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June 6, 1990
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Case Files, Campaign to Save our Public Hospitals v. Giuliani Hardbacks. Notice of Cross-Motion for Summary Judgment; Affidavit of Richard M. Weinberg in Support, 1996. 990be248-6835-f011-8c4e-7c1e5267c7b6. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/75c31f5e-846f-4588-b707-b36fce938bdd/notice-of-cross-motion-for-summary-judgment-affidavit-of-richard-m-weinberg-in-support. Accessed June 06, 2025.
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
Index No.: 004897-96
THE COUNCIL OF THE CITY OF NEW YORK,
PETER F. VALLONE, SPEAKER OF THE :
COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF:
THE COUNCIL HEALTH COMMITTEE,
Plaintiffs,
-against-
RUDOLPH W. GIULIANI, THE MAYOR OF THE,
CITY OF NEW YORK, NEW YORK CITY HEALTH : NOTICE OF CROSS-MOTION
AND HOSPITALS CORPORATION, and NEW YORK : FOR SUMMARY JUDGMENT
CITY ECONOMIC DEVELOPMENT CORPORATION :
Defendants. :
et 0 sn mm mt me i! Pe, X
CROSS-MOTION BY: Plaintiffs Council of the City of
New York, Peter F. Vallone, and
Enoch H. Williams
DATE, TIME & September 20, 1996
PLACE OF HEARING 9:30. a.m.
I.A.S. Part to be assigned
Supreme Court, Queens County
88-11 Sutphin Boulevard
Queens, New York
SUPPORTING PAPERS: Affidavit of Richard M. Weinberg,
sworn to on August 23, 1996, and
the exhibits annexed thereto
RELIEF REQUESTED: An Order, pursuant to CPLR § 3212,
granting summary judgment in
plaintiffs’ favor, and granting
such other and further relief as
this Court may deem just and
proper.
ANSWERING PAPERS DUE: September 11, 1996 (pursuant to
stipulation)
DATED: New York, New York
August 23, 1996
FROM: TENZER GREENBLATT LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
(212) 885-5000
by: Edward L. Sadowsky
Ira A. Finkelstein
-and-
RICHARD M. WEINBERG
General Council
City Council. of the City
of New York
75 Park Place
New York, New York 10007
(212) 788-7000
by: Richard M. Weinberg
Gail R. Zweig
PAUL A. CROTTY
Corporation Counsel of
the City of New York
Attention: Daniel Turbow,
Assistant Corporation Counsel
Attorney for Defendants
100 Church Street
New York, New York 10007
(212) 788-0412
COPY TO: KENNETH KIMERLING
Puerto Rican Legal Defense
& Education Fund, Inc.
99 Hudson Street
New York, New York 10013
(212) 219-3360
0 ‘9
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
Index No.: 004897-96
THE COUNCIL OF THE CITY OF NEW YORK,
PETER F. VALLONE, SPEAKER OF THE :
COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF:
THE COUNCIL HEALTH COMMITTEE,
Plaintiffs,
-against- : AFFIDAVIT OF RICHARD
: M. WEINBERG IN SUPPORT
: OF CROSS MOTION FOR
RUDOLPH W. GIULIANI, THE MAYOR OF THE, : SUMMARY JUDGMENT
CITY OF NEW YORK, NEW YORK CITY HEALTH
AND HOSPITALS CORPORATION, and NEW YORK
CITY ECONOMIC DEVELOPMENT CORPORATION,
Defendants.
STATE OF NEW YORK )
COUNTY OF NEW YORK)
RICHARD M. WEINBERG, being duly sworn, deposes and
says:
1. I am an attorney admitted to practice in the State
of New York, and am General Counsel to the Council of the City of
New York (the "City Council"). I make this affidavit for the
purpose of presenting documentary evidence to the Court in
support of the City Council plaintiffs’ cross-motion for summary
judgment.
2. Annexed hereto as Exhibit A is a true copy of a
letter dated May 8, 1969 from Mayor John V. Lindsay to Governor
Nelson A. Rockefeller urging approval of the Health and Hospitals
Corporation Act.
3. Annexed hereto as Exhibit B is a true copy of the
lease agreement dated June 16, 1970 between the City of New York
or '®
(the "City") and the New York City Health and Hospitals
Corporation (the "HHC"), whereby the City leased its public
hospitals (including Coney Island Hospital) to HHC for a term
coexistent with the life of the HHC and at an annual rent of $1.
The lease agreement provides that the HHC is to operate the
facilities (Section 2.3) and that the services it will render at
the hospitals "are particularly for those who can least afford
such services." (Section 2.1) The lease agreement was authorized
by vote of the Board of Estimate (Page 1), and provides that it
can only be amended by written consent of the parties and the
approval of the Board of Estimate (Section 12.1).
4. Annexed hereto as Exhibit C is a true copy of an
agreement between the New York City Economic Development Council
and J.P. Morgan & Co., dated August 1, 1995.
5 Annexed hereto as Exhibit D is a true copy of the
Affidavit of David R. Jones, a member of the Board of Directors
of the New York City Health and Hospitals Corporation, submitted
in opposition to the defendants’ motion for summary judgment in
Campaign to Save Our Public Hospitals - Queens Coalition v. Giuliani, Index No.
10763/96 (Sup. Ct. Queens Co.) (exhibits omitted), upon which the
City Council plaintiffs herein are also relying.
6. Annexed hereto as Exhibit E is a true copy of the
EDC’s Offering Memorandum for Coney Island Hospital, dated
October: 26, 1995,
7. Annexed hereto as Exhibit F is a true copy of
Mayor Giuliani’s June 26, 1996 Press Release announcing that the
LJ
: : | | ; A
Mayor's office has entered into a letter of intent for the lease
of Coney Island Hospital to a private corporation.
8. Annexed hereto as Exhibit G is a true copy of the
City Council’s Amended Complaint.
9. Whereupon, it is respectfully submitted that this
Court should grant the City Council’s cross-motion for summary
Richard M. Jobe,
judgment.
Sworn to before me this
23rd day of August, 1996
Q Pod"
_\|Notary Public
Dat AAV
©3-R » HES ANY
Pah Soed ¥ \\~ WR a
CO \ SSA yes 6x Nour 0 \ "Wa?
253384.1
Exhibit A
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ores
LL THE CITY QF ‘NEW YORK
_. OFFICE OF THE. MAYOR’
2 New YORK, N.Y. 10007 .
CA ..
Rules ..0-
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“ANAC In Felat¥on © the éreat ion: :
fo the New: York city. health?;
+: “hospitals corpora ion.and
7. viding forthe pq ra and i)
_thersof ah ATA
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‘xktions of: 4ne\administration,
37 he:clby, and. the’ deputy .mayqr-city. administrator: Jo
fstheieity;
a
or,-thedr suceg '80T3, “all séfving’ ex-pfficio;’ ‘ten. ‘directors: shal; i
{a
be: ppointed by\the mayer,. fivesof: whom shall be.designated by.
the| ¢i%y council) \of tha Cityrof. New. “Yorks. the: remaining;direc ct
‘shafll. be’ the’ thie ~exgcuti e’ ‘officer’ ‘of sthe corporationdiy
chides: Rxeaqutive “of Ricér isHELL b Ger ty, oA taforeméritioned: her
i £1 een: ;directors’/T m. persons othex, thar thems¥lvesi
and: ‘shall? ai
sese ve, fat. the Jpleasur of” the board.: ‘The. terms -of.: the ten: 4ditec="
“tors: /LATSE’ appointed - ‘tHe fnayor; other than’ ‘thase-’ ‘gerving. exh
18 ‘will be’ for five years: each. "The. Anitial
itermsy; ofeach;
5 b}
; i signated by dpe. €1ty council “and each of:thosé ap= i"
dinted: by- the mayor wil be stajsenel to, permits ones of eac to uid
N i shpesnred annually, > : VI hae, . * : 5. . ror ALES 2
bi
ath " atts Yalos, wi
3 a 3
A “The ebipiratton’ Would: suabiieh. ‘a comminity* 1 La i
oh ard” Tor “each ‘of - its. hospltils’ to’ consider and: ‘advise
ok
jgoration ‘concerning the: Gevel ment*: of, any, glans; or
a
53
he-. a nh jo ‘ : :
hu eR kay
n would be dyer” ar ha. GR je
hand medical “mervices forthe
“The oarborati®
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A
4 ub] feE thro gh-and, in’ such’ health. acilitiesss Lialls ACQUATe HTS
re oe = ents’ with the Citys...
{he ~hill. pl
2 oH
éeméntsiibe.; entered n
to on Sa re: “July sly 1970 BILL
ation “of the: municipal. ‘h
ospi 5.P%. the: ‘corpora: or
o ese =
eetient >urider: the. ‘terms of; legisladion:
coulditakeiith he Lor Re ;
Se, are cense to operate {OF pale p
Ya Tn Rok p SCATRE
ow
Pht § A or Fan =op ating? contrat, a’ Teas %
;
rn Nash re pt
ES fis CA Toa | el i EE |
i, CA ey RCA DE Eth BS
Le:
A
a BENG pha joorpOTAELon, would: have
;th powers: inecess 37s)
had SS [sioperatey| Baintain,.and;
Ampreve Araeili ties: It would gl¥cEhaver ;
RE co 3) ‘the ipower 8 ‘necessary:
go.c construe eduini; oricansett
0
ER Je Tucted, or; equipped, -health; facil
i £13211 ain. sthe Xn :
;
erent ; ext ene Loi; Len Ia fié
reconstalction; ‘penovation;-: Amprov
ort
53 J LY ‘replacement: or. ‘modif
ication, "0 Lsxisting go ra: d14t1es)
es 3 ne
Ese; powersiWith: ‘pes
pecti’ do major, ‘new\donstru
é ons
: ATHY TOT POT {on Srguld- be; subject
to; “triet;approvalo rhe] MAY OE; nl
REV LE Seu rad toi consult Sen, the StatesHealtiiad;M taf Heal
% EATS aciliyies’ proven Cpr een ELONRWO ULEAD Ed
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Ehe (app oe (hetreisruliegen:
aN
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AN TE
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Tae vie od Me TO T7N Co
5
“ncliorabie Welson A. Rockefeller FN
‘May 8, 1969 .
Page 3. Wh eo oh
el ye Re
bonds, tnotes, -or other evidences. of tndobiednse” for the eon-.
“ ‘struction of ‘4 health facility. The gorporation could not trans-: i
fer or. dispose: of any health facility or weal property acquired to 9
“from: or: ‘constrdcted”-for the City without Public. h ing: and. on™ 5s walls
“gent ah ‘the Board of Estimate, hepa Nn, ol oo AN
‘ The. géneral, Yorporate.
‘power 0) cres
CS absietary” ‘corporation
s. 4s. made shbject, to t approval’ ‘of: the the
a -and ;8ky “subsidiary: corp
orations’ sini be éstablis Neds ELAN
J are precluded ‘under -the legislation
Irom e% cising: corporates: (A
RES
Jill powers: with respect tr. capital’ borr
owing.p
/
3 in ‘collective. bargalui
ng However, no sus diary.corporations, may-. Pp
“be crigated to, ‘operate h ealth: facilitiesy til: wo, years: rl thé.
Persist ary of; this Bill. o Roy - f.. oN
‘ i =
~ -
PET dK Ol
dt “fre Gordonation would ive f nidnand: Fe pant” for. the. Gost x
of; hehith ahd: nedifal services: that/1t proviess, through, fees, :
Prentals, and -othar? ‘cHarges'; it. 'veckived f
:
= party: “fnsurers;-. and. governhent reinburseme
poration: br directly. collect ‘and. r
eceive;
": smbuirs ement. and {payieyc ror: servites’ Fes
APIO + operated: Py DTA "The :Cty ajrequirgd to a brian i payit
..the- “éorporatipn: from-tax yd fundsy.: auring he i
g ©1970-1971 and~1971-1972, an: amount ‘not’ less: than ‘one ndv
asy 5)
seventy-five million’ -ddl
lars.- “Théreaftec the: C
ity .shallsp
‘‘cérporation:, an: gmount’ which, isto. be; tgreed -ypon.betwee my
a oA ‘orporation?and. ithe CAt
y: except thatthe’ ‘amount ; Tan: np
Z J than’ * one hundred, seventy-five:
‘million: ddllars: for.
WEE periods without; approval: ofth
e State:Legislature.y.:
‘pion. would) spbniit] ahnua ually a -program: ‘budget, to. ‘thé“Cityi
deta
the. EL expenditure ‘of ‘tax levy Bis famprepritsstihy Ae
he oiiy. ; i fhe i RgaT +. 2 a A A AS
ig - The: . corporation. “would Ve
sgubjoct:. to anaato
Eg audits by : the: City Comptroller: The: ‘corparattom!s;
OWE:
: NEL provide. and. deliver-
health’ ‘and-! ‘medicals: sexvides
iwo i
iil eised an, accordance “with: ptsi
th ‘and; aris Ors a
Services’ Aguintstrabions
i 4 +4
: JTniadastick ain i
sited. to the yor the 0
Grey: 51, Néw-York, the St is bom
3
ations: bork zibe SKSTCIETP stellen settine otis in Pk
‘1 ons and’ romance
TIL & details: Tei
it = «
; SNL
£3 - Lash
’ 25 ene rature. Si nd tas co atic Ld ett 2
2 SOI | EC Een Ey iE ‘a
3
X 2 ig pe
oY SS Foy
NE 0
rsonnel. ‘policy and Fig ; Ske
‘services, fas:
deroun’ inoreadingly, L
a
‘ Ak FL by et”
-
AR ‘two “decades; have sdgari
y
AP thods:of. ‘operating, health: facili
pe di: ‘to’ ‘cope: with" the increasing
phe and medionl: care.’
>
ela beet
: “eed on
one investigation, Tarté
existing’ orosedures
for. purefi
itilizing: ‘needed ypersonnel ; ap
:
aging vital: passe)
3 Fn ona det
sical’ plant:
Ef ars and; inne Dat
ions. ‘has. i Ted! the sgreats
des” in the anes of. "resources 'd geveten to ope tioil
N “Phe ity PY propyeine Tog ‘beridth iF corporation
: facilitate’ solving, the. provlen.
of. effective. manage
oor:
murdcipal. sie, facilities: ana. prograng; ;
:
nw BE lk
crt of i
The’ city believes
ray it can. develop: Lhrol gh.
£it-corporaticn;’ inte
systens;jof/manage
e to the ineeds. of th ospttalsaand’ their
#:
¢which: Lo phe cg duot’ of: othe: Cat
s
he. cre tdon: ots a; ublic ‘benef
rp
Apr freedom. ‘from deta
iled’ Youth
ear i
.the. capacity
-internal: systems’
ne Tperation
; i : Luis
Sor 4 Saeed i evordinate. and 8
~ocedures “and cried to coorainaLe, Hoty
many
hiare: ‘maridated-in:
laws + These ; administrative, cons
traints:
have imide. the; ‘operation n,; maintenance; and,e construction ofits
Crete
‘racilities;a 16w;: CumbEraom
eedlessly- ‘expensive
; pace nes Core HERES
~sodrdinate’ the:purch
Bir 35 ment 35 ee
ocedures.. .that:are
:
eof” CE
e delay end: infle:
a ee — — «=
(re WARES w=
r
e
r
e
(3
o
o
r
ph
y
re oH ‘Honorabie! Nelson, A. Rocitetelier: :
BO EY EK we Mreh a
y . on ; wh gh, 7 . ] . : * e- i. ih x E : 3 Chi
whieh 2 i%: Ce brs LN
m tse procedures and egtslatida.
x
The: pbc and private seaiimpi
oghils Srraty. “wh
de*medical servites with. 4 ‘soutce: of; pay==--.-
he. costs of: providing ser 1cess -! It" "18.4n-
maximize Hele nese:
dimedicals ineeds.r
-
{manher iy
hy ar
SL 7.0F the: pegpae. of the" City 1.
i
will ‘not "in any: Api the; oa
EAE 2 ime corporation
“Services, ‘Adminis
tration . or’ the purposes .
tion was: formed =, ‘Healfh Services
Administration.)
‘to:promote ‘coordinated ‘policy: planning;and;
oe ean Pn
‘City's: public: health system. - ‘Exercising the) ;oper
ati OHE1IFespY ca
SRE TOL BBA for: directly: delivered. City mrviges through apts 15
Ba corporation’ Arlirio way
. ‘change:
; he £3:
responsibility: ., In point.of.: fact, a Health: SM
'
ti{ontwere not. now "4n existences. “18 would’ have’; ‘to-'be:; ata:
stra
‘supervise ‘the. “cofpora
tion. - ‘In large measure “4. was’ “thie /OVerview: 8
$758 i nade possible ‘bythe. esta
blishment: of. Hea alth Sree
fei that convinced} pispo
nszble City officYals f.the: rae NE ol
i of dmproving | the managemen tof ‘direct! operation
s.
Ki Tstrengthen; the:
entire. pubite. i
a SRE Le
. Noggnto,
Refit helt, : Ex .
i Li yee In” ‘eitablishing. a ‘pub
lic, ‘benefit. de
n
Citys. “hot getting
out: of | ‘the Hisipieay bi Ha Adds,
‘establishing a mechanism: ‘to -ald=1tidn betté
r mandgl CHATTARS
business for. ‘the benefit: riot only
" “ofthe public:
ser
als" it; ‘city: health
Toots
ire
tote the;
evened by Poor, cand the by: the: Lo
f Estimate, ‘the’ Mayor ,.-and ‘the. Health: ‘Servic
esyAdiinl
215] , of” ai a
the: ofuisnn ofa)
SE
as !
we
So
d
3 me. in is" part: oy ‘the Gatyt sz 208
iL UES; ghey yon,
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SEARS wo ik
Exhibit B
1 : . v | : ' . [] pS H ¢ { | de
AGIULHERT nude this =<d6th ay of June,
«1970, pursuant to Chapter 1016 of the Jaws of 1969, bobwveon
THE CITY OF NEW YORR (hercin called "City") and the
NEW YORK CITY HYFALTH -2RD BOSPITALS CORPORATION (herein callec
, Thosehorntion”), a public bencfit corporation.
’
{
'
!
|
gio,
v
o
WITNESSETH:
’ i
I
WHEREAS, by Chapter 1016 of the Laws of 1969 (here
called "Act") the Corporation was created to deliver high
quality and dignified health and medical services and provide
health facilities for comprehensive care and treatment for
the 111 and infirm, both physical and mental, particularly
tc those who can least afford such services, and
»
WHEREAS, the parties hercto are required by the
AfCck to enter into an agyeement by July J), 1970 for the
operation of the hospitals then being operated by the City
a . .
for the trcatment of acute and chronic discases, and
' WHERLCAS, pursuant to the Act, the Board of Estimate
: { s .
by resolution (Cal. No. 244 - June 18, 1970), has duly
authorized the execution of this Agreement on behalf of the
City, and
Nad
WHEREAS, Section 2 of said Act entitled, "Declara-
\Y
tion of Policy and Statement of Purposes," provides as
follows:
—
—
—
J ; ; & ‘@"
; "§ 2. Doclaration of policy and stateront
of purposes Ye :
It Js hereby found, doclared and deterivined
that the provision and delivery of comprehoisive
carc and treatment of the ill and Infivia, boih
physical and mental, are of vital and paramount
concern and esscntial to the protection and puo-
motion of the health, safety and welfare of the
inhabitants of the state of New York and the
city of New York. :
. There arc serious shortages in the number
of personnel adequately trained and qualified
to provide the quality care and treatment necdod.
A myriad of complex and often deleterious con-
straints and restrictions place a harmful burden
on the delivery of such care and treatment.
Technological advanc2s have been such that pcr-
tions of the health and medical services now
delivered by the city are not as advanced as
they should be. A system permitting legal,
financial and managerial flexibility is required
for the provision and delivery of high quality,
- dignified and. comprehensive care and treatment
for the 11) and infirm, particularly to those
who can Jcast afford such services.
: It is further found, declared and deter-
mined that hospitals and other health facilitics
of the city are oft vital and paramount concern
and essential in providing comprehensive care
and treatment for the ill and infirm, both ot
physical and mental, and are thus vital to the
protection and the promotion of the health,
welfare and safety of the people of the state
.0f New York» and the city of New York.
There are inadequate general and specialized
health care facilities including but not limited
to nursing homes and related laboratories and.
ambulatory care clinics and centers and diagnostic
treatment centers. The inadequacy and shortage
-0f health facilities derives from such factors
among others as the rapid technological changes
and advances taking place in the medical field.
These changes and advances have created the nced
for substantial structural and functional changes
in ‘existing facilities. Many of the health facil-
ities of the city are overcrowcésd. Buildings are
deteriorating ‘and many suffer harm as a result g
of piecemeal and uncoordinatcd additions. The
- N °
eT ? ¢ 2 3 '
. . ’ . < p
: .
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t
facilities avallable for cducetion, research
and developrent arc inadeguate to meet the
demands of the medical ficld., Procedures in-
. herent in the administration of health and
medical scxvices as heretofore cstablished
". obstruct and impair efficient operation of
health ang modical resources,
It is found, declarcd ond determined
‘that in order to accomplish the purposes .
; herein recited, to provide the needed health
; : Lan and medical services and health facilitieg,
; : : a public beneiit corporation, to be known: as
the New York City health and hospital cox-
, poration, should be created to provide such
t health and medical) services and health facil-
! ities and to otherwise carry out such purpo-
: jisest that the creation and opzrztlon of the
: . New York City health and hospitals corpora-
: : tion, as hereinafter providad, is in all
; : respects for the benefit of the people of
: the state of Rew Yorkand of the city of New
: York, and is a state, city and public pur-
pose; and that the exercise by such corpora-
tion of the functions, powers -and duties
as hercinafter provided constitutes the
performance of an ‘essential public and
governmental function,"
NOW, THEREFORE, if is agreed:
ARTICLE I
: LEASE
bh}
yin HR Section ¥.1...In RETO with Section 7 of the
Act, the City leases to the Corporation at an annual rent of
: | 81 for 3 term co-existent with_the life of the Corporation
commencing at 12:01 A.M., E.D.S.T.,. July 1, 1970 (herein
called the "effective date") for use in the execution of the
: corporate purposes of the Corporation all of the following _
| hospitals, including the equipment and property contained
? thercin or used in connection with the operation thereof, an
: inéluding any building, structure, unit or any improvement
ne
wwe
AIL (hin LH
$ ’ | FH i oi
A @
4 . re
. . oh []
to rcal property, all neceusary and vsual atrcencant aud
related covdpnent, facilities and fixtures thereof ox any
LJ
* .
\ . .
combination ox combinations thereof. The only hospitals
lcased hereunder are those being operated on the cffccective
aii
date by the City ang do noi include any building or build-
ings now being constructed a an ~addition to or replacement.
ea ———C —————— pt 1s 28 Be
wf mmy of the named hospitals nor any of the areas surround-
———
— pe ———o———— pm
So eres
- ' . ! |
ing Such) building or buildings which are being used by :
hs contactor during construction, but the City agrees—that
it vill lea se ‘such riidl ngs and areas to the Corporat Aon
upon their completion in accordance with the feyng of this
agreement.
" Manhettan
Bellevue Hospital Center
Harlem Hospital Center
Sydenham Hospital
Francis Delafield Hospital
Goldwater Memorial vesbitnl
Bird S. Coler Memorial Nospital
' Metropolitan Hospital
—
a
m
,
-
Brooklyn
Coney Island llospital
Kings County Hospital Center
Cumberland Medical Center
Greenpoint Hospital
$a
Ouveens
Bsmt i
City Houspilal Conter ot Dlhurst
Ducons Borpital Contor
Bron
Bronx Municipal Hospital Center:
+ Fordham Hospital | |
{
| * . [3
+ Morxrisenia Hospital |
Lincoln Hospitel
" Richmond
Seaview liospital and liome
In addition, the City hereby transfers to the Corporation as
of the cffective date all of the supplies and materials con-
LJ
tained in the above meéntioned hospitals,
- _—
Section 1.2. The City hereby leases space at 125
Horilt tvedt; Manhattan, and 346 Broadway, Manhattan, to the
Corporation. Both wyoRlies ave owned by the City. The space
leased. ls hereby set forth in the attached Schedule "A".
. i
.
Ad
These leases of the aforementioned space may be terminated
by either party upon six months' notice.
Section 1.3. The City hercby assigns its leases
a
to the following property, which property is presontly *
leased by The City of New York for use by the Department of
Bospitals in connection with or incidental to the operation P :
\
¥ . [| ‘ : 1 = !
