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Home My WebLink AboutLong Beach Memorial Medical Center dba Memorial Occupational Medical Services - 2009-10-21Name of Contractor: Long Beach Memorial Medical Center, dba Memorial Occupational Medical Services Purpose of Contract: Health Authority Services Amount of Contract: Original $10,000 Amendment #1 Term extended three years to terminate on October 21, 2015. Copy of contract distributed to: The original insurance certificate/waiver distributed Initiating Dept. F-1 to Risk Management F-1 Finance Dept. F1 ORIGINAL bonds sent to Treasurer F� AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND LONG BEACH MEMORIAL MEDICAL CENTER dba MEMORIAL OCCUPATIONAL MEDICAL SERVICES FOR HEALTH AUTHORITY SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "City", and LONG BEACH MEMORIAL MEDICAL CENTER dba MEMORIAL OCCUPATIONAL MEDICAL SERVICES, a California non-profit corporation, hereinafter referred to as "Consultant." WHEREAS, City and Consultant are parties to that certain agreement, dated October 21, 2009, entitled "Professional Services Contract Between the City of Huntington Beach and Long Beach Memorial Medical Center dba Memorial Occupational Medical Services for Health Authority Services" which agreement shall hereinafter be referred to as the "Original Agreement," and Since the execution of the Original Agreement, City and Consultant have agreed to an extension of the Term, NOW, THEREFORE, it is agreed by City and Consultant as follows: 1. TERM The term of the Original Agreement is hereby extended for three years to terminate on October 21, 2015. 2. CONSULTANT'S DESIGNEE PC Consultant hereby designates Frederick Asche, M.D. and/or Jorge Bernardez, M.D. who shall represent it and be its bP tl ?91(i contacts and agents in all consultations with City during the performance of this Agreement. 3 REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. 1 12-3385/81710 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on LONG BEACH MEMORIAL MEDICAL CENTER dba MEMORIAL OCCUPATIONAL MEDICAL SERVICES B - v c'- C". G h L.Cti. e \') ci L— print name ITS: (circle one) Chairman/President/Vice President AND By:'3 r 1 I at o I UbMiAb print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer Approved as to form. Signatgw MIS G�t�t� Title i O I 1 �tlo la-. Date 2 12-3385/81710 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Police Chie l2 .t - t Z_ APPROVED AS TO FO VI: / ftv(�� C1 y Attorney D 1-o -I W Jt?- EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of worst to be performed) Perform Health Authority review and compliance requirements outlined in the Minimum Standards for Local Detention Facilities Title 15 — Crime Prevention and Corrections Division 1, Chapter 1, Subchapter 4. B. CONSULTANT'S DUTIES AND RESPONSIBILITIES: 1. Conduct an annual health service audit 2_ Review Nurse Detention Officers (LVN) Qualifications 1 Review medical/mental health records storage procedures 4. Review health care procedures contained in the jail manual 5. Review of Management of Communicable Diseases policy 6. Assess treatment procedures 7. Review Mental health Services and Transfer to Treatment Facility procedures 8. Review sick call procedures 9. Review Informed Consent procedures 10. Assess pharmaceutical management 11. Assess and develop written plan for the Suicide Prevention Program 12. Inspect first aid kit (s) content and procedures for periodic inspection of kits 13. Review Facility Sanitation, Safety and Maintenance procedures 14. Evaluate protocols for intravenous blood withdrawal 15. Evaluate procedures for care of inmates confined in sobering cells, safety cell or in restraints 16. Review food preparation, menu and sanitation plans Deliverables: 1. Annual report of findings with recommendations for improvement or discrepancies 2. Letter confirming compliance with Federal/State medical and health regulation compliance, dates of review/audit of policies and physical walk -through -of facility 1 Testify in court as medical expert representing the City and Policy Department in litigation regarding health/medical policies and procedures. C. CITY'S DUTIES AND RESPONSIBILITIES: Allow access to policies and procedures, manuals, and plans specified in Section B of this exhibit. D. WORK PROC3-R"/PROJECT SCHEDULE: To be determined at a later date_ 1 of 1 EXHIBIT "B„ Payment Schedule (Hourly Payment) A. CONSULTANT shall be entitled to a full payment towards the fixed fee set forth herein in accordance with the following fee schedule: Hourly Rate All services performed shall be based upon a fee, including all costs and expenses, not to exceed $350.00 per hour. Additional Expenses Additional Expenses may include the following: Annual Title IS Review of Medical policies, manual and related documents $2,500.00; Inspection of the jails, first aide kits; medication storage, general inmate record keeping ,$600.00. B. Travel Charges for time during travel are not reimbursable. C. Biltin. l .All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non -approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the loft parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shalt be invoiced separately to CITY. Such invoice shall contain al.l of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any. dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2of2 CONTRACTS SUBMITTAL TO CITY CLERK'S OFFICE 2009 OCT 22 AN ll: 08 roe To: JOAN FLYNN, City Clerk Name of Contractor: . Long Beach Memorial Medical Center, dba Memorial Occupational Medical Services Purpose of Contract: For