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Item R10BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: November 17, 2010 (KL) Bulk Item: Yes No Division: County Attorney Department: County Attorney Staff Contact Person: Cynthia L. Hall x 3174 AGENDA ITEM WORDING: Approval of Memorandum of Understanding with Mariners Hospital, Inc., in order to facilitate Mariners' enrollment in federal 340B discount drug program. ITEM BACKGROUND: Mariners Hospital, Inc., a 501(c)(3) not for profit entity, wishes to apply for participation in the federal 340B discount drug program ("Program"). The Program requires drug manufacturers to sell medications at a deeply discounted price to certain hospitals, including those that provide reduced or no -cost health care to individuals who do not have health insurance and who do not qualify for Medicare or Medicaid. In order to apply, Mariners must provide a memorandum of understanding from its local government by no later than December 1, 2010, in order to apply for eligibility beginning in the first quarter of 2011. Mariners has requested that the County enter into the MOU for this purpose. PREVIOUS RELEVANT BOCC ACTION: None. CONTRACT/AGREEMENT CHANGES: Not applicable. STAFF RECOMMENDATIONS: Approval. TOTAL COST: $0 BUDGETED: Yes X No COST TO COUNTY: $0 SOURCE OF FUNDS: REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year APPROVED BY: County Atty OMB/Purchasing _ Risk Management — DOCUMENTATION: Included _ To Follow Not Required X DISPOSITION: AGENDA ITEM # MONROE COUNTY BOARD OF COUNTY COMMISSIONERS CONTRACT SUMMARY Contract with: Mariners Hospital, Inc. Contract # Effective Date: Nov. 17, 2010 Expiration Date: Contract Purpose/Description: Memorandum of Understanding, in order to allow Mariners to apply for eligibility in federal 340B discount drug program Contract Manager: Roman Gastesi County Administrator (Name) (Ext.) (Department/Stop #) for BOCC meeting on 11/17,/2010 Agenda Deadline: CONTRACT COSTS Total Dollar Value of Contract: $ 0 Current Year Portion: $ Budgeted? Yes❑ No ❑ Account Codes: - - - - Grant: $ 0 County Match: $ 0 Estimated Ongoing Costs: $0/yr (Not included in dollar value above) ADDITIONAL COSTS For: CONTRACT REVIEW Changes Date Out Date In Needed Division Director Yes❑ No❑ Risk Management Yes❑ No❑ O.M.B./Purchasing Yes❑ No❑ County Attorney R �� Yes❑ NoQ--' Comments: ll➢RT T_ _ -1- 1 -111 1\V Y 1.7G\l G/ G / / V 1 Zvi K- jpG MEMORANDUM OF UNDERSTANDING BETWEEN MONROE COUNTY, STATE OF FLORIDA AND MARINERS HOSPITAL THIS MEMORANDUM OF UNDERSTANDING is made this day of , 2010 by and between the undersigned representatives of MONROE COUNTY, FLORIDA ("COUNTY"), located at 1100 Simonton Street Key West, FL 33040, and MARINERS HOSPITAL, INC. ("HOSPITAL"), a non-profit corporation organized and existing under the laws of the State of Florida, located at 91500 Overseas Highway, Tavernier, Florida, 33070. RECITALS: WHEREAS, HOSPITAL is a Florida not -for -profit hospital certified by the Centers for Medicare and Medicaid Services and the Florida Office of Rural Health as a "Critical Access Hospital," as defined by Section 1820(c)(2) of the Social Security Act, and Hospital supports many programs that benefit the indigent, uninsured or underinsured population in the State of Florida; WHEREAS, HOSPITAL desires to participate in the drug discount program established under Section 340B of the Public Health Services Act, as amended (the "340B Program"); WHEREAS, in order to participate in the 340B Program, HOSPITAL must enter into an agreement with a unit of the state or local government pursuant to which HOSPITAL commits to provide health care services to low income individuals who are not entitled to Medicare or Medicaid benefits at no reimbursement or considerably less than full reimbursement from these patients; WHEREAS, HOSPITAL desires to make such a formal commitment to COUNTY; and WHEREAS, COUNTY agrees to accept such commitments on behalf of the citizens of COUNTY. NOW, THEREFORE, in consideration of the mutual agreements and covenants contained therein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it is mutually agreed and covenanted, under seal, by and between the parties to this Agreement, as follows: Mariners Hospital- Monroe County- 340B MOU— Page 2 Commitment of HOSPITAL to Provide Indigent Care. During the term of this MOU, HOSPITAL agrees to continue its historic commitment to the provision of health care to indigent, uninsured and underinsured residents of COUNTY. During the fiscal year of 2010, this commitment totaled more than Fifteen Million Dollars ($15,000,000.00) in foregone charges. Pursuant to this commitment, it is the intention of HOSPITAL that indigent care provided during the term of this MOU will range generally between Fifteen Million Dollars ($15,000,000.00) and Fifteen Million Five Hundred Thousand Dollars ($15,500,000.00) annually. In any event, HOSPITAL will assume that all patients will receive necessary care, as required by law, regardless of ability to pay. 2. Acceptance and Acknowledgements of COUNTY. (a) COUNTY accepts the commitment of HOSPITAL set forth above; (b) COUNTY hereby acknowledges that the healthcare services provided by HOSPITAL hereunder are in the public interest and are being provided to individuals who are not entitled to benefits under Title XVIII or eligible for assistance under any State plan pursuant to Title XIX of the Social Security Act; and (c) COUNTY acknowledges that HOSPITAL is providing these services at no reimbursement or considerably less than full reimbursement from the patients. 