' Sd. ur . Y : I 241 Church Street, Ravhiattan, op! fourih
; and fish floors : :
uw Lafayoeite Street, Manhattan, part of the
i #ifth floor
Joc dd Vest 1284h Strect, ‘Monhattan, the. entiyc
building consisting of three floors uscd
by Harlow liospital as a psychiatric anntd::
y 313-15 Vest lz5¢h Sttran, Manhattan, two floors
used as a laboratory in connection with
the Colunbia-larlem affiliation contract
2006 ritkin Avenue, Brooklyn, ambulance garayc
presently used by the Department of
+ ~~ llospitals as an ambulance station
i280 Basi 100th Street, Bronx, two ambulance
garages presently used by the Department
of Hospitals for an ambulance station
1152 Randall Avenue, Bron», motor vehicle
: -xepair shop
1165 Morris Park Avenue, Bronx, entire third
and fourth .floors used as a Piychintese
clinic
td
The Corporation agrecs to be responsible for the rentals of
the above mentioned properties. Atiabhed hereto and made a
part of this agreement, marked Schedule ipeids a schedule Tn
of caid leascd properties and their rentals.
bo! : 1
Section 1.4. Fhe Corporation accepts the hospitals,
the equipment and any other supplies and property incidental
to or necessary for the operation of said hospitals and all
Sthet real property, including the real property which is
presently leased by The City of New York and uscd by the
Department of Hospitals in connection with or incidenta
©
to the operation of such hospitals, in its condition as of
the effective date without warranty or representation
of the City, subject "to existing encumbrances and loses =
affecting such property. The Corporation agrees to naintein
211 property vihich is the subject mattor of this sgrociiint
A)
as wil) enable its continued use, including the yard:r, areas,
fences, railings, sidewalks and any and all of the adjacent
property that may be part of any of its premises and all
; :
- connections with the street, sewer, steam, water, electricity
-
gas, power and the elevators, boilers, machincry and cach
and every fixture used in connection with the use or opoera-
tion of any structure or building on the subject preniccs,
LJ
Section J.5. ‘The Corporation shall not acquire
- by: deed or Jeasc any rcal property without the prior approval
—
of the | Mayor, nor shall the Corpo ra tion acquire by gift any
real property which will impose an additional burden vpon
the City without such approval.
4 \ | ®
\ :
4 > : -—
’
ARTICLE 11
i.
t
CONDIrY0S Or SLnvICE
« a y 3
Section 2.1. The Corporation acknowledges th.:t
€hc hospitals under its jurisdiction and the services
.that it will render are particularly for those who can
» least afford such services.
ta Section 2.2. The Corporation agrees that the
services that it shall render will comply with all applicabla
‘governmental rules and regulations, and further agrecs to
conform to the standards implementing Titles XVIII and MIN
of Public Law 89-97, and further adrees to render services
in accordance with Section 6, subdivision 7 of the Act.
Section 2.3. The Corporation shall operate the
facilities under its jurisdiction consistent with the
SN . 2
standards promulgated by the Joint Commission on Accredita-
| -—
tion of Hospitals and Council on Medical Education of the
American Medical Association, where appropriate.
.
°
*
Section 2.4. The Corporation, recognizing that
heretofore the municipal hospitals have rendered services
to vorious agencies of The City of New York, agrees to con-
tinue these services. Payment for said services has becn in-
cluded in the Expcnsc Budget for the fiscal year commencing
July 1, 1970 and will be .included in future expense budgets * »
Ts EL Tg la . : i. . . .
; ' s : { ; Y o het et i
! : 9
- to the extent that reimburscnent for said services is not
v iy I
provided from any other source.
.« : g No
Section 2.5. The Corporation agrees to provide
any additional scrvices required by the City not hereto-
fore rendered by the municipal hospitals provided that when-
.ever the city requires the corporation to provide sich
health and medical services to persons in the city, ithe
city shall pay the corporation for the cost of such scrvices
as. are actually rendered, such cost to be determined by
agreement between the city and the corporation; provided,
however, that such payments shall- only be made hy the city
to the extent that no ye lnburaimt allowances or other
payments are paid to the corporation from any other govern-
ment or other sources for the payment of such costs.
\
\ . |
Section 2.6. In order to assure continued State
-— U
reimbursement -of psychiatric and other mental health ser-
vices, the Corporation agrees to provide said services in
accordance with Section 8-A of the Mental llygiene Law and
the regulations promulgated thereunder by the New York State
Department of Mental Hygiene, or any amendments thereto.
- \ . 1
: '
| ARTICLE .LIT |
' \ “oo : ‘i,
8 SERVICES TO BE RENDERED BY CITY
AGENCIES TO THI CORPORATION
\
\ "
Section 3.1. Pursuant to Section 5, paragraph
19 of the net, City agencies may continue 16 solder: sank
vices to the Coxporaks on in order for the Corporation to
carry out 168 purposes. These services will be rendered:
| by agreaient between various City agencies, including the
Comptiyoller, and the Corporation, and pursuant to the Act,
subject to approval of the Mayor. The cost of such
services ie to be charged to the Corporation and paid
from funds appropriated to the Corporation for such pur-
. poses.
ARTICLE 1v
Ory icy Or ir So Onhcy COUNSEL
"i
\ .
| .
Section 4.1. The Corporation Counsel. shall be the
attorney 2a ‘the Corporation so leng as the City's budget
contains an appropriation for the Corporation. In the VAD
of a en of interest between the City and the Co¥pora-
ton, however, the Corporation shall retain its own counsel.
Nothing in this Ariicle shall prevent the Corporation from
hiding its own ZEtomey. or from ehploying chteide counsel
"whene voY the Board of Directors of the Corporation deems it
desirable. |Such appointment will be made only in accordance
~~ with daw /and after consultation with. the Corporation -Counsel.
Section 4.2. The Corporation Counscl, in his dis-
cretion, may appear, or direct any of his assistants to
’
Ll}
id i Ld LJ - eo ’ [J . Ad appear, in any action or proceeding, whether criminal or civil,
|
. c—
—
vhich may be brought against any officer, subordinate or em-
ployee in the service of the Corporation, by reason of any
88 Tories omitted by’ such’ officer, Suboralinats or employee
while in the performance of his duty, whenever such appearance
is requested by the President of the ‘Corporation or whenever
the Snieroshs of the City require his appearance. The Presi-
dent shall bubmie all pertinent papers with other documents
to the Corppration Counsel.
ARTICLL 'V
!
COLLECTIVI BARGALIIING AGRVLL:
|
\
"Section Bide IN all instances where collective
bargaining 3 being conducted with certified cmployee
organizatiols’ and bargaining units of employees whose titles
and dutics dio substantially unigue to the Corporation, such
collective bargaining. negotiations shall be conducted’ by the
on Labo Relations of The City of New York jointly
with representatives of the Corporation. Such agreements
shall he effective upon approval by the City on economic
matters and by the Corporation on non-econcmic matters.
|
Section 5.2. In all other instances where nego-
tiations are being conducted with certified employce organiza-
tions aud bargaining units of employees of the Corporation
whose ‘titles and duties are no substantially unique to the
« a—
-—— Corporation, the Office of Labor Relations of The City of
New York shall bargain for and approve agreements on behalf
of Lhe Corporation. | The. parties agree that there will be a
continuing liaison between the Office of Labor Relations and
the Porrcraras with regard to any’ Special problems of
hospital operations which may bear on the negotiations then
in progress.
Section 5.3. In all cases where a dispute arises
as to whethel or not the titles and duties of the employees
|
K ' t br
con®
: . as er /
Colleclive Bargoining of The City ©f Now York whose decision
30d arc or arc not substantially uid to tho Cor=
- é 1
poration, such dispube shall bo submitted to the O7fice of
of
jo : ar
shall be final and binding. .
i") ha skction 5.4. The method of financing the cost
r any collective bargaining agreement will be the subject of
mem pm en : {== bese mri
[4 b :
g
|
|
.
IS [ .
.
~ |
TW pr ST . ¢ — ES . as
. P E—— c—
negotiations between the City and the Corporation.
- at = LE
; < . . -
t .
ARLICLE Vi .
Se vi INDEYNIFTCLITON
“Section 6.1. The City agrees to keep, save and
hold hariless the Corporation from any and all liability,
loss or damage arising’ from-or in connection with the pro-
. .
[J
pi vision and delivery. of health services, including any lia-
/ \ ——
/ Ie. 2 i . 7
frie / bility unex ‘the Workmen's Compensation Law. The City will
Sg 5
als eos) save and hold harmless the Bitoctirs, merhbers,
otfidery or agents of the Corporation from any act done or
omitted in good faith and with ordinary discretion pursuant
- to dis by- lavs, rilice. regulations or statutes governing
the Corpoiniton. IL is the intent of the parties that, such
exoneration of liability be consonant with the privileges
afforded to the aforementioned pursuant to Rew York City
™N, he Charter Section 1724.
4 rs ; Section 6.2, The City further agrees {o keep,
oe save and hold harmless ,the Corporation and its physicians
{FAN et : : : : : rE
and dentists, as well as the medical schools and voluntary
hospitals win whom the Corporation has an affiliation agree-
ment. by als signment from the City or otherwise to operate the
hospitals transferred to the jurisdiction of the Corporation,
from any and all liability, loss or damage for malpractice
of the Corporation, its Phys sicians and dentists, arising »
*
from the operation or supervision of the hospitals transferre
SRR SE Ale : Jd
C3 : ; |
9, ‘
- *
[] :
ys
to the Coxjporaetion, or the malpractice of the physicians and
dentists of the wadical schools and voluntary hospitals oc-
3 .
\ p S
.
: curring auring the performance of the affiliation agreements
existing now or hereafter with medical schools and voluntary
hospitals for medical services in the hospitals named in
Article 1.
The foregoing shall not apply to acts pexformed at
the medical school or voluntary hospital or apply or inure
fo tho BERnZLL of any physician or dentist who shall charge
a fee for his services whether or not payment is made directly
to him or not. Hotovor. a physician or dentist, who, at the
direction of the Corporation, exccutes an assignment: of his
fee for the benefit of the Corporation shall not be decrivd
to charye a fee. for his services hercunder. It is understood
that the City shall fot bs liable for or obligated to defend,
save harmless or indemnify the medical school or voluntary -
hospital or its physicians or dentists against or from any
claim arising out of amy act or omission on or at the
2 LY . :
premises of the medical school or voluntary hospital.
| The foregoing is conditioned upon each of the
following:
1. ' The Corporation, its physicians and dentists,
and the medical school or voluntary hospital and its »
physicians and dentists, shall promptly forward to the City
e
i B . . x
i.
i
t . : Jud
'
all swaeaonces or notices of whatuoever nature, pertaining {
Claims rogeived or sorved upon thom or cach of thom,
\
. :
1 .
»
2+ The. Corporation’ and cach of ‘its physicians
and dentists, and the medical schools and voluntary hos-
pitals and their dentists and physicians, shall cooperate
fully in aiding the City to investigate, adjust, scttle or
defend cach claim, action or procceding.
—
—
—
—
—
-
\
: 3. The defense of all claims, actions and pro-
ctedinys within the purview of this Article shall be con-
ducted by the City. The Corporation Counsel of the City
shall Aron and defend such actions and proceedings on be-
half of the Corporation, -its physieians and dentists, the
medical. schools and Vol untaxy hospitals and their physiciar
and dentists.
®
No settlement shall be made without the approval
of the City, including the Comptroller, and in accordance
with'procedures previously employed to settle actions invo!
hb) .
municipal hospitals.
L}
In the event of any appeal from a judgment agains
Ed the Colborntich its physicians and dentists, or the medic:
schools or voluntary hospitals and their physicians and der
tists, ‘the City will promptly satisfy the judgment or stay
the execution thereof by filing the appropriate bonds or 4r
struments, so that exccution shall not issue against the
property of the Corporation, its physicians or dentists, o:
.. Se: cit 7 5
: 2 »
againct the property of the medical schools or voluntary
-
’
J j | . . Ud . *
hospitals and their physicians and dentists. ~~
8 i is understood that the City is not obligated
SS
£0 save haa
K
Y
Y
N
nmless or indemnify the medical schools or volun-
! tary hospitals or their physicians and dentists as well as
"the physicians and dentists cmploycd or associated with the
‘ cdrporation as a result of AY act committed by them,
tortious or otherwise, other than 2B act of malpractice or
FT
an act arising out of the treatment of patients.
|
Liv, vl The Corporation shall in no vay increase the li-
*
~*. ability of ‘The City of New York pursuant to this Article by
agreement with its employces,. officers, directors or with
\
third parties by increasing the scope of its own liability
for the actions of its officers, cmployces, dircctors and
third parties. | | ; i”
CARTICLY VII
REIMBURSEMENT ALLOVANCES
\ *
. .
\
» + Section 7.1, The Coxporation shall apply for and
receive all reimbursement allowances or other moneys avail-
L 4
able to iho Corporation froin any sources fox the provision
LJ
-of health 2nd medical services for vhich such reindbursenent
allowan Ces ox other moneys are avaldlable through or in the
Lio : . ; i
LJ \ * : » ]
facild ties of the Corporation and such reimbursement allow-
\
ances o) other moneys shall be collected and rcceived by
the Corporation directly from any such sources and used by
the Corporation for its corporate purposcs.
ARTICLY VIIX
PROPERTY TO DRE RETAINED BY THE CITY
AND INTERIM PFI INZNCTIC a Sa
»
Section 8.1. . All property, including cash or =~
choses in action, under the jurisdiction of the Department
of Hospitals of the City at 12 midnight June 30, 1970, which
is not part of the leascd property shall be retained by the
City. except such property as is included in Section 1.1.
$33 woitvs duc to The City of New York relating to and in
connection with the operation of the Department of Hospitels
prior to July 1, 1970 shall be transferred to The City of
New York, -including but not limited to all unexpended moneys
repayable to The City of New York under affiliation agree-
Ha Bs tormi nating on June 30, 1970, moneys derived from
patient fees, reimbursement from private partice or govoern-
-
® | : » :
vs : [4
: .
<
) . he
. ‘
¢ 9 .
asntal sources, roentels or .fecy charged for concessions ov
privileges,
* : \.,
: )
++ Section C.2. Interim financing arrangements will
be made to insure cash flow to the Corporation consistcnt
with the responsibilities of the City and the Coxporation
: *
under this 2greement i
x
| | | ki
J
: 2
3 »
¢
“
" *
Ne
ot
{ ARTICLE. I
. EXPENDITURE OF )'UIIDS BY THE
CONRPORZLTIQOT
———
Section 9.1. The City shull cach ycar provide funds
in its oxpense and capital budgets for the Corporatign, in.
we i cm oe nt
.
‘consideration whereof the Corporation shall expend funds de-
‘rived from any bhud¢eted source whatsocover iniconformity with
:
the budgets appropriated by the City and in Contant with
-
the ‘meiroranda of understand
ing agreed upon by the Corporation
and the Mayor of The City of New York.
*-.- ~~ Secection 9.2. . The Corporation shall not make any
payment for work done on any capital project unless fiftcen
(15) days have elapsed after notice of intent to make such
payment: is reccived by tho Comptroller of The City of Now
York. The Compiroller shall notify the Corporation of any- .
objections or reservations that he might have in regard to
such payment, setting forth the reacons for such objections
i LY -
.
kJ
or reservations. Said objections or reservations shall be
binding upon the Corporation, and no payment shall be made
in excess'of the amount recorwmended by the Comptroller.
ARTICLE X
\ LJ
DEFINITIONS
Section 10.1. Whenever words defined in Sectien
3 of the Act are used in this Agreoment, they shall be con-
strued to have the ‘same meaning described in said section. ’
{
| ARTICLE XI
HEADINGS
Al Scction 1).1. The descriptive headings of the
articles of this Agrcenaznt are inserted for convenience and
reference only and shall not be construed to amend, modify,
vary ‘or extend the meaning or construction of any of the
®
provisions of this Agreement. : i
greet : ARTICLE XII
i 3s.
AMENDMENT
(}
‘
1}
Section 12.1. This Agreement will be reviewed
by the parties after twelve menths and may be amended from
time to time upon the written consent of the parties and
the approval of the Board of Estimate.
f [] ' : >
. {2
. in .
IN LESS VIIBTEOr, this hgrecoinent has heen auly
“exccuted by the partics ac of the day and year first above
, : , 2
written. : : ag)
. oi : FL AG EI
toe : ~ fr. <
[1] IC a >v AS
xX T11 CITY OF REW YOR
: A ; pu i ne’ :
hk? : : ap som [28 Fo
RA a By \p Naa ad
vill a =
gs NEW! YORK CITY HEALTH ARD
~ , HOSPITALS CORPORATION
7 # ~wv ois \ Somme SE :
By ey WZ A ¢ —— > 32 Wikia:
Inc———
ps
| mn — Oo c——— Sees —_ rn —
ESSE lo wand Presiden 4 i, Tl i
ATTEST:
RE i
City Clcrk
Fat i AE A Ein ail
. | ’ 1
APPROVED AS TO FORM:
N 2 -—
Corporation Counsel
® bo | @'
suai; OF REV YORK
yo. :
CITY OF REW YORK th 8S. . : ve
cCouMry OF NEW YORK ) ‘
‘ : . : . : . C i
: «On thig /2C day of July ry 1970, boforo me per-
|
sonally canic JOIR V. LINDSAY, to me known, who, being hy ne
duly sworn, asa depose and say that he resides at Cracic
Mansion, PRorough of Mana TEen; City of Rew York; that bo iE
‘the Mayor of The City of New York, the municipal corporation
: peng : . :
: : | described) in and which exccuted the totisuing instrument;
: : \ |
: that he knows the corporate seal of The City of New York;
: |
4 : i . - 2 ° . : ° ° :
that the seal affixed to. sald instrument is said corporate
seal; that it was so affixed under and by virtue of the
authority conferred on deponent by the Board of Estimate
of ‘She City of Row York, and that he signed his name thereto
by virtue of like authority.
L
4
a / ty Vs Sl, rr nll
:
YALRY RITA RHEINWALD . : : HOH PinliC, Site of New Yorx i
fin tem, £28500 | a : Certificeie filed in Kizhmend York Coup ov
Commission Fxpires arch 30, 1872
-
-
' +
Sarl 01 BlEv YORK ) 4 ; 8 -
CY. OF Kz YOR, 3. 55.3
COUNYY OF Ri YORR )
. A :
- ps }
Ble On this: Joy day of Jey + 1970, bofore
ne personally caine JOS P11 ENGLISH, to me known, who being
by me duly sworn, 48id depose and say that he resides at
157 Last 7st Tiros, Row York City, NHN. Y,. Apt. l-R
:
that ‘he, is the President of the NEW YORK cry HEALTH AND
A | j |
HOSPITALS cor wi 0i, ‘the corporation described in and
fev :
which executed the foregoing agreement; that he knows the
scal of said corporation; that the scal affixed to said
agrccient is such coxporeaete scal; that it was so affixed
by order of the Board of Directors of said corporation,
and that he signed his name thereto by like order.
[3
- p)
sly as i He. 4 ae ZL LON xX
yi i bo cIVA OF Fis Ai val 1)
0 . pI FI, Sen el Nr Vers
. ? a : 4 dr FA | Sah MILE SIDI
} ° : . ly Cz "tical ta tiled in Richmond 53 Baus
: Coinmission Crniics Wolk 29, 37
FS
.
»
*
4
SCHEDULE 2
SCEEDULE Or CITY PROPERTY LEZSED TO TEE CORPORATION
: Roons Rooms : ROOMS
Location : First FloOY Fourth Floor : Fif+*h Floor
125 Worth Street 3, 2,103, 4, 41), 412, 413, 414, 500 ,: 501, 503
Borough of Manhattan wD By Ty 8, 9, 415, 416, 417, 418, 504, 505, 505,
: 10; 11}, 112, 419, 420, 421, 422, 507, 508, 509,
113,.14,: 16, 423, 424, 430,43) 510, 510A, 3511, "™
17, 28 and Large 512,°S13, 5133,
waiting and cleri- 514, 315, 516,
cal room -.no num. i | 517, 518, 519,
ber, two eto-zge ) 830,521, 522,"
rooms, one pnoto : Ei 523,:524, 5259,
*o0; One fincer~ : : 526, 527.2528,
print room, mez- : : : ; 529, 530,521,
zaninc office = : 532,533 "5
no rocCm NUKDErXsS.
Ld
r
ROOMS = : Rooms
Location .Fifth floor Eleventh Floor
345 Droa€vay 5 ; .
£ Manhattan 5 Entire floox ~ Entire West Wing of ‘Building
Borovgh ol M
a or i om Ron @
H
a
4
'
NY
SCHEDULE OF CITY LEASES ASSIGNED TO THE CORPORATION
Board of Estimate
Resolution Current
Borouah Location Date Cal. No. Rent
Mznhattan " 7341 Chuwch Street 7-28-66 -41) $104,802.45
mae 2yonxk
Brooklyn 2006
© Avenue
5-22-68 192A
5-22-68 1928
7-28-66 445
4-25-68 - 114
7-25-68 73
2-18-70 225°
10-25-67 ® "429.
17,056.10
3,029.65
85,117.50
10,350.00
118,000.00
. 10,109.00
11,750. gy
e
: MEORANDUYS OF AGRULMENT BEYWLRET NEW
Yin YOU C19Y UHEALWH RR HOSPLT/1LS COR
PORETLON AND THE CITY OF BL YOPR }
ae RELATING 40 CAYITAL EXPERDULURILS
: BY ‘THE COIPOIATICH ~-
WHEREXS, purswnt to Chapter 1016 of the lave of."
1969, an agrcement has been subiitted for the approval oi
the Board of Estincte between The City of Kew York anc the
Rew York! City lLicalth and Hospitals Corporation: and ;
. [1]
!
WIEREAS pursuant to Article IX of said agreeicont
the Corporation and the City agrce that appropriations to
the” Corporation are to be included in the capital budget
of Tho Clty of Rew York and that such funds and all fuids
of the Corporation derived {from any budgetcd source vill
be spent in conformity with the appropriation and in con-
formity with the memoranda of agreement between the Corpora-
£2on and The City of New Yorn,
i kL
oy] . .
P
ROW, THEREFORE, iL is agreed as follows:
1. Capital Budget Reqguecst
-
Prior to Scptember 15, the Health and Hospitals Corpora-
tion will submit capital budget reguests and supporting
information &s required by the City Planning Commission,
the Budget Burcau and the Health Services Administration,
. | ee
<, .
i t ; od
Tov: Fort of thy svasinsion will body confovis iyrvith
capital bhudoetireguiroin ants of Yhe City,
. i .
A
2. Copitdl budget administration
a. Current Projects
; LJ
i Those projects under Dzpartiment of Public
ar {ty Works jurisdiction will continue as at n
|
present but with the Corporation actiina
. l bo
as Clicyni, rather than the laalth Scrvl:
ces Néninistration, oxcept as othexwizo
agreed.
1i ho Coxparationivill bocome theucliont
for projcois currently ander construc
tion by lecalih and Mental liygicene
. ?
Facilitics 1mprovenent Corporation
ONIFIC), swhicet {oa protocol to be
oi agreed vpon by the City, the Corpora-
: " ; .
tion, and NIMIPIC,
b. Multi-Project Lines
-
Items included in multi-project lines, inclu-
ding funds for general planning and personnel,
«will bo administered by the Corporation on
IN
the basic of blanket certificates issued py »
the Budget Bureau, The certificate will
identify aud cstablish a cost limitation
: '@® ¢
ih
4 "9
lira vers) Tt eh ocoo I wT A SI Re JErZoproachh ad ton charged against the coril
ficate, subjoch Lo Yh provision that:
. | Jor ;
. . )
iy WT oh 3 Por por cont of the funds within
each multi-~projece line will be
‘reserved for non-delincated items;
) ’
however, no such item with a cost
| “estimate in excess of $50,000 nay
be financed from this non-
-
ea
m
S
—
—
—
ois delincaiod yesorvo \Wwilens it ic
first approved by the Ludget
Burcau.
33 The Corporation lay increase the 2
cost of any approved item by an
amount not to exceed 15% without
prios; approval of the budget
Burcanu, subjoct to the total a
: limitation of the certificate.
re All such Bey ehinus will be ye-
: hi
~_._ported to the Budget Bureau,
Oe New Projects
i tate Projcets. Row projects assigned
to HMIUFIC, will follow the terms sot
forth in Budget Burcau Circular CS-19.
.
"~
ii Other New Projects. Al). other new pro-
jects will rprocuod as follows:
t ! : "9
(a) Prior approval by the Dudget Bureau
shall be required of the functio:.)
\
&nd space programs and cost esti-
= EE PR mate for each facility before an
architectural contract is entered
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into by the Corporation.
. {
i ° . .
(b) The Corporation ay utilize exisi--
. . { :
ing City or State architectura
.~
—
—
—
—
—
—
—
—
c
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: fce schedules or dcvelor new ones
subject to the approval of the
City. Budget Bureau approval of
the architectural contract is
not required, as long us the con-
tract is in accordance with an
approved fec schedule and within
the approved space program and
cost estimate.
. . : b . :
(c) After initial Budget Bureau approval of th
functional and srace program for a project
only major changes in a program and increec
in tho basic cost of a project more than °f
will require Budgct Bureau approval. A
» major change in a functional or space
JHE : program is defined as one which chinges th
nuber of beds, operating rooxs, or tic
amount of a given health sexvice by
(d)
(c)
a
y
.