Example: Audit Services or Water Quality Testing Huntington Lake —Huntington Central Park Health Authority Services Amount of Contract: $10,000.00 Copy of contract distributed to: The original insurance certificate/waiver distributed Initiating Dept. F� to Risk Management El Finance Dept. ❑ ORIGINAL bonds sent to Treasurer ❑ Date: / 6 /� lo 7 garrie/nensfon- City Attorney's Office G:AttyMisc/Contract Forms/City Clerk Transmittal PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND LONG BEACH MEMORIAL MEDICAL CENTER dba MEMORIAL OCCUPATIONAL MEDICAL SERVICES FOR HEALTH AUTHORITY SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY, and Memorial Occupational Medical Services , a non -profs organization hereinafter referred to as "CONSULTANT. WHEREAS, CITY desires to engage the services of a consultant to provide health authority services ; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached :hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Kigen K. Nagarnoto, M.D. or designee who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. agree/surf uprofessional sues to $49 1 z-07 1 of l l 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3, TERM; �TIME OF PERFORMANCE Time is of the essence of this .Agreement. The services of CONSULTANT are to commence on dGT , 20jQj (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. Ail tasks specified in Exhibit "A" shall be completed no later than three (3) rears from the Commencement Date. The time for -performance of the tasks identified in Exhibit "A" are generally to be shown in Ex' hibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to. pay CONSULTANT. on a time and.. materials .basis, at the rates specified in Exhibit "S," which is attached hereto :and. incorporated by: reference into this Agreement, a fee, including all: costs and expenses, not to exceed Ten Thousand Y Dollars 10,000.00 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or. changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such agreelsurfnettprofessional svcs to U9 12-07 2 of 11 work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 5. 1VIETHQD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit I'll." 7. DISPOSITION OF„PLANS, ESTIMATES AND OTHER DQQUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees ft. S. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors; if any) °negligent {or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at -its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are ngrce/surfnetiprofmionatsecsto S49 12-07 3 of I 1 applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above -mentioned insurance shall not contain a self -insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims -made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to agredsurfnolprofessionalsvesto $49 12-07 4 of I 1 forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination, CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10, CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; .however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in farce until the. work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from. CONSULTAN.T's- defense;hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner; the premiums on the insurance hereinabove required. agreelsur€ iettpro€essional sues to $49 12-07 5 of I I 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT_ 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsuitants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. agreeJsurfneVpro€essional svcs to S49 12-01 6 of 11 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15, CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the Califomia Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: TO CITY: TO CONSULTANT: Long Beach Memorial Medical Center City, of Huntington Beach dba: Memorial Occupational Medical Services ATTN: Dale Miller, Detention Administrator Atm Kathy Vinton, RN, COHN-S 2000 Main Street 2801 Atlantic Ave., Admin Bldg, Ste. 213 Huntington Beach, CA 92648 Long Beach, CA 90806 agree/surrnetlpmressional sues to S49 12-07 7 of 11 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. USTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole; according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement.is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as agmisurfnet/professional Svcs to $49 12-07 8 of 11 to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. agree/surfnet/proi'essionai &Vcs to $49 12.07 9 of 11 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of. the State of California. 27, SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY, in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. CQ' NSULTANT's initials V 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's agreelsurfnetlprofessionai Svcs to 149 12-07 10 of l i behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement; warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement., and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. CONSULTANT, Memorial Occupational Medical Services COMPANY NAME By: U.x-A-4-L , ANTE LA C 1tF,v e.E Ate print name ITS: (circle one} Chair€nant#'reside ice President CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California PQ L 1 -lie Director/Chief (Pursuant To HBMC J3.03.100) APPROVED AS TO FORM: AND City Attorney~ By: Ul<� print name >— ITS: (circle one) Secretary/Chief Financial OffrcevAsst. Secretary — Treatsurer agreelsurfnet/professional secs to $49 12-07l I of I 1 EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of work to be performed) Perform Health Authority