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MINUTES FOR THE REGULAR MEETING
ASHLAND CITY COUNCIL
October 16, 2012
Council Chambers
1175 E. Main Street
CALL TO ORDER
Mayor Stromberg called the meeting to order at 7:00 p.m. in the Civic Center Council Chambers.
ROLL CALL
Councilor Voisin, Morris, Lemhouse, Slattery, Silbiger, and Chapman were present.
MAYOR’S ANNOUNCEMENTS
Mayor Stromberg announced vacancies on the Public Arts Commission, Firewise Commission, Transportation Commission, Tree Commission, and the Audit Committee.
City Administrator Dave Kanner shared that the City of Ashland was one of twelve cities in the United States to receive The Voice of the People Award for Excellence. The International City Managers Association presented the award to cities that finished in the top three for service excellence ratings based on the citizen surveys conducted in 2011.
Council discussed taking public input regarding the proposed merger of Ashland Community Hospital with Dignity Health. Council adhered to the agenda that stated no public testimony would occur regarding the item during the meeting.
APPROVAL OF MINUTES
The minutes of the Executive Session of October 2, 2012 and Business Meeting of October 2, 2012 were approved as presented.
SPECIAL PRESENTATIONS & AWARDS
Councilor Silbiger declared a potential conflict of interest due to an investment he had in a company currently involved in a beta test with Ashland Community Hospital (ACH).
City Administrator Dave Kanner gave background on the proposed merger of ACH with Dignity Health. Once the affiliation and lease agreements were complete, they would become public documents and require action by Council. There was a likelihood the documents would not be ready in time for public review for the November 6, 2012 Council meeting. If that was the case, he recommended postponing deliberation until the November 20, 2012 meeting.
Mayor Stromberg explained the merger had generated controversy because of Dignity Health’s association with the Catholic Church and their Common Statement of Values as it pertained to abortions and aide in dying prescriptions. Councilor Voisin added the concern regarding the merger extended to local control of the hospital and protecting jobs as well.
ACH Board Chair Doug Gentry, introduced Board member Dr. Doug Diehl, Vice Chair Anne Golden, and Medical Staff President Dr. Miriam Soriano. The presentation would include the conditions that led to an affiliation agreement, the general healthcare market, the process used to choose a partner, working for Dignity Health, and public concerns regarding Dignity Health.
Showed the money received through net patient revenue and Medicare was less than total expenses that would continue to rise. In Fiscal Year 2011, ACH lost approximately $500,000 and $3,300,000 June 2012.
Capital expenses were critical to the organization. The care provided was complicated and relied on technology. Both facilities and information technology needed updating. ACH spent approximately $1,000,000-$1,500,000 yearly on routine capital expenses to ensure the hospital remained up to date with systems to support physicians and patients.
Operating losses and the need to continually make capital expenditures put stress on the hospital’s cash position. Reserves fell in recent years to just under $3,000,000. During September 2012, ACH lost slightly under $500,000 in operating losses. Of that amount, $200,000 was depreciation. The declining financial condition was one of the reasons the ACH Board considered finding a partner.
Dr. Diehl talked about why the affiliation was necessary. Medicare had gone from 40% to 52%-53% contributing to a $9,000,000 loss in the last fiscal year. Medicaid went from 5% to 9% leading to a $400,000 loss. The hospital also experienced a greater increase in community care, charity care services, and bad debt at approximately $1,300,000 each.
The government was pushing outpatient services to drive down the level of reimbursement. The government also had regulatory requirements for information technology and a system call Meaningful Use that cost millions of dollars to achieve and maintain. ACH was a small independent hospital and unable to take advantage of economies of scale. However, larger healthcare systems could negotiate significant reductions based on volume and economies of scale with supply vendors, payers, and insurance constituencies.
Prior to discussing affiliations, the Board researched available options that included remaining a stand-alone hospital, curtailing services, transitioning to an outpatient services or an urgent care facility, and working with the City regarding debt relief. An affiliation with a larger hospital would allow ACH to expand resources and expertise. In August 2011, the Board set up a series of meetings with the City. The Council appointed Councilor Silbiger as a liaison to the ACH Board and the board began to develop an affiliation process. The board sent a confidential memo outlining expectations of the affiliation, principles of operation, ACH’s mission statement, and financial information to 24 healthcare facilities. ACH received five responses with four submitting proposals. The Board reviewed each response carefully and entered into exclusive negotiations with Dignity Health.
