASKA
adfrWC 0„,.
Sue McClure, Mayor
AYES: DeMoss, Finch, Barnwell, Calhoon, Osenga, McClure
NOES: None
ABSENT: Wells
ABSTAIN: None
ATTEST:
Kris Peck
City Clerk
SE
(City Seal) �•\• �Ft o •Q %
s= --0-
• SEAL i •
••
•�. E. 1,.....o...Q'.
rEOF A\-
City Council Agenda Statement
Meeting Date: August 14, 2023
To: City Council
From: Norm Regis,Acting City Manager
Subject: Resolution 2023-093: Authorizing The City Manager To Enter Into A
Management And Operating Agreement With Providence Health & Services
Washington d/b/a Providence Health& Services Alaska
Background and justification:
The City owns certain real property consisting of land, a hospital, and a nursing home facility,
Seward Mountain Haven ("SMH"), which together with improvements thereon, but exclusive of
any space occupied or used for purposes of operating the Seward Community Health Center Inc's
federally qualified health center, shall be referred to collectively herein as the Providence Seward
Medical Center ("PSMC"). Since operations by Providence began in 1996, the Operating
Agreement has been amended numerous times. The current Management and Operating
Agreement expired in June 2023. The City of Seward and Providence have been working together
for the past several months to update the agreement to reflect current practices. The process has
included numerous meetings which included Management, Finance, and Legal representatives
from both entities. This operating agreement incorporates all of the relevant portions of the relevant
amendments and reflects the current operational relationship between the City of Seward and
Providence. The City desires to engage a company with sufficient healthcare knowledge and
expertise, and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan: 2.2.6 Health Care
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
212
Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking RWater R Healthcare
Motor Pool Other Hospital Fund
Enterprise
Note: amounts are unaudited
Available Fund Balance/Net Position $ 4,718,396
Finance Director Signature: No direct fiscal impact
Attorney Review
x Yes Attorney Signature:
Sam Severin 7/19/23
Not applicable Comments:
Administration Recommendation
eAdopt Res.
Other:
213
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
City of Seward
Management and Operating Agreement
This Management and Operating Agreement(Agreement)is made and entered into by and between
the City of Seward, a municipal corporation (the City) and Providence Health & Services
Washington d/b/a Providence Health & Services Alaska, a Washington non-profit corporation
(Providence).
WHEREAS, the City owns certain real property consisting of land, a hospital, and a
nursing home facility, Seward Mountain Haven ("SMH"), which together with improvements
thereon, but exclusive of any space occupied or used for purposes of operating the Seward
Community Health Center Inc's federally qualified health center, shall be referred to collectively
herein as the Providence Seward Medical Center("PSMC"); and
WHEREAS, Providence has administered hospital and primary care clinic operations in
Seward since June 28, 1996, and long-term care operations since April 28, 2002; and
WHEREAS, effective February 15, 2014, the primary care clinic operations was assumed
by a newly formed 501(c)(3) organization, Seward Community Health Center, Inc., operating a
federally qualified health center under Section 330 of the Public Health Service Act as a co-
applicant with the City of Seward ("FQHC"), and PSMC will no longer include the provision of
primary care clinic services within its prescribed scope of work or have responsibility for any
aspect of the management or operation of the FQHC; and
WHEREAS, the City desires to continue quality, affordable health care for its residents;
and
WHEREAS, the City desires a single delivery service for acute care and long-term care
services; and
WHEREAS,the City desires cost effective health care services with emphasis on
reducing duplication and inefficiencies in the delivery system; and
WHEREAS, the City desires to engage a company with sufficient healthcare knowledge
and expertise, and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002; and
WHEREAS, Providence owns and operates a number of health care facilities that are
operated in keeping with its philosophy, mission and values.
NOW THEREFORE, the City and Providence agrees on the following:
Page 1 of 17
216
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
1. Operations
a. Agreement to Operate/Manage. The City hereby contracts with Providence to be the
sole and exclusive operator and manager of PSMC with respect to the hospital and long
term care components of that facility for the term of this Agreement; provided, however,
that nothing in this Agreement shall require Providence to provide any services to the
FQHC, bear any responsibility for any aspect of the FQHC's operations, or assume any
liabilities or obligations related to the operation of the FQHC within PSMC's building.
Notwithstanding anything to the contrary, both parties understand and agree that any and
all services provided by Providence during the term of this Agreement shall be provided
solely for the benefit of the City. During the term of this Agreement and subject to the
other provisions of this Agreement, Providence shall operate PSMC, and may perform
or arrange for the provision of the following:
1. Ensure timely deposits into the Accounts (as defined in Section 6) of all receipts
and moneys arising from the operation of PSMC and shall make disbursements
from such accounts in such amounts and at such times as the same are required.
2. Establish all prices, price schedules, rate, and rate schedules for PSMC.
3. Negotiate, prepare and execute any such other contracts reasonably necessary or
desirable in connection with the operation of PSMC in the usual course of business.
4. Hire or retain any consultants, accountants, attorneys, or other professional
personnel necessary and appropriate to assist Providence in carrying out its duties
and responsibilities in accordance with this Agreement.
5. Operate PSMC in a manner that is consistent with applicable federal, state and local
anti-discrimination laws, including the provision of services to persons at PSMC
without regard to race, creed, color, national origin or financial circumstances.
