BILL ANALYSIS �
AB 276
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 276 (Alejo)
As Amended August 22, 2012
Majority vote
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|ASSEMBLY: | |(June 1, 2011) |SENATE: |31-0 |(August 28, |
| | | | | |2012) |
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(vote not relevant)
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|COMMITTEE VOTE: |6-0 |(August 30, 2012) |RECOMMENDATION: |concur |
|(L. GOV.) | | | | |
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Original Committee Reference: L. GOV.
SUMMARY : Authorizes the Monterey County Board of Supervisors
(Board of Supervisors) to establish the Central Coast Hospital
Authority (CCHA) as specified, and prohibits the Board of
Supervisors from establishing the CCHA until an agreement to
affiliate or consolidate the Natividad Medical Center (NMC) with at
least one other health care facility is reached.
The Senate amendments delete the Assembly version of this bill, and
instead:
1)Authorize the Board of Supervisors to establish the CCHA as a
public entity separate from the Monterey County (County) and any
other public entity, subject to specific requirements.
2)Require the CCHA to provide management, administration, and other
controls to continue to operate as a designated public hospital
and provide health care to maintain the viability of the health
care safety net in the County.
3)Prohibit the Board of Supervisors from establishing the CCHA
until an agreement is reached with the governing board of at
least one other health facility on terms and conditions
satisfactory to both parties to affiliate or consolidate the
facilities.
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4)Require the terms and conditions of the agreement to be binding
upon the CCHA and require the Board of Supervisors, after an
agreement is reached, to adopt an ordinance to establish the CCHA
that authorizes the CCHA to exercise its powers and duties, as
specified.
5)Permit the governing board or the Board of Supervisors and the
CCHA with mutual consent to amend the agreement as appropriate.
6)Permit the agreement to include, but not be limited to, the
transfer of the following:
a) Real estate and personal property, and assets and
liabilities from the County and the other health care facility
to the CCHA;
b) Employees from the County and the other health facility to
the CCHA;
c) Maintenance, operation, and management or ownership of the
medical center, pursuant to provisions of existing law, or of
the other health care facility; and,
d) Other matters the Board of Supervisors and the governing
board deem necessary and appropriate.
7)Require the agreement to include provisions addressing the
following:
a) Require the CCHA to take title to all assets associated
with the medical center, including, but not limited to all
real and personal property, funded pension assets, and
accounts receivable;
b) Require the CCHA to either assume or immediately
extinguish, defease, or satisfy, all obligations and
liabilities directly or indirectly associated with the medical
center, including, but not limited to related or associated
debt, accounts payable, accrued liabilities, unfunded pension
liabilities, or financial or contractual obligations of any
kind;
c) Require the CCHA to take any other actions necessary so
that the County has no continuing financial obligation or
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responsibility over the CCHA or its operations;
d) Require any contract between the Public Employees
Retirement System (PERS) and the CCHA to be separate from the
County; and,
e) Prohibit the County from being in custody or control of
CCHA funds and prohibits the CCHA from depositing funds with
the County.
8)Require the agreement to include a transition plan for personnel
that includes the following:
a) Ongoing communication to employees and recognized employee
organizations regarding the impact of the transition on
existing medical center and other health care facility
employees and employee classifications;
b) Meeting and conferring by the County and the other health
care facility with affected employee bargaining units on the
following:
i) A timeframe for which the transfer of personnel occurs;
and,
ii) A specified period of time during which employees of
the County affected by the establishment of the CCHA may
elect to be considered for appointment to vacant positions
and exercise reinstatement rights for which they are
qualified and eligible.
c) Acknowledgment that the CCHA is bound by the terms of the
memoranda of understanding (MoU), to the extent permitted by
state and federal law, executed between the County and its
exclusive employee representatives that are in effect as of
the date the County adopts the ordinance that establishes the
CCHA. Specifies that a subsequent MoU is subject to approval
only by the CCHA.