Council wanted to ensure the affiliation agreement clearly stated the criteria. Dr. Diehl further explained credentialing authority and ACH’s goal to retain its own credentialing privileging. The Board went through due diligence, negotiated points, developed the term sheet and memorandum of understanding recently approved by both organizations. At this time, the planning merger needed to go through the Council approval process.
Vice Chair Golden explained Dignity Healthcare not only met the criteria, they had the resources and willingness to make financial investment in ACH for debt reduction, capital improvements and future growth. Dignity Health possessed a commitment to patient centered care, the Planetree model, a willingness to support a broad range of services, and wanted to support, maintain, and grow a local independent medical staff and employee base. ACH employed 404 full and part time employees. Dignity Health would maintain staff at the current level, retain competitive wages, and provide a generous benefit package.
Dignity Health was socially responsible with a variety of ecology programs that focused on environmental conservation. They surveyed the cities they served to determine the best hospital services to meet community needs. Dignity Health also provided extensive community grants and community investment programs.
Vice Chair Golden clarified Catholic Healthcare West no longer existed. Dignity Health had changed their governing structure and was no longer a ministry or connected to the Catholic Church. Some hospitals within Dignity Health were Catholic and some secular. Chair Gentry further explained a board that had no connection with the Catholic Church governed Dignity Health. The twenty-five Catholic hospitals with Dignity Healthcare followed the ethical and religious directives of the Catholic Church. The remaining secular hospitals were contractually bound to a Statement of Common Values that originated from the traditions and values of Catholic Healthcare West and would not change in the future.
With the merger, ACH would retain its name, staff, salary, and benefit levels. Community and employed physicians would keep their admitting privileges, credentials, and the medical staff governance would remain the same. Dignity Health would assume ACH’s $15,000,000 pension liabilities and the $10,000,000 loan on the surgical and diagnostic center. An affiliation with Dignity Health would provide ACH significant reductions in costs for supplies and capital for facilities and other needs. Dignity Health would deploy organizational resources to assist back office functions and create a community board devoted to ACH to ensure patient safety, fiduciary responsibility, and compliance. The board would participate in developing operating budgets, strategic and capital growth service plans and consist of nominated local citizens approved by the Dignity Corporate Board.
Dr. Diehl addressed public misconception regarding women’s reproductive rights and death with dignity. Facts regarding women’s reproductive rights included ACH had not performed any elective abortions in over 7 years and no abortions in the past five years. The two procedures performed were to preserve, the health and well-being of the mother, procedures not prohibited by a Dignity Health affiliation or under the Statement of Common Values. Elective abortions were no longer hospital procedures and occurred in outpatient clinics and physician offices. ACH currently did not have any physicians who performed elective terminations of pregnancy. There were no stipulations prohibiting employed physicians from having any conversation regarding women’s reproductive rights. Nor were there prohibitions of any kind regarding contraception or elective sterilization done in the hospital. Additionally, contraception was not an issue with the hospital. Employed physicians could provide elective abortion services on their own time. The Statement of Common Values prohibited in vitro fertilization. This was a procedure beyond ACH’s scope of services and subsequently never performed at ACH.
Regarding the death with dignity legislation, this was a function the hospital had not performed in the past nor would in the future. This was a procedure between a patient and their physician. The Statement of Common Values prohibited an employed physician from writing the prescriptions, but strongly encouraged end of life discussions with patients. There were no requirement to provide life sustaining treatment against a patient’s or their family’s wishes. Employed and non-employed physicians could have discussions with patient’s regarding aid in dying, fill out the necessary paperwork, required declarations, and refer the patient to a physician who could write the prescriptions. Additionally, an employed physician could provide aid in dying for patients and write the prescriptions needed on their own time. Oregon was the only state in the union that allowed death with dignity procedures. Dignity Health would not impede ACH’s ability to direct patients to the appropriate physicians for pregnancy termination or aid in dying services. The affiliation agreement with Dignity Health codified these views in non-ambiguous terms.
Dr. Soriano spoke on behalf of ACH physicians and explained how important the hospital was to them and the excellent care provided.
The physicians were involved with the merger process, provided input, and understood the need to affiliate. Dr. Soriano spoke to doctors possibly affected by the Statement of Common Values. They supported the affiliation knowing they could continue their work unhindered. The physicians reached out to doctors and nurses that worked for Dignity Health hospitals and received positive responses. The medical staff thought Dignity Health was a financially sound organization with a wide array of services and facilities. The affiliation would provide information technology assistance, interface with hospital and offices for lab work, better monitoring in obstetrics and allow ACH to retain its unique birth center. Dignity Health supported ongoing education for physicians and nurses and advancement of staff. Patients would experience an expansion of services, continued charity care programs, and emergency care.