6. Operate PSMC in a manner consistent with their Medical Staff Bylaws, as
applicable. The parties hereby specifically agree to allow Providence, while acting
in the name of PSMC, to enter into certain exclusive contracts for the practice of
medical care.
7. Provide physician credentialing services and any and all other services as
reasonably required to facilitate and perform credentialing functions (as applicable)
at PSMC.
8. Employ or otherwise retain and be responsible for selecting, hiring, training,
supervising, and firing all management, professional, administrative, clerical,
secretarial, bookkeeping, accounting, payroll, billing and collection and other
personnel that are reasonably necessary and appropriate for the operation of PSMC.
9. Take all such actions reasonably necessary to cause PSMC to continue as
participating providers under the Medicare and Medicaid programs.
10. Prepare, execute and file any required documents with governmental or accrediting
agencies, including without limitation any Medicare cost reports, provider
agreements, and licensing documents.
11. Provide or arrange for the provision of all marketing and public relations services
that are reasonably necessary and appropriate for the operation of PSMC. The
parties hereby agree that Providence may, during the term of this Agreement,
identify PSMC as an entity under the operational management of Providence.
Page 2 of 17
217
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
12. Providence may, in its sole discretion defend, assert, settle, or otherwise dispose of
any claims, litigation,judgments, or liabilities in connection with PSMC, and will
notify the City of same.
13. Provide to the City a capital budget annually for PSMC by September.
14. Negotiate, contract for and generally supervise the disposal of all medical waste
and/or garbage refuse.
15. Conduct medical educational training programs at PSMC, including training of
interns and residents and other medical/technical personnel, in a manner consistent
with applicable governmental regulations and Providence's policies.
16. Unless otherwise specifically provided in this Agreement, Providence shall be
responsible for the performance of all other acts reasonably necessary in connection
with the operation of PSMC in accordance with the approved annual budget and
the terms and conditions of this Agreement.
Notwithstanding anything to the contrary in this Agreement, Providence shall not have
authority to bind the City or PSMC as to the following matters or to perform any of the
following on behalf of the City or PSMC without first obtaining approval from the City:
(i) any sale, lease, exchange, mortgage, pledge, or other transfer or disposition of all or
substantially all the assets of any of PSMC other than in the ordinary course of business;
(ii) any fundamental change in the nature of PSMC's businesses; (iii) any merger,
consolidation or affiliation of any of PSMC with another entity; and (iv) any material
change with respect to the insurance coverage obtained or provided through Providence,
unless such change is beyond Providence's reasonable control.
b. General Control of PSMC. Although the City has contracted day-to-day operations and
management of PSMC to Providence during the term of this Agreement, the City shall
continue to own and have financial responsibility for PSMC. The City shall also have
control over the facility other than day-to-day operations. The City represents that, as of
the Effective Date, it has a license as owner of PSMC, and has listed Providence on the
license as the manager to operate the PSMC with respect to its hospital and long-term
care operations. Providence agrees that it will take all steps necessary to maintain and
continue the PSMC and licenses, permits, and certifications for the term of this
Agreement, and the parties agree to take all steps necessary to preserve the designation
of colocation of the critical access hospital and long-term care facilities at PSMC, as such
designation is outlined in the regulations published by the State of Alaska Department of
Health and Social Services. The City grants Providence the authority and responsibility
for all related business licenses.
c. Required Notifications. Providence shall notify the City in writing with twenty-four
(24) hours of the occurrence of any one or more of the following events:
1. Any loss of licensure by PSMC.
2. At such time as Providence becomes aware of any material governmental
investigation or disciplinary proceeding relating to PSMC.
Page 3 of 17
218
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
3. At such time as PSMC becomes debarred, suspended or otherwise ineligible to
participate in any federal or state health care program, including the Medicare and
Medicaid programs.
4. At such time as Providence becomes aware of any act of nature or any other event
5. which has a material adverse effect on Providence's ability to operate PSMC.
6. At such time as Providence becomes aware of any issue which may have a material
adverse financial impact on the operations of PSMC.
2. Effective Date and Term. This Agreement shall become effective upon execution by both
parties following adoption of a Resolution (the "Resolution") by the Seward City Council
(the "Effective Date"). The term of this Agreement shall be five (5)years from May 8, 2023
unless sooner terminated as provided herein. The Parties may extend the Term for an
additional five (5) years based upon mutual written agreement. Such renewal (if applicable)
shall be on the same terms and conditions of this Agreement. Any change in the Annual
Fixed Periodic Fee ("AFPF") above the CPI increase allowed in Section 7, is subject to
approval by the Seward City Council. Providence understands that under the Charter and
Code of Ordinances of the City, the Resolution may be voided by referendum. Providence
agrees that if the Resolution is the subject of a referendum petition filed with the City Clerk,
this Agreement shall be ineffective unless and until the Resolution is approved by the voters
of the City, and Providence shall not be entitled to any damages or other relief against the
City in the event the Resolution is not so approved. In such an event, on the Effective Date,
the Prior Agreement shall terminate.
3. Operating Expenses.In accordance with the operating budget adopted annually,Providence
will incur costs generally associated with the operation of a health care facility providing
acute and long-term care services. Costs associated with the Providence Alaska Regional
Office and Providence System Office are deemed to be recovered in the form of the Annual
Fixed Periodic Fee as described in Section 7 and will not be billed to PSMC in addition to
the AFPF.