9)Provide rights and benefits for NMC employees upon transfer to
the CCHA, as follows:
a) To retain the existing or equivalent classification,
seniority status, job descriptions, salaries, and benefits,
including but not limited to accrued and unused vacation, sick
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leave, personal leave, health and pension benefits, retiree
health benefits, and deferred compensation plans; and,
b) To recognize the exclusive representative of the employees
bargaining unit.
10)Require the CCHA for 24 months after the term end date of any
medical center MoU in existence when the County establishes the
CCHA to continue to:
a) Recognize each exclusive representative of each bargaining
unit;
b) Provide at least the same level of employee benefits to
CCHA employees who were medical center employees; and,
c) Be bound by any existing medical center MoU including the
level of wages and benefits, unless modified by mutual
agreement with each of the exclusive representatives, and
specifies any conflicts in the existing agreement as to wages
and other terms and conditions of employment to be resolved
only by mutual agreement between the CCHA and each of the
exclusive representatives.
11)Authorize the CCHA to determine the number of employees, the
number of full-time equivalent positions, job descriptions, the
nature and extent of classified employment positions and salaries
of employees, except as provided in the transfer agreement
described in 8) and 26).
12)Specify that an agreement for the maintenance, operation and
management or ownership of NMC, whether accompanied by a change
in licensing, shall not relieve the County of the ultimate
responsibility for indigent care pursuant to provisions of
existing law.
13)Exempt the CCHA from the jurisdiction of a local agency
formation commission, pursuant to the Cortese-Knox-Hertzberg
Local Government Reorganization Act of 2000.
14)Require the CCHA to contract with PERS, to the extent permitted
by federal law, to provide membership for CCHA employees.
15)Prohibit the CCHA from participating in PERS if the PERS Board
determines that their participation could jeopardize the PERS tax
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qualified or governmental plan status under federal law.
16)Require the CCHA be governed by a board of trustees who must
reflect the expertise necessary to maximize the quality and scope
of care at the CCHA in a fiscally responsible manner and to
reflect the communities of interest that they serve.
17)Specify that the membership of the board of trustees is nine
members, appointed as follows:
a) By the Board of Supervisors, one trustee for a two-year
term, two trustees for a three-year term, two trustees for a
four-year term; and,
b) By the governing board, two trustees for a two-year term,
one trustee for a three-year term, and one trustee for a
four-year term.
18)Require the governing board and the Board of Supervisors to
continue appointments to the trustee positions for which they
made initial appointments, including to fill a vacancy.
19)Permit the Board of Supervisors and the governing board to
remove their respective appointee for cause, with a majority
vote.
20)Permit the Board of Supervisors and the governing board to
modify the number and length of terms, either during or after the
formation of the CCHA, if the following conditions are met:
a) The board of trustees consists of at least five members;
and,
b) The board of trustees includes appointees of the Board of
Supervisors and the governing board.
21)Requires the board of trustees to adopt bylaws with a majority
vote for the CCHA that specify the officers of the board of
trustees, time place and conduct of meetings, and other matters
deemed necessary and appropriate to conduct the CCHA's
activities.
22)Provide the CCHA with the following powers:
a) To incur indebtedness and to borrow money and issue
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tax-free bonds, including revenue bonds, (if pursuant to state
law any indebtedness, notes, bonds, or other securities
require voter approval than the approval of the Board of
Supervisors is required);
b) To request that the Board of Supervisors levy a tax on
behalf of the CCHA, with the approval of the Board of
Supervisors to place the measure on the ballot and subject to
voter approval;
c) To have the duties and rights of a local unit of
government;
d) To have perpetual existence;
e) To sue and be sued;
f) To purchase, lease, hold or sell real and personal property
of any kind necessary;
g) To appoint and employ a chief executive officer and other
employees as necessary and to establish compensation,
retirement, and other benefits for those employees;
h) To provide sufficient funds for achieving its purposes;
i) To pursue its own credit rating;
j) To engage in contracts or agreements;
aa) To establish policies relating to its purpose;
bb) To contract for and to accept grants, gifts, loans of
funds, property, or any other aid from the federal government,
state, state agency, or other source;
cc) To invest surplus money in its own treasury, manage
investments, and engage third-party investment managers;
dd) To establish nonprofit, for profit, or other entities
necessary to carry out its duties;
ee) To enter into joint powers agreements;
ff) To contract with the County for the provision of indigent
care services; and,
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gg) To engage in other activities that may be in the best
interests of the CCHA in order to respond to changes in the
health care industry, as determined by the board of trustees.