Vice Chair Golden explained the ACH Foundation unanimously voted to support the affiliation and were still in discussions on retaining assets. The ACH Foundation had a net value in assets slightly under $5,000,000 that included mortgages. They would also remain a separate 501c3 entity with a local board to support the hospital and connect with the community. The ACH Foundation and Dignity Health were working on a separate agreement.
Without the merger, ACH had roughly $2,000,000-$3,000,000 in cash. If the rate of loss continued, ACH had 4-6 months of operating cash possibly longer if they cut services.
The agreement treated reproductive rights and death with dignity as contractual obligations. Bill Nash, attorney for ACH explained the contract was enforceable by law. The City would be a part of that agreement and have enforceable rights, as would ACH and Dignity Health. The City would also hold the lease agreement with Dignity Health. Mr. Kanner added language in the lease agreement specifically stated the failure of Dignity Health to honor the promise made in the terms sheet would be a breach of the lease agreement. Mr. Nash further explained physicians might have separate agreements with Dignity Health or abide by the same policies Dignity Health had with their physicians. The agreement codified reproductive rights and death with dignity and was enforceable. Assistant City Attorney Doug McGeary clarified the enforcement aspect in the agreement that would allow the City to remedy whatever went wrong. There was a variety of remedies and it was not necessary to put them in the contract.
Chair Gentry explained Dignity Health did a detailed Performa and budget operating plan to determine whether they could make ACH financially viable. ACH would experience immediate savings on supplies, economies of scale, and the capital infusion to grow the hospital without tapping into a dwindling cash flow. There would most likely be initial losses but it would quickly turn into a positive cash flow. Dignity Health would not enter into an agreement as a subsidy.
ACH used temporary services and savings would not come from staff reduction. The affiliation agreement included staff retention, and competitive wage scales. ACH could not afford to lose their staff.
Chair Gentry clarified the community board would have fiduciary and advisory responsibilities. Dignity Health would delegate patient safety, quality, staff relationships, medical staff by-laws, and their credentialing decisions to the local community board and have the board participate in developing operating, budget, and strategic plans. The Dignity Health Board and their corporate leadership had ultimate control and the local community board would have less control than what the current ACH Board experienced. Mr. Kanner added Dignity Health was amenable in allowing the Council to have a Councilor as an ex-officio member on the local community board.
Dignity Health acquired St. Mary’s Hospital in Reno, Nevada. Due to the economy, the hospital was not financially sustainable and Dignity Health sold the hospital. The City owned the land, buildings, and fixed equipment and Dignity Health would need the City’s permission in order to sell. If ACH failed, Dignity Health would go to the City to renegotiate the lease.
Mr. Kanner explained the existing lease had 14 years remaining and Dignity Health was committing to certain commitments for the first five years. Additionally, the significant capital investments they wanted to make would take longer than five years to see a return of investment.
Chair Gentry added that St. Mary’s was located in a distressed area of Reno and when it became apparent they were unable to make it financially solvent, the options were sell or shut it down. It took two years to find a non-secular buyer.
Mr. Kanner clarified Dignity Health could not transfer the lease without City approval. There was nothing in the lease agreement that would prohibit Dignity Health from selling an interest in Dignity Health as a corporation who would then become the lessee.
Dr. Soriano confirmed staff physicians could prescribe any type of contraception including the morning after pill. Dr. Diehl explained the ACH Foundation funded the Emergency Department renovation and contributed to funding remaining projects along with community donations.
Council would forward further questions to Mr. Kanner. City Attorney Dave Lohman would advise Council if they could recommend changes to the lease agreement during deliberations.
Councilor Voisin requested adding the citizen’s resolutions to the next agenda. Mr. Kanner responded they could include that item as long as it met the noon deadline the Wednesday prior to the meeting and required less than two hours of staff time.
CONSENT AGENDA
1. Approval of Commission, Committee, and Board Minutes
2. A resolution relating to procedures for the appointment of persons to various city boards, commissions, and committees and repealing Resolution #1989-29
3. Approval of a direct commission to Sue Springer to create and install public art on the Plaza as part of the Plaza Improvement Project
Councilor Silbiger pulled Consent Agenda item #2 for discussion.
Councilor Slattery/Morris m/s to approve Consent Agenda items #1 and #3. Voice Vote: all AYES.
Councilor Silbiger explained Section 7 of the proposed resolution was not consistent with AMC 2.11.015 regarding Audit Committee appointments.