It is the City's expectation that Providence will exercise due care as it centralizes services
keeping in mind that all services are provided solely for the benefit of the City and that
services must be able to disconnect from Providence without undue complication should the
relationship end. Further, in the event that such centralization of services is deemed by the
City to have a significant adverse impact on the operational efficiencies or cost of operations
of PSMC,the City shall have the right to request PSMC seek alternative procurement of such
affected services. In the event the City and Providence discontinue their contractual
relationship,the costs incurred by PSCMCC in winding down and closing out its relationship
with the City shall be deemed Operating Expenses.
4. Capital Expenditures.Following completion of the annual capital budget, Providence may
purchase the listed items as cash flow allows.
In addition to capital budget items purchased from PSMC operating funds, the City may,
from time to time, provide additional funding for capital needs at PSMC. To the extent that
capital budget request items were identified by PSMC on a Capital Budget Plan submitted
Page 4 of 17
219
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
to, and accepted by the City, PSMC may spend City capital funds on those items in addition
to any other item whose individual item cost does not exceed $10,000, without further City
approval. All capital purchases procured in this manner will be the property of the City.
5. Equipment.
a. Providence shall maintain all equipment at PSMC, regardless of ownership. The
City will establish a separate account based on capital budget funds approved by
the City Council, to be used for PSMC capital purchases that will require only
approval of both the City and the facility administrator to access as a way to
streamline the capital purchasing process.
b. The City will retain title to all PSMC equipment owned by the City. Providence
may purchase replacement or additional equipment to be used in the maintenance
or improvement of Providence's operations of PSMC. Such additional equipment
shall be the City's property, and shall be tagged and recorded in the financial
records, as such. Providence shall annually provide a list of equipment to the City
detailing these assets as of December 31 of each year. This list should be provided
no later than February 281h of the following year.
6. Admission Policy. Providence agrees to accept any and all bona fide emergency patients
PSMC can accommodate. Providence shall treat patients in accordance with the services and
capacity available at PSMC. Providence agrees it shall not discriminate in the admission of
patients or delivery of outpatient services on the basis of race, religion, national origin or
color. Providence agrees that any patient seeking treatment at PSMC and requiring for
medical reasons transport to a larger facility, has the right to select the health provider(s) and
hospital of the patient's preference. Providence agrees to honor such determinations by
patients and will relate such directives to emergency transportation services.
Providence acknowledges the importance to the people of Seward of having a long-term care
facility within the City boundaries and operating at its fullest capacity, and agrees that except
to the extent necessary to meet patient choice, or the particular health or safety needs of a
patient, and only for such time as is necessary to meet such needs, Providence will not move
or cause patients to move to other facilities owned, operated or managed by Providence. The
City has the right to retrospectively review reasons for all such transfers, so long as such
review is in compliance with patient confidentiality laws. The "Green House" model was
chosen by the people of Seward for the long-term care facility in 2008 due to its emerging
reputation as the latest, state-of-the-art thinking for providing long term care services, and
because of its vast improvement over Seward's previous institutional model of care. After a
full decade of operations however, the practical limitations of the model constrain the ability
of staff to best meet the specific needs of fragile elders with high acuity needs, operate the
facility at maximum efficiency and address safety issues unique to Alaska's climate (e.g.
covered walkway). For example, the increased need for higher care delivery is constrained
by certain Greenhouse rules (e.g. restrictions on lifts in common areas), restrictions on
charging mechanisms, and the physical separation of nursing staff from the elders. From an
efficiency standpoint, some services have been shifted away from the Shabazim (laundry,
activities, housekeeping) in order to provide improved focus on elder care, but represent
Page 5 of 17
220
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
deviations from particular requirements of the Green House model. Fundamentally, the
Green House is a trade-marked concept that provides care in home-like settings where
services are brought to the residents rather than bringing residents to the services. The parties
intend to continue to support many of the concepts fundamental to the Green House model
of care, but find that the nature of process improvement in Seward requires changes which
are not in full conformance with the Green House model. It is determined therefore, that
Seward Mountain Haven and its elders are best served by retaining many qualities of the
Green House model while no longer seeking to qualify as an official "Green House" so that
Seward is better able to accommodate specific needs of a more vulnerable population of
elders with high acuity, to drive process improvements and seek better operational
efficiencies, and to perform facility modifications which are not entirely consistent with the
Green House model.
Providence further acknowledges the importance to the people of Seward of being able to
receive care and treatment in a local hospital, rather than to be transported out of town, and
agrees that except to the extent necessary to meet patient choice, or the particular health or
safety needs of a patient, Providence will not move or cause patients to move to other
facilities. The City has the right to retrospectively review reasons for all such transfers, so
long as such review is in compliance with patient confidentiality laws.
7. Disposition of Funds, Reporting and Administration.
a. Funds originating from the operation of PSMC and collected by Providence pursuant to
this Agreement shall be received, handled, managed and disposed of as follows:
1. Providence shall deposit all funds received by it from the operation of PSMC and
all amounts advanced by the City in a j ointly held bank account or accounts bearing
the name of PSMC(hereinafter the "Accounts") in a bank or trust company
approved by the City and Providence. Such funds shall in no event be commingled
with other City or Providence funds. Providence shall have no liability or
responsibility for any loss resulting from the insolvency, malfeasance or
nonfeasance of the bank or banks in which such funds are deposited.