3. Representations of HOSPITAL. HOSPITAL represents that as of the date hereof: (a) HOSPITAL constitutes a corporation duly organized and validly existing in good standing under the laws of the State of Florida with the corporate power and authority to enter into and perform its obligations under this MOU; and (b) HOSPITAL is a tax-exempt corporation of under Section 501(c)(3) of the Internal. Revenue Code of the United States, as amended and under applicable laws of the State of Florida. 4. Term and Termination. The term of this MOU shall commence on the date first above written and shall continue until terminated by either party upon not less than sixty (60) days prior written notice to the other. 5. Notice. All notices required or permitted to be given under this MOU shall be deemed given when delivered by hand or sent by registered or certified mail, return receipt requested, addressed as follows: Mariners Hospital- Monroe County- 340B MOU— Page 3 MONROE COUNTY Attention: Roman Gastesi, County Manager Address: 1100 Simonton St. Key West, FL 33041-6193 MARINERS HOSPITAL: Attention: Maribeth Rouseff Assistant Vice President, Employee Health Services and Wellness Advantage 12420 SW 127th Avenue Miami, Florida 33186 With a copy to: David Friedman Corporate Vice President & General Counsel 6855 Red Road, Suite 600 Coral Gables, Florida 33134 6. Governing Law. This MOU shall be governed by and construed in accordance with the laws of the State of Florida (excepting any conflict of laws provisions which would serve to defeat application of Florida substantive law). IN WITNESS WHEREOF, HOSPITAL and COUNTY have executed this Memorandum of Understanding as of the day and year first written above by their duly authorized representatives. COUNTY: MONROE COUNTY By: Roman Gastesi, County Manager Approv as to form and legal sufficiency by: B Name: &W7-1k'A Title: h5515;r,4-n!T el HOSPITAL: MARINERS HOSPITAL, INC. By: Rick Freeburg, Chief Executive Officer MARINERS HOSPITAL, INC. Annual Financial Report for the Years Ended September 30, 2009 and 2008 MARINERS HOSPITAL. INC. NOTES TO FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30.2009 AND 2008 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - Mariners Hospital, Inc. (the "Hospital"), located in Monroe County, is a not -for -profit Florida corporation, which owns and operates a general acute care hospital with a licensed capacity of 42 beds. The Hospital was incorporated in 1979. Baptist Health South Florida, Inc. (`BHSF" or "Baptist Health"), a not -for -profit Florida corporation, is the parent of the Hospital and a system comprised of four other not -for -profit hospitals and other not -for -profit and for -profit corporations. The Hospital provides inpatient, outpatient and emergency care services through its acute care facilities. The Hospital owns and operates a medical office building, which is located adjacent to the Hospital on the Hospital's campus. The building is approximately 36,000 square feet and houses certain clinical outpatient functions of the Hospital, a wellness center and medical office space. The Hospital leases the medical office space to several physician practices for varying lease terms and amounts (see Note 9). Activities directly associated with the health care services the Hospital provides to its patients are considered operating activities. Other activities unrelated to its health care services, including income and expenses related to physician office space and contributions restricted to operations, are included in other income - net in the accompanying financial statements. Mission - The mission of Baptist Health is to improve the health and well-being of individuals, and to promote the sanctity and preservation of life, in the communities it serves. Baptist Health is a faith -based organization guided by the spirit of Jesus Christ and the Judeo-Christian ethic, and is committed to maintaining the highest standards of clinical and service excellence, rooted in the utmost integrity and moral practice. Consistent with its spiritual foundation, Baptist Health is dedicated to providing high -quality, cost-effective, compassionate healthcare services to all, regardless of religion, creed, race or national origin, including, as permitted by its resources, charity care to those in need. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to: recognition of net patient service revenue; valuation of accounts receivable, including contractual allowances and provisions for doubtful accounts; reserves for losses and expenses related to employee health care and professional and general liability risks; asset impairments; and estimated third -party settlements. Future events and their effects cannot be predicted with certainty; accordingly, management's accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the accompanying financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. Management regularly evaluates the accounting policies and estimates it uses. In general, management relies on historical experience and on other assumptions believed to be reasonable under the circumstances, and may employ outside experts to assist in the evaluation, as considered necessary. Although management believes all adjustments considered necessary for fair presentation have been included, actual results may vary from