Supplemental Affirmation of Daniel Turbow

    SUPREME COURT OF THE STATE OF NEW YORK 

COUNTY OF QUEENS 

  

  

~~ —— X 

THE COUNCIL OF THE CITY OF NEW YORK, 

et al., 

Plaintiffs, IAS Part 5 

Posner, J. 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE Index No. 004897-96 

CITY OF NEW YORK, et al., 

Defendants. 

a 0 © = = So nC nn X 

CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS 

- QUEENS COALITION, an unincorporated 

association, et al., Index No. 10763/96 

Plaintiffs, 

SUPPLEMENTAL 

- against - AFFIRMATION 

RUDOLPH W. GIULIANI, THE MAYOR OF THE 

CITY OF NEW YORK, et al., 

Defendants. 

I GE TRE RDN A A leet x 

Daniel Turbow, an attorney admitted to the practice of law before the Courts of 

the State of New York, affirms the following to be true under penalties of perjuty pursuantto. 

Section 2106 of the Civil Practice Law and Rules: 

1. I am an Assistant Corporation Counsel in the Office of Paul A. Crotty, 

Corporation Counsel of the City of New York, attorney for defendants in these actions. I submit 

this affirmation in response to the Court’s request, made during a conference call had with all 

counsel on November 12, 1996, for further submissions with respect to certain issues relevant 

to currently pending cross-motions for summary judgment. 

 



  

2 Specifically, the Court requested that defendants address its concern that 

the proposed sublease of Coney Island Hospital is inconsistent with the legislative intent of the 

HHC Act as it relates to HHC’s obligation to operate the municipal hospitals for the benefit of 

the indigent. In particular, the Court suggested that the sublease might be inconsistent with the 

representation made by Mayor Lindsay when, in a letter to Governor Rockefeller urging 

adoption of the HHC Act, he wrote that "in establishing [HHC], the City is not getting out of 

the hospital business."' There are several readily apparent reasons why the Court’s concerns 

are unwarranted. 

3. First, by the proposed sublease for CIH, HHC is not "getting out of the 

hospital business." It is simply performing that same business in a different way. Most 

pertinently to this Court’s stated concerns, under the sublease PHS-NY is obligated to spend 

considerably more on indigent care than HHC currently spends. 

4. Submitted herewith’ as Exhibits A and B are the "briefing books" which 

were provided to the HHC Board of Directors on October 24 and October 31, 1996, 

3 These materials, which include the respectively, to aid in its consideration of the transaction. 

sublease (contained in Exhibit A), reveal the following about the transaction: 

® Continuation of Services: PHS-NY will continue to provide in-patient and out- 
  

patient programs in all "core service" areas offered at CIH as of the day before the closing, with 

  

1 A copy of Mayor Lindsay's May 8, 1969 letter is annexed as Exhibit A to the August 23, 

1996 Affidavit of Richard M. Weinberg, submitted in support of the Council Plaintiffs’ cross- 

motion for summary judgment. 

2 Because of their bulk, the exhibits to this affirmation are being submitted in separate volumes. 

3 Subsequently, by resolution adopted on November 8, 1996, the Board authorized the sublease. 

The resolution is submitted herewith as Exhibit C. 

Me 

 



  

the understanding that PHS-NY may make changes with HHC approval if the practice of 

medicine changes radically. The core service areas include medicine, general surgery, 

pediatrics, ob/gyn, rehabilitation, psychiatry and emergency medicine. 

® Payment for Indigent Care: PHS-NY will pay for all the charity care HHC 
  

currently provides at CIH, plus an additional 15% over the current HHC level of payments, plus 

a medical inflation factor. Any available third party reimbursements will not be counted towards 

this charity care obligation. PHS-NY makes this commitment indefinitely, for the life of the 

sublease. The environmental assessment performed in connection with the transaction (contained 

in Exhibit B) found that charity costs would not rise more than 115%, plus medical inflation, 

until well after the year 2000. If that "trigger point" is reached the sublease requires that HHC 

reimburse PHS-NY for the costs exceeding the trigger point for one year. 