2. Providence has the right to make withdrawals from and use the Accounts for the
purposes of operating PSMC and performing their obligations hereunder and
paying Providence's compensation herein until the expiration or termination of this
Agreement, at which time Providence shall resign as co-signatory for the Accounts.
3. Signatories and approvals as to the amounts on all checks drawn from the
Accounts shall be in accordance with the policies and procedures mutually agreed
to by Providence and the City.
b. Providence will perform all billing and collection activities for PSMC accounts
receivables, will process accounts payable, and will provide such other administrative,
accounting and clerical services as are necessary. All revenues and cash collections
including those from patients, third-party payers and other sources billed and collected
by Providence, and arising out of or related to services rendered during the term of this
Agreement, and all grants or portions thereof attributed to PSMC arising out of or related
to PSMC during the term of this Agreement, shall be used first to pay debt service on
Seward Mountain Haven bonds issued by the City, then to offset Operating Expenses of
PSMC incurred on or after the Effective Date. Providence shall aggressively collect all
Page 6 of 17
221
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
amounts billed for services provided at PSMC. The excess, if any, of such revenues over
such expenses shall accrue to the City's account, and be applied in the City's sole
discretion, to pay debt service on the City's existing general obligation and/or revenue
bonds related to the PSMC, the costs of repairs, renewals, improvements or additions to
PSMC, or to cover past, present or future operating losses.
c. Providence shall provide the City with audited year-end financial statements for the
PSMC as a co-located entity within 150 days after the end of each year. Upon request by
the City, Providence will make a representative available to make presentations to
Seward City Council and community groups concerning the annual report. The
information to be shared under this paragraph shall not include protected health
information covered by the Health Insurance Portability and Accountability Act of 1996
and regulations adopted thereunder("HIPAX).
d. Providence shall maintain all financial, medical and hospital records,including admitting
register books, schedules of room rentals, patients' insurance records, pertinent hospital
personnel records and such other books and records as are necessary to the continued
operation of PSMC. Original copies of medical and hospital records shall be maintained
and stored at PSMC or at another facility acceptable to Providence.
e. Providence will use reasonable efforts to operate PSMC consistent with the annual
budget. Under the terms of this Agreement, the City shall have the right to review and
approve Providence's budget.
Providence shall provide the Advisory Council with monthly updates comparing PSMC's
actual financial performance to the approved budget during the course of each year to
ensure that the City is fully aware of the financial performance of PSMC on a monthly
basis.
The parties acknowledge that the budget is only a projection for the upcoming year and
changed circumstances may require budgetary modifications. Providence will notify the
City of the following modifications to the budget: (i) instigation of any litigation on
behalf of PSMC against a third party where the amount in controversy exceeds
$1,000,000; and (ii) settlement of any litigation on behalf of PSMC where the amount in
controversy exceeds $1,000,000 or the proposed settlement involves payment by PSMC
of an amount in excess of$1,000,000.
8. Annual Fixed Periodic Fee. Beginning January 1, 2024 and each January 1st thereafter,
the AFPF will be payable by the City in equal quarterly amounts, and will be based upon
the total AFPF applicable in calendar year 2023, as adjusted by the Consumer Price Index
for the second preceding twelve-month period ended December 31 (Anchorage Alaska,
All Urban Consumers - Not Seasonally Adjusted, Base: 1982-1984). (For example,
January 1st 2024 will be adjusted based on the CPI for the full year which ended
December 31, 2022.) Partial years shall be pro-rated. Both parties understand and agree
that the City has other financial obligations to Providence pursuant to the terms of this
Agreement.
9. Medicare and Medicaid Reimbursement.
Page 7 of 17
222
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
From and after the Effective Date, Providence shall maintain Medicare and Medicaid
certification and shall prepare all Medicare/Medicaid cost reports in a timely manner and
shall provide all draft cost reports to the City for review and comment no less than 30
days prior to the date of submission, understanding that Providence may not be able to
include the "Home Office" cost report at that time. Alternatively, the parties may agree
to have the City hire an independent consultant to prepare the cost report. All expenses
incurred within this Section are considered Operating Expenses and shall be paid as costs
from Providence. The City may, as Operating Expenses, have the cost reports prepared
and/or analyzed by a financial consultant.
10. Working Capital and Cash Flow.
a. Providence will pay Operating Expenses as they become due, using funds from the
Accounts and provide the City with information satisfactory to the City supporting
such transfer of funds from City to Providence. Providence will assure that all
Operating Expenses are paid consistent with the various terms and conditions of
vendors, as well as the operating budget and applicable regulations governing
employee pay practices. In the event insufficient funds are available to pay Operating
Expenses, Providence will notify the City verbally and in writing via Email.
Providence will then have the sole discretion to require payment as described in
Subsection 11 (b) or Subsection 11 (c). In the event the City fails to transfer funds
adequate to support Operating Expenses in accordance with Section 11 (b) or 11(c),
and such failure is not cured within 60 days of the original notice, Providence may
terminate this Agreement by providing the City with 30 days' advance written notice
of such termination.
b. The City shall place a minimum of $500,000 of Emergency Funds into the City of
Seward General Fund account reserved for healthcare operation and capital shortfalls.