those estimates. Community Benefits - In pursuing its mission, the Hospital provides services to the financially disadvantaged and to the broader community in which it operates, despite the lack or adequacy of payment for those services. These services are categorized as follows: Charity Care - The Hospital provides a level of charity care that is consistent with the needs of the community it serves and the financial resources that are available. All or a portion of the charges incurred at established rates are classified as charity by reference to the Hospital's established policies. Essentially, these policies define charitable services as those for which no payment is anticipated. In assessing a patient's ability to pay, the Hospital utilizes generally recognized poverty income levels for the respective community, but also includes certain cases where incurred charges are considered to be beyond the patient's ability to pay. In addition, the Hospital provides services to other indigent patients under various state and local programs that pay health care providers amounts that are less than the cost of the services provided. Because the Hospital does not pursue collection of amounts determined to qualify as charity care, such amounts are not reported as revenue in the accompanying financial statements (see Note 2). Other Community Benefits - The Hospital has entered into agreements to pay certain physician specialists for care they provide to the Hospital's charity care patients. In addition to the services that are provided to the financially disadvantaged, the Hospital provides services to the broader community. These services include educational programs, SIJE I community information on health services, donations and the cost of care in excess of payments for patients under federal and state programs. TreasuryPolicy - BHSF is responsible for the oversight, management and coordination of all treasury functions of BHSF, in its entirety, including investments, advances and loans. BHSF serves as the centralized cash receipt and disbursing agent for all BHSF entities. Accordingly, all unrestricted cash of the Hospital is periodically transferred to BHSF. The cash transferred is invested, maintained, managed and utilized in a manner consistent with policies and resolutions adopted from time to time by the Board of Trustees of BHSF. Such cash held by BHSF is used to provide financial support for the Hospital and the other corporations comprising the system. BHSF allocates debt and related costs to the Hospital based on the use of debt proceeds. New Accounting Pronouncements - In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162 ("SFAS 168"). SFAS 168 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with accounting principles generally accepted in the United States of America. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Upon adoption of SFAS 168, financial statement disclosures are required to reference the new Accounting Standards Codification ("ASC"). In May 2009, FASB issued SFAS No. 165, Subsequent Events, ASC 855-10 ("SFAS 165"). SFAS 165 codifies the guidance regarding disclosure of events occurring subsequent to the balance sheet date. SFAS 165 does not change the definition of a subsequent event (i.e., an event or transaction that occurs after the balance sheet date but before the financial statements are issued) but requires disclosure of the date through which subsequent events were evaluated when determining whether adjustment to or disclosure in the financial statements is required. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009, and applied prospectively. The Hospital adopted SFAS 165 in April 2009, and since SFAS 165 requires only additional disclosures concerning subsequent events, the adoption of the standard did not impact the results of its operations. The Hospital evaluated subsequent events through the date the accompanying financial statements were issued, which was December 18, 2009, and no additional disclosures were required. In April 2009, FASB issued SFAS No. 164, Not -for -Profit Entities: Mergers and Acquisitions, ("SFAS 164"). SFAS 164 provides guidance on accounting for a combination of not -for -profit entities. SFAS 164 is effective for mergers for which the merger date is on or after the beginning of an initial reporting period beginning on or after December 15, 2009, and acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. The Hospital has not determined the impact to its financial statements from the adoption of this statement. In November 2008, the Emerging Issues Task Force ("EITF") of the FASB ratified the consensus reached in EITF Issue No. 08-6, Equity Method Investment Accounting Considerations, ASC 323-10 ("EITF 08-6"). The application of the equity method is affected by the accounting for business combinations and the accounting for consolidated subsidiaries. EITF 08-6 is effective for fiscal years beginning on or after December 15, 2008. The Hospital has not determined the impact to its financial statements from the adoption of EITF 08-6. In August 2008, FASB issued FASB Staff Position FAS No. 117-1, Endowments of Not -for -Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds ASC 958-205 ("FSP FAS 117-1"). FSP FAS 117-1 provides guidance on classifying the net assets associated with donor -restricted endowment funds held by organizations subject to the Uniform Prudent Management of Institutional Funds Act ("UPMIFA"), which