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HomeMy WebLinkAboutResolutions - 2006.12.14 - 28116REPORT (misc. 106255) December 14, 2006 BY: Finance Committee, Chuck Moss, Chairperson IN RE: GOLDEN OAKS MEDICAL CARE FACILITY — MANAGEMENT AGREEMENT CD To: The Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: The Finance Committee, having reviewed the above-referenced resolution on December 7, 2006, reports with the recommendation that the resolution be amended as follows to insert the following language as the second BE IT FURTHER RESOLVED paragraph: BE IT FURTHER RESOLVED that Ciena HealthCare Management, Inc. shall provide bi-annual reports to the Board of Commissioners' General Government Committee on staffing levels, occupancy, number of new admissions, inspection reports, facility upgrades, and corrective measures undertaken to address any identified operational or facility deficiencies. Chairperson, on behalf of the Finance Committee, I move acceptance of the foregoing report. FINANCE COMMITTEE n ct,u,( Motion carried on a roll call vote: Ayes: Woodward, Melton, Jamian, Long, Coulter, Zack, Moss Nays: Palmer, Crawford, Wilson December 14, 2006 REPORT MR # 06255 BY: Personnel Committee, Gregory C. Jamian, Chairperson RE: County Executive Administration — Golden Oaks Medical Care Facility — Management Agreement TO: Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: The Personnel Committee having reviewed the above referenced Resolution on December 6, 2006 Reports with the recommendation the resolution be adopted. Chairperson, on behalf of the Personnel Committee, I move the acceptance of the foregoing report. PERSONNEL COMMITTEE Personnel Committee Vote: Motion carried on a roll call vote: Jam ian, Moss, Scott, Jacobsen — yes Hatchett and Nash - no Middleton, Coleman, Rogers, and Suarez - absent MISCELLANEOUS RESOLUTION # 06255 December 14, 2006 BY: General Government Committee, Christine Long, Chairperson IN RE: COUNTY EXECUTIVE ADMINISTRATION - GOLDEN OAKS MEDICAL CARE FACILITY — MANAGEMENT AGREEMENT To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the Golden Oaks Medical Care Facility (MCF) has experienced significant operating losses exceeding $3.6 million from FY 2003 through FY 2006; and WHEREAS the Fiscal Services Division is projecting additional operating losses exceeding $12.5 million during the period from FY 2007 through FY 2010; and WHEREAS Facilities Management estimates critical facility upgrades necessary for the long term continuance of MCF operations will require investments of between $4.9 million and $16.9 million; and WHEREAS Michigan's short and mid-term economic outlook continues to be negative with job losses and declining business activity making it desirable and necessary for Oakland County government to continue exploring alternative methods of providing services in more cost effective and efficient manners; and WHEREAS the MCF's ongoing financial losses, increasing competition from private sector providers utilizing modern facilities, adverse changes in Medicaid reimbursement formulas for public providers and the impact of regulatory penalties resulting from disappointing inspection outcomes makes utilization of alternative MCF service delivery models prudent; and WHEREAS the MCF's occupancy rate has fallen from 112 in 2002 to 88 currently (73% of capacity); and WHEREAS the County Executive directed staff to explore methods of providing MCF services that are: fair to current residents, fiscally responsible to county taxpayers, meet or exceed present levels of quality of care, maintain an acceptable mix of Medicare, Medicaid and Private Pay beds for county residents, and provide employment options for current staff; and WHEREAS to that end, over 80 organizations were invited to participate in an RFP process, with six providers attending a mandatory pre-bid meeting in April. 2006, which resulted in three RFP responses being submitted by June 9, 2006; and WHEREAS an evaluation committee reviewed the responses, conducted site visits, ranked the respondents and has recommended that a public/private partnership agreement be entered into with Ciena Healthcare Management Inc., an experienced Oakland County-based health care provider operating some 2597 beds in 27 facilities in the State of Michigan; and WHEREAS Ciena's proposal obligates Ciena to immediately assume all aspects of the operation and management of the MCF, to be fully responsible for day-to-day operations, compliance with state and federal statutory and regulatory codes, cost reports, contracts, insurances, periodic building maintenance, legal services, employment, recruitment, selection, training, and retention of all staff and any and all other aspects of facility supervision, management and operation for a term of up to three years; and WHEREAS upon commencement of the Management Agreement Ciena commits that it will afford current MCF employees the first opportunity for continued employment at the MCF; and WHEREAS Ciena's proposal further obligates Ciena, during the three-year term of the Agreement, to seek land in the Pontiac area and obtain a Certificate of Need (CON) to replace the Golden Oaks facility with a newly constructed/remodeled facility, with the County committing to cooperate in Ciena's efforts to obtain a CON for the replacement facility; and WHEREAS the proposal requires that, upon completion of a new facility, the licensed beds and Certificate of Need of Golden Oaks will be transferred to Ciena and the new facility for no additional