Such funds may be used for capital or operating shortfalls only and require the prior
written approval of the City Manager or designee. In the event that shortfalls are
expected to be in excess of$500,000,Providence will notify the City and within sixty
(60) days of receiving such notice, the City will transfer sufficient funds to PSMC to
cover the shortfall.
c. To the extent that the Accounts do not have sufficient cash available to reimburse
Providence for costs, Providence may, at its sole discretion, charge interest for the
cumulative unpaid portion of the monthly amount due.
d. Interest will be calculated monthly at the Prime Rate+ 1%on the average outstanding
balance for the month, where the Prime Rate is defined in the Wall Street Journal
Financial Section. Principal plus unpaid interest must be fully paid by December 31,
provided however,that this date may be extended by Providence only upon its written
consent. In the event the City fails to make such required payments, the City agrees
to pay on demand, all costs of collection, including reasonable legal expenses and
attorneys fees, incurred in enforcing this repayment.
11. Supplies. Providence shall, as part of its Operating Expenses, supply and maintain all
expendable supplies as may be required in Providence's discretion for the proper
operation of the PSMC. Upon termination of this Agreement, Providence will leave
Page 8 of 17
223
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
behind all of the supplies in inventory as well as floor stock items maintained at the
Property.
12. Condition on Surrender.Upon termination or expiration of this Agreement,Providence
shall surrender the Property to the City in substantially the same condition as exists on
the Effective Date, except for reasonable wear and tear, construction and demolition
required or permitted under the terms of this Agreement, and damage by fire and other
risks covered by the insurance policy in Section 15.
13. Alterations.
Providence shall have the right to make alterations, additions, improvements and
renovations to PSMC as Operating Expenses, provided: (a) Providence shall notify the
City with respect to any such work requiring any substantial expenditure; (b) such work
shall not adversely affect the structural integrity of PSMC or diminish the value thereof,
(c) any such work shall be performed in a good and workmanlike manner and in
conformance with all applicable building, fire and health regulations; and (d) the City
shall have approved in writing all such work exceeding $50,000,in advance, in the City's
sole discretion.
14. Insurance.
a. Providence shall either obtain or continue, occurrence-based, professional (including
medical malpractice)and general liability insurance relating to PSMC as Providence,
in its sole opinion, deems necessary and sufficient, and maintain such liability
insurance coverage for PSMC during the term of this Agreement. Such insurance
shall provide coverage for personal injuries, death or property damage to PSMC in
an amount of at least $5 million per occurrence and $10 million annual aggregate;
provided, however that Providence's reasonable allocated cost for providing or
continuing such insurance on the City's behalf shall be deemed an Operating Expense.
In addition, Providence shall maintain insurance, in reasonable amounts, subject to
reasonable terms, provisions and customary exclusions, for professional liability and
workers' compensation for all Providence employees who provide services at PSMC
pursuant to this Agreement. Providence shall also maintain automobile, crime,
directors and officers, property earthquake and fiduciary insurance coverage (as
requested by the City) relating to PSMC and maintain such insurance coverage for
PSMC during the term of this Agreement. Any insurance obtained or provided by
Providence under this Section may be provided by insurance or alternative risk
programs which may include self-insurance programs,provided such alternative risk
or self-insurance programs are fully funded (confidence level of 80% or higher) for
any reasonably projected liabilities, and contain customary and reasonable deductible
and coinsurance amounts. The City hereby acknowledges that Providence has
informed it of Providence's insurance's deductible/co- insurance amounts. The
Operating Expenses will include the payment of such deductible/coinsurance
amounts. All costs incurred by Providence under the terms of this Section 15 (a) shall
be deemed Operating Expenses and paid by City to Providence pursuant to the terms
of this Agreement. The Operating Costs shall include the payment of such
Page 9 of 17
224
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
deductibles/co-insurance in the event of any loss or casualty covered under the
insurance provided by Providence hereunder.
b. The City hereby acknowledges and agrees that upon the earlier of termination or
expiration of this Agreement, Providence shall no longer provide nor arrange for the
provision of any insurance of any kind whatsoever to PSMC.
c. The minimum amounts and types of insurance required under this section shall be
subject to revision in accordance with standard insurance practices, in order to
provide continuously throughout the Term, a level of protection consistent with good
business practice and accepted standards in the industry. Such factors as increases in
the cost of living shall be utilized in assessing whether the minimum insurance
requirements should be increased. The City shall notify Providence of any required
changes in insurance coverage.
All insurance policies shall include a waiver of subrogation and shall provide for 30
days' notice to the City of cancellation and/or material change in policy terms. All
such policies shall be written either by insurance companies legally authorized to do
business in the State of Alaska and acceptable to the City, or by self-insurance under
the same terms as the policies for healthcare centers, hospitals, or long-term care
facilities owned or operated by Providence, and acceptable to the City. The City shall
be named as an additional insured party on each such policy of insurance, and
certificates thereof shall be furnished to the City. Nothing herein shall be construed
as a representation by the City as to the sufficiency of any insurance coverage for any
purpose.