E
>
\
20% or thie adwrwion of non-progrs mG
hoalth soyvicon that will Ancyeoono Lic
gross operating expenses of the .
facility. '
Hhe Corporation shall subuit beth
schewatic drawings and prelimingiy
spans Lo %ho budget Duraau for
sinforretion, -¥nese documents will
reuuvire Budget rend approval only
3% the cs timated construction cost
cxcreas 105% of the previously
approved concliruction estimate
or involxes major changes from the
previously approved functional end -
space program,
At the time of review of preo-
liminary plans by the Dudget
Burcau, a cost limitation for
. the project will be established
basad upon the latest approved
estimate including appropriate
escalation and contingency
-
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[4]
\ allowance. If, after final plenn ©
are completed or vhen bids are
\ .
taken, the cost limitation is
exceecqod, Dudget Durcau concur ie: co
@ - y id i. - ¢
will be required pric to kidding
~
or awarding of contracts for eoin-
struction, |
\
| (£) Change orders during cons tructio: ~-
i . ‘arisi ‘yor other than field co: : i i rising from otl t) fiel
)
ditions or architectural error ox
omission =~ shall reguire Budget
Bureau approval if they involve &
.
~ : ;
change of morc than 5% in the
arount of any construction contract,
or inwolve addition of health sci
sm vices not in the approved prograni. ~
: 4. 'hdvance of Funds
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(a) Advances. The City will make quarterly advances of
+ funds to the Corporation pursuant to certificates
issued by the Budget Bureau. The amount of each
advance will be based on a& spending schedule sub-
mitted by the Corporation.
{b) Copies of all capital project contracts will be for
warded by the Corporation to the Budget Bureau and
the Comb troller,
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<,
t
-
i Interna) Cos nyy IE _imd liepor 1
(ny Sp in 5 7 Ne iy “i nN ved ~~ .e SP . . 20) cars
Te Corntvratio: vill maintain approprialc £0CCol ie ant
wil oe respunLible for providing monthly infor: tlacn
on spunding against upproved capital projecls to Uh
.Budoet Bureau nd the Comptroller. ‘
H
G. Jidniecosasue Informe tion Svsten |
in 8 eS Si 2 HE San mp 4
i
;
3
: ine Corporation will establish Ar Sperats a coviinl
projects mancgeagnt information system which wiil pines
vide data on capital projects as rcasonably rcjuvirad
by the Budget Bureau,
\
IN MITINESS WN rEoy, ths vig have Quly cxecuted Lule
> e
agreement on the ic Gay of Bi 1970.
/
New York City lealth and losp
Corporation
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Exhibit C
CITY COUNCIL “® rau Jan 9.96 4 “Lelia
| PHASE TT CorTan oF
# 773-000 2
FINANCIAL ADVISORY SUPPLEMENTAL AGREEMENT (the "Supplemental Agreement”), dated as of August 1, 1995, between NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION (the "Corporation”), a local development corporation pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, having an office at 110 William Street, New York, New York 10038, and J.P. MORGAN SECURITIES INC. (the "Financial Advisor"), a Delaware corporation, having an office at 60 Wall Street, New York, New York 10260.
The Corporation hereby engages the Financial Advisor to act as the Corporation's exclusive financial advisor with respect to the sale, transfer, conveyance or other disposition of, ia one or a series of transactions (which may include or take the form of the execution of management contracts or leases in respect of) (each, a “Transaction” and, collectively, the “Transactions"), Coney [sland Hospital, Elmhurst Hospital Center and Queens Hospital Center (each a "Hospital" and, collectively, the "Hospitals"). This Supplemental Agreement supplements and, unless
the Corporation and the Financial Advisor (the "Advisory Agreement”), which shall be deemed a \ part hereof as if fully set forth herein, Certain capitalized terms used and not otherwise defined herein shall have the respective meanings given thereto in the Advisory Agreement.
The Financial Advisor agrees to undertake certain Transaction Services on behalf of the Corporation, including to the extent requested by the Corporation:
(i) performing valuation and financial analysis of each Hospital;
(i) designing appropriate strategies and financing structures for each Transaction;
(i) identifying buyers, contacting buyers, preparing marketing materials, supervising due diligence reviews and assisting the Corporation in negotiating each Transaction, as directed by the Corporation;
(iv) assisting the Corporation in its selection of other advisors and business brokers, if appropriate, in respect of each Transaction;
(v) assisting the Corporation in analyzing financial offers received ig respect of each Transaction;
(Vi) assisting the Corporation in negotiating the financial terms of each Transaction;
(vil) assisting the Corporation in reviewing and commenting on the business terms of all documentation to be executed in connection with each Transaction:
CITY COUNCIL | oh Jan 9,96 '® No .002 P.O9
«3d
(vil) assisting the Corporation in finalizing the terms of, and advising the Corporation
through consununation of, each Transaction; and
(x) performing such other services and functions as are customary in Transactions of
this nature. ©
As compensation for the Transaction Services to be provided by the Financial Advisor hereunder,
the Corporation agrees to pay to the Financial Advisor (i) a retainer fee (tbe "Retainer Fee"),
payable quarterly in arrears, in an amount equal to (2) $50,000 per month until such time as the
first Transaction hereunder is consummated, (b) $33,333 per month thereafter until such time as
the second Transaction hereunder is consummated, and (c) $16,667 per month thereafter until
such time as the third Transaction hereunder is consummated and (ii) a Transaction Fee for each
Transaction as described below (the "Transaction Fee"), payable with respect to each Transaction
in cash upon the consummation of such Transaction.
The Transaction Fee for each Transaction referred to above shall be in an amount equal to
$1,000,000 per Transaction, less the pro rata amount of Retainer Fees in respect of such
Transaction (i.e., $16,667 per month) actually paid by the Corporation during the first year of the
Financial Advisor's engagement hereunder,
In the event any Transaction is consummated within 12 months of the date hereof, the Transaction
Fee for each such Transaction so consummated shall be increased by an amount equal to
$150,000 (such amount, the "Incentive Fee"), payable with respect to each such Transaction in
cash upon consummation of such Transaction.
In the event definitive terms are finalized in respect of any Transaction and memonalized in a
letter of intent or other comparable document within 12 months of the date hereof, but such
Transaction is consummated after 12 months from the date hereof, the Transaction Fee for each
such Transaction so consummated shail be increased by an amount equal to the Incentive Fee;
provided, that such Incentive Fee shall be reduced (to an amount not less than $0) by an amount
equal to the pro rata amount of Retainer Fees in respect of such Transaction (i.e., $16,667 per
month) actually paid by the Corporation during the second year of the Financial Advisor's
engagement hereunder.
Each Transaction Fee, together with each Incentive Fee (if any), shall be payable with respect to
each Transaction in cash upon the consummation of each such Transaction.
Unless this Supplemental Agreement is earlier terminated or extended by mutual agreement of the
parties hereto, the Financial Advisor shall render the Transaction Services until August {, 1996.
The Corporation agrees to provide the Financial Advisor all financial and other information
requested by it for the purpose of its assignment hereunder. In performing its services hereunder,
the Financial Advisor shall be entitled to rely upon and assume, without independent verification,
CITY 2&2 No .002 P.10 ra an 9.96 17: COUNCIL “® a bY, iia '®
the accuracy and completeness of all information that is available from public sources and of all information that has been furnished to it by the Corporation or otherwise reviewed by the Finaacial Advisor, and the Financial Advisor shall have no obligation to verify the accuracy or completeness of any such information or to conduct any appraisal of the Hospitals.
Any financial advice rendered by the Financial Advisor pursuant to this Supplemental Agreement may aot be disclosed publicly in any manner without the Financial Advisor's prior written approval and will be treated by the Corporation as confidential, except to the extent disclosure is required by law.
In order to coordinate our efforts with respect to possible Transactions relating to the Hospitals, during the period of our engagement hereunder neither the Corporation nor any representative thereof (other than the Financial Advisor) will initiate discussions regarding any Transaction
except through the Financial Advisor. If the Corporation or its management receives an inquiry regarding any Transaction, it will promptly advise the Financial Advisor of such inquiry in order that the Financial Advisor can evaluate the person making such inquiry and its interest and assist
the Corporation in any resulting negotiations.
The Corporation shall pay to the Financial Advisor Out-of-Pocket Expenses incwred in the
performance of the Transaction Services during the first 12 months of the Financial Advisor's engagement hereunder, in accordance with the procedures set forth in Section 2.01 C. of the Agvisory Agreement, in an amount not to exceed $50,000, unless otherwise agreed in writiog by
the parties. The Corporation shall pay to the Financial Advisor Out-of-Pocket Expenses incurred
in the performance of the Transaction Services following the first 12 months of the Financial
Advisor's engagement hereunder, in accordance with the procedures set forth in Section 2.01 C. of the Advisory Agreement, in an amount to be mutually agreed in writing by the parties.
The Corporation shall also reimburse the Financial Advisor for Out-of-Pocket Professional
Expenses to the extent incurred by (and so agreed to be incurred by) the Financial Advisor to
third party professionals retained by the Financial Advisor in accordance with Section 2.01 D. of
the Advisory Agreement in an amount not to exceed 350,000, in accordance with the procedures
set forth below.
The Corporation shall require each third party professional firm or person retained by the
Financial Advisor at the Corporation's request to submit to the Corporation and the Financial
Advisor work-in-process expense statements on not less than a monthly basis during the Term.
To the extent agreed to by the Financial Advisor, the Financial Advisor shall pay such
Out-of-Pocket Professional Expenses (in an amount not to exceed $50,000 in the aggregate)
when incurred. The Corporation shall reimburse the Financial Advisor for all such Out-of-Pocket
Professional Expenses paid by the Financial Advisor within thirty (30) days of the approval (which approval shall not be unreasonably withheld), by the Director, of payment vouchers to be
submutted by the Financial Advisor to the Director. Each voucher shall set forth in detail (i)
CITY COUNCIL LEGH en
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itemized Out-of-Pocket Professional Expenses paid by the Financial Advisor, and (ii) the tota] amount of reimbursement requested.
The Director shall review said vouchers and promptly approve the reimbursement to the F tnancial Advisor of each of the itemized Out-of-Pocket Professional Expenses set forth therein. If the Director disputes any payment of Out-of-Pocket Professional Expenses, the Financial Advisor shall, upon the Directors request, assign to the Corporation all relevant contracts, documents, correspondence and work product relating to the services for which the disputed payment was made. The Director shall be required to act reasonably in making such determinations.
The Financial Advisor represents and warrants that, as of the date hereof, there is no material pending or, to the best knowledge of the Financial Advisor, threatened litigation, or contractual or other business relationship, involving the Financial Advisor which would prevent or limit the Financial Advisor from providing any of the Transaction Services requested by the Corporation hereunder, or which would. in the judgment of the Financial Advisor, constitute a8 conflict of
agrees to inform the Corporation promptly if at any time during the term of this Supplemental
Notwithstanding anything to the contrary contained in this Supplemental Agreement or in any Supplemental Agreement, the Corporation shall retain the absolute right to accept or reject, in its sole discretion, the terms, including financial terms, and conditions of any proposed Transaction.
The Financial Advisor and the Corporation acknowledge that the consummation of any Transaction may require the consent or approval of third parties including certain Federal, State and local governmental agencies, entities and bodies.
This Supplemental Agreement shall be governed by the law of the State of New York.
-
CITY
Tan S.05 172% Nog Q02 P.12 COUNCIL LEGHL 1 A y : ; N t
TT
IN WITNESS WHEREOF, the Corporation and the Financial Advisor have executed ths Supplemental Agreement, as of the date and year above written, in triplicate, two counterparts of which are to remain with the Director and one of which is to remain with the Financial Advisor.
I1.P. MORGAN SECURITIES INC.
NEW YORK CITY ECONOMIC
DEVELOP CO TION
343 sc
Exhibit D
$ |
; » :
' 1
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS -
QUEENS CCALITION, an unincorporated
association, by its member WILLIAM
MALLOY, CAMPAIGN TC SAVE OUR PUBLIC
HOSPITALS - CONEY ISLAND HOSPITAL
COALITION, an unincorporated association, INDEX NO. 10763/96 Dy its member PHILIP R. METLING, ANNE
YELLIN, and MARILYN MOSSOP,
Plaintiffs,
- against -
RUDOLPH W. GIULIANI, THE MAYOR OF THE AFFIDAVIT CITY OF NEW YORK, NEW YORK CITY HEALTH DAVID R. AND HOSPITALS CORBCRATICON, and NEW
YORK CITY ECONOMIC DEVELOPMENT
CORPORATION,
Defendants.
COUNTY OF NEW YORK
David R. Jones, being duly sworn, deposes and says:
1. I am President and Chief Executive Officer of
Community Service Society and serve on the Board of the
York City Health and Hospitals Corporation ("HHC"). Purs
OF
ONE
the
New
uant
to the HHC Act,' HHC is administered by the board of
directors on which I serve. I have served on the HHC Board
since 1993. I submit this affidavit in support of
plaintiffs’ opposition to defendants’ motion for an order
granting summary judgment in their favor. The facts
forth below are within my personal knowledge or are b
' Unconsolidated Laws § 7384 (McKinneys 1996) .
3
set
ased
f " hd
ij » &
upon information obtained from officials and employees of the
City, HHC, and the New York City Economic Development
Corporation ("EDC"), books and records of these entities, or
other public documents.
INTRODUCTION
2. In this suit, plaintiffs seek to ensure that the
defendants undertake the legally mandated public comment ard
review as they proceed with the disposition of the Elmhurst
Hospital Center, Queens Hospital Center, and Coney Island
Hospital Center (the "target hospitals").
3: The Uniform Land Use Review Procedure ("ULURP") is
a@ procedure mandated by the New York City Charter for
ensuring community, borougia, and City Council participation
in the sale, lease or other disposition of city property.
New York City Charter § 197-c.
4. Defendants claim that ULURP is rot applicable to
the disposition of the target hospitals because HHC, and not
the City, is subleasing the target hospitals. I submit this
affidavit to place into the record the facts to show that
defendants are wrong.
S., What is at issue in this case is the Mayor’s plan
Lo lease the target hospitals to a private entity. The Mayor
of the City of New York -- nct HHC -- decided to privatize
the public hospitals. The Mayor chose to put the
privatization plan into the hands of the New York City
Economic Development Corporation. The Mayor decided that the
« F
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first three hospitals to be "sold" are the target hospitals.
The Board of HHC has never voted upon, reviewed or formally
discussed whethar to privatize the public hospitals or
whether to dispose of the target hospitals specifically.
THE HEALTE AND HOSPITALS CORPORATION
6. The New York State Constitution mandates the State
and its political subdivisions to provide aid, care, and
support for the needy and to provide for the protection of
the health of the inhabitants of the State and the City of
New York. New York State Constitution Article XVII, Section
Od
rR
oh
7: In order to fulfill this constitutional mandate to
provide health care for the poor, on May 26, 1969, the New
York State Legislature enacted the HHC Act, Unconsclidated
Laws §§ 7381 et seq., establishing the Health and Hospitals
Corporation.
8. HHC was created at the request of New York City to
provide comprehensive Physical and mental health care to the
ill and infirm of the City, and was specifically charged with
ensuring the provision of "high quality, dignified" care to
"those who can least afford such geryvices.” U.L, § 7382.
9. In order to effect the purposes of the Act to
provide such care, HHC'Ss Creation was intended to overcome
the "myriad of complex and often deleterious cecnstraints®
which inhibited the provision of care by the City
government’s operation of the municipal hospital system.
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10. However, many of the powers granted te HHC were
constrained, and in some instances, subject to direct
cversight by the City. See U.L. §§ 7385{19); 73881) (a),
(2) (Bb), (7); 73%90(5)- (8). Among these were the power to
"dispose of by sale, lease or sublease, real cr personal
property including but not limited to a health facilicy, or
Bly ‘interest therein . '. . . '» U.L. § 7385(6). This
authority was contingent upon approval by the then-existing
New York City Board of Estimate. U.L., § 7385(6)
11. On July 1, 1970, the City and HHC entered into an
agreement ("Operating Agreement") under which HHC agreed to
assume responsibility for maintaining and operating the
City’s public hospitals. For its part, the City agreed to
lease its hospital facilities to HHC for an annual rent of
»1, for a term coexistent with the life of HEC. A copy of
the Operating Agreement is annexed hereto as Bxhibit 1.
12. Among the eleven hospitals operated by HHC, the
target hospitals are intended for immediate disposition by
the Mayor as part of his privatization plan.
13. The public hospitals, including the target
hospitals, provide a disproportionate amount of care for
those who are indigent or uninsured. Private hospitals are
just that -- "private." Under state law, private hospitals
generally may turn away the uninsured and underinsured except
in cases of emergency. Public Health Law § 2805-b.
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®
14. Queens and Elmhurst Hospital Centers are the only
public acute care facilities in Queens. If they are
privatized, there will be no facility in Queens that is
required under state law to provide non-emergen:t care to the
indigent or uninsured. Similarly, Coney Island Hospital is
the largest facility in South Brooklyn, serving a population
of 750,000. The privatization of this targeted hospital may
result in the lack of care for many within its catchment area
unable to afford private care.
15. Queens Hospital Center Las existing plans for
renovation and reconstruction. The "sale" of the hospital to
a private entity could affect the plans for and completion of
those much needed rzpairs and modernization.
THE MAYOR'S PRIVATIZATION PLAN
A, The Privatization Initiative
16. As set forth below, in 1994, Mayor decided to
privatize the public hospitals. The HHC Board was not
consulted as to this decision.
17. The Mayor has yet to forward evidence that
privatizing HHC facilities would save the City money. The
Mayor, not the HHC Board, requested from J.P, Morgan a
feasibility study of privatization. Significantly, in its
report to the City regarding the financial feasibility of
privatizing the target hospitals, J.P, Morgan specifically
did not consider the costs or benefits to the delivery of
services to the indigent. A copy of the Report to The City of New
AE ; 3
NB
® | |
York Concerning the Privatization of Coney Island Hospital, Elmhurst Hospital Center,
Queens Hospital Center (hereinafter J.P. Morgan Report] at 30,
annexed hereto as Exhibit 2 ("The financial benefits to the
City of New York, of course, also depend upon factors not
considered in this analysis, such as conditions of sale
relating to care of the indigent, provisions of services to
the City and the like.")
18. Nor did the Mayor provide evidence that the
provision of care will be superior if the HHC hospitals are
privatized. indeed, the medical care at HHC hospitals is
already provided by private medical centers or medical
corporations; the Queens Hospital Center and Elmhurst
Hospital have affiliation contracts with Mount Sinai Medical
School and Coney Island Hogpital has worked in partnership
with University Group Medical Associates. D.C. ("UGMA"), a
medical group that employs more than 300 physicians.
13. From the inception of his extensive privatization
program, the Mayor has exercised total control over the
entire process. While on some cccasions, the Mayor’s office,
often through Maria Mitchell, Special Advisor to the Mayor
for Health Policy and Chairperson of the HHC Board, has
briefed the HHC Board about City policies and plans, the
Mayor has never consulted the Board. Indeed, the HHC Board
has never voted to proceed with privatization. This affiant
asserts that it is the exclusive fiduciary responsibility of
the HHC Board to determine the fate of the HHC facilities.
6
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The Mayor‘s actions to date do not respect this legislatively
mandated authority.
20. In 1994, it is my recollection that the Mayor's
advisors circulated proposals to transfer control of Lincoln,
North Central Bronx, Elmhurst, and Queens toc their respective
voluntary affiliates and Coney Island into an independent
voluntary hospital. The HEC Board was not presented with
these proposals.
21. The Mayor chose EDC to manage the privatization
initiative and, in summer of 1994, EDC engaged J.P. Morgan to
consider the sale of one or more of the HHC hospitals and to
issue a report. The HHC Board was neither consulted, nor
were public discussions held, nor a vote ever taken on these
actions.
B. Disposition of the Target Bospitals
<2. In February of 1995, prior to the issuance of the
J.P. Morgan Report, the Mayor publicly announced that the
City would procesd with his plan to privatize the target
hospitals; again the Board was not consulted regarding this
decision and did not give its approval. In this connection,
and without consultation with or approval from the Board, the
Mayor created and alone appointed an "Advisory Panel" to
Study the sale of the Target Hospitals. Maria Mitchell, the
Special Advisor to the Mayor for Health Policy and HHC Chair,
CO serve as Executive Director of the Mayoral Advisory Panel.
I question how an Advisory Panel could supplant the vote of
»
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the HHC Board. Moreover, despite My protestations at HEC
Board meetings to have the Advisory Panel make a presentation
LO the HHC Board, no such presentations have taken place.
23. The J.P. Morgan Report was issued in March of 1995,
While the Report concluded that the target hospitals have
desirable assets which will attract buyers, it did rot
censider the cost of providing care to the indigent. J.P.
Morgan Report at 30, annexed hereto as Exhibit 2.
<4. Once again, the EBC Board was not given an
opportunity to review or authorize the J.P. Morgan Report or
any recommendations in it prior to its dissemination. The
HHC Board only received a copy of the report after it was
made public.
25. Shortly after the issuance of the J.P. Morgan
Report, in April of 1995, six members of the HHC Board,
including myself, sent a letter to the Mayor protesting the
inadequacy of the J.P. Morgan report as well as the entire
privatization process. In the letter we also stated:
We are further disappointed that the Board of Directors
Of HHC, as the designated governing body under state
law, was not sought in this decision making. As members
of the Board of Directors, we would be breaching our
fiduciary duty to the institution, as well as our
responsibility to the public, by allowing this decision
process to move forward without asking that our concerns
about this report be addressed and that the Board be
informed, full participants in this process.
26. At the HHC Board Meeting I attended held April 27,
1995, Ms. Mitchell announced that "The J.P. Morgan report was
a logical first step in a multi-tiered process which the City
’ 1 ' ,
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® :
required in order to determine whether privatization was in
its financial interest, and if it was, then to determine how
to prccesed. The report analyzes the financial implications
Of the City’s ownership of Coney Island, Elmhurst, and Queens
Hospitals, the anticipated interest by other organizations in
taking over these facilities, and the financial ramifications
of transferring those assets. From a strictly financial
perspective, the report finds that privatization is
overwhelmingly in the City’s interest." A copy of the April
27 Meeting Minutes is annexed hereto as Exhibit 3.
27. At the July 27, 1995 meeting, Ms. Mitchell reported
that "(tlhe City’s Economic Development Corporation last
Friday announced the selection of J.P. Morgan as the
financial advisor for the sale of Coney Island, Blmhurst and
Queens Hospitals. . . . The EDC Board approved J.P. Morgan
and selected them over a group of four other firms that had
responded to the Request for Proposals. The firms were
identified from a pool of thirty-six firms that responded to
EDC regarding the City’s privatization and financing
initiatives." A copy of the July 27, 1995 Meeting Minutes is
annexed hereto as Exhibit 4.
28. At this meeting, Ms. Mitchell also notified us of
the schedule of the sale/lease process for the target
hospitals. She stated that the City would receive
indications of interest from potential purchasers and select
finalists by January 1996, complete due diligence and receive
v 1 v
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®
binding offers by March 1996, and complete negotiations and
finalize the sale by June 1996. IQ. iat 12,
29. Responding to the objection of a Board Member that
the Board had never discussed the issue of whether to sell
any HHC facilities or the criteria to be employed in deciding
which facilities, if any, to sell, Ms. Mitchell stated that
the Administration had already made the decision to proceed
with the sale, and had already selected the three facilities
LO be 35014 as well. Id at 16-21. At no point in this
meeting, did Ms. Mitchell request approval by the HEC Board
of this Mayoral decision.
30. when Board members raised objections to the fact
that the Board had never had an opportunity to decide whether
to dispese of the target hospitals, Ms. Mitchell stated that
the "intent of the Administration 1o go forward with the sale of those three facilities
has been clear for sometime and has been discussed previously
before the Board." (emphasis added) Id. at 28.
31. On August 1, 1995, EDC on behalf of the City
entered into a Supplemental Agreement with J.P. Morgan to act
as the financial advisor "with respect to the sale, transfer,
conveyance or other disposition of, in one or a series of
transactions (which may include or take the form of the
execution of management contracts or leases in respect
of) (each, a "Transaction" and, collectively, the
"Transactions"), Coney Island Hospital, Elmhurst Hospital
Center and Queens Hospital Center (each, a "Hospital" and,
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collectively, the "Hospitals"). The Supplemental Agreement
provides no role for the HEC Board, reserving, instead, for
EDC the right to accept or reject, in its sole discretion,
any proposed transaction. A copy of the Supplemental
Agreement is annexed nereto as Exhibit 5.
c. Offering Memoranda and Letter of Intent
32. On October 258, 1995, EDC issued two Offering
Memoranda prepared by J.P. Morgan for the privatization of
the target hospitals. According to the Memoranda, the
privatization will be accomplished through long-term leases
of the facilities to the health care providers, Neither the
Offering Memoranda, ner any of the terms incorporated in them
were submitted to the MHC Board for its advice, comment or
approval.