serves as a model act for states to modernize their laws governing donor -restricted endowment funds. FSP FAS 117-1 also requires additional disclosures about endowments for both donor -restricted funds and board -designated funds for all organizations, including those that are not yet subject to an enacted version of UPMIFA. FSP FAS 117-1 is effective for fiscal years ending after December 15, 2008. (See Note 13.) Cash - Cash consists of miscellaneous petty cash funds on hand. Inventories - Inventories, consisting primarily of medical and surgical supplies, are stated at average cost. Property and Equipment - Net - Property and equipment are stated at cost less the allowance for depreciation. Depreciation is computed on the straight-line method using estimated useful lives ranging from 2 to 40 years. Expenditures that materially increase values, change capacities or extend useful lives are capitalized, as are interest costs, during the period of construction. Gains and losses on dispositions are recorded in the year of disposal. Property and equipment are more fully described in Note 3. -8- Net patient service revenue recognized for medical services rendered includes adjustments resulting from reviews and audits of prior year Medicare cost reports and subsequent payment experience from patients and third -party payors. Such adjustments are considered in the recognition and estimation of revenue in the periods the adjustments become known or as cost report years are no longer subject to reviews and audits. The combined effect from changes in estimates related to payment experience from patients and third -party payors was an increase in net patient service revenue of approximately $484,000 and $958,000 for the years ended September 30, 2009 and 2008, respectively. The Hospital provides charity care to patients who are financially unable to pay for the health care services they receive and who are unable to access federal or state entitlement programs. The Hospital does not pursue collection of amounts determined to qualify as charity care and does not report such amounts as revenue. Uninsured patients treated at the Hospital who have income at or below 500% of the federal poverty level may be eligible for charity care. Uninsured patients whose income exceeds 500% of the federal poverty level also may be eligible for charity care, if incurred charges are considered beyond the patient's ability to pay. The federal poverty level is established by the federal govemment and is based on income and family size. The level of charity care (charges foregone) provided during the years ended September 30, 2009 and 2008, based on established rates, was $10,352,078 and $9,345,975, respectively. The Hospital receives payments for services rendered from government agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, employers and patients. During the years ended September 30, 2009 and 2008, approximately 17% and 15%, respectively, of the Hospital's net patient service revenue related to patients participating in the Medicare program. The Hospital recognizes that revenues and receivables from the Medicare program are significant to its operations, but does not believe that there are significant credit risks associated with this federal program. The Hospital does not believe that there are any other significant concentrations of revenues from any particular payor that would subject it to any significant credit risks in the collection of its accounts receivable. The concentration of net patient service accounts receivable by payor class, as a percentage of total net patient service accounts receivable, at September 30, 2009 and 2008, was as follows: 2009 2008 Medicare 22% 26% Managed care 50 55 Medicaid 3 4 Other third -party payors 16 12 Patients 9 3 Total 100% 100% The Hospital records a provision for accounts receivable that could become uncollectible in the future by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Hospital estimates this allowance based on the aging of its accounts receivable and historical and expected net collections, business and economic conditions, trends in federal and state governmental and private employer health care coverage and other collection indicators. Additions to the allowance for doubtful accounts are made by means of the provision for doubtful accounts. Accounts written off as uncollectible are deducted from the allowance and subsequent recoveries are added. The combined effect from changes in estimates related to recoveries was a decrease in loss from operations of approximately $1,277,000 and $1,601,000 for the years ended September 30, 2009 and 2008, respectively. The following summarizes the activity in the Hospital's allowance for doubtful accounts for the years ended September 30, 2009 and 2008: Balance, beginning of year Provision, during the year Accounts written off (net of recoveries) Balance, end of year - 10- 2009 $6,297,940 10,462,615 (10,703,705) 2008 $4,584,749 9,904,268 (8,191,077) $6,056,850 $6,297,940 MARINERS HOSPITAL. INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2009 AND 2008 NET PATIENT SERVICE REVENUE Net patient service revenue for the periods ended September 30, 2009 and 2008, consists of the following: PATIENT SERVICE CHARGES: Inpatient Outpatient Total DEDUCTIONS FROM REVENUE: Medicare Managed care Workers' compensation Medicaid Other Employee health insurance Charity patients Total NET PATIENT SERVICE REVENUE Year to Date FY 2009 FY 2008 Actual Budget Actual $43,196,083 $40,840,000 $36,306,056 86,351,235 87,674,000 77,175,797 129,547,318 128,514,000 113,481,853 48,610,248 13,979,263 458,655 5,041,565. 