15. No Assumption of Liability: Indemnification.
a. During the term of this Agreement, Providence shall not assume or be liable for any
claim, liability, or obligation of PSMC, whether known or unknown, fixed or
contingent, accrued or unaccrued, arising from Providence's operation of PSMC
pursuant to this Agreement, except where such claim, liability or obligation arises
from Providence's negligence or material breach of this Agreement.
b. During the term of this Agreement, the City shall not assume or be liable for any
claim, liability or obligation arising from its responsibilities and duties under the
terms of this Agreement, whether known or 'unknown, fixed or contingent, accrued
or unaccrued pursuant to this Agreement, except where such claim, liability or
obligation arises from the City's negligence or material breach of this Agreement.
c. The parties will defend,indemnify and hold each other harmless from any loss, claim
or damage arising from the negligent acts and omissions of their respective
employees, officers and agents, including negligence connected with performing
their obligations under this Agreement. In the event that loss or damage results from
the conduct of more than one party, each party agrees to be responsible for its own
proportionate share of the claimant's total damages under the laws of the state of
Alaska.
d. The obligations under this Section 16 shall survive any termination or expiration of
this Agreement and shall continue until the expiration of the applicable statute of
limitations (with extensions)relating to the causes of action at issue.
Page 10 of 17
225
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
e. Providence shall have no obligation for, and the City shall indemnify and hold
Providence harmless from and against, any and all liability with respect to any claims
resulting from the negligence of the City or its agents or employees, or any claims
arising out of acts or omissions which occurred: (a)prior April 28, 2002 with regard
to the previous Wesley facility long-term care site; or (b) prior to 1996 with regard
to the hospital site; or(c) on or after February 15, 2014, with respect to the operation
of the FQHC or any uses of the FQHC space within the PSMC building.
16. Assignment. This Agreement may not be assigned by Providence except in whole to an
affiliate of Providence, as "affiliate" is defined in AS 10.06.990(2). Each and every
provision of this Agreement shall inure to the benefit of and shall be binding upon the
successors in interest of Providence and the City. This assignment provision is
specifically excluded as pertains to the Seward Community Health Center.
17. Early Termination. Either party shall have the option in its sole discretion, to terminate
this Agreement upon twelve (12)months written notice to the other party.
18. Religious and Ethical Directives: Termination. Providence shall not be obligated to
provide any services at PSMC that are in conflict with the Providence St Joseph Health
System Mission and Core Values and the Roman Catholic moral tradition as articulated
in such documents as The Ethical and Religious Directives for Catholic Health Care
Facilities, as amended from time to time. Providence shall at all times have the right,
power and duty to operate PSMC in accordance with, and to make decisions that in
Providence's reasonable discretion are necessary or desirable to comply with such
Directives. If at any time during the term, as a result of changes to Alaska law or
regulations, Providence shall be required to operate PSMC in a manner that is not
consistent with such Directives, then at its option, Providence may terminate this
Agreement upon 60 days advance written notice.
19. Termination for Cause.
a. Either party may terminate this Agreement in the event of breach of this Agreement
by the other party where such breach is not cured within thirty (30) calendar days
after the non-breaching party gives written notice of the breach to the breaching party.
b. This Agreement shall automatically terminate in the event either party files a petition
in voluntary bankruptcy, makes an assignment for the benefit of creditors, or takes
any other action voluntarily or involuntarily under any state or federal statute for the
protection of its debtors.
c. Either party may immediately terminate this Agreement in the event the other party
attempts to limit or otherwise avoid its obligations set forth in Section 16 of this
Agreement.
d. The dissolution or liquidation of Providence, other than as the result of merger or
consolidation under conditions permitting continued full compliance with the terms
of this Agreement, shall be cause for termination by the City.
e. The cessation by Providence of use of the Property for the purposes contemplated
hereby for a period of thirty (30) consecutive days, except for periods when the same
Page 11 of 17
226
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
may be untenantable shall be cause for termination by the City, and no Annual Fixed
Periodic Fee shall be owed following such cessation of use.
20. Winding Up. This Section 21 shall survive termination or expiration of this Agreement.
Upon the termination or expiration of this Agreement, the following procedure shall be
followed after the effective date of expiration or termination ("termination date"):
a. Providence shall work cooperatively with the City to facilitate a smooth transition
of the operation/management of PSMC.
b. The City shall retain as its property any equipment on the Property as of the
expiration or termination of the Term to the extent that such equipment was
acquired with the PSMC or City funds. The City may purchase, free and clear of
any encumbrances, any equipment owned by Providence at its then net book value.
Notice of the City's exercise of this option shall be effected by notice given at any
time before the expiration date. Providence shall remove from the Property at its
expense, any or all equipment that the City has not elected to retain under this
paragraph.
c. Providence shall give the City, or such other person identified by the City, all
records required for continued operations of PSMC.
d. All licenses and permits incident to operation of the PSMC will be transferred to
an operator identified by the City, including, but not limited to transfer of permits
for and inventories of alcohol, narcotics and dangerous drugs. Providence will file
a final cost report within 45 days after termination.
e. Upon termination, all accrued revenues and expenses related to the ordinary
course of business shall be the City's. Such expenses shall include any fees owed
to Providence under this Agreement, including an amount equal to the final bi-
weekly payroll costs.
21. Notices. Any notice permitted or required hereunder shall be in writing and shall be
deemed given on the date delivered in person, sent by electronic mail or fax, or deposited
in the United States certified or registered mail, postage prepaid, and addressed as
follows:
To the City: City of Seward
P.O. Box 167
410 Adams Street
Seward, Alaska 99664-0167
ATTN: City Manager
Phone: 907.224.4047
Fax No.: 907.224.4038
Email: citym r a,cityofseward.net
To Providence: Providence Health and Services - Washington
d.b.a. Providence Health and Services - Alaska
3760 Piper Street
P.O. Box 196604
Anchorage, Alaska 99519-6604
Page 12 of 17
227
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
ATTN: Chief Executive, Alaska Service Area
Fax No.:907-261-3041
Email: ella. oss(c_,providence.org
Such addresses may be changed by either party by ten (10) days' prior written notice to
the other party.