33. They were distributed to a confidential list of
potential purchasers te allow them to submit bids on the
hospitals. As an HHC Board member, I never received nor
approved the bidders list,
34. EDC has retained counsel to handle the legal
aspects Of the disposition of the target hospitals. The HHC
Board was never consulted, neither did we approve this
decision,
35. On June 26, 1996, a letter of intent setting forth
the framework for the sublease of Coney vslend Hospital to
Primary Health Systems, Inc. and PHS New York, In¢. was
signed by Peter Powers, First Deputy Mayor of the City of New
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York, Luis Marcos, for HEC, and Steven Volla for both PHS New
York and Primary Health Systems, Inc. ("Letter of Intent") .
A copy of the letter of intent is annexed hereto as Exhibit
8,
36. The HHC Board has not been consulted, neither have
we approved or delegated the authority to Mr. Marcos to
approve the Letter of Intent with PHS New York.
37. The fact that a Letter of Intent was signed with
PHS-New York, a for-profit entity, represents a significant
departure from the current method of providing medical care
in New York City. A for-profit entity has never operated a
hospital in New York City. The HHC Board was not consulted,
neither were public discussions held or a vote taken to allow
a for-profit entity to operate a hospital in New York City.
CORCLUSION
38. In sum, the Board of HHC has never been consulted, nor
had public discussions about, nor voted upon the issue of the
privatization of the hospitals in general, the disposition of the
target hospitals, Of any steps in between. Therefore, it is
evident chat it is the Mayor, and not HHC, who is undertaking the
disposition of the target hospitals.
Dated: New York, New York
August 22, 1996
|
Sworn to before me this
22nd day of August, 1996.
JONATHAN FELDMAN
Notary Public. State of New York
No. 02FES035948
Qualified In New
: Commission Expires if [ i lide
13
Exhibit E
vr f
October 26, 1995
Coney Island Hospital
Offering Memorandum
JPMorgan
IL
J PMorgan % Offering Metrorandum » Coney Island Hospital - +
Offering Memorandum
This Offering Memorandum (the “Memorandum™) is being furnished to parties who have expressed an
interest in submitting proposals to acquire Coney Island Hospital (“Coney Island” or the “Hospital” or
“CIH"). currently a hospital of the New York City Health and Hospitals Corporation (“HHC"). New
York City Economic Development Corporation (*EDC™) has retained J.P. Morgan Securities Inc. (*J.P.
Morgan”) to act as exclusive financial advisor in evaluating proposals to acquire CIH. This
Memorandum has been assembled by HHC and Hospital management with the assistance of J.P.
Morgan. The sole purpose of this Memorandum is to assist the recipient in deciding whether to proceed
with further analysis of this opportunity in accordance with the procedures described below.
J.P. Morgan will arrange all contacts for appropriate due diligence by potential purchasers. All inquines
or requests for additional information should be submitted or directed to J.P. Morgan. Management of
HHC or CIH should not be contacted directly under any circumstances. and any unauthorized contact
may result in disqualification.
While the information provided herein is believed to be accurate and reliable. none of the City of New
York. HHC. CIH. EDC nor J.P. Morgan or any of their respective agents. advisors or representatives
make any representations or warranties, express or implied. as to the accuracy or completeness of such
information. Only those representations and warranties contained in a definitive purchase agreement
shall have any legal effect. In furnishing this Memorandum. J.P. Morgan reserves the right to amend or
replace the Memorandum at any time and undertakes no obligation to provide the recipient with access
to any additional information. Nothing contained within this Memorandum is. or should be relied upon
as. a Promise Or representation as to the future. Any pro forma or esumated financial information
contained herein was prepared exclusively for use herein and is based on certain assumptions and
management's analysis of information available at the time this Memorandum was prepared.
Prospective purchasers should conduct their own investigation and analysis of the business. data and
property described herein.
All inquiries should be directed to either of the individuals at J.P. Morgan listed below.
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Rondy Jennings Thomas Todorow
Managing Director Vice President
(212) 648-4564 (212) 648-9449
Issued to:
MMM dd. YYYY
JPMorgan
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= Offering Memorandum e Coney Island Hospital
Contents
iyo RM IR AN Rea 2 TR Re
EXCCUNVE SUIIIMIBLY ............ccooovsisissisninmimesiniiriussranvasssrinsasiabinsisisns
I. Integrated health care network with development potential
PrIMaIY CATR FOCUS ... occ their ers Catto itn evan ss sesso os sires tices
Referrals 10 tertiary Care INSHIMLIONS .....c..ccccrrcininiiossrssmmssssseesrss
Managed:icare INLAYS oi... i. hn hn i iE
CC OMITIIMENT HO IBACIING oll iii iininsmia ns sims sonssssnnsnss
II. Underexploited position in large catchment area ................
SUAESICROCTHON .ovnr viii sicher ss ii nan bisauvenrisanstersisisntsasras sorties sibs
Leading market SHAE ....... cc iinnnibis iano so rtansiandoniibnes
Favorable JemIOBIaADINCS. |... ....coioiieirs chinnennnnss thinarinsensitissnminision.
Inroads by academic mBGICal COMES ............ co ii iii
II1. Significant operating leverage .........................c.coccooovveein..
Large PRUE VOIUMIE ci ihe inition santos stairs sda
Broad ranse Of SEIVICES ....../....cmisinrriisasisrmnmisinsitios ssn aitoni
Bed COMPIEIEII teers hilar ssiiinsincesiotoisimitesnsosss rene imn ils
Well-maintiNCO FACHHURS ...........ccvivnicrissnmarnnsonsiisisisirvisnabornssidh
Financial performance Hed 10 PAYOR IX ...ccivciiiiiniiiriinionns
- Indigent care
IV. Management and organization ...........................................
COVEIMIBIICE ....o cctrirosesiisnssirsisssrmnnssions sii sves suassridasbessessbe sisson
Experienced SERIO MANAGEIMBNAL ..............ccniecrvrnrivorensssnssiosins ioe
ssesscssscscsosnses
sscssssscsssssnne
ecesssscvecscssces
ceees ere rescscnes
»
seessssesessssnses
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JPMorgan “ Offering Memorandum Coney Island Hospital t
Appendices
TYanSACHOTI SUMMARY: il. iivs cose snsesresnomrssrarmisisbb ess resets 35
Property description : |
Ownership
Advisor
. Proposed structure of disposition
Key investment considerations
Indigent care
Labor
Existing indebtedness
Future capital commitment
Malpractice liability
Community liaison
LI J « T "
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JPMo rgan » Offering Memorandum e Coney Island Hospital :
Exhibits
Executive Summary
CIH = service area Profile BY 2iP COUR ...c.itvrr iis msiviissisinsinsissmmressesrsvasssnss 4%
Market share = 1993 Inpatient QISCHArEES ...............cccummumsiiinrsrescsisnsmrmrssensss 5
Condensed INCOME SIAMBMENLS ...........ccoukeniestinincsnisiiiniriosionsorsnsistrs ins snmnbersaiatin 6
SUMMAry OF ODETAUINIE SIAUSHCSY..o.cuvecrocnresotsbinssssinridabs sonia: mtorr iinet sn ircaissintads 6
Sources of net patient service revenue by payor classification ........................ 7
Inpatient discharges by payor classification .................c.ccoccoeoieioeveeeereeenn 7
Outpatient visits by payor classification vu. ......coii niin iiiisiinsissadorissa, 8
Integrated health care network with development potential
CICA SBIVICES Li iiss Saisie iid tesa mais cinn ris s rons ni bed 10
Referrals bY SPROIaltY hii ii bie alas SEAN SEE Nie 11
Managed Care SMHALIVES in... 00k... clic consoles isitini iro ss sis arsgbeiases 12
RESIAENCY PIOSIAMIS rl rinse tle onside tein as eis 13
EAucatioNa ATRIIBHONS ....sciviois hus suvssssvtisibiniesavetiosinsncthss ebsioedte i ea i gd, 14
Underexploited position in large catchment area
Cll in SETVICE ATBAS 1.0... es iitthinsiasiumntur an bsston eens di dsl SE 15
CIH acute inpatient discharges by zipcode .............cccocooveoeeeeooe, 16
ClH and competitors - 1993 bed complement] .................................. 17
Comparative summary operating statistics — 1992 and 1993 18
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JP Morgan - Offering Memorandum e Coney Island Hospital
Market share analysis - 1993 acute discharges
Population by zip code
Per capita income by zip code
Unemployment rates by zip code
Map of Brooklyn hospitals
Significant operating leverage
CIH - selected operating statistics
Breakdown of licensed beds by type of service
Discharges by service - 1995
Top ten DRGs by inpatient cases - fiscal year 1995
Existing facilities
Full-ume equivalents by category — June 30, 1995
Condensed income statements
Bad debt and charity care needs and services to indigent
Bad debt and charity care pool revenues
Management and organization
CIH - organization chant
Appendix A: Transaction Summary
Outstanding indebtedness
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JPMo rgan & Offering Memorandum « Coney Island Hospital
Appendix B: Site plan/stack diagram
Appendix C: Audited financial statements
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JP Morgan % Offering Memorandum « Coney Island Hospital 1
Preface
The City of New York has made a major commitment to the physical and mental
well-being of its citizens as demonstrated by its health care infrastructure — the New
York City Health and Hospitals Corporation (“HHC") - the largest municipal health
care system in the United States. The City recognizes that the health care industry is
undergoing rapid and dramatic change and that the City is poised to take advantage
of the opportunities presented by these changes. The focus of health care delivery is
becoming more regionalized. better access to primary care has become a key goal.
competition for patents has intensified. and providers are assuming more risk from a
payment standpoint.
Because of these changes. New York City has been witnessing a transformation of its
health care delivery system. Managed care is on the rise and hospitals are joining
forces to form large integrated networks. At the same time. revenue sources for
providers are shrinking and competition is escalating. Change can mean opportunity
for those who are able 10 meet the demands of the new health care environment.
With networks forming at a rapid pace. those institutions who can respond to change
will likely benefit. while those who are excluded will have limited ability to be
competitive in the new marketplace.
As the City continues to strive toward the goal of quality, cost-effective medical care
for all its citizens, it realizes that HHC 's operating structure limits its ability to
compete in today’s dynamic health care environment. Given these changes. HHC
facilities can better serve their communities as part of larger integrated health
networks. The hospital consolidation now taking place in the metropolitan region
represents a strategic window of opportunity for the City to ensure the enhanced
viability of its hospitals.
Accordingly. the City and HHC are requesting proposals trom health care providers
to acquire a long-term sublease of Coney Island Hospital. Tremendous benefits can
be derived from a transfer of the facility. Coney Island Hospital is deeply rooted in
the community and possesses a dominant market position in southern Brooklyn. The
Hospital can benefit from the economies-of-scale and scope which accrue to facilities
that are part of a larger. more cost-effective network.
Certain issues will be central to any agreement providing tor the transfer of the
facility. Appendix A sets torth an outline of these issues that is meant to encourage
prospective purchasers to develop creative solutions to these complex issues. This
‘« * EF
J PMorgan fa Offering Memorandum e Coney island Hospital y » i, 2
summary of the key investment considerations will serve as an initial starting point
for further discussions with prospective purchasers and will form the basis of any
final agreement.
Proposals must be specific in addressing certain key issues which are critical to the
City and HHC in the selection of a successful purchaser. Paramount among them is
indigent care. The City will require a concrete plan from all prospective purchasers
which will ensure continued access to quality care for the indigent. The City and
HHC will seek innovative strategies which will ensure the continued access to and
the expansion of primary care, especially through community-based facilities; they
will expect the prospective purchaser to demonstrate on-going improvements in the
quality of health care: and it will require public monitoring — including the issuance
of report cards — so a buyer is held accountable to the City. as well as the public. tor
achieving and maintaining key performance standards. Further, prospective
purchasers must address transition of the workforce. development of a capital
program, arrangements for the repayment of existing indebtedness, assumption of
future malpractice liability. and methods for addressing community concerns in the
operation of CIH. Please refer to the Transaction Summary in Appendix A for
further detail and discussion of these issues.
JPMorgan ‘Offering Mefhorandum Coney Island Hospital olf » : | 3
Executive summary
Coney Island Hospital (“CIH" or the “Hospital ™) offers potential purchasers the
Opportunity to gain a competitive advantage in southern Brooklyn's dynamic health
care marketplace. CIH has few comparable direct competitors within its service area.
and would be a significant addition to an existing health care network. Furthermore.
with its roots in primary care, it will continue to prosper as managed care penetration
increases throughout the region.
CIH. the largest medical tacility in southern Brooklyn. is a 460-bed acute care
hospital serving a population of approximately 750.000. CIH offers a full range of
services through the Hospital and its free-standing outpatient facility. the Ida G.
Israel Community Center. The Hospital's strategic focus is in the areas of managed
care. ambulatory care, alternate site delivery. and information systems. The Hospital
has been working to identity off-site ambulatory care facilities and to expand
expansion of existing on-site outpatient facilities. CIH is also aggressively pursuing
managed care Contracts as part of a strategy to increase market share. This effort is
bolstered by the Hospital's strong relationship with MetroPlus, an HHC subsidiary
which is one of the fastest-growing HMOs in the region.
Coney Island Hospital offers significant advantages to a potential purchaser:
« Integrated health care network with development potential and significant
buyer synergies,
o Underexploited position in large catchment area with solid demographics;
» Significant market share potential; and
e Strong operating and solid financial performance
Integrated network with development and synergy potential
Despite its position as the largest facility in southern Brooklyn. the Hospital currently
experiences a significant migration of cases to facilities outside of its primary service
area. The Hospital's wide catchment area offers room for significant market share
gains, if teamed with an appropriate partner. Complementary service lines and
improved marketing would significantly diminish the outward migration of patients.
Placed in a larger coordinated health care system. CIH could become a feeder for a
tertiary institution and could benefit from the economies of scale and operating
efficiencies that accrue to diversified. integrated health care systems.
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JPMo rgan » Offering Memorandum « Coney island Hospital t : 4
Underexploited position in large catchment area
CIH’s strong position within southern Brooklyn, which has very favorable
demographics, would make it a strategic acquisition for several facilities and existing
networks that are currently expanding their presence in the Brooklyn market. The
Hospital attracts patients from a densely populated catchment area of approximately
750,000 residents. As shown on the map below, the Hospital's primary service area
covers zip codes 11224 and 11235, which form the Coney Island peninsula. The
Hospital's secondary and tertiary service areas cast a wide net that extends up to
central Brooklyn.
CIH - service area profile by zip code
yi
J) Community Hosprtal of Brooktyn (= Primary:
©) Kings Highway Hosptal Secondary
—~ Tertiar
3 Brookiyn Hospital Center y -
(Caledonian Campus)
Coney Island Hospital
CIH offers a potential buyer tremendous reach and instant market share in southern
Brooklyn. While CIH does not have a direct competitor located in its primary
service area, it captures only 33 percent of inpatient discharges. ‘The three relatively
small hospitals located in Coney Island’s tertiary service area, Community Hospital
of Brooklyn, Kings Highway and Brooklyn Hospital Center (Caledonian Campus),
do not represent the Hospital's major competition. Instead, the major competition
comes from the Maimonides Medical Center and the Manhattan academic medical
centers. As illustrated in the table which follows, CIH has a definite location
advantage in its primary and secondary service areas, yet significant opportunity for
market share growth still exits.
Market share - 1993 inpatient discharges
CIH Maimonides AMCs!
Market Market Market
Service area Discharges share. Discharges share Discharges share
Primary 6.487 33.0% 1,725 8.9% 1,811 9.2%
Secondary 3492 13.2 3,901 14.8 2,707 10.3
Tertiary 2566 4.9 8777 13.0 5015 9.6
Combined 12.545 12.8 12,403 12.5 9,533 9.7
Manhattan academic medical centers, including: Beth Israel Medical Center, Mount Sinai Medical Center
New York Hospital/Comell Medical Center, New York University Medical Center. and Presbyterian Hospital
Source: FACETS database
Significant operating leverage
Despite the operating limitations which flow from being a public hospital. CIH has
displayed a relatively strong financial and operating performance. CIH has
significant throughput in all its service lines, both on an inpatient and outpatient
basis. It has also recently made a major effort to control costs. As the following
table shows. the Hospital's on-going cost-containment program when combined with
increased volume, resulted in earnings from operations, calculated prior to the HHC
central office allocation, interest and depreciation, that increased from $311,000
during fiscal 1994 to approximately $10.400,000 during fiscal 1995.
[
JP Morgan Offering Memorandum « Coney Island Hospital
Condensed income statements
$ thousands
Fiscal year ended June 30,
1994 1995
Net patient service revenue $182,250 $220,885
Tax levy 10,264 181
Other revenue 1,884 1,541
Total revenue 194,398 222,607
Operating expenses 194,087 212,224
EBIDA? an 10,383
Interest and depreciation 12,079 12,624
Central office allocation 9,830 9,034
Net loss from operations $(21,598) $(11,275)
"EBIDA earnings before interest. depreciation and central office allocations
Source: Audited financial statements
The Hospital has strong patient volumes as demonstrated by its 17,700 inpatient
discharges. 345.000 clinic visits and 71.000 emergency room visits in fiscal year
1995. The Hospital's operations are robust. For the past two years, CIH has seen its
discharges increase while its acute average length of stay has dropped dramatically.
The volumes in the clinic continue to steadily rise. A summary of the Hospital's
operating statistics is presented below.
Summary of operating statistics
Fiscal year ended June 30,
1991 1992 1993 1994 1995
Licensed beds’ 498 473 473 498 488
Inpatient discharges’ 16,011 15,822 15.656 16,463 17.711
Patient days’ 162,375 157266 155546 157,419 153,599
Occupancy (acute) 91% 93% 92% 87% 88%
Average length of stay (acute) 9.4 9.2 9.1 8.8 7.6
Case mix index 1.20 1.18 1.21 1.24 1.24
Emergency room visits 65,493 64,390 63,885 61,899 57,731
Ambulatory surgery 2,828 1,263 1,117 1,688 2,201
Clinic visits 315,273 321,299 324,826 326,646 334,644
Includes bassinets
“Including newborns
Source: HHC internal records
JP Morgan = Offering Memorandum e Coney Island Hospital ! >
CIH’s financial performance is tied to its payor mix; Medicare and Medicaid patients
represent about 85 percent of net revenues. As managed care becomes more
prevalent, the Hospital's ability to negotiate effectively with the various managed
care entities could be greatly enhanced if it were part of a larger network. In
addition, a prospective buyer could realize significant operating efficiencies by
improving the cost structure. The following tables provide a five-year histories of
payor mix by net patient service revenue. inpatient discharges, and outpatient visits.
Sources of net patient service revenue by payor classification
Fiscal year ended June 30,
1991 1992 1993 1994 1995
Medicare 26.0% 32.1% 27.7% 30.0% 30.8%
Medicaid 55.1 52.6 56.2 53.6 54.0
Blue Cross 8.8 7.0 7.6 6.0 5.0
Self pay 0.9 0.9 1.0 0.8 0.8
Other 9.2 7.4 7.5 9.6 9.4
100.0% 100.0% 100.0% 100.0% 100.0%
Note: Bad debt and charity care revenue included in Medicaid revenue
Source: HHC internal records
Inpatient discharges by payor classification
Fiscal year ended June 30,
1991 1992 1993 1994 1995 1995%
Medicare 3,994 3,771 3,467 3,444 3,803 21.5%
Medicaid 8,223 8,732 9,444 10,512 11,562 65.3
Blue Cross 2,992 2,846 2,459 1,392 963 54
Self-pay N.A. 190 115 187 141 0.8
Other 802 283 171 928 1,242 7.0
16,011 15,822 15,656 16,463 17,711 100.0%
Rt eau TET FEI EL NOET——— Rr iS A re dul
Source: HHC internal records
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JPMor gan ® Offering Memorandum e Coney Island Hospital 8
Outpatient visits by payor classification
Fiscal year ended June 30,
1991 1992 1993 1994 1995 1995%
Medicare 83,530 79,787 69,759 61,765 60,859 15.4%
Medicaid 149,416 160,534 174,186 195,435 208,948 83.1
Blue Cross 5172 4111 5,242 5,181 5,305 1.3
Self-pay 115,701 110,873 105,741 78,321 76,270 19.3
Other 29,775 31,647 34,900 49,531 43,194 10.9
383,594 386,952 389,828 390,233 394,576 100.0%
Source: HHC internal records
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JPMor gan Offering Memorandum e Coney Island Hospital g A " 9
I. Integrated health care network with
development potential
CIH is a fully integrated health care delivery system that has provided community-
based medicine for 25 years and has the potential for further network development.
The Hospital has a proven ability to generate a steady flow of patients. In addition.
the Hospital generates a significant number of referrals to tertiary institutions. These
referrals could be further developed as part of a larger health care system. CIH could
become a major feeder institution for a tertiary institution. CIH has established
productive relationships with several managed care organizations and continues to
expand these initiatives. As a leading teaching hospital. CIH also has educational
affiliations with many other hospitals.
Primary care focus
CIH provides primary care on-site through a 3(X)-member primary-care physician
group and through a satellite clinic, the Ida G. Israel Center. Since 1979, the
Hospital has worked with and supported University Group Medical Associates, P.C.
("UGMAY) in a partnership that combines a medical group with a hospital to perform
community-based medicine. UGMA employs over 300 physicians. many of which
are currently based at CIH. with internal medicine. gynecology/obstetrics and
pediatrics comprising a major portion of the physicians within the group. CIH has
provided UGMA with the support and resources to grow. Despite that fact that
UGMA's current affiliation agreement with CIH expires on June 30. 1996. the
Hospital remains committed to the development of an extensive primary care
network. Compensation from HHC to UGMA for its hospital-based services on the
CIH campus. totaled $35 million during fiscal 1995.
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JP Morgan Offering Memorandum « Coney Island Hospital 10
Exhibit I-A: Clinical services
Ambulatory Care Physician Assistants Service
Community Health Center Psychiatry
Office Practice Services Adult In-Patient Services
Anesthesiology Adult Out-Patient Services
Emergency Medicine Children's Out-Patient Services
Medicine Consultation Liaison/Emergency Services
Allergy Radiology
Cardiology Rehabilitation Medicine
Dermatology Respiratory Care
Endocrinology Surgery
Gastro-intestinal Breast
Hematology/Oncology Colorectal
Infectious Disease Dentistry
Neurology Head and Neck
Nephrology Neurosurgery
Pulmonary Orthopedics
Rheumatology Otolaryngology
Nuclear Medicine Opthalmology
Nursing Pediatric
Obstetrics/Gynecology Plastic
Pathology/Laboratories Podiatry
Pediatrics Thoracic
Adolescent Medicine Urology
Cardiology Vascular
Endocrinology
Hematology/Oncology
Neonatology
Nephrology
Neurology
Ida G. Israel Community Health Center
Founded in 1985. the health center, centrally located in Coney Island at 2201
Neptune Avenue. leases approximately 30,000 sq. ft. and had approximately 21,000
medical and dental visits in addition to 16.500 psychiatric visits for the year ended
June 30. 1995. The family practice model offers comprehensive services including:
AIDS, pediatrics, dental. diabetes, family planning, geriatrics, laboratory, nutrition,
pharmacy. podiatry, prenatal. psychiatric, social work, and women's health services.
Referrals to tertiary care institutions :
The Hospital generates a significant number of referrals to tertiary care institutions.
Notably. most referrals are of cardiac cases because CIH does not perform coronary
surgery.
“ 8 ML
JP Morgan ® Offering Memorandum « Coney Island Hospital » 11
Exhibit 1-B: Referrals by specialty
Service 1992 1993 1994
Coronary 54 67 76
Medicine 31 41 36
Pediatrics 16 18 LL
Psychiatric 26 23 27
Rehabilitation 26 35 46
Other 54 53 49
Total 207 237 255
Source: HHC internal records
Opportunites exist to expand this system of referrals: CIH unlike many Brooklyn-
based competitors, has not entered into an alliance with any Manhattan-based
academic medical center.
Managed care initiatives
CIH has been or is negotiating business arrangements with several managed care
organizations. With a population base that is rapidly migrating to managed care. the
Hospital realizes that the prudent negotiation of managed care contracts will be
critical to its tuture success. As an HHC hospital. CIH has a strong relationship with
MetroPlus Health Plan. a subsidiary of HHC. and one of the fastest-growing HMOs
in the region.
The following table summarizes the managed care contracts that are in place or
currently being negotiated by CIH.
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JP Morgan & Offering Memorandum e Coney Island Hospital » 12
Exhibit I-C: Managed care initiatives
Plan Arrangements Payment mechanism
MetroPlus Health Plan Hospital agreement in place Discounted Blue Cross
Oxford Health Plans Hospital agreement in place Inpatient per dienmv
Outpatient fee for service
CIGNA Health Plan UGMA agreement in place Inpatient per diem
Managed Healthcare Systems Ongoing negotiations inpatient per dierrv
(MHS) Outpatient fee for service
Metlife Health Care Network Ongoing negotiations Negotiated fee for service
Health Insurance Plan of Ongoing negotiations Negotiated fee for service
Greater NY (HIP)
Source: HHC internal records
Commitment to teaching
CIH is an active teaching institution. providing a wide range of residency programs
and clinical rotations to students from other hospitals.