1,085,169 1,801,564 10,352078; 81,328,542 $48,218,776 49,753,000 14,669,000 373,000 2,649,000 1,591,000 1,889,000 8,695,000 79,619,000 $48,895,000 40,383,928 11,108,685 435,008 2,542,375 1,339,835 1,849,717 9,345,975 67,005,523 $46,476,330 Fulfilling Our Mission: Qualifying for Charitable Care http://www.baptisthealth.netleri/fulfilling-our-mission/Pages/Qualifyin. Baptist Health Nuestro Sitio en Espanol I Contact Us I Make a Donation I Advanced Search 3uhrn r t; y,, n South Florida Employment International Services For Physicians For Employees Giving Media Center t� Fulfilling Our Mission: Qualifying for Charitable Care Home Hospitals and Facilities Patient and Visitor Guide Health Services Find a Doctor Classes and Events Health Topics A to Z About Baptist Health Fulfilling Our Mission Quality and Patient Safety The ways vve benefit the Community springs frain our not -for -profit, faith -based mission of caring. Fulfilling Our Mission Home I Mission Statement I Pastoral Care I Care and Counseling Services I Congregational Health I Community BenefdlCharitable Care Qualifying for Charity Care Entail 1 Print I A A A " - Please call 786-573-6004 for information on our Charity Care and Financial 1 t.03.2010 -Rudy Kranys Elected Chairman of Baptist Health Foundation Assistance programs. Our financial counselors Wit gladly assist you with this 10.28.2010 - More Than 6,000 Parents, application. Children Attend Children's Health Day As a faith -based organization, we are serious about our mission to help those in need. 1 Hospital Foundation Char 10 - Patricia Muir Named Mariners Fosptal We provide free care to people who have no health insurance and who qualify for our 10.15.2010 - homestead Hospital's Pineapple financial assistance program. Services la to host Circus at Benefit for Children's The eligibility criteria for our financial assistance program are more generous than the 10.14.2010 - Baptist hospital's Uve Webcast state's charity care definition. The state of Florida's charity care definition is based on Oct. 21 to Show Mnimaly Invasive Spine family income at or below 200 percent of the federal poverty guidelines or charges Surgery 10.112010 -New AVP Of Customer exceeding25 percent of rtincome — as long as family income is less than 400 Management for Baptist Outpatient Services percent of the federal poverty guidelines. Names Chief Nursing Officer -Baptist Outpatient Services Names Chi We don't stop there. We provide free health care to people with household 10,12.2010 - Mariners hospital Receives Incomes up to three times (300 percent) the federal poverty level. For example. — — • ••• -• for a family of four, the poverty level is $20,000 a year, so a family with a household income of up to $60,000 would qualify for charity care. The Baptist Health charity care program is run under the auspices of the Pastoral Care Department, and our Financial Assistance Program. Charity care, with a sliding scale of discounts, is available to patients whose income exceeds 300 percent of the poverty level in special cases of hardship. The criteria we use for deterrtrning financial assistance eligibility are reviewed annually. The criteria may be revised upward or downward by the Baptist Health governing board, which consists entirety of community volunteers. For patients who are uninsured and apply for financial assistance but do not quality for free care under our financial assistance program, Baptist Health will consider the patient's household income, assets and other circumstances to reach a mutually agreeable payment arrangement. To apply for free care, your doctor must be on the medical staff of a Baptist Health hospital. Your doctor must have prescribed (ordered) the healthcare service requested. Also, you must complete a Financial Assistance Application. Related Links Community Benefit Report Free Health Clinics Our history with Charitable Care Pastoral Care Qualifying for Charitable Care Copyright © 2010 Baptist Health South Florida. All Rights Reserved. Contact Us I For Board Members Only I Notice of Privacy Practices I Website Privacy Policy I Terms of Use I Site Map Baptist Health Facilities aregm Baptist Hospital and South accredited by The Joint Miami Hospital have earned 01 Commission. Read More I Magnet designations. 1 of 1 11/0/7f11A 1-'2Q i]11d Fulfilling Our Mission: Free Health Clinics http://www.baptisthealth.net/en/fulfill ing-our-mission/Pages/Free-Heal, Erm Baptist Health IjSouth Florida Employment Home Hospitals and Facilities Patient and Visitor Guide Health Services Find a Doctor Classes and Events Health Topics A to Z About Baptist Health Fulfilling Our Mission Quality and Patient Safety Nuestro Sitio en Espanol I Contact Us I Make a Donation I Advanced Search Srmtir;. International Services For Physicians For Employees Giving Media Center Fulfilling Our Mission: Free Health Clinics The ways arse bonefft the Community springs from our not -for -profit, faith -based mission of caring. Fulfilling Our Mission Horne I Mission Statement I Pastoral Care I Care and Counseling Services I Congregational Health I Community BenerNCharitable Care Free Health Clinics Ewell 1 Print I A A A - - " " Baptist Health provides free care, including hospitalization and outpatient services, to 11A3,20f0 - Rudy Kmnys Elected Chairman all patients at these clinics: of Baptist Health Foundation 10.28.2010 - More Than 6,000 Parents, Good Health Clinic Children Attend Children's Health Day 91555 Overseas Highway, Tavernier 10.26.2010 - Patricia Mull Named Mariners 305-863-1788 Hospital Foundation Char 10,15.2010 -homestead hospital's Pineapple Hours: Wednesday, Thursday and Friday 9 a.m.