23)Specify that the CCHA must:
a) Be a government entity separate from the county and any
other public agency that is not governed by or subject to the
policies or operational rules of the county or any other
public entity;
b) Be subject to state and federal taxation laws that are
applicable to public entities, except to apply from exemption
from social security taxation with an agreement with the
exclusive representatives of the affected employees, pursuant
to federal law;
c) Comply with the Meyers-Milias-Brown Act, the Public Records
Act, the Ralph M. Brown Act, and other existing laws that
apply to public agencies and laws relating to peer review;
d) Carry professional and general liability insurance or
programs to the extent sufficient to cover its activities;
e) Comply with current law regarding the settlement of
terminated employment contracts;
f) Meet all local, state, and federal data reporting
requirements; and,
g) Be subject to the jurisdiction of the Public Employment
Relations Board.
24)Prohibit the liabilities or obligations of the CCHA from
becoming the County's responsibility.
25)Prohibit the transfer of NMC from the County to the CCHA from
affecting the eligibility of the County to authorize the CCHA to
participate in the financing of and receipt of funds that would
otherwise be available to a county provider or designated public
hospital, as specified.
26)Grant the board of trustees of the CCHA the authority over
procurement and contracts and to adopt written, rules,
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regulations, and procedures regarding contacts.
27)Prohibit the CCHA from subcontracting work performed by
classifications represented by employee organizations, unless the
CCHA and exclusive representatives have reached a mutual
agreement.
28)Require the CCHA to be responsible for human resources functions
pursuant to written rules, regulations, and procedures adopted.
29)Prohibit a member of the CCHA's administrative staff from
engaging in activities inconsistent and incompatible with his or
her duties as a result of prior employment or affiliation with
the County or the governing board.
30)Establish the process for the board of trustees and Board of
Supervisors to terminate the CCHA.
31)Define the following terms:
a) "Governing board" to mean the governing body of any other
health care facility;
b) "Other health care facility" to mean one or more health
care facilities, districts, or systems in the County of
Monterey, including, but not limited to general acute care
hospitals, public hospital districts, and related health care
programs, facilities, care organizations, and delivery
systems, but does not include the medical center; and,
c) "Medical center" to mean the NMC and related public health
care programs, facilities, care organizations, and delivery
systems that exist or are established by the board of
trustees.
32)Make findings and declarations that a special statute is
necessary and that a general law cannot be made applicable
because of the particular needs of Monterey County.
EXISTING LAW :
1)Requires counties to relieve and support all incompetent, poor,
indigent persons, and those incapacitated by age, disease, or
accident, lawfully resident therein, when such persons are not
supported and relieved by their relatives or friends, by their
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own means, or by state hospitals or other state or private
institutions.
2)Defines a "designated public hospital" as one of a list of county
and UC hospitals, including NMC.
3)Establishes the Alameda County Hospital Authority as a separate
public entity, established by the Alameda County Board of
Supervisors, to manage the Alameda County Medical Center.
AS PASSED BY THE ASSEMBLY , this bill increased penalties for local
agencies, including specified joint powers agencies, that fail to
file their annual financial transaction reports with the California
State Controller's Office in a timely manner, and makes other
specified changes to local agency financial reporting requirements.
FISCAL EFFECT : None
COMMENTS : According to Monterey County, "NMC is a 172 bed acute
care hospital that is owned and operated by Monterey County. NMC
is a successful designated public safety net provider serving the
residents of Monterey County for over 126 years providing health
care access to all patients regardless of their ability to pay. As
a county hospital, it is currently a department within the County
and is thus subject to all the rules, regulation, policies and
oversight inherent in being within a county governmental
structure."