consideration and provides that all residents of Golden Oaks be afforded the opportunity to transfer to the new facility; and WHEREAS Ciena's proposal commits Ciena to maintaining/providing 120 fully certified/licensed Medicaid/Medicare beds in Oakland County, and WHEREAS Ciena's proposal provides that if for any reason Ciena is unable to secure land in the Pontiac area or if a CON cannot be obtained for the replacement facility, that Ciena will continue to operate the MCF and will execute a lease agreement with the County leasing the MCF at a fair market GENERAL GOVERNMENT COMMITTEE VOTE: AYES: Wilson, Crawford, KowaII, Molnar, Jacobsen, Long (6) NAYS: Hatchett, Gregory, Coulter, Melton (4) Motion carried on a roll call vote. rent; and WHEREAS the County's obligation during the term of the Management Agreement is to pay an annual fee of $500,000 to Ciena. to assist Ciena in obtaining a Certificate of Need for the new/replacement facility and to allow Ciena to use the existing facility; and WHEREAS the County Executive believes the Ciena proposal is most advantageous to Oakland County, its taxpayers and the residents of the MCF as it provides for management and operation by an experienced provider possessing substantial resources, provides MCF residents with a substantial time period to evaluate the new operators and service providers before deciding if they want to stay with the new organization or transfer elsewhere, does not require any physical transfer of patients for up to 36 months, fixes Oakland County's risk of loss to $500,000 annually, provides existing employees with the opportunity to continue employment with Ciena or an affiliated employment entity and it allows private sector expertise and innovation to assist in the upgrading and improvement of MCF operations while expanding the income tax and ultimately personal property and real property tax base within the County and likely the City of Pontiac. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners authorizes the County Executive to negotiate and execute a final Management Agreement with Ciena HealthCare Management, Inc., and its affiliates that accomplishes all of the following: 1. Transfers operation and control of the MCF to Ciena effective on a mutually agreed date set forth in the Agreement to continue for a period of up to three years. 2. Requires Ciena, in exchange for a payment of $500,000 annually over the three-year term, to fully assume and be responsible for any losses or profits of the facility, as well as any and all other liabilities of operations. 3. Requires Ciena to be fully responsible for day-to-day operations, compliance with state and federal statutory and regulatory codes, cost reports, contracts, insurances, periodic building maintenance, legal services, employment, recruitment, selection, training, and retention of all staff and any and all other aspects of facility supervision, management and operation. 4. Requires Ciena to provide existing employees with the opportunity to continue employment with Ciena or an affiliated employment entity. 5. Requires Ciena, during the term of the Agreement, to seek land in the Pontiac area and obtain a certificate of need (CON) to replace the Golden Oaks facility with a newly constructed/remodeled facility. The County will cooperate in Ciena's efforts to obtain a CON for the replacement facility. 6. Provides that upon completion of a new facility, the licensed beds and Certificate of Need of Golden Oaks will be transferred from the County to Ciena and the new facility for no additional consideration. 7. Provides all residents of Golden Oaks the opportunity to transfer to the new facility. 8. Commits Ciena to maintaining/providing 120 fully certified/licensed Medicaid/Medicare beds in Oakland County. 9. Provides that, if for any reason Ciena is unable to secure land in the Pontiac area, or if a CON cannot be obtained for the replacement facility, that Ciena will continue to operate the MCF and execute a lease agreement with the County leasing the MCF at a fair market rent. BE IT FURTHER RESOLVED the Department of Human Resources is directed to take all steps, consistent with Merit System Rules and any applicable collective bargaining agreements, that are necessary or desirable to transfer, separate, assist, or place MCF or other county employees whose services are no longer required as a result of creation of the County-Ciena partnership; and BE IT FURTHER RESOLVED that pursuant to Board of Commissioner Rule IX, Section E, this resolution be directly referred to the Personnel and Finance Committees. Chairperson, on behalf of the General Government Committee, I move adoption of the foregoing resolution. GENERAL GOVERNMENT COMMITTEE FISCAL NOTE (MISC. #06255) December 14, 2006 BY: FINANCE COMMITTEE, CHUCK MOSS, CHAIRPERSON IN RE: GOLDEN OAKS MEDICAL CARE FACILITY - MANAGEMENT AGREEMENT TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: Pursuant to Rule XII-C of this Board, the Finance Committee has reviewed the above referenced resolution and finds: 1. Due to a changing business environment, the Golden Oaks Medical Care Facility (MCF) experienced losses of $3.6 million from FY 2003 through FY 2006; and is projected to lose an additional $12.5 million through FY 2011. 2. The County Executive directed staff to explore methods of providing MCF services that was fair and maintained services now provided to current residents, fiscally responsible for county taxpayers, meets and/or exceeds present levels of quality of care, maintains an acceptable mix of Medicare, Medicaid and Private Pay beds for county residents, and provides employment options for current staff. 