Residency programs
Through a joint professional affiliation with Maimonides Medical Center. CIH
maintains residency programs in general surgery. orthopedics. urology. pediatrics.
obstetrics. gynecology and anesthesiology. CIH has a free-standing program in
internal medicine and a joint SUNY at Brooklyn/Kings County/Coney Island
Hospital program in ophthalmology. CIH also has a fully accredited osteopathic
program with the New York College of Osteopathic Medicine and trains both interns
and students from that institution. Approximately 140 residents are actively engaged
in these programs in addition to third-and-fourth year medical students from SUNY
at Brooklyn and foreign medical schools.
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JP Morgan ; Offering Memorandum « Coney Island Hospital 13
Exhibit I-D: Residency programs
Maimonides Medical Center
General surgery Ophthalmology
Obstetrics/Gynecology Oral surgery
Orthopedic surgery :
Pediatrics
New York College of Podiatry New York College of Osteopathic Medicine
Podiatry Rotating internship program
Internal medicine
Cardiology
Pulmonary
Hematology/Oncology
Endocrinology
Source: HHC internal records
Educational programs
Numerous educational affiliations have enabled CIH to maintain a cadre of allied
health professionals to care for the southern Brooklyn patient population. For
example. the Hospital is an on-site extension campus of the Touro College Physician
Assistant Program and offers clinical rotations to physician assistant candidates from
Long Island University and the State University of New York; physical therapy
students from Touro College. State University of New York, and New York
University: midwifery students from State University of New York. Columbia.
Fronuer College: and occupational therapy. communication disorders. health
information management, and biomedical engineering students from Touro College.
The following exhibit shows CIH's educational affiliations.
JPMorgan -
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Offering Memorandum e Coney Island Hospital 14
Exhibit I1-E: Educational affiliations
Educational institution Specialty
St. George's University
New York College of Osteopathic Medicine
Touro College
Columbia University
Long Island University
New York University
Brooklyn College
College of Staten Island
SUNY/Downstate
Source: HHC internal records
Medical students
Medical students
Physician assistants, physical therapists
Midwives, speech pathologists
Physical therapists
Physical therapists, occupational therapists
Speech pathologists
Physical therapists
Medical students, midwives, physical
therapists, occupational therapists
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JPMor gan Offering Memorandum e Comey Island Hospital » ' 15
II. Underexploited position in large
catchment area
Strategic location
CIH is the only acute care facility in southern Brooklyn, serving a population of
approximately 750,000. No other health care provider within its primary service area
provides a comparable level of services.
The Hospital's primary service area covers the neighborhoods of Sheepshead Bay
and Coney Island at the southernmost end of Brooklyn, while the secondary service
area of the hospital includes Gravesend. Bensonhurst, Homecrest. and Bay Ridge.
The Hospital's tertiary service area includes Boro Park. Midwood. Flatbush, Mill
Basin, and Canarsie.
Exhibit II1-A: CIH - service areas
Tertiary
service area
Secondary
service area
Primary service area
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J PMorgan % Offering Memorandum « Coney Island Hospital P 16
Leading market share
CIH is the leading provider of acute inpatient services in its primary service areas
with about one-third of all the discharges. CIH also has a strong 13 percent share in
its secondary service area, just north of the Hospital, and approximately five percent
market share in its tertiary service area. CIH's primary and secondary service areas
represented approximately 45 percent and 15 percent of total acute discharges in
1993. respectively. Despite this strategic location advantage, a substantial number of
patients bypass the Hospital in favor of institutions located outside of the service
area.
Exhibit 11-B: CIH acute inpatient discharges by zip code
1992 1993
Market Market
Neighborhood Zip codes Discharges share Discharges share
Primary service area
Coney Island/Gravesend 11224 2.829 36 9% 2.917 371%
Sheepshead Bay/Homecrest 11235 3,303 28 1 3,570 30.3
6,132 6.487
Sos mm
Secondary service area
Bensonhurst/Bay Ridge 11214 732 81% 751 8.4%
Coney Island/Gravesend 11223 1.433 17.0 1.551 18.0
Sheepshead Bay/Homecrest 11229 1,193 134 1,190 13.5
3,358 3.492
Ar
Tertiary service area
Boro Park 11204 414 56% 357 5.0%
Midwood 11230 836 86 932 92
Boro Park 11218 330 43 330 43
Flatbush 11226 388 31 326 26
Midwood 11210 296 50 YT 46
CanarsieMill Basin 11234 284 34 344 4.0
2,558 2,566
:t SR) Bs SE NE
Source: FACETS database
Hospital competitors
The hospitals closest to CIH are Community Hospital of Brooklyn (“*Community™),
three miles north: Kings Highway Hospital (“Kings Highway™), 3.5 miles north: and
Maimonides Medical Center (“Maimonides”). 5.5 miles to the northwest.
' . ' . H . .
JPMor gan % Offering Memorandum Coney Island Hospital » 17
Exhibit II-C: CIH and competitors — 1993 bed complement’
Community Kings Highway Maimonides Coney Island
Medicine/surgery 134 212 507 321
Obstetrics/maternity 0 0 145 27
Pediatrics 0 0 43 26
Psychiatry 0 0 70 30
Rehabilitation 0 0 0 33
Skilled nursing — 0 0 np -_8B
Total 134 212 765 445
' Includes bassinets except for Coney Island Hospital
Source: Institutional cost reports and HHC internal records
Community Hospital and Kings Highway have market shares of approximately four
percent and seven percent. respectively. based on 1993 inpatient discharges in CIH's
three service areas. These community hospitals lack significant market share due to
their relatively small size. Maimonides Medical Center is the Hospital's major
competitor. Maimonides draws a significant number of inpatient discharges from
CIH's primary and secondary service areas. Maimonides’ total market share in
CIH's combined service areas was 13 percent in 1993. the same as CIH. The
Manhattan academic medical centers also attract a substantial number of patients in
CIH’s overall service area. with approximately 10 percent market share in 1993".
With increased marketing of CIH’s position in the catchment area, a potential buyer
could recapture a significant portion of these patients.
~ Manhattan academic centers include Beth israel Medical Center. Mount Sinai Medical Center. New York
Hospital/Cornell Medical Center. New York University Medical Center. and Presbyterian Hospital
Source: FACETS database
JPMo rgan Offering Memorandum e Coney Island Hospital : 18
Exhibit 11-D: Comparative summary operating statistics — 1992 and 1993 ®
Community Kings Highway Maimonides CH :
1992 1993 1992 1993 1992 1993 1992 1993 N
Beds 134 134 212 212 705 765 473 473
Discharges 4,804 4,666 8,462 8,344 22,405 26,496 15,822 15,656
Patient days 43,236 39,904 71,927 67,173 224,050 233,559 157,266 155,546
Occupancy 88% 82% 92% 82% 88% 84% 90% 90%
ALOS 9.0 8.6 85 8.1 10.0 8.2 9.9 9.9
Note: Beds include bassinets; discharges and patient days include newborns
Source: United Hospital Fund and HHC internal records
JPMorgan
Offering Memorandum « Coney Island Hospital
19
Exhibit 11-E: Market share analysis - 1993 acute discharges .
Neighborhood Zip codes Community Kings Highway Maimonides CH
Discharges Mkt. share Discharges Mkt. share Discharges Mkt. share Discharges Mkt. share
Primary service area
Coney Island/Gravesend 11224 325 4.6% 280 3.6% 633 13.4% 2917 37.1%
Sheepshead Bay/Homecrest 11235 925 7.9 1,055 8.6 1,062 25.7 3,570 30.3
Secondary service area
i
Bensonhurst/Bay Ridge 11214 304 3.4% 231 2.6% 1,724 19.2% 751 8.4%
Coney Island/Gravesend 11223 394 46 430 5.4 1,156 134 1,551 18.0 ;
Sheepshead Bay/Homecrest 11229 758 8.6 1,234 13.8 1,021 11.6 1,190 13.5
Tertiary service area
Boro Park 11204 125 1.8% 204 2.7% 1,864 26.3% 357 5.0%
Midwood 11230 457 45 806 8.3 1,802 17.8 932 9.2
Boro Park 11218 [A 0.9 161 2.1 1,654 21.7 330 43
Flatbush : 11226 33 0.3 83 0.7 269 2.2 326 26
Midwood 11210 217 36 513 8.7 438 7.3 277 4.6 oe
Canarsie/Mill Basin 11234 394 4.5 1,628 19.1 750 8.6 344 4.0 Ww
Source: FACETS database
al
JPMor 4 an Offering Memorandum « Coney Island Hospital 20
Favorable demographics
CIH's catchment area has a favorable demographic profile, with a steady population
base, moderate household income and relatively low unemployment. The following
exhibits which follow provide detail on population, household income, and
: unemployment rates in CIH's catchment area.
Exhibit II-F: Population by zip code
1990 1994 1999
Neighborhood Zip codes census estimated projected
Primary service area .
Coney Island/Gravesend 11224 52,480 46,336 45,539
Sheepshead Bay/Homecrest 11235 67,088 71,578 70,439
Secondary service area
Bensonhurst/Bay Ridge 11214 73,076 72,300 75,038
Coney Island/Gravesend 11223 70,904 66,497 65,447
Sheepshead Bay/Homecrest 11229 72,660 68,940 67,869
Tertiary service area
Boro Park 11204 64,780 67,845 67,570
Midwood 11230 72,733 75,163 74,091
Boro Park 11218 66,569 64,453 63,578
Flatbush 11226 111,396 105,298 103,954
Midwood 11210 62,445 54,765 54,086
Canarsie/Mill Basin 11234 74,951 77,778 74,078
789,082 770,953 761,689
Source: HHC internal records
JPMorgan
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Offering Memorandum « Coney Island Hospital
Exhibit 11-G: Per capita income by zip code
Per capita income
1999
Neighborhood Zip codes 1989 1994 projected
Primary service area
Coney Island/Gravesend 11224 $9,884 $11,100 $12,613
Sheepshead Bay/Homecrest 11235 15,385 17,674 20,565
Secondary service area
Bensonhurst/Bay Ridge 11214 $13.277 $15,185 $17,540
Coney Island/Gravesend 11223 14,294 16,722 19,858
Sheepshead Bay/Homecrest 11229 16,021 18,487 21,598
Tertiary service area
Boro Park 11204 $12,408 $14,239 $16,520
Midwood 11230 15,276 17,555 20,402
Boro Park 11218 13,327 15,324 17,817
Flatbush 11226 10,5789 12,228 14,276
Midwood 11210 15,302 17,498 20,183
Canarsie/Mill Basin 11234 17,687 20,779 24.776
Source: HHC internal records
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Offering Memorandum e Coney Island Hospital 22
Exhibit II-H: Unemployment rates by zip code
Percent
1990 census
unemployment
Neighborhood Zip codes rate (civilian)
Primary service area
Coney Island/Gravesend 11224 6.4%
Sheepshead Bay/Homecrest 11235 4.2
Secondary service area
Bensonhurst/Bay Ridge 11214 5.0%
Coney Island/Gravesend 11223 4.1
Sheepshead Bay/Homecrest 11229 3.8
Tertiary service area
Boro Park 11204 4.8%
Midwood 11230 4.3
Boro Park 11218 5.4
Flatbush 11226 8.1
Midwood 11210 51
Canarsie/Mill Basin 11234 3.7
Source: Bureau of the Census
L} 3 1
J PMorgan » Offering Memorandum « Coney Island Hospital » ; 23
Inroads by academic medical centers
Over the past several years, Manhattan-based academic medical centers have
aggressively pursued alliances with many of Brooklyn's community-based facilities.
The exhibit below details these strategic relationships.
Exhibit II-1: Map of Brooklyn hospitals
Coney Island Hospia!
Affiliate Hospital
New York Hospital/Cornell Med Ctr.
Community Hospital of Brooklyn
New York Methodist Hospital
Victory Memorial
Brooklyn Hospital Center (Caldonian Campus)
Brooklyn Hospital Center (Downtown Campus)
Kings County Hospital
Woodhull Medical and Mental-Health Center
Kings Highway Hospital
Brooklyn Jewish Division - interfaith
St. John's Episcopal - Interfaith
Brookdale Hospital Medical Center
Long Island College Hospital
St. Mary's Hospital of Brooklyn
Wyckoff Heights Medical Center
Maimonides Medical Center
Lutheran Medical Center
University Hospital of Brooklyn
Kingsbrook Jewish Medical Center
Columbia-Presbyterian Med. Ctr
New York University
Health and Hospitals Corp
Beth Israel Med Ctr
Interfaith Med. Ctr
Mount Sinai Med. Ctr
Catholic Med. Ctr, Brooklyn & Queens
Preferred Health Network
Unaffiliated
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Offering Memorandum « Coney Island Hospital
III. Significant operating leverage
CIH has strong patient volumes as evidenced by its 17.711 discharges in 1995. Over
the past five years the Hospital has witnessed positive trends in nearly all areas of
operations.
Large patient volume
With occupancy near ninety percent, the Hospital has seen an increase of over 1.000
discharges during the last fiscal year. Over the past five years, length of stay has
decreased by almost two days. Throughput in the outpatient areas continue to show
steady gains. with ambulatory surgery showing the largest percentage gain in the past
five years as shown in the exhibit below.
Exhibit I11-A: CIH - selected operating statistics
Fiscal year ending June 30,
1992 1993
Licensed beds
Bassinets
Total beds
Inpatient discharges
Acute
Psych
Rehab
Total
Average length of stay
Acute 92
Psych 27.3
Rehab 33.2
Patent days
Acute 139,715
Psych . 10,171
Rehab
Total
Occupancy
Acute
Psych
Rehab
Case mix index
ER visits
Ambulatory surgery
Chnic visits
Total amb care visits
"Including newborns
Source: HHC internal records
JPMorgan Offering Memorandum « Coney Island Hospital 25
Broad range of services
CIH provides a wide range of inpatient and outpatient services. The major services
provided by the Hospital are described below. Opportunities exists to rationalize
some of these services. particularly if CIH becomes part of a more focused health
care network.
Coronary Care Unit
In CIH’s Coronary Care Unit, a highly trained staff of cardiac nurses and physicians
treat patients in a semi-private area, with around-the-clock bedside monitoring.
Women’s Health Center
The Obstetrics and Gynecology Department formally opened its Women's Health
Center in 1992. The Center is open five days a week, with morning. afternoon and
evening hours. Patients are seen by a professional staff of doctors, midwives and
physician assistants in a private office setting.
Pediatrics
The Hospital maintains general pediatric clinics for routine well baby/child care
visits and immunization and specialty clinics in: allergy immunology; asthma;
cardiology: developmental pediatrics: diabetes: endocrinology/metabolism:
hematology: oncology: high risk neonatal: neurology: psychiatry/behavior; and renal.
Recognizing that the practice of pediatrics is not just for children, CIH also offers a
wide range of services for adolescents, including: general adolescent medical clinics:
adolescent gynecology clinics: family planning and contraceptive services:
individual and family counseling services: social services: and programs for
adolescent parents and their newborns.
Psychiatric Services
The muludisciplinary staff of the Department of Psychiatry Services provides a
comprehensive range of mental health and chemical dependency services. These
services are organized into five divisions:
Inpatient services. A 60-bed Psychiatric Inpatient Program is provided for
patients sixteen years of age and older who reside in Community Districts 13 and
18. :
Adult outpatient services. An Adult Mental Health Clinic provides
muludisciplinary clinic services to patients between 16 and 60 years of age,
JPMorgan
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= Offering Memorandum s Condy Island Hospital i» : 26
including individual. family, group psychotherapy. medication and crisis
intervention.
Child psychiatry. CIH has a Child Psychiatric Clinic which provides a tull range
of psychiatric services to children and adolescents under age 16 and to their
families. In addition to its hospital-based site, the Child Psychiatry Clinic treats
patients at the Ida G. Israel Community Health Center.
Emergency services. CIH has a Consultation/Liaison and Emergency Services
division, which offers psychiatric consultation and brief treatment to general
hospital patients. as well as 24 hour psychiatric emergency services. A Mobile
Crisis Management Team is also open Monday through Saturday which can
provide in-home evaluation. triage and linkage for persons in crisis who reside in
southern Brooklyn.
Addictive diseases. A Comprehensive Alcoholism Treatment Program offers
medical. psychiatric and social services to approximately 150 patients ages 18
and over. A Hospital Intervention Service provides outreach, education and
prevention services to the general hospital and local providers. Specialized
program components include the Women's Alcoholism Program and the
Geriatric Alcoholism Program.
Trauma unit
During 1993 CIH began work on a Level One Trauma Unit. Trauma designation is
expected in the fall of 1995. at which time the Hospital will be able to treat patients
suffering from any major wound or injury.
Emergency department
CIH has a state-of-the ant emergency department outfitted with the latest diagnostic
imaging equipment, including a CAT scanner. Treatment rooms for minor surgical
problems and gynecological examinations have been created to ensure patient
privacy and comfort. In addition. a pneumatic system for transporting specimens to
the Hospital's clinical laboratories and a computerized system to speed the
availability of test results have been installed.
Bed complement
CIH's 460-bed complement is broken down into a variety of services. CIH is the
only acute care facility in its primary service area and offers the full range of medical
specialties. including obstetrical. pediatric. rehabilitation and psychiatric.
JPMorgan
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Offering Memorandum e Coney Island Hospital 27
The exhibits below provide detail on CIH's breakdown of licensed beds and inpatient
discharges by service.
Exhibit I11-B: Breakdown of licensed beds by type of service
Type of service Licensed beds
Medical/Surgical 315
Obstetrical 27
Pediatric 26
Rehabilitation 32
Psychiatric 60
Total 460
Note Not including bassinets
Source: HHC internal records
The exhibit below shows patient discharges by service.
Exhibit 111-C: Discharges by service — 1995
Service Patient days Discharges % of total
Medicine 70,594 7,031 39.7%
Surgery 23,174 2,995 16.9
MICU 3,759 105 1.0
SICU 2,558 56 0.2
CCU 2,657 165 0.6
CRU 2,330 630 3.6
GYN 1,882 546 31
OBS 7,706 1,999 11.3
Pediatrics 5,535 1,597 8.0
Rehabilitation 8,082 295 : }.7
Psychiatry 17,947 676 ’ 3.8
Newborns 7.375 1.616 9.1
Total 153,599 1734 100.0%
Source: HHC internal records
JPMorgan
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Exhibit 111-D: Top ten DRGs by inpatient cases - fiscal year 1995
Number of
DRG Description admissions Average LOS
629 Newborn BW > 2499 w/o Sig or w/NW BDX 1,508 3.7
373 Vaginal delivery w/o comp 1,141 3.3
127 Heart failure and shock 628 10.2
372 Vaginal delivery w/comp 272 4.4
140 Angina pectoris 265 5.6
475 Resp sys — diag 251 20.9
383 Antepartum 249 4.2
121 Circ dis w AMI & CV 238 12.1
381 Abort w D&C 235 1.5
775 Bronchitis and asthma < 18 w/o CC 234 2.8
Total $.021
Source: HHC internal records
Well-maintained facilities
The Hospital occupies approximately 10 acres of land at the intersection of Ocean
Parkway and Avenue Z in the southern portion of Brooklyn. The Hospital is located
immediately oft the Belt Parkway. making it easily accessible by car or ambulance.
The main hospital building has been renovated and expanded significantly since its
construcuon over 41 years ago. CIH has been fully accredited by the Joint
Commission on the Accreditation of Health Care Organizations and is licensed by
the New York State Depaniment of Health.
The following exhibit sets forth the principal patient care and ancillary and support
services buildings at CIH. the year of construction. and if applicable. the approximate
gross square footage and the principal facilities or services contained therein. Refer
to Appendix B tor a map of the main campus and a stack diagram of operations
within the facility.
JPMorgan Offering Memorandum e Coney Island Hospital
Exhibit III-E: Existing facilities
Gross Major facilities
Yearof square and clinical
Building construction footage services
Main hospital building 1954 490,200 Main Hospital/Administration
North wing
South wing
Trailers’ building 1984 20,000 Temporary
Hammett pavilion 1910 74,500 Psychiatric
Powerhouse 1917 14,200 Engineering services
Engineering building (building 5) 1917 6,600 Plant
CDATP building (building 6) 1834 13,100 Patient care
Ambulance garage 1954 10,700 Emergency medical service
Total 628.700
Source: HHC internal records
Workforce
UGMA's physicians are augmented by a balanced staff of professionals at the
Hospital. CIH has a large staft of registered nurses. clerical and environmental
professionals. As part of its affiliation agreement. UGMA provides a specified
number of hospital-based physicians, technicians and specialists to augment CIH's
medical staff. The UGMA agreement expires June 30). 1996 and is not being
transferred with the Hospital. In fiscal 1995. the Hospital downsized the staff by
approximately 350. with estimated annual savings of approximately $3 million. The
table below details the total full time equivalents on the payroll at CIH and the full
ume equivalents supplied by UGMA.
JP Morgan s Offering Memorandum Coney Island Hospital
Exhibit I1I-F: Full-time equivalents by category — June 30, 1995
CH?
Management/Supervision
Technicians/Specialists
Registered Nurses
Licensed Practical Nurses
Aides/Orderlies
Environmental
Administrative/Clerical
Residents
Physicians Assistant ‘ 0.0
Physicians : ar 05
Total : £2.380.0
Represents “Part A” FTEs as stipulated in the affiliation agreement
2 Inclusive of UGMA totals
Source: HHC internal records
Financial performance tied to payor mix
The Hospital's financial performance is tied to its payor mix: Medicare and Medicaid
represent about 85 percent of net revenues. As managed care becomes more
prevalent. the Hospital's ability to effectively negotiate with the various managed
care entities would be greatly enhanced if it were part of a larger network. In
addition, a prospective purchaser could realize significant operating efficiencies by
improving the cost structure.
Considering its heavy outpatient load, large percentage of Medicaid patients and
significant charity care burden. CIH has been able to effectively serve the population
of southern Brooklyn. Through an ongoing cost reduction program, the Hospital has
been able to increase its earnings before interest. depreciation and HHC Central
office allocation from approximately ($3.5 million) during fiscal 1993 to
approximately $10.4 million during fiscal 1995. By diversifying the payor mix and
increasing throughput, a purchaser could improve operating margins. Below are
provided condensed income statements for the past five fiscal years. Audited
financial statements for 1994 and 1995 are included in Appendix C.
JPMorgan
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B Offering Memorandum e Coney Island Hospital 8 SD ie 31
Exhibit 111-G: Condensed income statements
$ thousands
Fiscal year ended June 30,
Unaudited Audited
1991 1992 1993 1894 1995
Net patient service revenue $159,634 $177,401 $152,523 $182,250 $220,885
Tax levy 18,514 6,575 7,212 10,264 181
Other 1,778 1,694 2.683 1.884 . 1.541
Total revenue 179,926 185,670 162,418 194,398 222,607
Direct operating expenses 166.874 178.386 165.899 194.087 212.224
EBIDA 13,052 7,284 (3,481) 311 10.383
Interest and depreciation 10,618 9.410 10,013 12,079 12,624
Central office allocation 9,594 8,782 10,659 9,830 9,034
Net loss from operations ($7,160) ($10,908) ($24,153) ($21,598) ($11,275)
EBIDA - earnings before interest depreciation and central office allocations
Source: HHC internal records (1991 - 1993); Audited financials (1994 and 1995)
Indigent care
The exhibits which follow outline the Hospital's services to the indigent over the past
two years and show a five-year history of bad debt and charity care pool funding
received by the Hospital. The City is a major contributor to the State's bad debt and
charity care pools. The City is directly responsible for 50 percent of the funds
received by the HHC facilities from the Supplemental and SLIPA pools. As part of
the overall negotiation process on all of the key issues, the City will continue to make
a substanual contribution to indigent care. The City would also work closely with
the selected purchaser to assist in the maintenance of funding for the indigent from
all sources. The prospective purchase will be expected to demonstrate ongoing
improvements in the quality of and access to health care and must be willing to
illustrate these improvements through the periodic submission of reports to the City
which will be made publicly available.
The Hospital attempts to collect payment for all services rendered. Financial
counseling is provided for patients to determine available payment sources.
Uninsured patients who do not quality for Medicaid are charged for services using a
sliding fee schedule. based upon their ability to pay.
JPMorgan
Offering Memorandum e Coney Island Hospital 32
Exhibit 111-H: Bad debt and charity care needs and services to indigent
Fiscal year ended June 30,
1993 1994
BDCC formula’ ($ millions) $48.4 $35.0
Services to indigent
Acute discharges 102 175
Excluded units-days 634 341
Emergency room visits 26,471 23,578
Ambulatory surgery cases 279 249
Clinic visits 78,609 54,029
Other ambulatory 369 465
NYPHRM formula 1s scheduled to expire June 30, 1996
Source: HHC internal records
Exhibit 111-1: Bad debt and charity care pool revenues
$ thousands
Fiscal year ended June 30,
1991 1992 1993 1994 1995
Regional $2,217 $2,955 $1,909 $2,938 $1,765
Supplemental 9,667 12,575 6,615 3,329 8,497
SLIPA 4,389 2,073 4518 9,058 6,530
Total $16,273 $17,603 $13,042 $15,325 $16,792
City contribution $7,028 $7,324 $5,567 $6,194 $7,514
Source: HHC internal records
JPMorgan - Offering Memorandum e Coney Island Hospital “ ) an
IV. Management and organization
CIH is operated by the New York City Health and Hospitals Corporation, a public
benefit corporation of the State of New York created in 1969 under the New York
City Health and Hospitals Corporation Act, New York Unconsolidated Laws 7381 er
seq. for the purpose of assuming responsibility for the operation of the municipal
hospital system of the City and providing comprehensive physical and mental health
care and substance abuse services to the ill and infirm in the City.