The Board of Supervisors has determined that in the era of health
care reform and the competitive nature of the health care
environment, and in order to continue providing people of the
County access to affordable, high-quality health care services, NMC
needs the ability to function with increased flexibility,
responsiveness and innovation. To accomplish this goal, the Board
of Supervisors wants NMC to be affiliated or consolidated with one
or more healthcare facilities in Monterey County and operated by a
separate and distinct Hospital Authority apart from the County.
This bill is permissive and allows the Board of Supervisors to
establish the CCHA if an agreement is reached with another health
care facility to merge or consolidate those facilities. This bill
contains several provisions to ensure that healthcare services
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remain accessible to patients regardless of their ability to pay
and that the CCHA as a separate entity from the County will still
continue to serve as a designated hospital. This bill also
provides requirements for the CCHA upon the transfer of NMC
employees. The California Nurses Association argues that this bill
"ensures that the employees have a seamless transition of wages,
benefits, and contracts without loss of rights or status." One may
argue that these protections are vital for both patients and NMC
employees as the bill establishes the board of trustees as the
governing board of the CCHA removing the immediate decision-making
out of the hands of the elected Board of Supervisors. Supporters
argue that the board of trustees will be appointed and skill-based
therefore having the authority to effectively and independently run
the CCHA.
According to the author, "This bill provides a viable solution to
maintain the hospital's mission of improving the health of the
people in Monterey County through access to affordable, high
quality health care services. This Authority will also allow the
region to become more competitive for federal dollars." This bill
is author-sponsored.
The Legislature has granted several counties the ability to create
health authorities including Alameda, San Luis Obispo, Santa
Barbara, and Sonoma (for dental).
AB 2374 (Bates), Chapter 816, Statues of 1996 authorized the
County of Alameda to establish a hospital authority to manage the
respective county hospitals and county programs currently known
as the Alameda County Medical Center.
SB 538 (O'Connell), Chapter 899, Statues of 1999 authorized San
Luis Obispo County to establish a health authority to administer
its hospital and family health centers.
This bill differs from past legislation to create hospital
authorities in several ways. First, previous health authorities
were established with existing county-run and operated hospitals
and programs. This bill allows the Board of Supervisors to
establish the CCHA, but only if an agreement is reached with the
Board of Supervisors and another health care facility to
consolidate or merge the facilities. The definition for "other
health care facility" includes facilities that are not county-run
or operated and does not give a clear indication what facility will
be consolidated to establish the CCHA, unlike past legislation.
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The second difference is that this bill authorizes the CCHA to
issue bonds and levy taxes, subject to voter approval. AB 2374
(Bates) initially provided the Alameda Hospital Authority with the
power to issue bonds without voter approval, but the provision was
removed in a later version of the enacting legislation.
This bill authorizes the CCHA to issue bonds and levy taxes. While
the Legislature has not yet granted this power to a hospital
authority, health care districts can levy taxes and issue general
obligation bonds subject to voter approval. Health care districts
like Salinas Valley Memorial Hospital (which is part of the Salinas
Valley Memorial Healthcare System) already have the ability to
utilize those financial mechanisms.
On July 26, 2012, the Salinas Valley Memorial Hospital board of
directors unanimously rejected a proposal to merge with NMC. A
local news station reported that Salinas Valley Memorial Hospital
voted to continue as a stand-alone public district hospital, but
are open to merging in the future. This bill prohibits the CCHA
from being established unless there is an agreement reached between
the Board of Supervisors and a governing board. Absent an
agreement in place to consolidate or merge, the Legislature may
wish to consider whether there is a need for this bill. The author
argues that NMC can continue to pursue a merger in the future and
that this bill will help ease concerns by granting the Board of
Supervisors the ability to establish the CCHA in statute.
Support arguments: Supporters argue that the formation of the CCHA
is the best long-term strategic and operational model for the
sustainability of NMC and its affiliation partners, and that the
CCHA will continue the safety net mission of NMC, including
providing services to low income residents and populations with
special needs.
Opposition arguments: With no agreement in place, a case could be
made that this legislation is unnecessary at this time.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
FN:
0005807
AB 276
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