Councilor Silbiger/Chapman m/s to approve Resolution #2012-30 as amended to reflect Section 7 and AMC 2.11.015. Voice Vote: all AYES. Motion passed.
PUBLIC HEARINGS - None
PUBLIC FORUM – None
UNFINISHED BUSINESS – None
NEW AND MISCELLANEOUS BUSINESS
1. Adjustments necessary for the biennial budget process for Fiscal Years 2013-2014 and 2014 – 2015 and resolution appointing the budget officer
Administrative Services/Finance Director Lee Tuneberg explained the move to a biennial budget required Council to adjust the terms for Budget Committee members.
Councilor Silbiger/Morris m/s to approve the new term expiration dates for Budget Committee positions #1 through #7 as submitted in this document, confirming the State required 4-year term
rolling expiration process. Voice Vote: all AYES. Motion passed.
Councilor Voisin/Silbiger m/s to approve Resolution #2012-31. Voice Vote: all AYES. Motion passed.
2. Council consideration of a grant application for a resource center for the homeless in Ashland
City Administrator Dave Kanner explained Council needed to determine a process for reviewing and approving applications. Some suggestions for the applications included adding non-discrimination language, and specifying that the City would only pay lease costs for two years. The grant recipient would cover all remaining costs and provide a plan on sustaining the operation beyond the initial two years. The grant recipient would also comply with the living wage code.
Any expenses incurred during the current fiscal year for the resource center would come out of the General Fund Contingency. The intention was allocating $100,000 of the City’s Reserve Fund and treating the start-up and lease costs as a one-time capital expenditure. All funding decisions would go through the Budget process.
Councilor Lemhouse/Slattery m/s to direct staff to advertise the approved grant application for the provision of a homeless resource center in Ashland. DISCUSSION: Councilor Lemhouse clarified his intention was not to have the resource center strictly for homeless people but a resource center for everyone in need. Councilor Lemhouse withdrew the motion with Councilor Slattery’s consent.
Councilor Lemhouse/Slattery m/s to direct staff to advertise the grant application for the provision of a resource center in Ashland. DISCUSSION: Councilor Lemhouse thought it was important the community was able to provide the resources available for homeless people and those at the risk of being homeless in a quick and coordinated manner. The center should also include laundry and shower services and a limited food pantry since the Food Bank was close. Councilor Slattery agreed with Councilor Lemhouse and added a central resource center would not only help services currently happening but also generate more solutions to implement in the community.
Councilor Chapman supported helping the homeless and people at risk of being homeless. He was concerned the center would experience the same negative behavior from individuals that eventually caused the previous centers to close. He would not support an environment where people seeking assistance did not feel comfortable accessing the resource center.
Council Silbiger referred to his experience as a Community Works board member and how The Grove Program focused more on the at risk portion of the community than homeless issues. He supported having a center but finding one proposal that encompassed the list of services Council wanted would be difficult to attain. Councilor Morris supported the motion but agreed with Councilor Silbiger. He was disappointed the center would only be open 20 hours a week and wanted to know the guarantees of keeping the center open after the initial two years. Mr. Kanner explained the application stated twice the successful applicant would determine how to sustain the center for more than two years and was part of the selection criteria. No one could provide an absolute guarantee but Council would look at organizational stability, fund raising capacity, and Performa to make an appropriate choice. Councilor Slattery clarified the center would be open no less than 20 hours per week.
Councilor Voisin noted the DHS (Department of Human Services) office was open 40 hours a week and provided service for people at risk of being homeless. Having that service at the resource center was repetitive. Additionally, she wanted the RFP (request for proposal) require applicants discern and determine the needs of the community, and illustrate how they would meet those needs. Roll Call Vote: Councilor Voisin, Silbiger, Slattery, Lemhouse, and Morris, YES; Councilor Chapman, NO. Motion passed 5-1.
Councilor Voisin/Slattery m/s that the RFP (request for proposal) include a request that the applicant define the needs of the community and how they would meet those needs.
DISCUSSION: Councilor Slattery made a friendly amendment to remove “clearly” from “clearly define” in the motion with Councilor Voisin’s consent. Councilor Morris would not support the request in an RFP and thought it was odd the City would ask the applicant to define community needs. In addition, the request should be separate. Councilor Slattery thought a request for services was different from an RFP and saw no harm in asking the question. Mr. Kanner added the proposal did not include a problem statement and was not one of the four evaluation criteria. Councilor Slattery thought it was a qualitative request. Councilor Silbiger commented it was reasonable to ask applicants to justify what services they would provide. Council could use their answers in the evaluation. Roll Call Vote: Councilor Voisin, Silbiger, Slattery and Lemhouse; YES; Councilor Chapman and Morris, NO. Motion passed 4-2.