Governance
The Corporation is governed by a Board of Directors consisting of sixteen members.
Five of the directors serve ex-officio by virtue of their positions as city officials: an
additional ten directors are appointed by the Mayor, with five such members
appointed upon designation of the City Council; and one director chosen by the other
directors acts as Chief Executive Officer of the Corporation. Members other than the
Chief Executive Officer and the ex-officio members serve overlapping five-year
terms.
Experienced senior management
CIH is managed by a highly capable management team that has been in place for a
number of years. These professionals have directed the Hospital through numerous
physical plant and program additions and have demonstrated an ability to adapt to
changing market and reimbursement environments. A summary organization char is
presented herein.
JPMorgan % Offering Memorandum « Coney Island Hospital » cA
Exhibit IV-A: CIH - organization chart
| NYC HMC raat)
—
EEQVAA Officer Medical Director
| Mignot! Executive Director A Kagan MD
~ Cohen
—
Med. Staft President
H Schaefler MD
Chairman (Act.)
M Bromberoer
Deputy Exec. Ourctof
J _Genoenning
| P Dwmona
Engineering & ein
Risk Manegement] F Detsiop
P ioannies
Public Aflsirs
Medica! Records | K Kernan |
T Deerin
Safety Management
Patents Relatior T Coliins
8 Paimer
I I ] 5 ] J
Finance | Cap PlanDesion, | tursig | | Pst Care vor | Materials ua | | Long Range PI. | Human Resources
J Baliow P Mahoney J Kelby C Ruey XK _Fehiy S Kientart J Persauvo
Howard C. Cohen, Chief Executive Officer Coney Island Hospital
Mr. Cohen has been the Hospital's Chief Executive Officer since 1982. Mr. Cohen
presently serves as the Chairperson of the Executive Board of the National
Association of Public Hospitals (NAPH). During 1995, Mr. Cohen served, while at
Coney Island Hospital. as Acting Executive Director of Bellevue Hospital and Acting
Senior Vice President of the South Manhattan-North Brooklyn Network of the New
York City Health and Hospitals Corporation (HHC).
Mr. Cohen has been an employee of HHC since 1973. Mr. Cohen received his B.S.
from New York University School of Commerce in 1958 and has taken numerous
post-graduate and professional courses in Finance and Hospital Administration from
New York University School of Public Administration. Mr. Cohen is a Clinical
Associate Professor of Health Care at Ithaca College and is an Advance Member of
the Healthcare Financial Management Association and the Public Hospital
Association. Finally, Mr. Cohen is an accomplished author in the field of health care.
having authored the following: “Computerized Materials Management System Aids
Cost Control,” Healthcare Computing and Communications and “Staffing Ratios and
Hospital Efficiency in Two Public Hospitals,” Graduate School of Public
Administration. N.Y. U.
Additonal biographical material is available upon request.
JPMorgan
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= Offering Memorandum e Coney Island Hospital ; as
Appendix A: Transaction summary
Property description
Coney Island Hospital (“CIH" or “the Hospital”) is a 460-bed facility strategically
located at the corner of Ocean Parkway and Avenue Z in southern Brooklyn. The
Hospital campus comprises six buildings on 10 acres. In addition to the main
campus, the Hospital also operates the Ida G. Israel Community Health Center, which
is located in the heart of Coney Island at 2201 Neptune Avenue.
CIH. which provides both primary and tertiary health services to a population of
approximately 750.000. is located in a growing area of southern Brooklyn known as
Coney Island/Sheepshead Bay. The main campus consists of six buildings: (1) the
main building. occupying 490.200 square feet. houses all acute and rehabilitation
beds. all general hospital clinics. the emergency department and support services, in
addition to administrative functions: (2) the Hammett Pavilion, which. with 74.500
square feet, primarily houses the inpatient adult psychiatric units, psychiatric
administrative functions, selected psychiatric clinics, the MIS unit and the University
Group Medical Associates. P.C. (“UGMA") administrative unit (the UGMA
agreement expires June 30. 1996 and is not being transferred with the Hospital) (3)
the Powerhouse. which occupies 14.200 square feet: (4) the Engineering Building
(Building 5). with 6.600 square feet: (5) Building 6, which. with 13,100 square feet.
houses the drug and alcohol abuse programs: and (6) the EMS Garage building.
which occupies 10,100 square feet. The Hospital's off-site Ida G. Israel Community
Health Center occupies approximately 30.000 square feet of leased space and offers a
tull range of primary medical and dental services. in addition to outpatient
psychiatric services.
Ownership
CIH is operated by the New York City Health and Hospitals Corporation (“*HHC" or
the “Corporation™), a public benefit corporation of the State of New York. The
Corporation was created in 1969 under the New York City Health and Hospitals
Corporation Act, New York Unconsolidated Laws § 7381 et seq. for the purpose of
assuming responsibility for the operation of the municipal hospital system of the City
and providing comprehensive physical and mental health care and substance abuse
services to the ill and infirm in the City. The Corporation operates the largest
municipal hospital system in the United States with over 40,000 employees and an
annual operating budget of over $3 billion. Nationally. it is second in size to the
Department of Veterans Affairs as a governmental health care provider.
JPMorgan Offering Memorandum « Coney Island Hospital
The Corporation operates a facility network of over 10,000 beds and comprises
eleven acute care hospitals. including major teaching and tertiary care facilities. six
certified home health agencies. five long-term care facilities, six diagnostic and
treatment centers, a network of over twenty satellite clinics, one prepaid health plan
and the Emergency Medical Service - a city-wide medical emergency response
system. HHC leases the Hospital from the City and will enter into a long-term
sublease with the purchaser. The disposition of the Hospital will take effect upon
receipt of necessary state regulatory approvals.
Advisor
New York City Economic Development Corporation (“EDC™) has retained J.P.
Morgan Securities Inc. as exclusive financial advisor in the transfer of leasehold
interest in CIH and its satellite facility. EDC is a local development corporation that
acts on behalf of the City with respect to certain commercial real estate. economic
development matters and privatization projects.
Proposed structure of the disposition
The City of New York and HHC are seeking proposals from interested and qualified
parues to enter into a long-term sublease for the property, plant and equipment of
CIH and the Ida G. Israel Health Center. Qualified parties must be bonafide
501(c)(3) organizations or other entities which bid with 501(c)(3) organizations, so
that the facility is transferred to a 501(c)(3) organization. No arrangement involving
a non-501(c)(3) entity will be considered which would have the effect of
undermining the tax-exempt status of the existing indebtedness. The Hospital.
currently operated by HHC, is being offered unencumbered by existing management
agreements or affiliations. A transfer will be subject to the approval of the HHC
Board of Directors. and the City pursuant to Section 8 of the HHC Act
(Unconsolidated Laws 7385).
New York State law provides that an entity may not operate a hospital without the
approval of the New York State Public Health Council and the New York State
Department of Health. Thus, a condition to closing this transaction would be the
receipt of all necessary State approvals needed to transfer the entire operating license
of CIH. including any clinics, to the selected purchaser. The City will work with the
selected purchaser to secure the receipt of all regulatory approvals needed to close
this transaction.
Key investment considerations
The City’s and HHC's interest in the disposition of CIH is to improve the access 10
and quality of health care being received by the residents of Brooklyn, while
JPMorgan
vow ' ‘4 IY A
; \
- Offering Memorandum « Coney Island Hospital 0 WB 37
simultaneously improving overall efficiency. Consequently. certain issues must be
agreed upon with the prospective purchaser, prior to the transfer. The evaluation of
proposals will depend, in large measure, upon the extent to which prospective
purchasers demonstrate thorough and thoughtful consideration of the following
major items: provision of indigent care; transition of the workforce: development and
implementation of a capital program; arrangements for the repayment of existing
indebtedness; assumption of future malpractice liability; and methods for addressing
community concerns in the operation of the Hospital. The selected purchaser will be
expected to preserve and enhance access to and quality of health care services to the
residents of Brooklyn while addressing the above mentioned issues.
The tollowing discussion highlights some of the major concerns in each of these
areas. Proposals should outline in detail how they would address these issues.
Serious weight will be given to both the creativity and thoroughness with which each
of these issues are addressed by prospective purchasers.
Indigent care
The City and HHC are committed to preserving and improving the ability of all New
Yorkers to access quality care, including those who may not have the financial
resources to pay and who are not covered by third party reimbursement (Medicare.
Medicaid. Blue Cross. private insurance, or a managed care plan). The City will
require a concrete plan from all prospective purchasers which will ensure continued
access to quality care for the indigent. The City and HHC expect any prospective
purchaser of CIH will develop and maintain clinics, community-based programs. and
other means of primary care access to care for all residents. including the indigent, at
levels at least equal to the care already being received. The City and HHC will work
in conjunction with the selected purchaser to develop a system of performance
standards to publicly ensure quality and access of care to the indigent.
The bad debt and charity care need for CIH is funded. in part, by contributions from
the Federal, State. and City governments. During fiscal 1994. the indigent care
caseload consisted of 175 acute care discharges and over 75.000 ambulatory cases.
The Hospital was partially reimbursed for these costs through monies received from
the Regional, Supplemental. and SLIPA Bad Debt and Charity Care Pools which
exist under the current state reimbursement program. HHC facilities are currently
reimbursed for a higher proportion of their bad debt and charity care than most
voluntary hospitals. However, since. unlike public hospitals. voluntary hospitals can
participate in the Distress Hospital Pool, many voluntary hospitals receive a higher
reimbursement of their bad debt and charity care needs than HHC facilities.
JPMorgan
]
1
[ f »
Offering Memorandum e Coney Island Hospital as
Upon transter of CIH, continued access to quality medical care for the indigent is of
the utmost concern to the City and HHC. The City currently makes a significant
commitment to the indigent via its contribution to the bad debt and charity care
pools. As part of the overall negotiation process on all key issues, the City will
continue 10 make a substantial contribution to indigent care. The City and HHC
would also work closely with the selected purchaser to assist in the maintenance of
funding for the indigent from all sources. The prospective purchaser will be expected
to demonstrate ongoing improvements in the quality of and access to health care and
must be willing to illustrate these improvements through the periodic submission of
reports to the City that will be made publicly available.
Proposals to sublease and operate CIH should include, at minimum. responses to the
following questions concerning indigent care:
1. How will the prospective purchaser continue to ensure access to quality health
care at CIH for all its patients, including the uninsured? What assumptons have
been made with respect to funding for these plans?
ro
How will the prospective purchaser use CIH's existing outpatient clinics. other
primary care resources in CIH's service area. and any new clinics to be opened
by the prospective purchaser to both improve the quality of care and to ensure the
availability of outpatient services?
3. How will the prospective purchaser coordinate the provision of health care at
CIH with services and programs provided elsewhere within the community”?
What will the prospective purchaser do to assure access to quality health care in
its current service area, and if applicable. what does the prospective purchaser do
now? How will this be monitored?
Labor
The majority of employees at CIH are members of the following unions: (1) District
Council 37 of the American Federation of State. County and Municipal Employees
(AFSCME): (2) Local 237 of the International Brotherhood of Teamsters: (3) the
New York State Nurses Association: and (4) Licensed Practical Nurses and
Technicians of New York (SEIU). The City recognizes that the selected purchaser
must have the flexibility to effectively deploy the workforce if operating efficiencies.
improved patient care and increased overall competitiveness are to be achieved. The
prospective purchaser should provide specific proposals which outline how it is
prepared to address future staffing, retraining of existing workers, pension rights and
other labor issues.
JPMorgan Offering Memorandum « Coney Island Hospital 39
Existing indebtedness
Historically, New York City General Obligation Bonds have not been recorded as
debt on the balance sheet of HHC. Funding from New York City General Obligation
Bonds for capital outlays has been reflected as contributed capital to HHC. Interest
expense derived from New York City General Obligation Bonds attributed to HHC is
reflected in the Statements of Revenue and Expenses.
CIH has traditionally raised capital through general obligation borrowings by the
City and system-wide revenue bonds issued by HHC. The table which follows
depicts the anticipated outstanding indebtedness related to capital expenditures at the
facility. as of September 1. 1995. and estimated additional debt through June 30).
1996.
Exhibit A-1: Outstanding indebtedness
§ thousands
Cnty of New York General Obligation Bonds
Tax-exempt fixed rate $21,387
Taxable variable rate 1,866
Estimated through June 30, 1996 1,839
HHC Revenue Bonds 17,048
Total $42,140
Source: New York City Office of Management and Budget
As part of the transaction, the City and HHC would expect the prospective purchaser
to provide for the existing debt service payments. both principal and interest, that are
associated with the facility. The estimated annual debt service payments for the next
five years are presented below.
JPMorgan
' * » |!
= Offering Memorandum e Coney Island Hospital g ' 40
Exhibit A-2: Estimated annual debt service payments
$ thousands
Fiscal year ending
1996 $4,449
1997 4,768
1998 4,605
1999 4,591
2000 4,383
Source: New York City Office of Management and Budget and HHC internal records
The City will work with the prospective purchaser to effectively refinance or defease
the City/HHC debt or establish a flow of funds to achieve the same economic result.
Future capital commitments
While the existing physical plant is in good condition, the City and HHC would
expect any prospective purchaser of CIH to fund future capital needs for the Hospital.
Current estimates for on-going capital needs at CIH range from $10 to $15 million
per year in order to purchase equipment and maintain the physical plant.
Malpractice liability
While the City will continue to bear all malpractice liability for events which occur
prior to the disposition, upon completion of the transaction. the selected purchaser
will assume full responsibility for any malpractice liability for post-disposition
events.
Community liaison
The City and HHC expect proposals to specifically address how the prospective
purchaser plans to work in conjunction with the community to enhance medical care
in the region. The prospective purchaser should explain in detail in the proposal
what mechanisms it intends to employ to maintain an open dialogue and productive
working relationship with the local residents.
iagram
Site plan/stack d
in campus
3 a a £ ° 3 2 >
2 8 [J]
E
38 c = o E @ = [*2
c @ 5 Oo
Appendix B
Site plan - ma
ed
ueas’Q
JPMorgan
Exhibit B-1
JPMor gan & Offering Memorandum Coney Island Hospital
Exhibit B-2: Stack diagram
Man hospital Dulang Hammett pavibon
someon | soutwest | Center 1 Norwest | Norhees! South | commons | North
Finance | PH
[Doctor 3 lounge
Peaatnc NU | Biomedical
26 beds { gl]
posgxratory ther
Gynecology Otstetncs
NU amb surg
36 beds aamin
SICU Surg | Surges! NU | Ambulatory Surgery suppor
NU 36 beds surgery cystatogy
34 beds ’
Medca NU
39 beas
Mea:al NU CCU MICU
34 beos 30 bes
Pnmary cave’ | Primary care Outpasent
specal dincs once psychiatry
Occupatonsl
theapy 30 adult bes
Central stonie Pharmacy Planning
sadmnistraton aetary
Emergency Agmimng Meaca! Ambulatory PC
patent records care sgmirustraton
accounts soqsl services| regstraton
Mar hoaprtal Dudding
Southwest Center Nohwes!
JP Morgan » Offering Memorandum Coney Island Hospital Bh 43
Appendix C: Audited financial
statements
kemG Peat {LB LLP
CONEY ISLAND HOSPITAL
Financial Statements
June 30, 1995 and 1994
(With Independent Auditors’ Report Thereon)
Ki cat Marwick LLP ®
345 Park Avenue
New York, NY 10154
Independent Auditors’ Report
Economic Development Corporation:
We have audited the accompanying balance sheets of Coney Island Hospital (the Hospital), a
facility of the New York City Health and Hospitals Corporation (the Corporation), a public
benefit corporation of the State of New York, as of June 30, 1995 and 1994, and the related
statements of revenue and expenses, changes in net assets and cash flows for the years then
ended. These financial statements are the responsibility of the Hospital's management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of Coney Island Hospital as of June 30, 1995 and 1994, and the results of
its operations, the changes in its net assets and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
September 29, 1995 KPMG PasX Wows +
= fA
% : Bon Merpe rr
at WL a Kiynv A iors Goeroese-
Assets
Current assets:
Cash and cash equivalents
Patient accounts receivable, net (notes 3 and 9)
Bad debt/charity care pools receivable, net (notes 3 and 9)
Supplies
Other current assets
Total current assets
Plant and equipment, net (note 4)
See accompanying notes to financial statements.
CONEY ISLAND HOSPITAL
Balance Sheets
June 30, 1995 and 1994
(000's omitted)
Liabilities and Net Assets
Current liabilities:
$ 80 89 Current instalment of note payable (note 6)
28,850 29,327 Accrued salaries, vested benefits and payroll
300 1,000 taxes
1.367 1,222 Accounts payable
1.793 108 Accrued expenses
Retainage and construction accounts payable
32390 32,346 Due to the Corporation, net (note 5)
Estimated third-party payor settlements -
59,003 55.585 Medicaid, net (notes 3 and 9)
Estimated third-party payor settlements - Medicare,
Blue Cross and other, net (notes 3 and 9)
Total current liabilities
Accrued pension costs (note 7)
Due to the Corporation (note 5)
Note payable, net of current installments (note 6)
Contingencies (note 9)
Net assets:
Unrestricted
Donor restricted assets
Total net assets
1995 1994
$ 283 -
17.263 15.332
4,736 8.141
3,745 4312
218 310
14,383 5.826
15,500 15.100
1.827 _2300
57955 51,321
4473 4519
18,573 12,820
2,260 -
8,120 19,260
12 11
Sl 1921
$ 9391 81991
CONEY ISLAND HOSPITAL
Statements of Revenue and Expenses
Years ended June 30, 1995 and 1994
(000's omitted)
Revenue:
Net patient service revenue
Funds appropriated by The City of New York
for operations
Restricted income transferred from donor
restricted assets
Other revenue
Total revenue
Expenses:
Personal services
Other than personal services
Fringe benefits and employer payroll taxes
Affiliation contract expenses
Services provided by the Corporation (notes 5 and 10)
Depreciation
Interest
Provision for bad debts
Total expenses
Loss from operations
Nonoperating gains - investment income
Net loss
See accompanying notes to financial statements.
1]
“ Ce
[
P 1
1995
$ 220,885
181
(11,275)
—s
$ (11,260)
1994
182,250
10,264
1,583
—-—301
(21,598)
(21,598)
rd CONEY ISLAND HOSPITAL $
Statements of Changes in Net Assets
Years ended June 30, 1995 and 1994
(000's omitted)
Unrestricted Restricted Total
Net assets at June 30, 1993 $ 40,668 11 40,679
Net loss (21,598) - (21,598)
Donations of property and equipment 190 - 190
Donor restricted activity:
Grants and other increases - 1,583 1,583
Transfers to unrestricted assets
for operations = £1983) | (1333)
Net assets at June 30, 1994 19,260 11 19,271
Net loss (11,260) - (11,260)
Donation of property and equipment 120 - 120
Donor restricted activity:
Grants and other increases — 1,274 1,274
Transfers to unrestricted assets
for operations - (1.273) £1213)
Net assets at June 30, 1995 $ 8,120 12 8,132
See accompanying notes to financial statements.
% CONEY ISLAND HOSPITAL
Statements of Cash Flows
Years ended June 30, 1995 and 1994
L] M
r
%
(000's omitted)
1995 1994
Cash flows from operating activities and nonoperating gains:
Net loss $ (11,260) (21,598)
Adjustments to reconcile net loss to net cash used in
operating activities and nonoperating gains:
Depreciation 8,613 7,979
Provision for bad debts 23,389 18,138
Changes in assets and liabilities:
Patient accounts receivable (22,912) (26,772)
Estimated third-party payor settlements, net (73) 10,700
Bad debt/charity care pools receivable/payable 700 (2,700)
Supplies and other current assets (1,230) 3,726
Accounts payable and accrued expenses (3.972) (839)
Accrued salaries, vested benefits and payroll taxes 1,931 873
Accrued pension costs Lo 46) (31)
Net cash used in operating activities
and nonoperating gains _(4860) (10,524)
Cash flows from investing activities:
Purchase of plant and equipment, net (9,227) (16,311)
Donated equipment 190
Net cash used in investing activities X9.007) (6.12)
Cash flows from financing activities:
Advances from the Corporation 14,310 26,630
Retainage and construction accounts payable (92) 21
Repayments of note payable {en =
Net cash provided by financing activities 13.958 26651
Net (decrease) increase in cash and cash
equivalents 9) 6
Cash and cash equivalents at beginning of year 3 —3
Cash and cash equivalents at end of year $ 80 89
Supplemental disclosures: .
Interest paid $ 215 -
Issuance of note payable $ 2803 -
See accompanying notes to financial statements.
% CONEY ISLAND HOSPITAL ®
Notes to Financial Statements
June 30, 1995 and 1994
(000's omitted)
(1) Summary of Significant Accounting Policies
Coney Island Hospital (the Hospital) is an acute care hospital which is operated by the New
York City Health and Hospitals Corporation (the Corporation), a New York State public
benefit corporation created by Chapter 1016 of the Laws of 1969. On July 1, 1970, the
* Corporation assumed responsibility for the operation of the municipal hospital system of
the City of New York, including the Hospital, pursuant to an agreement (the Agreement)
with the City dated June 16, 1970.
The Hospital is a 460 bed facility located in Southern Brooklyn which provides services to
the communities of Brighton Beach and Coney Island. It is included in the Corporation's
Brooklyn Health Care Network and is dependent upon the Corporation for continued
financial support.
The Hospital's significant accounting policies are as follows:
(a) Donor Restricted Assets
Donor restricted assets are used to differentiate resources, the use of which is
restricted by donors or grantors, from resources of unrestricted assets on which
donors or grantors place no restriction or that arise as a result of the operations of the
Hospital for its stated purposes. Resources restricted by donors for plant replacement
and expansion are added to the unrestricted asset balance to the extent expended
within the period. Resources restricted by donors or grantors for specific operating
purposes are reported in revenue to the extent used within the period.
(b) Charity Care
The Hospital provides care to patients who meet certain criteria under its charity care
policy without charge or at amounts less than its established rates. Financial
counseling is provided for patients to determine available payment sources. The
Hospital does not pursue collection of amounts determined to qualify as charity care,
and they are not reported as revenue.
(c) Statements of Revenue and Expenses
Transactions deemed by management to be ongoing, major or central to the provision
of health care services are reported as revenue and expenses. Peripheral or incidental
transactions are reported as gains and losses.
(Continued)
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(1), Continued
(d) Net Patient Accounts Receivable and Revenue
(e)
The Hospital reports patient accounts receivable and revenue for services rendered at
the estimated net realizable amounts from third-party payors, patients and others. Net
patient service revenue includes estimated third-party payor settlements which are
accrued on an estimated basis in the period the related services are rendered, and
adjusted in future periods as required. :
Funds Appropriated by The City of New York for Operations
The City funds the Hospital (through the Corporation) for care given to uninsured
indigent patients, members of the City's uniformed services, prisoners and or other
services not fully reimbursed by third-party payors. In addition, the City pays the
Hospital's costs for settlements of claims for medical malpractice, negligence and
other miscellaneous torts and contracts; as well as other certain Hospital costs
including utilities (in fiscal year 1995) and City debt which funded Hospital capital
acquisitions. The Corporation reimburses the City for debt payments.
Plant and Equipment and Depreciation
Prior to April 1, 1993, substantially all of the additions to plant and equipment were
funded by the City. In accordance with the Agreement, the City retains legal title to
all such Corporation facilities and related equipment, including any additions and
leases, and subleases such to the Corporation for an annual rental of $1. From April
1993 through November 1994, the Corporation funded substantially all of the
Hospital's capital acquisitions through the issuance of its own debt. However,
effective December 1994, at the request of the City, the funding for additions to plant
and equipment is again derived from the City.
Since the Hospital is the sole beneficiary as to use of the plant and equipment and is
responsible for the control and maintenance of the physical plant and equipment, the
leased plant and equipment have been capitalized in the accompanying balance sheets
as follows: ;
(i) Assets placed in service through June 30, 1972 were recorded at an estimated
cost as determined by an independent appraisal company's physical inventory
and valuation of such assets as of June 30, 1972.
(ii) Assets acquired subsequent to June 30, 1972 are stated at cost.
(iii) Donated property and equipment is recorded at its fair market value at date of
donation.
(Continued)
® uci ®
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(1), Continued
(f), continued
Construction in progress (CIP) is recorded on all project costs associated with
facilities under construction which are to be leased or subleased to the Hospital. Such
CIP costs are depreciated when the related assets are placed in service.