It is true that the sublease does not address the issue of what will happen if costs 

exceed the trigger point indefinitely. However, that question could not be answered even if CH 

was not subleased. That is, if indigent care costs rise dramatically in the City, a fundamental 

restructuring of indigent care financing and service delivery at all HHC facilities will have to 

be effected; nobody can guarantee the precise funding levels or levels of care in any of the HHC 

facilities years from now. However, the sublease would leave HHC better off in one crucial 

respect: PHS-NY is obligated to fund the charity care costs up to the trigger point throughout 

the term of the sublease. In other words, it -- unlike HHC -- could not reduce charity care 

funding at CIH. 

 



  

® Capital Commitment: PHS-NY will spend at least $25 million in the first five 
  

years of the sublease on capital projects at CIH, in addition to assuming all routine maintenance 

costs (estimated at $5 million per year).* 

® Monitoring of Compliance: CIH will have a sixteen member community 
  

advisory board, which will develop a grievance process; HHC will have the right to audit PHS- 

NY's books and records; and the parties agree on arbitration, specific performance and other 

remedies for non-compliance with sublease obligations, including those relating to the provision 

of indigent care. 

5. In sum, the transaction calls for the continued delivery of services at CIH, 

the provision of indigent care, capital improvements of the facility, and HHC oversight. HHC 

believes that it will result in better health care at a lower cost. Plaintiffs may dispute the wisdom 

of that analysis. However, we think it plain that the transaction is not only authorized by the 

HHC Act but clearly advances the Act’s legislative intent. 

6. Indeed, as we previously noted, the Act -- which was endorsed by Mayor 

Lindsay -- expressly itself contemplates such a transaction. Thus, § 7385(6) expressly grants 

HHC the power to "dispose of by . . . lease or sublease, real . . . property, including but not 

limited to a health facility, or any interest therein for its corporate purposes." Moreover, § 
  

* 7385(8) expressly authorizes entry into a lease with a private entity for the delivery of medical 

services in an HHC facility, granting HHC the power: 

  

4 In addition, PHS-NY will pay $42 million immediately on closing, an amount representing 

most of the HHC and City bonds associated with CIH. Another $7 million will be paid as 

rental, representing the balance of the outstanding bonds associated with the hospital. The $17 

million of this amount that reflects HHC bonds will be used by HHC to fund other HHC capital 

projects. 

4- 

 



[tlo provide health and medical services for the 

public directly or by agreement or lease with any 

person, firm or private or public corporation or 

association, through an in the health facilities of the 

corporation. 

These provisions could not be clearer. They put to rest any assertion that, somehow, a lease 

transaction with a private party for the delivery of services is inconsistent with the HHC Act’s 

legislative intent. 

7. Even plaintiffs’ pleadings do not hint that HHC lacks the inherent authority 

to enter into the sublease. Rather, they assert that exercise of that authority is conditioned upon 

compliance with ULURP or other type of approval by the City Council. In fact, the only place 

that the Court’s concerns were foreshadowed is in the Council Plaintiffs’ initial memorandum 

of law where, citing U.L. § 7387(4), they argued that HHC’s "power to sublease its property 

to third parties requires that it make a determination that the use and occupancy of the property 

is no longer required for the operation and control of the hospital." ° In other words, Council 

Plaintiffs argued, HHC could close a hospital and sub-lease the property to a third party, but 
  

could not lease the property for operation as a hospital. 

8. Again plaintiffs’ contention is belied by the statute’s plain language. By 

its terms section 7387(4) authorizes HHC to dispose of property which is "no longer required 

for its corporate purposes and powers . . . ." By contrast, sections 7385(6) and 7385(8) grant 

HHC the authority to sublease property in furtherance of its corporate purposes. And, as we   

have described, the sublease for CIH, which provides for maintenance of services at enhanced 

levels of indigent care, will further HHC’s corporate purposes. 