3. A Request for Proposal (REP) was released in the spring of 2006 soliciting vendors to propose alternative arrangements which met the County Executive's goals. Of the 8C organizations contacted, six attended a pre-bidder's conference and three (3) submitted proposals. 4. An evaluation committee reviewed the proposals and conducted site visits and recommended a public/private partnership agreement with Ciena Healthcare Management, Inc. The County Executive supports this recommendation. 5. The Management Agreement provides for Ciena to immediately assume all aspects of the operation and management of the MCF (including all compliance, regulatory, personnel, and building maintenance), and to obtain a Certificate of Need (CON) for a newly constructed / renovated facility within the City of Pontiac. 6. The County's obligation under the Management Agreement is to pay an annual fee of $500,000 to Ciena, and to assist Ciena in obtaining the CON. 7. The FY 2007 and FY 2008 Budget includes a $2,812,587 transfer from the General Fund to support MCF operations. In addition, MCF pays $704,082 in indirect cost to the General Fund; therefore the current net budgeted obligation of the General Fund for MCF operations is $2,108,505 for FY 2007 and FY 2008. 8. Approval of the Management Agreement would reduce the General Fund obligation by $1,608,505. 9. Due to the uncertainty of when the Management Agreement will be implemented, as well as uncertainty as to whether and what degree transition funds are needed (including transfers to eliminate any MCF fund deficit), no budget amendment is recommended at this time. 10. Once the uncertinties listed above are eliminated, a budget amendment will be recommended as part of the Quarterly Financial Forecast process. FINANCE COMMITTEE Cfit FINANCE COMMITTEE Motion carried on a roll call vote with Coulter, Zack, Woodward and Melton voting no and Rogers absent. Resolution #06255 December 14, 2006 Moved by Long supported by Crawford the resolution (with fiscal note attached) be adopted. Moved by Long supported by Crawford the Finance Committee and Personnel Committee Reports be accepted. A sufficient majority having voted in favor, the reports were accepted. Moved by Long supported by Crawford the resolution be amended to coincide with the recommendation in the Finance Committee Report. A sufficient majority having voted in favor, the amendment carried. Moved by Zack supported by Coulter the resolution be amended as follows: Strike the wording "and execute" from the NOW THEREFORE BE IT RESOLVED paragraph. Add the following in the NOW THEREFORE BE IT RESOLVED paragraph: 6. Ciena HealthCare Management, Inc., shall obtain of resolution in support of the Certificate of Need Application from the Oakland County Board of Commissioners, prior to submitting the application to the Michigan Certificate of Need Commission of the Michigan Department of Community Health. 9. Commits Ciena to maintaining/providing 120 fully certified/licensed Medicaid/Medicare beds in Oakland County over and above any beds that Ciena may provide in other facilities throughout Oakland County. 10. Provides that, if for any reason Ciena is unable to secure land in the Pontiac area, or if a CON cannot be obtained for the replacement facility, that Ciena will continue to operate the MCF and execute a lease agreement with the County leasing the MCF at a fair market rent, any such lease agreement shall come back to the Board of Commissioners for final approval through the Board of Commissioners' committee process. 11. Ciena HealthCare Management, Inc. shall provide quarterly reports to the Board of Commissioners' (through the committee process) on the staffing levels; occupancy; number of new admissions; inspection reports; facility upgrades; and corrective measures undertaken to address any identified operational or facility deficiencies. Add two BE IT FURTHER RESOLVED paragraphs as follows: BE IT FURTHER RESOLVED that the Department of Human Resources is to provide a quarterly report to the Personnel Committee on the status of all full-time and part-time county employees currently assigned to the Medical Care Facility. BE IT FURTHER RESOLVED that once the Management Agreement with Ciena HealthCare Management, Inc., is negotiated, it shall come back to the Board of Commissioners for final approval through the Board of Commissioners' committee process. Ruth .1c - -1SOn, County Clerk Discussion followed. Vote on Zack's amendment: AYES: Gregory, Hatchett, Melton, Nash, Suarez, Zack, Coulter, Gershenson. (8) NAYS: Jacobsen, Jamian, KowaII, Long, Middleton, Molnar, Moss, Palmer, Potter, Rogers, Scott, Wilson, Bullard, Crawford, Douglas. (15) A sufficient majority not having voted in favor, the amendment failed. Discussion followed. Vote on resolution, as amended: AYES: Jacobsen, KowaII, Long, Middleton, Molnar, Moss, Palmer, Potter, Rogers, Scott, Wilson, Bullard, Crawford, Douglas. (14) NAYS: Hatchett, Jamian, Melton, Nash, Suarez, Zack, Coulter, Gershenson, Gregory. (9) A sufficient majority having voted in favor, the resolution (with fiscal note attached), as amended, was adopted. p.m I NW MOVE THE FORME RESOUITION STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Ruth Johnson, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on December 14, 2006, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 14th day of December, 2006.