22. Authority.Each individual executing this Agreement on behalf of Providence or the City
represents and warrants that he or she is duly authorized to execute and deliver this
Agreement on behalf of such party, that all actions by such organization have been taken
to authorize execution, delivery and performance of this Agreement, and that this
Agreement is binding upon such party. The individuals signing on behalf of Providence
further warrant and represent that they are authorized to act on behalf of Providence in
all matters relating to this Agreement.
23. Representations and Warranties of Providence. As of the Effective Date, Providence
hereby represents and warrants as follows:
a. Providence is a Washington non-profit corporation in good standing under the laws
of the State of Washington and authorized to do business in Alaska.
b. Providence has full corporate power and authority to carry on its business as now
conducted and to enter into this Agreement. The execution and delivery of this
Agreement has been authorized by proper corporate action, and this Agreement
constitutes a valid and legally binding obligation of Providence.
c. Except as may have already been obtained, no consent or approval of any trustee or
holder of any indebtedness or obligation of Providence, and no consent, approval,
permission, authorization, order, or license of any governmental authority,is required
to be obtained by Providence for the execution and delivery of this Agreement or any
other instrument or agreement required of Providence under this Agreement.
d. Providence is not subject to any charter, bylaw, or contractual limitation or provision
of any nature whatsoever which in any way limits, restricts, or prevents Providence
from entering into this Agreement or from performing any of its obligations
hereunder.
e. Neither the execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
provisions hereto, materially conflicts with, violates, or breaches any charter, bylaw,
or stock provision of Providence, any of the material terms, conditions, or provisions
of any indenture,instrument, or agreement to which Providence is a party or by which
Providence is bound, any statute, rule or regulation, or any judgment, decree, or order
of any court or agency binding on Providence, or constitutes a default under any of
the foregoing which has not been waived or consented to in writing by the appropriate
party or parties, or results in the creation or imposition of any lien, charge, security
interest, or encumbrance of any nature whatsoever upon any of the property or assets
of Providence not permitted under the terms of any restriction, agreement,instrument,
statute, governmental rule or regulation, court order,judgement, or decree.
f. To the knowledge of Providence, there is no action, suit, proceeding, inquiry, or
investigation by or before any court, governmental agency, or public board or body
Page 13 of 17
228
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
pending or threatened against Providence which (i) affects or seeks to prohibit,
restrain, or enjoin the execution and delivery of this Agreement, (ii) affects or
questions the validity or enforceability of this Agreement, or(iii)questions the power
or authority of Providence to carry out the transactions contemplated by, or to
perform its obligations under, this Agreement.
g. When duly executed, this Agreement will be enforceable against Providence
according to its terms, except as may be limited by bankruptcy, insolvency,
reorganization, or other laws affecting creditors' rights generally as amended from
time to time.
h. Any certificate signed by an officer of Providence duly authorized to execute such
certificate and delivered pursuant to this Agreement shall be deemed to be a
representation and warranty by Providence as to the statements made therein.
i. The execution, delivery, or performance of this Agreement or consummation of the
transactions contemplated by this Agreement or compliance by Providence with any
of the provisions of this Agreement will not violate any statute (including Alaska's
Certificate of Need laws), rule, regulation, ordinance, code, order,judgment, ruling,
writ, injunction, decree, or award.
24. Representations and Warranties of the City. The City hereby represents and warrants
that neither the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated by this Agreement, nor compliance by
the City with any of the provisions of this Agreement, will:
a. violate or conflict with any provision of Seward's City Charter or the Seward City
Code;
b. violate, conflict with, or result in a breach of any provision of, or constitute a default
(or an event which, with notice and/or lapse of time, would constitute a default)
under, terminate, accelerate the performance required by, or result in a right of
termination or acceleration under any of the terms, conditions or provisions of any
material contract, plan, indebtedness, note, bond, indenture, security or pledge
agreement, commitment, license, lease, franchise, permit, agreement, or other
instrument or obligation (i) to which the City is a party or (ii) by which the assets
relating to PSMC are bound; or
c. violate any statute (including Alaska's Certificate of Need laws), rule, regulation,
ordinance, code, order,judgment, ruling, writ, injunction, decree or award.
25. Parties in Interest.Nothing in this Agreement expressed or implied is intended or shall
be construed to confer upon any person, other than the parties hereto, any right, remedy
or claim, legal or equitable, under or by reason of this Agreement, this Agreement being
intended to be and being for the sole and exclusive benefit of the parties hereto.
26. Confidential Information. Providence shall comply with all laws, regulations,
directives or requirements in any form related to operating and managing hospitals and
long- term care facilities, including, but not limited to the Health Insurance Portability
and Accountability Act of 1996 ("HIPAA"), and regulations adopted under HIPAA. The
City shall not have access to Protected Health Information as defined by HIPAA. City
has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R.