  

5 Council Plaintiffs’ August 22, 1996 Memorandum of Law in Support of Cross Motion for 
Summary Judgment and in Opposition to Defendants’ Motion for Summary Judgment, pp. 12-13. 

-5-  



  

9. In addition, Council Plaintiffs’ hypothesis is plainly illogical. Obviously,   

closing an HHC hospital is an act which brings the City closer to "getting out of the hospital 

business," than subleasing an HHC hospital for continued operation. Yet, over the years, HHC 

has found it necessary or appropriate to close several of the hospitals it initially operated, and 

the Courts have consistently rejected challenges to those decisions. See, e.g. Bryan v. Koch, 
  

627 F.2d 612 (2d Cir. 1980), aff’g 492 F. Supp. 212 (S.D.N.Y.)(Closing of Sydenham Hospital 

in Harlem); Jackson v. HHC, 419 F. Supp. 809 (S.D.N.Y. 1976)(Closing of Morrisania Hospital 
  

in the Bronx). 

10. Significantly, the Courts recognized that HHC and the City must be given 

maximum flexibility in the management of the hospital system. For example, in Jackson, the 

Court acknowledged that "medical care is . . . a basic necessity of life," and that HHC hospitals 

were "set up to provide essential medical services for those who cannot afford private care.” 

419 F. Supp. at 812. Nonetheless, those principles could not serve to constrain HHC’s ability 

shut down Morissania Hospital: 

Within the context of providing these services, the 

Corporation must have the discretion to determine in 

what manner its services are to be dispensed. There 

is no constitutionally protected right to a particular 

number of hospital beds or to a particular kind of 

medical services. Nor is there a right to access to 

medical care at a particular location. Any "right to 

life" through access to medical treatment must be 
limited by the discretion a municipality must have in 
providing medical services in the manner it sees fit. 

Id. Virtually identical teaching drove the District Court's decision in the Bryan litigation: 

  

Some of the individuals now served by Sydenham 

will suffer inconvenience. and even less effective 

care [as a result of the hospital's closing]. . . . 

[However,] the dispute over closing Sydenham has 

5 

 



  

been the subject of great public concern for many 

months, if not years. . . . Whatever this court may 

think of the decision . . . as a matter of public 
health policy, the City appears to have properly 

considered all the relevant factors and alternatives in 
reaching its decision in the face of fierce, often 

emotionally charged opposition. . . . 

492 F. Supp. at 238. See also Bryan, 627 F.2d at 620. 
  

11. A fortiori, if the legislative intent of the HHC Act is not violated by HHC 

actually closing hospitals which treat the indigent, it is obviously not violated by a transaction 

which keeps CIH open as a community based acute care inpatient hospital, with improved 

services and continued access to health care for indigent uninsured patients. 

Dated: New York, New York 

November 19, 1996 

  

Daniel Turbow 

 



  

Index No. 004897-96 and Index No. 10763-96 respectively 
  

SUPREME COURT OF THE STATE OF NEW YORK 

COUNTY OF QUEENS : IAS PART 5 
    

THE COUNCIL OF THE CITY OF NEW YORK, et al., 

Plaintiffs, 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY 

OF NEW YORK, et al., 
Defendants. 

  

CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - 
QUEENS COALITION, an unincorporated association, et 

al., 

  

Plaintiffs, 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY 

OF NEW YORK, et al., 
Defendants. 

    

SUPPLEMENTAL AFFIRMATION 

    

PAUL A. CROTTY 
Corporation Counsel of the City of New York 

Attorney for Defendants 

100 Church Street 

New York, N.Y. 10007 

Of Counsel: Daniel Turbow 

Tel: (212) 788-0412 

NYCLIS No. 
    

Due and timely service is hereby admitted. 

New York, N.Y.