Councilor Lemhouse/Slattery m/s that in the Request for Grant Funding Proposals the line stating “referral to other services,” change to “referral to other services including but not limited to veteran services, senior services and educational services.” DISCUSSION: Councilor Lemhouse explained the motion would help the applicant justify what services they would not support. Councilor Slattery made a friendly amendment to add “including but not limited to…” with Councilor Lemhouse’s consent. Councilor Chapman noted the people working in veteran services informed him no one from the City had contacted them regarding these efforts.
Councilor Voisin explained a volunteer told her White City had considerable services for veterans and it was his job to inform veterans of those services. She thought having the City provide services for veterans was repetitive. Councilor Lemhouse clarified the resource center would provide people with contact information. Councilor Slattery further clarified this was referral to other social services, not a duplication of efforts. Roll Call Vote: Councilor Voisin, Chapman, Silbiger, Slattery, Lemhouse, and Morris, YES. Motion passed.
Councilor Voisin motioned to add to the RFP that the applicant address the issue of separating teens from adults and women from men within the operation of the day use center. Motion died for lack of a second.
Councilor Slattery/Silbiger m/s that the request for services address a safety plan for the individuals using the resource center. DISCUSSION: Councilor Slattery explained St. Vincent de Paul did not separate people but enforced a safety protocol. Councilor Silbiger thought the motion contained the specificity needed. Councilor Voisin thought the motion needed to be more specific regarding teens and adults. Roll Call Vote: Councilor Chapman, Silbiger, Slattery, Lemhouse, and Morris, YES; Councilor Voisin, NO. Motion passed 5-1.
ORDINANCES, RESOLUTIONS AND CONTRACTS
1 First reading of an ordinance titled, “An ordinance amending Ashland Municipal Code, Chapter 10.110 Fair Housing”
Housing Specialist Linda Reid explained the proposed ordinance would clarify protections for people with disabilities including reasonable accommodation regulations. It would also bring the City’s code into compliance with the protections and definitions contained in state and federal fair housing law and clarify the City’s role with regard to fair housing compliance.
The Housing Commission removed local level compliance because the City lacked the staff and expertise for fair housing compliance. The previous ordinance had the City conducting the investigation, mediating between the parties, and if in the event it was not resolved, bringing the matter to the Municipal Court where it fell to the City to provide the evidence to prosecute. Staff did not have the capacity to put together the package for Municipal Court. The Bureau of Labor and Industries (BOLI), the Department of Housing and Urban Development (HUD), and the Fair Housing Council had more experience and specialized in fair housing issues. If a case was ambiguous, staff could forward it to BOLI, HUD, or the Fair Housing Council of Oregon. BOLI would then prosecute through the state and federal government with HUD. Additionally, a Fair Housing Compliance person would be in the region within the next six months.
College students were not included as a protective class because SOU (Southern Oregon University) Student Senate had not yet approved a representative to be part of the Housing Commission.
City Recorder Barbara Christensen noted the following corrections to the ordinance: Section 10.110.040 Exceptions (C) indicated AMC 10.011.020 when it should be 10.011.030 for Sections (C), (D), and (E).
Councilor Voisin/Slattery m/s to approve First Reading of the Ordinance and place on the agenda for Second Reading as amended. Roll Call Vote: Councilor Silbiger, Voisin, Slattery, Lemhouse and Morris, YES; Councilor Chapman, NO. Motion passed 5-1.
2. First reading of an ordinance titled, “An ordinance amending Chapter 2.13 of the Ashland Municipal Code, reducing the number of established members on the Transportation Commission ”
Councilor Lemhouse/Morris m/s to approve First Reading of the Ordinance and place on the agenda for Second Reading. DISCUSSION: Councilor Chapman explained Colin Swales was concerned the Commission would lose diversity by reducing member numbers. Roll Call Vote: Councilor Lemhouse, Morris, Chapman, Silbiger, Voisin, and Slattery, YES. Motion passed.
OTHER BUSINESS FROM COUNCIL MEMBERS/REPORTS FROM COUNCIL LIAISONS -None
ADJOURNMENT
Meeting adjourned at 10:28 p.m.
__________________________________ _______________________________
Barbara Christensen, City Recorder John Stromberg, Mayor