For financial statement purposes, depreciation is computed on a straight-line basis
using estimated useful lives based on American Hospital Association guidelines.
(g) Affiliation Contract Expenses
(h)
(i)
Gg)
Affiliation contract expenses are incurrec by affiliated medical institutions which
participate in patient service programs at the Hospital. Under terms of the affiliation
contracts, the affiliate is required to furnish the Hospital with an independent audit
report of receipts, expenditures and commitments chargeable to the contract,
refunding any excess advances at that time. The reported incurred expenditures are
also subject to subsequent independent audit contracted by the Hospital.
Supplies
Supplies are stated at the lower of cost (first-in, first-out method) or market (net
realizable value).
Income Taxes
The Hospital incorporates its tax information with the Corporation, which is a public
benefit corporation of the State of New York and is exempt from Federal income
taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no
provision for income taxes has been made in the accompanying financial statements.
Cash and Cash Equivalents
The Hospital considers all highly liquid investments with maturities of three months
or less to be cash equivalents.
(Continued)
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(2) Charity Care
3)
The Hospital maintains records to identify and monitor the level of charity care it provides.
These records include the amount of charges forgone for services furnished under its
charity care policy and the estimated cost of those services. The following information
measures the level of charity care provided during the years ended June 30:
1995 1994
Charges forgone, based on established rates $ 16,813 14,962
Estimated expenses incurred to
provide charity care $ 13,824 19,213
Patient Accounts Receivable and Revenue
Substantially all of the Hospital's patient service revenue is derived from services provided
on behalf of patients under governmental medical assistance programs and private health
insurance plans. Generally, revenue from these sources are related to cost reimbursement
principles and are subject to audit by the applicable payors. Certain payors have performed
audits and have proposed various disallowances which other payors may similarly assert.
Management provides for the effects of all anticipated prior year settlements and audit
adjustments by recording estimates based upon existing regulations, past experience and
discussions with intermediaries. In addition, the Hospital is in varying stages of appeals
relating to its 1980-1995 reimbursement rates from certain third-party payors. Since the
ultimate outcome of these appeals is not presently determinable, no provision has been
made in the accompanying financial statements.
Net patient service revenue for the years ended June 30 is as follows:
995 1904
Medicaid ~~ $ 89.875 72,394
Medicare 60,732 49,330
Bad debt/charity care pools 16,793 15,325
Other payors 28,617 25,743
Self-pay 1,479 1,320
Provision for bad debts _ 23389 18.138
$ 220,885 182,250
(Continued)
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(3), Continued
4)
The Hospital provides services to its patients, most of whom are residents of the City and
are insured under third-party payor agreements. Net accounts receivable were as follows as
of June 30:
1995 1994
% of % of
Dollars Total Dollars Total
Medicaid $ 14,004 485 $ 13,613 46.4
Medicare 6,124 21.2 7,959 27.1
Other third-party payors 8,611 29.9 7,643 26.1
Self-pay oll 4 112 4
$ 28.850 100.0 $$ 29,327 100.0
The allowance for estimated doubtful accounts at June 30, 1995 and 1994 was $15,257 and
$8,980, respectively. Patient accounts receivable is presented net of Blue Cross advances
of $1,122 at June 30, 1995 and 1994.
Plant and Equipment
Plant and equipment as of June 30 consists of the following:
1995 1994
Land improvements $ 1619 1,273
Building and leasehold improvements 46,615 45,617
Equipment wd ll 13.114
127,952 120,004
Less accumulated depreciation 77.844 _72.768
50,108 47,236
Construction in progress | 8.895 8.349
Plant and equipment, net $ 59,003 55,585
"As of June 30, 1995 and 1994, there were $30,974 and $26,263, respectively, of fully
depreciated assets.
The Hospital capitalizes interest costs for construction projects. Capitalized interest costs
were $727 (net of interest income of $230) as of June 30, 1995. Capitalized interest costs
were $709 (net of interest income of $530) as of June 30, 1994.
(Continued)
CONEY ISLAND HOSP.TAL
Notes to Financial Statements
(000's omitted)
(5) Due to the Corporation
At June 30, the balances due to the Corporation, net are as follows:
1995 1994
Working capital advances, net (a) $ 14,383 5,826
Capital projects advances - long-term (b) 18.573 12.820
$ 32,956 18,646
(a)
(b)
The Corporation routinely provides essential operations and administrative
support to the Hospital and allocates a proportion of those costs based on work-
load statistics which, in management's opinion, represent a reasonable basis of
allocation (see note 10). In addition, the Corporation provides ongoing daily
operating cash flow to the Hospital resulting in a non-interest bearing receivable
or payable to or from the Corporation for working capital.
On June 15, 1993, the Corporation issued its Health System Bonds, 1993 Series
A (1993 Series A Bonds) in the amount of $550,000. The 1993 Series A Bonds
were issued for the purpose of funding a major portion of the Corporation's
ongoing capital program, funding the Capital Reserve Fund, refunding the
Corporation's Revenue Bonds, Series A, issued on May 1, 1985 (the 1985
Bonds) and paying costs of issuance of the 1993 Series A Bonds. The 1993
Series A Bonds were issued at a discount of $3,154.
The 1993 Series A Bonds are secured by a pledge of Health Care
Reimbursement Revenues, as defined in the General Resolution adopted
November 19, 1992, to HHC Capital. HHC Capital was created by the
Corporation in 1993 in order to secure the 1993 Series A Bonds. The sole
purpose of HHC Capital is to accept all payments assigned to it by the
Corporation or a Corporation Provider, and then monthly remit from such
assigned payments amounts required for debt service to the Bond Trustee with
the balance transferred to the Corporation.
The Hospital has been advanced $18,573 and $12,820 as of June 30, 1995 and
1994, respectively, relating to its expansion and modernization program. The
preliminary cost associated with the capital programs for the Hospital initially
identified in the 1993 Series A Bonds was $23,350. However, at the request of
the City, effective December 1994, the funding for capital is derived from the
City.
(Continued)
(6)
(7)
* Rl [
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
Installment Note Payable
The Hospital purchased 460 patient beds at a cost of $2,803. The beds were financed by
the seller issuing a secured eight year installment note payable, with an 8% rate of interest.
Principal and interest payments are due the first of every month in the amount of
. approximately $40.
Principal payments due on the installment note payable as of June 30, 1995 are as follows:
Year Amount
1996 $ 283
1997 307
1998 332
1999 358
2000 389
Thereafter 874
$2,543
Pension Plan
The Hospital participates in the New York City Employees Retirement System (NYCERS)
which is a cost-sharing multiple-employer Public Employees Retirement System, as
defined by Governmental Accounting Standards Board (GASB) Statement No. 5. Hospital
employees who receive permanent appointment to a competitive position and have
completed six months of service are eligible to participate in NYCERS. NYCERS
provides pay-related retirement benefits, as well as death and disability benefits. The total
amounts of the Hospital employees’ covered payroll approximated $47,822 and $42,630 for
the years ended June 30, 1995 and 1994, respectively.
The frozen entry age actuarial cost method of funding with 20-year amortization of a
revised unfunded frozen initial accrued liability is used to calculate the contribution from
the Corporation on behalf of the Hospital. In 1981, the Hospital recorded a liability for
unfunded pension costs. The Hospital's pension costs for 1995 and 1994 ‘approximated
$2,030 and $1,876, respectively.
(Continued)
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(8) Other Benefits
(a)
(b)
Postemployment
In accordance with collective bargaining agreements, the Corporation provides other
postemployment benefits that include basic medical and hospitalization (health care)
benefits to eligible retirees and dependents at no cost to approximately 62% of the
participants. Basic health care premium costs that are partially paid by the remaining
participants vary according to the terms of their elected plans. To qualify, retirees
must: (i) have worked for the Corporation with at least five years of credited service
as a member of a pension system approved by the City (requirement does not apply if
retirement is as a result of accidental disability); (ii) have been employed by the
Corporation prior to retirement; (iii) have worked regularly for at least 20 hours a
week prior to retirement; and (iv) be receiving a pension check from a retirement
system maintained by The City of New York or another system approved by the City.
The City does not make separate measurements of the cost of retired employees’
health care benefits for the individual facilities of the Corporation.
Severance
During 1995, the Hospital offered voluntary severance incentive programs. There
were 241 employees who participated in the programs and the cost charged against
operations for 1995 in the accompanying financial statements of the Hospital related
to the incentive payments was approximately $2,100.
(9) Contingencies
(a) Reimbursement
As discussed in note 3, revenue received from third-party payors represents a
substantial portion of the Hospital's revenue. Effective January 1986, Medicare
began paying for inpatient services rendered on a per discharge basis, based on
diagnosis related groups of illnesses. This system is the Prospective Payment System
(PPS). Effective January 1, 1988, New York State adopted the Case Payment System
(CPS), which reimburses inpatient care in a manner similar to the PPS system. All
non-Medicare payors are covered under CPS. Such system has been modified and
extended through June 30, 1996.
Inpatient acute services are paid at prospectively determined rates per discharge.
These rates vary according to a patient classification system that is based on clinical,
diagnostic and other related factors. Payments for Medicare beneficiaries are
governed by regulations issued by the Federal government whereas all other third-
party payors (Medicaid, Blue Cross and commercial insurance carriers) and self-pay
patients are governed by regulations issued by the New York State Department of
Health.
(Continued)
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(9), Continued
(a), continued
(b)
Inpatient nonacute and outpatient services are paid based upon a fee schedule or a
cost reimbursement basis. Certain items (e.g., defined capital costs) are reimbursed
on a cost basis. These items are paid at a tentative rate with final settlement
determined after submission of annual cost reports by the Hospital and audits thereof
by the Medicare fiscal intermediary. The Medicare cost reports have been audited by
the fiscal intermediary through June 30, 1992.
The Hospital has also entered into payment agreements with certain health
maintenance organizations and preferred provider organizations. The basis for
payment to the Hospital under these agreements includes prospectively determined
rates per discharge, or per day, and discounts from established charges.
For most payors other than Medicare certain provisions of the New York Prospective
Hospital Reimbursement Methodology (NYPHRM) legislation and related
regulations required retroactive rate adjustments for years encompassed by these
methodologies. Those which can be reasonably estimated have been provided for in
the accompanying financial statements. However, those which are either (a) without
current specific regulations to implement them or (b) are dependent upon certain
future events, cannot be reasonably estimated and, accordingly, have not been
provided for in the accompanying financial statements.
In addition, there are various proposals at the Federal and New York State levels to
reduce future hospital reimbursement. The outcome and effect of these proposals
cannot be presently determined.
Legal Matters
There are a significant number of outstanding legal claims against the Hospital for
negligence, malpractice and other miscellaneous torts and contracts, Pursuant to the
Agreement, the Hospital is indemnified by the City through the Corporation for such
costs. The Hospital reports malpractice claims when settled by the City as other than
personal services expenses in the accompanying financial statements. Such amounts
relating to the Hospital approximated $4,199 for 1995 and $2,913 for 1994.
Accordingly, no provision has been made in the accompanying financial statements
for unsettled claims, whether asserted or unasserted.
(Continued)
% | 10
CONEY ISLAND HOSPITAL
Notes to Financial Statements
(000's omitted)
(10) Services Provided by the Corporation
The Corporation provides certain services to the Hospital and charges the Hospital for (1)
direct costs incurred in providing such services and (2) applicable indirect costs based on
workload statistics which, in management's opinion, represent a reasonable basis of
allocating such costs. Costs charged are included in the Hospital's statement of revenue
and expenses and are composed of the following:
Personal services : 3,642
Other than personal services (i.e., legal fees,
data processing and other administrative
services) 3,822 4,302
Fringe benefits and employer payroll taxes 1,139 1,047
Brooklyn central laundry 838 839
Exhibit F
THE CITY OF NEW YORK
OFFicE oF THE MAYOR
New York, N.Y. 0007
PRESS OFFICE
FOR IMMEDIATE RELEASE: Release #302-96
Wednesday June 26, 1996
CONTACT: Colleen Roche 212 - 788 - 2958
Jack Deacy 212 - 788 - 2969
MAYOR GIULIANI ANNOUNCES CITY WILL ENTER
FINAL NEGOTIATIONS FOR LEASE OF CONEY ISLAND HOSPITAL
Primary Health Systems - New York Would Form Partnership
With NYU Medical Center And Brooklyn Hospital Center
Mayor Rudolph W. Giuliani announced today that the City’s Health and Hospitals
Corporation (HHC) had entered into final negotiations for transferring control and
Spcrsuon of Coney Island Hospital (CIH) to Primary Health Systems - New York (PHS-
NY), an affiliate of Primary Health Systems, Inc. (PHS). PHS-NY plans to form a health
care delivery network with New York University Medical Center and Brooklyn Hospital
Center to expand and improve health services available to the Coney Island community.
The City and the other parties signed a Letter of Intent this morning
regarding the lease of Coney Island Hospital. It contains the following stipulations:
A guarantee of full access to care for all residents regardless of ability to pay.
Assumption oy PHS of the full indigent care commitmeri.
Community involvement in the governance structure of the facility.
Publicly accountable standards for quality of care.
Substantial capital improvements, routine capital expenses, and the assumption of
debt service by PHS.
« Agreement to deal in good faith with existing unions.
In addition to meeung the City's criteria, it &
achieve savings of $100 millicn for taxpayers ¢
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Since its formation in 1994, PHS has acquired three health centers in Cleveland,
Ohio to place more than 1300 beds under common ownership: St. Alexis Hospital Center
in Cleveland, Ohio, with 220 beds, Deaconness Hospital in Cleveland with 316 beds, and
Mit. Sinai Health Care System, including Mt. Sinai Medical Center, a 450-bed major
teaching affiliate of Case Western Reserve Medical School. The company is about to
assume ownership of the 160-bed Laurelwood Hospital and 220-bed Richmond General
Hospital there. PHS has announced the intention to acquire and Roxborough Memorial
Hospital in Philadelphia with 189 beds.
Mr. Volla was formerly Chairman, President and Chief Executive Officer of
American Heaithcare Management, where he pioneered a turnaround of its operations.
His exceptional commitment to community involvement has been central to his strategic
philosophy. Under his leadership AHM was honored by Senator Art Torres and
Assemblymember Richard Polanco for creating community partnerships in East and
Southeast Los Angeles County, including the establishment of a family wellness centers,
AIDS Education Awareness programs in East Los Angeles, and training of health care
workers.
PHS-NY will affiliate with New York University Medical Center to serve as its
tertiary care affiliate. New York University Medical Center, founded in 1841, is among
the nation’s leading academic medical center and tertiary care institutions, with a strong
tradition in medical training, patient care and scientific research. The Medical Center is
also a major East Coast center for cancer care, cardiology, cardiothoracic and vascular
surgery, neurosurgery, reconstructive surgery, and transplantation. NYU Medical Center,
a 726-bed tertiary care facility, includes the NYU School of Medicine, Tisch Hospital, the
Rusk Institute of Rehabilitative Medicine, and the Hospital for Joint Diseases.
PHS-NY will affiliate with Brooklyn Hospital Center as its community health
care affiliate. The Brooklyn Hospital system maintains over 600 beds, and is composed
of two acute care facilities: Brooklyn Hospital Center (BHC) serving the downtown and
northern Brooklyn area, and the Brocklyn-Caledonia facility serving central Brooklyn.
BHC, the oldest healthcare institution in the borough, has a long and distinguished
history of serving the residents of Brooklyn. In addition to the provider network of over
200 physicians, BHC maintains several strategically located primary and ambulatory care
facilities as part of the Brooklyn HealthNet, the hospital's integrated primary care
delivery network.
It is anticipated that the process of negotiating a final contract will last up no
longer than 160 days. Community groups and elected officials will be kept apprised of
the progress toward a final contract, which will be subject to the approval of the Board of
Directors of the Health & Hospitals Corporation.
230-
TET. DA
“The PHS team submitted the best proposal in a competitive process, meeting all
of the City’s requirements including a commitment to full guaranteed access for the
indigent, improved quality of care, and involvement of the community in the governance
structure of the facility,” Mayor Giuliani said. “This is a terrific opportunity not only for
Coney Island residents but for all New Yorkers because it will provide better health care,
better facilities, guaranteed access, and more preventive care in the community. We will
also be saving money for taxpayers and injecting much-needed capital into the City’s
health care system.”
PHS is a for-profit company that focuses on reviving and expanding community
based hospitals in diverse urban communities. Their affiliate, PHS-NY, will run Coney’
Island Hospital under the leadership of the principals of PHS, Inc.
PHS plans to create an integrated health care delivery network in joint partnership
with Brooklyn Hospital Center and New York University Medical Center to ensure a full
continuum of care for the Coney Island community and enhance the Hospital's primary
care delivery system. Brooklyn Hospital Center will participate as a community-based
primary care affiliate and New York University will offer tertiary care -- high technology,
trauma, and acute care -- and serve as an academic medical center affiliate.
The Mayor said that a community-centered monitoring process will be negotiated
to ensure that the hospital is publicly accountable for providing high quality care and
meets its commitment to full indigent access. The monitoring process will have ngorous
regulatory and enforcement procedures with appropriate penalties, and will be more
involved and public than any monitoring process currently in place in the City for other
public and voluntary hospitals. The City will design and negotiate the monitoring process
using recommendations from focus groups that were held in March with residents of the
Coney Island community.
Coney Island Hospital, the largest medical facility in southern Brooklyn, is a 460-
bed acute care hospital serving a population of 750,000. CIH offers a full range of
services through the Hospital and its free-standing outpatient facility, the Ida G. Israel
Community Center. It is one of 11 hospitals currently operating in the HHC system and
has a full time staff of 2,337.
Maria K. Mitchell, Special Advisor to the Mayor for Health Policy and
Chairperson of the Health & Hospitals Corporation noted that with this agreement the
City can benefit from trends in the rapidly changing, competitive environment of today’s
health care system.
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“This is an important and innovative agreement that will not only benefit Coney
Island Hospital but more importantly the men, women, and children who depend on it for
care. We are going to see major improvements in access to quality care, along with a
vastly expanded range of services like primary care for the tens of thousands of people in
this very vital part of Brooklyn,” Ms. Mitchell said.
Steven L. Volla, chairman of PHS explained that the company submitted a
proposal because Coney Island Hospital has enormous potential to reach many more
people in the Coney Island area and provide an expanded range of services. Currently,
despite the community’s relatively large geographical distance from other hospitals in the
City, two-thirds of residents do not select Coney Island Hospital,
“Coney Island Hospital is part of a very vibrant community. We will modernize
and expand services by upholding a strong commitment to the traditions and the
constituencies that the hospital serves,” said Mr. Volla, “We look forward to significant
community involvement in the governance and support systems of the hospital. And with
the addition of New York University and Brooklyn Hospital affiliations, we will create a
truly integrated system in which services, programs and staff can be coordinated to
deliver care of the highest caliber to the people of the Coney Island community.” © eo op —
The Letter of Intent commits PHS to immediate commencement of talks with the
unions representing employees of Coney Island Hospital. Ms. Mitchell said that the City
will ensure that the agreement is fair and equitable to the dedicated people who work at
Coney Island Hospital. -
PHS is an integrated health care company with its main mission developing
community-based primary care systems in urban environments. Members of the
management team including Mr. Volla have over 20 years of expertise and nationally
renowned reputations turning around financially distressed health care organizations. Mr.
Volla said the company has expanded health services and quality in communities with
economically, culturally, and religiously diverse populations. He said they pioneered
innovative and effective strategies for imposing quality standards that are cutting edge in
the hospital industry, and established strong partnerships with physicians, nurses, and
local communities.
The management team formerly ran American Healthcare Management, Inc., a
proprietary hospital company with 16 hospitals in 9 states that merged into OrNda
HealthCorp in 1994, which now owns 47 hospitals in 17 states with $1.6 billion in
revenue.
(OVER)
City Selects PHS:NV., A For-Profit Corporation, to Leass and Operate Coney Iland Hospital
o PHS NY, Inc, (PHS.NY), a private, for-profit, hospital management corporation has been selected
as the winning proposer for the lcase of CIH, PHS-NY, an affiliate of Primary Health Systems Ine.
(PHS), will Icasc and operate CIH under a 49 year sublease with the NYC Health and Hospitals
Corporations (HHC). A letter of intent has been signed with PHS-NY to serve as a framework for
negotiations leading toa definitive contract with final terms,
-- PHS has a proven track record of operating hospitals providing high quality care in urban based,
multi-ethnic communitics, and preserving commitments to care for the indigent. Before this transaction,
its system wil! include six hospitals in two states,
0 PHS-NY will joint venture with Brooklyn Hospital Center as its community-based primary care
affiliate; and New York University Medical Center as its tertiary care /academic medical center
affiliate to cnsure a full continuum of care and provide an enhanced primary care delivery system for the
CIH community. /
0 PHS-NY's ‘propaes] wag or all Ee to ar submitted by other fot- for-profit hospitals
and met all the City's stated terms and conditions. PHS-NY will commit in the final contract to:
-- Providing Indigent Care - PHS-NY will guarantee and assume in full, all of the curvent
indigent care obligations, including providing all of the financing for care.
- Improving Quality Care « PHS-NY has committed to enhances current services, and to
demonstrate ongoing improvements in the quality of care. This will be accomplished through
implementation of a proprietary Quality Outcome Management System and other prov
quality management techniques;
-- Maintaining Access to Care « PHS «NY has committed to provide full access to care for the
CIH community, regardless of the ability to pay;
-- Preserving Commtuntty Involvement - Continued involvement of tho community in the
gavemance structure of the hospital will be provided,
« Minlmizing Labor Transition - PHS-NY has committed to mcot with the unions whilch
currently represent CIH employees to achieve a smooth and orderly transition, PHS-NY will
meet its staffing needs substantially through the use of current employezs of CIE.
ow Assuming Malpractice Costs - Any liability for malpractico occurring after closing of the
transaction will be assumed by PHS-NY.
oe Assuming All Debt Service - PHS-NY will provide for payment of all of the outstanding
CIH debt required to be paid off now with the remainder of debt service payable by PES-NY as
retital payments under the lease,
- Requiring Neo Clty Subsidy « PHS.NY has committed to provide full access to care for the
indigent at current levels without conditioning access on continued City funding through tax
levy subsidy or contributions to the BDCC pools,
-« Upgrading the Physical Plant - Much needed capital infusion in the physical plant of CIH
will be undertaken by PHS-NY through a capital commitment of no less than $25 million, in
addition to routine maintenance costs
|
YIQ oring andii{orcement Pro ong Wi sure Indipern are CC OmMmitingss
- 38 8nd ONTY S.A ave Maintained
o The indigent care commitments made by PHS «NY will be subject to Clty monitoring.
o Performance clauses will be made a part of the final contract including contractual penaltics for non-
compliance. The City will make public performance and compliance information.
o Monitoring of contractual compliance will include community input. A regulatory mechanism
utilizing governmental and external audits will be developed,
BTS VAST HOY
Ongoing Improvements to the Ouality of Care Will be Achieved
o PHS-NY will focus on improving quality of care by building & network of primary care and specialty
physician-linked clinical services in community-based facilities and by establishing direct linkages with
tertiary care/ academic medical centers affiliates. Quality will be improved by:
-- preserving and strengthening community health care acecss
«» developing a continuum of care for the community
-- undertaking extensive capital investment programs
— aggressively recruiting high quality physicians and staff
o Through its proprictary Quality Outcome Management System, PHS has improved quality in the
hospitals they operate by tracking service and quality indicators on the basis of 23 criteria.
o A performance-based monitoring system incorporating quality care measures will be implemented
at CIH.
o The City's overarching goals of access to care for the indigent and uninsured and improving the
quality of care for the CTH community will be fully met.
o The City views privatization as one of many ways to mect the challenges confronting the City's health
care system. Lease and operation of CIH by an entity with ready access to capital will ensure its
continuation as & high-quality, community-based hospital, strategically repositioned for success in this
competitive environment,
o The transfer will occur upon signing & final contract and obtaining all regulatory approvals, thus
relieving the City of significant coste and long term liabilities incurred for CIH.
ARLE A Ee
o Over flve years, the City will conservatively realize an estimated $100 milifon in cumulative savings
and avoided costs, resulting largely from operating losses incurred by CIH, the City contribution to
charity care pools, principal payments on the debt and capital expenditures for CIH. Present value
savings to the City are estimated to be over $44 million on a cash flow basis,
This Structure Satisfies Requirements of State Law for Ownership of 2 Hospital
o State law allows a for-profit corporation to own and operate hospitals in New York provided that
such ownership is by individuals.
o PHS-NY is a privately-held corporation, owned by individual shareholders, and will be structured 2s a
Sub-$ Carporation.