-5 p,m., Gala to host Circus at Benefit for Children's Services Good News Care Center 10.14.2010 - Baptist hospital's Live Webcast 101 S. Redland Road, Florida City Oct. 21 to Show Mnimally Invasive Spine 305-246-2844 Surgery Hours: Tuesday -Friday, 9 a.m. - 4 p.m.; Saturday, 8 a.m.- 12:30 10,13.2010 - New AVP Of Customer p.m. Management for Baptist Outpatient Services Open Door Health Center 10.13.2010 - Baptist Outpatient Services Names Chief Nursing Officer 1350 SW fourth St., Homestead 10.12.2010 -Mariners hospital Receives 305-246-2400 ' Hours: Tuesday 9 a.m.-8 p.m; Wednesday -Friday, 9 a.m.-5 p.m.; Saturday 9 a.m.-12 noon South Mlami Children's Clinic 6701 SW 58 Place, South Miami 305-662-5988. Hours Monday, Tuesday, Thursday, Friday 9 a.m.- 3 p.m.; Wednesday 3 p.m.-7 p.m. Related Links Community Benefit Report Free Health Clinics Our history with Charitable Care Pastoral Care Qualifying for Charitable Care Copyright©2010 Baptist Health South Florida. All Rights Reserved. Contact Us I For Board Members only I Notice of Privacy Practices I Website Privacy Policy l Terms of Use I Site Map ABaptist Health Facilities are Baptist Hospital and South accredited by The Joint Miami Hospital have earned Commission. Real More Magnet designations. Sr 1 of 1 ttioi1ntn z•zc nhi ADD —ON REVISED BACK—UP BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: November 17, 2010 MJ Bulk Item: Yea --X— No _ Staff Contact: Suzamw Hutton # 3473 AGENDA ITEM WORDING: Approval of Ama idnerd No. 2 to Grow d Lease Overseas Red emkp awd Cmnpany, LLC extending the substantial completion date to June 10, 2011 as required to obtain the fimding needed to complete this affordable housing project. ITEM BACKGROUND: On September 20, 2006, the BOCC entered into a ground lease with Overseas Redevelopment Company, U-C to construct 49 affordable housing units. On April 15, 2009, the BOCC approved Amea:dment No. 1 c luffiring certain terms and modigyi% other terms of avid agreement to facilitate completion of the project. The financial institution financing the project and the Florida Housing Finance Corporation notified the parties that the dal completion date must be extended in order to allow the financing needed to complete this project. This Amendment No. 2 wdends the m6aaatial completion date to June 20, 2011. PREVIOUS RELEVANT BOCC ACTION: See above. CONTRACT/AGREEMENT CHANGES: Extends substantial completion date to June 10, 2011. STAFF RECOMMENDATIONS: Approval. TOTALCOST: N/A INDIRECT COST: C�Zr1 �Zk� I r �1li Yes SOURCE OF FUNDS: REVENUE PRODUCING: Yes _ No — AMOUNT PER MONTH Year APPROVED BY: County Atty X ` NfflMurchams Risk Management DOCUMENTATION: Included X _ Not Required DISPOSITION: AGENDA ITEM # P - I I Revised 1/09 ADD—ON/REVISED BACKUP AMENDMENT 140. 2 TO GROUND LEASE OVERSEAS REDEVELOPMENT COMPANY, LLC THIS AMENDMENT NO. 2 TO GROUND LEASE is entered into this 1711 day of November, 2010, by and between MONROE COUNTY a Lessoej and OVERSEAS REDEVELOPMENT COMPANY, LLC ("Lessee"). WHEREAS, on September 20, 2006, the parties entered into a ground lease for real property located on Stock Island, Monroe County, Florida, at Block 39, George L. McDonald's Plat, as recorded in Plat Book 1, Page 55, and a portion of the adjacent First Avenue as previgtusly abandoned, as recorded in the Official Records of Monroe County, Florida, at Book 537, page 937; and WHEREAS, the ground lease provided for the Lessee to construct 49 Affordable Housing Units; and WHEREAS, on April 15, 2009, the parties amended the Ground Lease to clarify certain terms and modify other terms of said agreement; now therefore, WHEREAS, the financial institution financing the project is requiring the substantial completion date be extended to facilitate financing and completion of the affordable housing project; now therefore IN CONSIDERATION OF THE COVENANTS AND PROMISES contained herein, the parties agree as follows: 1. The Ground Lease entered between the parties on September 20, 2006, and amended on April 15, 2009, shall be fiuther amended to extend the substantial completion date to June 10, 2011 as follows: A. Section 14.01(a) shall be amended to read, effective as of the date of this Amendment No. 2: (a) Initial Lessee shall renew the building permits for the 49 Affordable Housing Units no later than June 10, 2011. For any reason of omission by Lessee which results in the building permits not being issued by June 10, 2011, a notice of default shall be issued by Lessor to the Lessee and the Mortgagee, after which notice the Lessee and Mortgagee, individually or jointly, have sixty (60) days within which to sue the default. N the building permits have not been issued by June 10, 2011, due to omission of Lessor, this Lease shall be amended a time commensurate with said omission. The Projects shall be substantially completed no later than June 10, 2011, unless there occurs a default which is cured or an extension is granted, in either case the June 10, 2011 date for substantial completion shall be extended by the amount of time of the cure or extension in the issuance of the building permits. Substantial