Page 14 of 17
229
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
164.504(e) applies to this Agreement, and that Providence therefore has the following
obligations:
Providence agrees to hold all individually identifiable patient health information
("Protected Health Information") that may be shared, transferred, transmitted, or
otherwise obtained pursuant to this Agreement strictly confidential, and provide all
reasonable protections to prevent the unauthorized use or disclosure of such information,
including, but not limited to the protection afforded by applicable federal, state and local
laws and/or regulations regarding the security and the confidentiality of patient health
care information. Providence further agrees to make every reasonable effort to comply
with any regulations, standards, or rules promulgated pursuant to the authority of the
HIPAA, including those provisions listed below, as soon as possible. Providence may
use and disclose Protected Health Information when necessary for Providence's proper
management and administration (if such use or disclosure is necessary), or to carry out
Providence's specific legal responsibilities pursuant to this Agreement. Specifically,
Providence agrees as follows: ( 1)to maintain safeguards as necessary to ensure that the
Protected Health Information is not used or disclosed except as provided herein; (2) to
mitigate, it possible, any harmful effect known to Providence of a use or disclosure of
Protected Health Information by Providence; (3) to ensure that any subcontractors or
agents to whom it provides Protected Health Information will agree to the same
restrictions and conditions that apply with respect to such information; (4) to make
available respective internal practices, books and records relating to the use and
disclosure of Protected Health Information to the Department of Health and Human
Services or its agents; (5) to incorporate any amendments or corrections to Protected
Health Information when notified that the information is inaccurate or incomplete; (6)to
return or destroy all Protected Health Information that Providence still maintains in any
form and not to retain any such Protected Health Information in any form upon
termination or expiration of this Agreement, if feasible or, if not feasible, Providence
agrees to limit any uses of Protected Health Information after this Agreement's
termination or expiration to those specific uses or disclosures that make it necessary for
Providence to retain the information; (7) to ensure applicable policies are in place for
providing access to Protected Health Information to the subject of that information; (8)
if requested by the City, report to City any use or disclosure of Protected Health
Information which is not provided for in the Agreement; and(9)to make Protected Health
Information and an accounting of disclosures available to the individual who is the
subject of the information or to City, to the extent required by HIPAA. Breach of this
section shall be considered material.
27. Access to Books and Records. Pursuant to 42 U.S.C. Section 1 3995x(v)(1 ), until the
expiration of four (4) years after the furnishing of services under this Agreement,
Providence shall make available and provide copies to the City, upon written request by
the Comptroller of the United States Department of Health and Human Services, or upon
request by the Comptroller General of the United States General Accounting Office, or
any of their duly authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to certify the nature and extent of the services
furnished by Providence under this Agreement. If Providence carries out any of its duties
Page 15 of 17
230
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
under this Agreement through a subcontract, with a value or cost of ten thousand dollars
($10,000) or more over a twelve (12) month period, with a related organization of
Providence, such subcontract shall contain a clause to the effect that until the expiration
of four (4) years after the furnishing of such services pursuant to such subcontract, the
related organization shall make available and provide copies to the City, upon written
request by the Secretary of the United States Department of Health and Human Services
or upon request by the Comptroller General of the United States General Accounting
Office, or any of their duly authorized representatives, a copy of such subcontract and
such books, documents and records as are necessary to verify the nature and extent of
such costs.
28. Miscellaneous.
a. This Agreement constitutes the entire agreement between the parties with respect to
the Property and operation of PSMC. Any prior representations and agreements are
of no effect except to the extent provisions of the Prior Agreement survive
termination by its terms.No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the City or Providence unless reduced to
writing and executed by the parties.
b. This Agreement shall be governed by and construed in accordance with the laws of
the State of Alaska, and venue for all disputes shall be in Anchorage, Alaska.
c. If any term, covenant or condition of this Agreement, or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term, covenant or condition
to other persons and circumstances shall be valid and enforceable to the fullest extent
permitted by law.
d. The terms, covenants and conditions hereof shall be binding upon and shall insure to
the benefit of the parties hereto and their respective legal representatives, successors
and assigns.
e. One City resident will be eligible to participate as a voting member on the Providence
Alaska Region Community Ministry Board which will vote on the operations of
PSMC.
f. Nothing in this Agreement expressed or implied is intended or shall be construed to
confer upon any person, firm, or corporation, other than the parties hereto, any right,
remedy or claim, legal or equitable, under or by reason of this Agreement, this
Agreement being intended to be and being for the sole and exclusive benefit of the
parties hereto.
g. Nothing in this Agreement, and no performance of either party hereunder shall cause
the relationship of the parties to be that of principal and agent, partners, or joint
venturers, or cause the parties to be associated in any manner other than as
independent contractors.
h. The parties to this Agreement will perform their obligations hereunder consistent
with applicable federal, state and local laws.
Page 16 of 17
231
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
In witness whereof, the parties have caused this Agreement to be executed by their
duly authorized representatives as of the dates set forth below.
AGREED TO BY AND BETWEEN:
FOR CITY OF SEWARD:
Norm Regis,Acting City Manager Date
FOR PROVIDENCE HEALTH & SERVICES-WASHINGTON
DBA PROVIDENCE HEALTH& SERVICES ALASKA:
DocuSigned by:
_hac Ski 7/20/2023
]I lski Administrator-PSMH/PSMC Date
RV
DocuSigned by:
� WUA, 7/21/2023
I—Va&82Rfiff4 ecutive Director Date
Real Estate & Strategic Operations -Alaska
DocuSigned by:
�bSS 7/21/2023
ffa UoNs,lUgional Chief Executive -Alaska Date
Page 17 of 17
232