0 PHS-NY will lcase the CIH and expects to contract with PHS to serve as manager of the hospital,
o All State regulatory approvals, including securing 8 “Certificate of Need" and “establishment
pproval” from the State, will bo obtained prior to transfer and receipt of & new operating certificate by
PHS-NY. :
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o PHS-NY is an affiliate of PHS, Inc. an integrated hospital management company formed in 1994 by a
team of seasoned health care management executives, PHS-NY will lease CIH and expects to cetitract
with PHS for the management of the hospital.
o PHS has a proven track record of operating hospitals providing high quality care in urban-based,
multi-ethnic environments and a reputation for:
-- preserving the community-based focus and traditions of each hospital in their system while
continuing its commitment to providing access to the indigent and uninsured,
— improving the financial soundness and operation of the hospitals they own,
- strengthening the service delivery with capital investment programs, service enhanccracnts
and physician recruitment.
o Current PHS Operations - PHS operates health care facilities in urban markets such as Cleveland,
OH and Philadelphia, PA. PHS recently acquired Mt. Sinal Health Systems of Ohio, Inc. and also
operates 220-bed St. Alexis Medical Center and 316-bed Deaconess Hospital in Cleveland. In sddition,
PHS recently agreed to acquire Roxborough Memorial Hospital in Philadelphia, and plans additional
acquisitions in that arca. :
o Prior History and Experience of Senior Management Team - PHS was established by the former
senior management team of American Healthcare Management, Inc. (AHM) and Universal Health
Services, Inc.
Exhibit G
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
THE COUNCIL OF THE CITY OF NEW YORK,
PETER F. VALLONE, SPEAKER OF THE
COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF THE
COUNCIL HEALTH COMMITTEE,
Plaintiffs, Index No. 004897-96
- against -
RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY AMENDED COMPLAINT
OF NEW YORK, NEW YORK CITY HEALTH AND
HOSPITALS CORPORATION, and NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION,
Defendants.
Plaintiffs, The Council of the City of New York (the “City Council”), Peter F.
Vallone. Speaker of the City Council and Enoch H. Williams, Chair of the City Council
Health Committee. by their attorneys, Tenzer Greenblatt LLP and Richard M. Weinberg, for
their complaint allege as follows:
NATURE OF THE CASE
l. This is an action to declare and mandate that the defendants Rudolph W. Giuliani,
Mayor of the City of New York (the “Mayor™), the New York City Health and
Hospitals Corporation (the “HHC™), and the New York City Economic Development
Corporation (“EDC”) must
87000/0006'ELS/247312.
a. submit to the City Council for approval any and all proposed transfers, sales,
and/or subleases by the HHC to private lessees of the HHC hospitals including
Coney Island Hospital, Queens Hospital Center and Elmhurst Hospital
pursuant to the Health and Hospitals Corporation Act, Unconsolidated Laws §
7381, et seq. (the “HHC Act”); and
b. comply witn the Uniform Land Use Review Procedures (“ULURP™) of Section
197-c and 197-d of the New York City Charter (the “City Charter”), which
require City Planning Commission and City Council approval of any transfers
or dispositions of HHC hospitals.
to
Such a declaration is necessary because the Mayor and the other defendants have
acted and are continuing to act in furtherance of their wrongful Coonan that
a. only the Mayor's approval is required for the proposed subleases under the
HHC Act and not the City Council's: and
pb. the transfer or disposition into private hands of these City-owned properties is
not subject to ULURP.
3. The Mayor's position described in the previous paragraph contravenes and subverts
the intention of the HHC Act, which authorized the disposition of HHC facilities
subject to the Board of Estimate’s local legislative power. a power which now,
pursuant to the City Charter currently in effect. vests wholly in the City Council.
4. The Mayor's calculated and unlawful effort to preclude City Council review of any
87000/0006 ELS 247312.
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plan to dispose of HHC hospitals and property represents not only a radical departure
from the system of checks and balances provided for in both the HHC Act and the
City Charter, but also an attempt to curtail public debate about a plan which would
impose a dramatic change in the health care policy of the City having its greatest
impact upon the indigent.
1HE PARTIES
S, The City Council is the independent legislative branch of the government of the City
of New York (the “City”). City Charter § 21. Plaintiff Peter F. Vallone is Speaker
of the City Council and plaintiff Enoch H. Williams is Chair of the City Council
Health Committee.
6. The Mayor is the chief executive officer of the City. City Charter, § 3.
id The HHC is a public benefit corporation which was created in 1970 under the HHC
Act for the purpose of assuming responsibility for the operation of the municipal
hospital system of the City. Unconsolidated Laws § 7381. er seq,
8. The EDC was established pursuant to State not-for-profit corporation law and is a
local development corporation that acts on behalf of the City. pursuant to a contract
funded by the City budget. with respect to certain commercial real estate, economic
development matters and privatization projects. The majority of the EDC Board is
appointed by the Mayor, and the President of EDC Board of Directors Sirves at the
pleasure of the Mayor.
87000/0006/ELS/247312.
STATEMENT OF FACTS
Creation of the HHC
9. Prior to July 1, 1970, the City constructed, maintained and operated hospital facilities
in all five boroughs providing general chronic, ambulatory and skilled nursing care to
residents of the City and particularly those who could not otherwise afford hospital
Services.
10. On July 1, 1970, New York State enacted the HHC Act, Unconsolidated Laws §
7381, er seq, creating the HHC and authorizing the City to transfer the municipal
“hospital facilities to HHC for the purpose of maintaining and operating them.
11. The statutory mission of HHC is to provide comprehensive physical, mental health,
and substance abuse to the ill and infirm of the City, “particularly to those who can
least afford such services,” U.L. § 7382. consistent with the State’s mandate
contained in Article XVII of the New York State Constitution which provides that
§ 3 The protection and promotion of the health of the inhabitants of
the state are matters of public concern and provision therefor
shall be made by the state . . . as the legislature shall from time
to time determine.
§ 4 The care and treatment of persons suffering from mental
disorder or defect and the protection of the mental health of the
inhabitants of the state may be provided by state and local
authorities and in such manner as the legislature may from time
to time determine.
Upon information and belief, the HHC operates the largest municipal hospital system
87000/0006/ELS/247312.
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in the United States and, as a governmental health provider, is second in size to the
U.S. Department of Veteran Affairs.
12, The HHC was created at the request of the City in part to permit independent
financing of municipal hospital construction and improvements and to facilitate
professional management of the hospital system. At the same time, the City’s
intention was tC 11Su.¢ ix aorninion and control over the HHC. Since iis cieation,
the City’s dominion and control of HHC has been achieved by the following
provisions of the Act:
a. The HHC’s funding has been derived from inclusion in the City budget,
commencing with its submission of its program budget to the City in time for
inclusion in the Mayor's executive budget. HHC Act. U.L. § 7386(1)(a), and
culminating with its inclusion in the City budget which the City Council has
the sole authority to adopt. |
b. The City has the right to acquire any health facility held by the Corporation.
Id.. § 7386(2)(b).
g. The HHC must exercise its powers in accordance with policies and plans
determined by the City. Id.. § 7386(7).
d. Employee grievances are conducted in accordance with the New York City
Administrative Code. Id., § 7390(5)-(8).
e. The HHC is dependent upon agents, employees and facilities of the City,
87000/0006/ELS. 247312.
13.
14.
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whose availability is at the pleasure of the Mayor. Id., § 7385(19).
The HHC, therefore. unlike other public benefit corporations such as the
Metropolitan Transportation Authority or the Urban Development Corporation,
is and was intended to be an instrumentality of the City.
In addition, the HHC Act gives the Mayor personal appointive domination over the
Board of Directors of HHC, which: consists of 16 persons. The Chair is designated
by the Mayor. Four other members who serve ex officio are heads of City agencies
also appointed by the Mayor. Five additional members are appointed by the Mayor.
Five members are designated by the City Council. The remaining director is the
Chief Executive Officer of the Corporation chosen by the other 15 directors. HHC
Act, U.L. § 7384.
As a check on the Mayor's appointive power over the HHC Board of Directors
and his power to propose changes in ownership of HHC facilities. the HHC
Act further provides that no health facility or other real property acquired from
the City or constructed by the Corporation may be sold or leased or otherwise
transferred without the consent of the Board of Estimate of the City. Id., §§
7385(6): 7387(4).
In 1970. at the time of the passage of the HHC Act. the Board of Estimate
consisted of three members who were elected Citywide (the Mayor, the
President of the City Council and the Comptroller), plus the elected presidents
87000/0006/ELS 247312.
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of each of the City’s five boroughs. It had both executive and legislative
functions. The Mayor, President of the City Council and the Comptroller
were each entitled to cast four votes on the Board of Estimate; each of the
borough presidents had two votes for a total of 22 votes. Therefore, although
the Mayor had four votes, any combination of 12 votes could, after a public
hearing, defeat any proposal the Mayor put forth before the Board of Estimate.
City Charter, § 62(a) (1968).
. 16. In response to the determination by the United States Supreme Court in Morris
v. Board of Estimate, 647 F. Supp. 1463 (E.D.N.Y. 1986), aff'd, 831 F.2d
384 (2d Cir. 1987), aff'd, 489 U.S. 688 (1989) that the Board of Estimate’s
voting scheme was unconstitutional. the 1989 Charter Revision process
abolished the Board of Estimate and restructured the City’s government.
17. The current City Charter, which became effective on January 1. 1990, vests
exclusive local legislative power in the City Council, City Charter, § 21, and
oversight authority in it and its committees. City Charter. § 29.
18. It is clear that the City Council has succeeded to the role of the Board of
Estimate under the HHC Act, because the Act contemplates that there will be a
local legislative restraint on certain HHC-related decisions proposed by the
Mayor. The Board of Estimates approval power under the HHC Act, |
accordingly, devolved to the only local legislative body of the City, the City
87000/00"6/ELS/247312.
Council. See City Charter, § 1152(c).
HHC'’s Role Since Its Creation
19. The State Constitutional mandate to provide health care for the indigent is
reflected in Section 1 of the HHC Act and, moreover, in the operating lease
between the City and the HHC.
On or about July 10, 1970, the Ciiy :casea ali of its hospital facilities to HHC,
for an annual rent of $ 1. The lease extends for as long as the HHC has a
corporate existence. At all times since July 10, 1970, the HHC has operated
the hospitals under the lease. There are eleven such HHC hospitals City-wide,
but as of the filing of this complaint. there are three hospitals. Coney Island
Hospital. Queens Hospital Center and Elmhurst Hospital Center (the “Target
Hospitals ™), which the Mayor proposes to dispose of in this first round of
privatization.
The Target Hospitals form a significant part of the HHC system. Coney
Island Hospital is the largest medical facility in South Brooklyn. serving a
population of 750,000. Queens Hospital Center and Elmhurst Hospital Center
are the only acute care municipal hospitals in the Borough of Queens.
Moreover, the three Target Hospitals are the primary sources of health care
for low income and indigent residents of the areas which they serve, including
Medicaid and Medicare recipients and indigent patients with special needs such
87000/0006/'ELS/247312.
22.
23.
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as AIDs. TB, mental illness and homelessness. The Target Hospitals operate
extensive ambulatory programs, outpatient departments, emergency rooms,
alcoholism and drug treatment programs, methadone maintenance clinics,
neighborhood psychiatric facilities and alternative care.
The Target Hospitals also treat and admit many uninsured and underinsured
patients. Hospitals outside the nC sysiem are only required by State law to
treat uninsured patients when there is an emergency need for immediate
hospitalization. Public Health Law § 2805-b.
Medical services provided to the City’s uniformed services (the Police and
Fire Departments) are provided by HHC hospitals including the Target
Hospitals.
The Mavor’s Privatization Plan
24.
26.
In 1994. the Mayor publicly announced his intention to privatize the leased
hospitals by transferring them from HHC to private voluntary (i.e.. non-HHC
hospitals) hospitals in order to relieve the City of some or all of the expense
necessary for their operation.
The HHC hospitals targeted for the first stage of this massive privatization
program (the Mayor's “Asset Disposition Program™) are the aforementioned
Coney Island Hospital, Queens Hospital Center and Elmhurst Hospital Gener.
In this first wave of privatization of City hospitals. the Mayor initially
87000/0006/ELS 247312.
27
29.
30.
i) EET ®
proposed the sale of the Target Hospitals. But, apparently. because of the
perpetual lease between the City and HHC, he unilaterally restructured the
form of the transactions so as to provide for long-term (99 year) subleases
from the HHC to the selected sublessees. The transactions are, however, in
purpose and effect sales, and are referred to as such in the City’s privatization
Offering Memoranda which also refer to the potential lessees as “purchasers.”
The Mayor has made clear that he views the HHC as a vehicle which he can
control, and that he alone has the authority to transform the health care system
of the City without the scrutiny, much less the approval. of the HHC Board,
the City Council and other public officials.
The Mayor has exercised his dominion and control over the HHC and the
Asset Disposition Program from its very inception. The Mayor announced the
proposed transfers of the Target Hospitals without consulting with, much less
obtaining approval from the HHC Board. in violation of U.L. § 7384 which
vests the powers of the HHC in the Board.
The Mayor has imposed a veil of secrecy on the privatization process such that
essential. material information has been routinely withheld from HHC's Board
of Directors and others legally entitled to such information.
Indeed. management of the disposition of the Target Hospitals has been
withheld from HHC and put instead into the hands of the EDC, an agency
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87000/0006 ELS/247312.
31.
32.
33.
controlled by the Mayor. The HHC Board was not consulted nor did it
®
|]
.
approve of such management.
In August 1994, without consulting with or obtaining the approval of the HHC
Board, the EDC directly retained J.P. Morgan Securities, Inc. (“J.P.
Morgan”) to act as the financial advisor with respect to the plan to privatize
the Target Hospitals.
In 1995, J.P. Morgan rendered a report to the Mayor concluding that the
current milieu in health care provided an excellent opportunity for the City to
privatize the Target Hospitals. The HHC Board did not review or authorize
this report or its recommendations and did not receive it until after it was
made public.
On February 23, 1995, in a press release, without consulting with or obtaining
the approval of the HHC Board. the Mayor announced that the City would
move forward in its effort to privatize the Target Hospitals. In this
connection. and without consulting with or obtaining the approval of the HHC
Board. the Mayor created and alone appointed an “Advisory Panel” to study
the sale of the Target Hospitals.
The HHC Board of Directors has never approved the Mayor's decision to
privatize the Target Hospitals. To the contrary, in April 1995, five members
of the HHC Board wrote to the Mayor complaining that the HHC Board had
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87000/0006/ELS/247312.
35.
36.
38.
eo -. ®
not been consulted with respect to the proposal and, upon information and
belief, they received no response to their letter.
Thereafter, on August 1, 1995, without consulting with or obtaining the
approval of the HHC Board, EDC, acting on behalf of the Mayor, entered into
an agreement with J.P. Morgan as financial advisor for the purpose of
unplementing the Mayor’s plan to privatize the Target fospitals. The J.P.
Morgan agreement provided no role for the HHC Board, reserving, instead,
for EDC the right to accept or reject, in its sole discretion, any proposed
transaction.
On or about October 26, 1995. the EDC issued two Offering Memoranda
prepared by J.P. Morgan for the privatization of the Target Hospitals. The
Offering Memoranda were never submitted to the HHC Board for its advice,
comment or approval.
EDC retained counsel to handle the legal aspects of the transfer of the Target
Hospitals. The HHC Board was never consulted about nor did it approve of
such retention of counsel.
Following the issuance of the Offering Memoranda. the Mayor and EDC have
ignored the efforts of the City Council to exercise its State-and City Charter-
given authority regarding the disposition of the Target Hospitals. On October
30. 1995, City Council Speaker Peter F. Vallone wrote to the Mayor. In that
87000/000¢/E£31.S/247312.
letter, Mr. Vallone stated, in part:
I request that, notwithstanding statements by your office to the contrary, you
recognize the vital legal role the City Council must play in any effort to lease
the aforementioned hospitals. We can and should work together, in the spirit
of cooperation, to develop a plan that provides quality health care in a cost-
effective manner to all of the citizens of our City.
The Council, pursuant to State Law and the City Charter, has an obligation to
~lav » cignificant role in any effort by the Fivv ta sell transfer or lease the
inn) facilities]. Specifically, pursuant 10 visu..suinuaiea Laws Sections 7385
and 7387(4), the City Council, as the successor in interest to the Board of
Estimate in this connection, has an obligation to approve of any such sale,
transfer, lease or sub-lease. Moreover, under Section 197-c of the New York
City Charter, the City Council must approve of any change or contract
respecting the use, development or improvement of real property of the City.
The real property underlying the three aforementioned hospitals is such City
property.
* %* %
I respectfully urge you to recognize the City Council's legal role in this
process, so that it will not become necessary to transform this matter into a
legal battleground where the City Council or concerned citizens must seek -
court intervention to vindicate their rights. I emphasize that the preferable
course is to work together to develop a cost-efficient solution that safeguards
the health care of the citizens of the City of New York.
I look forward to your reply.
The Mavor never answered Speaker Vallone's letter of October 30, 1995.
The City Council's concerns, expressed by Speaker Vallone. are not the only
ones that have been ignored by the Mayor. City Comptroller Alan G. Hevesi
has written two letters, in September and November 1995, both of which,
upon information and belief, have gone unanswered. The subject of
Comptroller Hevesi's letters was, like that of Speaker Vallone's, the fact that
87000/0006/ELS 247312.
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“ :
the City has done little or no analysis with regard to maintaining health care
for the indigent.
41. Indeed. conspicuously absent from all J.P. Morgan reports and from the
Offering Memoranda, and still unaddressed by the Mayor's Advisory Panel, is
any meaningful plan, consistent with Article XVII of the New York State
Cousitiuiion, regarding the provision of and funding for medica: care aud
facilities for the indigent after a sale of the Target Hospitals. Since the
disposition of the Target Hospitals is only the first phase in a much larger
privatization plan involving many more HHC facilities, there is a critical need
for a concrete program to address, at the outset. continuation of
comprehensive health care for the indigent. how medical services will be
provided to the City's uniformed services. and how funding will be handled
for all of the foregoing needs. The City Council's role in developing such a
plan is not only vital from a policy standpoint. but legally certain and
necessary.
On information and belief. the Mayor is on the verge of consummating deals FN
=
for the disposition of the Target Hospitals. The Mayor has continued to keep
the hospital privatization process secret. He has refused to inform the City
Council. the Comptroller and even the HHC Board itself of the identities of
the parties whose bids for the Target Hospitals were received in February.
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87000/0006/ELS/247312.
4 .
»
Deputy Mayor Peter Powers, asked recently why no details of privatization or
of the bids received by the City were being given to the City Council, told
Newsday in February 1996: “They don’t have a right to have a say in this.”
FIRST CAUSE OF ACTION
43. Plamiffs repeat and reallege the allegations of paragraphs 1 through 4Z as
though fully set forth herein.
44. In the HHC Act, the State Legislature imposed the requirement that HHC
could not sell, transfer or lease any of its facilities to any other agency, entity
or group without the approval and consent of the City's Board of Estimate.
U.L. § 7385(6) and 7387(4). In so authorizing the Board of Estimate, the
State Legislature imposed a local legislative check to restrain the Mayor from
making certain critical decisions respecting health care services in the City
without the input of a City legislative force.
45. The devolution of that power to the City Council is certain since the State’s
unchanged statutory scheme contemplates that the Mayor could initiate
proposals and control the HHC's decision-making through his appointive
powers, but that a local legislative body would scrutinize and ultimately
approve or disapprove certain important actions by the HHC.
46. Despite the intent of the HHC Act to require local legislative approval, the
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87000/0006/ ELS/247312.
Mayor and his counsel contend that under the new City Charter. the power to
dispose of the property of the City has devolved solely upon the Mayor. In
the Mayor's view, therefore, he alone could propose the sale. transfer or lease
of any HHC facility and thereafter, he alone would have the power to approve
the terms of such disposition on behalf of the City. In the Mayor’s view, he
may act unilateiaily and unchecked by any local legislative boay in
contravention of the HHC Act’s legislative intent.
47. The Mayor's position described above subverts the intent of the HHC Act that
any disposition of the HHC facilities be subject to local legislative approval, a
role which the new City Charter vests wholly in the City Council. The
Mayor's unilateral abrogation of power is designed to shut the City Council
and even the HHC Board out of the privatization process and to prevent them
from exercising their rightful roles under the HHC Act and the City Charter.
Such action by the Mayor is especially egregious given that privatization of the
HHC facilities will bring about an unprecedented transformation in the
delivery of health care to the indigent and to the City, particularly to the City’s
uniformed services.
SECOND CAUSE OF ACTION
48. Plaintiffs repeat and reallege the allegations of paragraphs 1 through 47 as
though fully set forth herein.
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87000/0006/ELS/247312.
’ 1
x “
) ¥
The new City Charter, in addition to abolishing the Board of Estimate,
instituted ULURP as a means to insuring community, borough and City
Council participation in any sale or lease of City property. In pertinent part,
ULURP is required whenever there is a sale, lease . . . exchange or other
disposition of the real property of the city. . . .° City Charter § 197-d(e).
50. The Mayor contends that the privatization of the Target Hospitals does not
require ULURP because the transactions consist of subleases by the HHC to
private institutions.
51. This contention ignores the fact that the HHC is an instrumentality of and
under the dominion and control of the City and that even if it were not under
the City's dominion and control, the subleases constitute, in form and
substance. a disposition of real property of the City which requires the
application of ULURP.
THIRD CAUSE OF ACTION
32: Plaintiff repeats and realleges the allegations of paragraphs 1 through 51 as though
fully set forth herein.
53. Pursuant to General City Law, §23 and the City Charter § 384 real property of the
City may not be leased except for the highest marketable rental at public ion or
by sealed bids, in the absence of a local law otherwise so providing.
37.
87000/0006/ELS/247312.
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' :
> +
L ¥
The proposed subleases of the Target Hospital by negotiated subleases made without
the approval of the city council is in violation of said provisions.
WHEREFORE. plaintiffs demand judgment
A.
87000/0006/ELS/247312.
declaring that the privatization of the Target Hospitals by means of a
sublease (or other device) to private institutions requires the approval of
the City Councu,
declaring that any sale, transfer or lease of any other HHC facilities
likewise be subjected to City Council approval:
declaring that such disposition also requires the application of New
York City's Uniform Land Use Review Procedures:
permanently enjoining defendants from selling, leasing or otherwise
disposing of any HHC hospital or real property prior to submitting and
obtaining the necessary approvals of the City Council:
mandating that the Mayor and EDC. as an agency funded by the
City and expending City funds in connection with its conduct in
relation to the HHC. provide the City Council with all requisite
information pursuant to Section 29 of the City Charter: and
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Dated:
87000/00u,/TLS/247312.
granting plaintiffs such other and further relief as the Court may deem
just and proper.
New York, New York
July 18, 1996
-19-
TENZER GREENBLATT LLP
Attorneys for Plaintiffs
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
(212) 573-4300
-and-
RICHARD M. WEINBERG, ESQ.
General Counsel
The Council of the City of New York
Gail R. Zweig
Of Counsel
75 Park Place
5th Floor
New York, New York 10007
(212) 788-7000
r 5 ES)
STATE OF NEW YORK .° 7 ey me
COUNTY OF NY yo oon, 4
, being duly sworn,
deposes and says:
[] AFFIDAVIT OF SERVICE BY MAIL
That I am over 18 years of age, not a party to this action and reside
That on the day of , 19 , I served the
within
upon the following attorney(s), for the part(y) (ies) and, at the address(es), indicated below and designated by
said attorney(s) for that purpose:
Party Attorney Address
by depositing a true copy or copies, of the enclosed in a properly addressed wrapper in an official depository
under the exclusive care and custody of the United States Postal Service within the State of New York.
© © 8 6 8 © 5 8 8 8 8 8 8 8 8 8 8 6 8 SS 6 GS 6 8 SP GG GS SSS OL LES Ge ee ees soe
[] AFFIDAVIT OF PERSONAL SERVICE
That I am over 18 years of age, not a party to this action and reside
That on the day of , 19 , I served the
within
upon
the
herein, by delivering a true copy thereof to
personally. Deponent knew the person so served to be the person mentioned and described in said papers as
the therein.
© © © 6 8 5 9 8 8 5 8 5 8 8 8 8 8 8 8 8 6 8 8 SS 8 8S 8 ST GE SOG eG 0 Es ee es eee
© © 8 5 © ® 8 8 8 8 8 8 8 8 8 8 SSS 8 SG EG 8 8 GS 6 6 8 OG 0 0 6 0 5 GO 6 Gs es ee eo
Notary Public
[1 CERTIFICATION BY ATTORNEY
certifies that the within has been compared
by the undersigned with the original and found to be a true and complete copy.
Dated: rR Seles vi seals a wer Seat n I AT Wie Tee aw io 0a 4 wins
INDEX NO. 004897-96
SUPREME COURT: STATE OF NEW YOR
COUNTY OF QUEENS
i
THE COUNCIL OF THE CITY OF NEW
YORK, et al.,
Plaintiffs,
-against-
RUDOLPH W. GIULIANI, et al.,
Defendants.
NOTICE OF CROSS-MOTION FOR
SUMMARY JUDGMENT WITH
SUPPORTING AFFIDAVIT
TENZER GREENBLATT LLP
Attorneys for Plaintiffs.
405 Lexington Avenue, New York, N.Y. 10174
(212) 885-5000
Due and timely service of a copy of the within
is hereby admitted.
Dated, N.Y,,
Attorney For