ORC, LLC Amend 2 BOCC 10/17/10 completion shall mean either that (i) certificates of occupancy have been issued for at least 37 of the Affordable Housing Units or that the Lessee, at Lessee's expense, produces a certificate of 75% completion ofthe Project, which certification shall be executed by a certified professional appraiser. If the Project is not at least 75% complete at the required substantial completion date, a notice of default shall be issued by Lessor to the Lessee and the Mortgagee, after which notice the Lessee and Mortgagee, individually or jointly, have sixty (60) days within which to we the default. In the event the Project is more than 75% complete but less than 100'/o completed by June 10, 2011, the Lessee shall have an additional two months, until August 31, 2011, to complete the construction of the project. Failure to have certificates of occupancy for all 49 units by August 31, 2011, unless the date is adjusted pursuant to provisions of this section, shall constitute a default, which shall require notice to the Lessee and Mortgagee with 60 days to cure the default, jointly or individually. The foregoing limitations of time for Project progression may be extended by written agreement of the Parties. 2. All other provisions of the ground lease agreement entered the 2& day of September, 2006, and amended on April 15, 2009, not inconsistent herewith, shall remain in full force and effect. IN WITNESS WHEREOF, the Lessor and Lessee have hereunto set their hands and seal, the 17d' day of November, 2010. (SEAL) BOARD OF COUNTY COMMISSIONERS DANNY L. KOLHAGE, CLERK OF MONROE COUNTY (LESSOR) By. Deputy Clerk By. MAYOR / (LESSEE) Print Pi'm �Jj_r:'% -- /`/fir / �iA�er i i 01:'02 COUNTY ATTOMI :Y VEM 5 `o t; �� E A. I f' vie! (;011 Ili YNAT W� ' y ORC, LLC Amend 2 BOCC 10/17/10 2 A f t� 0 1w41M • • s "3=1 a'ft� 111gkW+7, M1!<r A Aprew inti n conma PNt om" ten "9 Democratic Banking Member T&vsraisr,FL 33070 3OW093.1947 Bell" & CaLnAae Council 203 HowD ollloo Building Government Accounteldi ty Act 40s south !/oaroo afteart Tanabseme, !L 32319-=300 commmftftm f130/IM99K smaib ron.saunders®mribridahouse.aov Legislative Budget Stab E mpe N matatty Dlstriat Iio WORAMUM TO: Monroe County Commissioners From Ron Saunders D"M November 15, 2010 Am Overseas/Flagler Village Affordable Housing Project RECEIVED NOV 1. 5 2010 MONROE COUNTY ATTORNEY As you all know, I have supported the County's efforts in addressing the affordable housing problem in the Keys for many years. We have made some strides, but there is still more to be done. Some of the projects in the Keys have utilized the programs of Florida Housing Finance Corporation. I have also worked hard to get Monroe County its fair share of those dollars as well. To that end, I have supported the project known as Flagler Village on Stock Island, and I have worked hard to assist with FHFC dollars being awarded to the project and now I am intent on seeing the project funded with the dollars that have been awarded. As I understand the funding process, we are at the end of the process and final measures are being taken to achieve funding by December 10, 2010. One of the requirements, and I believe the most significant requirement remaining, is to extend the substantial completion date provided for in the lease to make it consistent and concurrent with the underwriting FHFC has done for the project. It is my understanding that the projected completion of the project is still slated to occur consistent with the current lease requirements, and that will not change. The substantial completion date needs to be extended to make sure FHFC has followed its underwriting guidelines. I also know that it is never the most desirable situation to place matters on your meeting agendas as add on items. Sometimes, however, it is unavoidable. In this case, this requirement came up just last week and the closing must occur by December 10, 2010 or the funding will be lost. That being the case, I am respectfully requesting that you support this request so that we can move forward with this project and complete this cooperative effort to obtain much needed affordable housing in this area of the Keys. Thank you very much for your consideration. we males housing affordable F1on*dj4a'**Housi ,,T .. $rsano. Fax Street, Suite 980 � Tallahassee, Florida 32301 .org$:SCt.A$$.4197 * Fss,c $Sd].d.$f3.9$�i9 : �reasw.flraric�lahousing.csry F i n a n c e t„ o r p a r a t i a n November 12, 2010 RECEIVED Ms. Suzanne Hutton NOV ( 5 2010 1111 12th Street, 4th Floor MONROE COUNTY ATTORNEY Suite 408 Key West, Florida 33040 Re: Florida Housing Finance Corporation $2,450,000 Tax Credit Exchange Program Loan (the "Loan") to Flagler Village Limited Partnership, LTD (the "Borrower") in connection with the development of Flagler Village (the "Development') Dear Ms. Hutton: I write this letter to offer further explanation regarding, and support for, Tim Koenig's request for an extension of the construction completion requirements currently set forth in the ground lease between Monroe County, Florida and the Borrower (the "Lease"). As we have discussed with the Borrower, the Lease currently contains language that, assuming a mid - November Loan closing, would trigger a default with respect to the construction completion requirements therein two (2) weeks following Loan closing. As it pertains to funding under the Tax Credit Exchange Program, it is not Florida Housing's policy to fund into a default situation or under circumstances in which a default is eminent. Accordingly, as a condition to Florida Housing's closing and funding of the Loan, we require that the construction completion deadlines currently set forth in the Lease be extended by at least six (6) months to a completion date which coincides with the projected construction schedule approved by Florida Housing's credit underwriter. As of the date of this letter, Florida Housing and the Borrower have worked diligently to negotiate the documents such that there are only a few remaining issues, none of which we deem to be material. The Borrower has also provided us with the vast majority of due diligence we require to close the Loan, including title, survey, permits and other items requiring significant lead-time to produce, review and deem satisfactory. The few outstanding items are items that, in our experience, are routine and do not require significant lead-time to produce. While we understand that there are several other interested parties to this transaction, each of whom have requirements that must be satisfied by the Borrower, we believe that with the County's approval of the requested extension, Florida Housing will be in a position to move forward toward closing the Loan. Additionally, we are not at this time aware of any other significant issues that would prevent this deal from closing expeditiously following such approval. CIKrloa Chet, Asa~ ww %Crd 4 CD1mdom David F_ oe6%h, Chm mm ® SUxte� �y�,Vice Chahn= . Tom iy hum & C96t), mmil m 1_ Carle rrm FalnnCrl s tymn t'ttAr1�11 m a, fiord F7m* • Jo i Pay9 6 • [sand V6 Thank you for your consideration and the County's commitment and support to the development of affordable housing in the State of Florida. Please let me know if you have any questions. Sincerely, Kevin L. Tatreau Director of Multifamily Development Programs we mate housing affordable Honda ousing 227 North 8ronough Street, Suite 5000 Tallahassee, Florida 32301 850.488.4197 • Fox 850.488.9809 www.iloridahousing.org F i n a n c e C a r a o r a t i o n November 10, 2010 Mr. Jonathan Wolf Wendover Housing Partners, LLC 1275 Lake Heathrow Lane, Suite 115 Heathrow, Florida 32746 Re: Florida Housing Finance Corporation $4,250,000 Tax Credit Exchange Program Loan (the "Loan") in connection with the Development of Flagler Village (the "Development") Dear Jonathan: As previously discussed, the lease governing the Development currently contains language that, assuming a mid -November Loan closing, would trigger a default with respect to the construction completion requirements therein two (2) weeks following Loan closing. As it pertains to funding under the Tax Credit Exchange Program, it is not Florida Housing's policy to fund into a default situation or under circumstances in which a default is eminent. Accordingly, prior to Florida Housing's closing and funding of the Loan, the construction completion provisions of the lease must be revised in accordance with the projected construction schedule approved by Florida Housing's credit underwriter. Thanks again for your continued commitment to the development of affordable housing in the State of Florida. Please let me know if you have any questions. Sincerely, i�- Kevin L. Tatreau Director of Multifamily Development Programs cl*xlie Gies, Govcam w eoaed of Dinwbm- David E. OW6x4k, Chawa n • Sloan 5&crop, Vim Oidmxe • Tcvn ftliam, Ex Lerida Marilyn L Gri • Ken Fakum + Lym Han6 m • Ci&rd �*'dt' a Jerry 1rkj orlon a Lsmrnrd V6 SteF,hm P Auger, Execufwa Dimour Wells Fargo Community Lending and Investment 301 South College Street Charlotte, NC 28288-5640 704.374.3468 Wells Fargo Conununity Lending and Investment November 12, 2010 Suzanne Hutton 1111 12`h Street, 4`h Floor, Suite )o8 Key West, Florida 33040 Re: Flagler Village Dear Ms, Hutton: We are you writing you today to support Tim Koenig's request that you amend your ground lease. The lease contains certain performance dates that have become impossible to meet. If these dates are not extended to coincide with the projected construction period, we would face the problem of closing into a transaction with a likelihood of a ground lease default shortly after closing. This risk would be untenable for us and we would be unable to proceed. We understand that this development has been through several phases and that its timeline has been extended several times. Please know that we are working assiduously on this transaction and have every reason to expect that it will close in the next week or so. For example: 1. we have obtained our internal credit approval; 2. we are almost finished negotiating our partnership agreement and related documents; 3. Florida Housing Finance has circulated the second drafts of its documents, and we expect no issues with these documents: we have closed 4 deals with FHFC in the past few weeks; 4. we believe Tim has negotiated final terms with the existing leasehold lender - BB&T - to permit this transaction to proceed; 5. we do not believe we have any material title issues; 6. you were kind enough to execute an estoppels for us several moths ago, so we need no changes to the ground lease other than the milestone dates. In summary, while a deal is never closed until it is closed, we are working hard toward closing and we would appreciate your giving due consideration to the extensions sought by Tin) Koenig. Sincerely, J. Frederick Davis, III Managing Director Wells Fargo Community Lending and Investment