review and compliance requirements outlined in the Minimum Standards for Local Detention Facilities Title 15 — Crime Prevention and Corrections Division 1, Chapter 1, Subchapter 4. B. CONSULTANT'S DUTIES AND RESPONSIBILITIES: L Conduct an annual health service audit 2_ Review Nurse Detention Officers (LVN) Qualifications 3. Review-medical/mental health records storage procedures 4. Review health care procedures contained in the jail manual 5. Review of Management of Communicable Diseases policy 6. Assess treatment procedures is Review Mental health Services and Transfer to Treatment Facility procedures 8. Review sick call procedures 9. Review Informed Consent procedures 10. Assess pharmaceutical management I I . Assess and develop written plan for the Suicide Prevention Program 12. Inspect first aid kit (s) content and procedures for periodic inspection of kits 13. Review Facility Sanitation, Safety and Maintenance procedures 14. Evaluate protocols for intravenous blood withdrawal IS. Evaluate procedures for care of inmates confined in sobering cells, safety cell or in restraints 16. Review food preparation, menu and sanitation plans Deliverables: 1. Annual report of findings with recommendations for improvement or discrepancies 2. Letter confirming compliance with Federal/State medical and health regulation compliance, dates of review/audit of policies and physical walk-through of facility 3. Testify in court as medical expert representing the City and Policy department in litigation regarding health/medical policies and procedures. C. CITY'S DUTIES AND RESPONSIBILITIES: Allow access to policies and procedures, manuals, and plans specified in Section B of this exhibit. D. WORK PROGRAM/PROJECT SCHEDULE: To be determined at a later date. 1o#1 EXHIBIT "B„ Payment Schedule (Hourly Payment) A. CONSULTANT shall be entitled to a full payment towards the fixed fee set forth herein in accordance with the following fee schedule: Hourly Rate All services performed shall be based upon a fee, including all costs and expenses, not to exceed $350.00 per hour. Additional Expenses Additional Expenses may include the following: Annual Title 15 Review of Medical policies, manual and related documents $2,500.00; Inspection of the jails, first aide kits, medication storage, general inmate record keeping $600.00. B. Travel Charges for time during travel are not reimbursable. C. Billing l . All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non -approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the Iof2 parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shalt be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning; payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2of2 RESOLUTION - CORPORATE SIGNATURES Long Beach Memorial Medical Center Board of Directors January 27, 2009 Number 04-FY2009 WHEREAS, Long Beach Memorial Medical Center is a subsidiary of Memorial Health Services, RESOLVED, that the President, CEO, Executive Vice Presidents and Senior Vice Presidents of this corporation, acting individually or jointly, on behalf of the corporation, are authorized to execute documents pursuant to the Memorial Health Services Financial Authorization policy including the entering into and termination of contracts. FURTHER RESOLVED, that this resolution shall be a continuing one, and shall remain full force and effect unless and until amended, added, to, or repealed by resolution of the Board. Secretary Certification of Resolution I, Guadalupe Padilla, Secretary of Long Beach Memorial Medical Center, a California non-profit, public benefit corporation, certify that the foregoing is a full, true and correct copy of the resolution of the Board of Directors of the corporation and regularly passed and adopted at a meeting of the Board called and held in all respects as required by law, and by the bylaws of the corporation, at the principal executive office thereof, on.January 27, 2009, at which meeting a quorum of the board was present. Such resolution has not been amended, altered or rescinded and is in full force and effect on the date hereof. Executed by me as Secretary of the corporation on � - a 1- o 92 m.f.resolution. Signatures 010408 Su, . INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST O 1. Requested by: Dale Miller AUG 2 7 2009 2. Date: July 29 _2009;t,, 4, try a ' =: z: 3. Name of contractor/permiitee: LB Memorial Medical Center 4. Description of work to be performed: Health Authority Services 5. Value and length of contract: $10,000/ 3 years 6. Waiver/modification request: Seepage attached for details. 7. Reason for request and why it should be granted: Consultant is unable to comply. 8. Identify the risks to the City in approving this waiver/modification: low Department Head Signature Date. APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrator's Office is only required if Risk Management and t e City Attorney's Office disagree. 1. Ri k Management (4� Y la Pee, Approved El Denied 1% Signature Date 2. City Attorney's Office / pppoved ❑ Denie ' � - 3 Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources Contract Health Authoritv Waiver2 7/29/2009 2:22:00 PM Long ]Beach Memorial Medical Center List of Waivers Requested HOLD Harmless — Page 3, section 8, line 6. HOLD HARMLESS — before the word "negligent" add the word "sole". Page 6, Section 12. TERMINATION OF AGREEMENT — The CITY has the right to terminate this Contract. LBMMC does not have any right to terminate during the 3 year term. Legal's recommendation is that LBMMC also have a right to terminate the Contract. PROFESSIONAL LIABILITY INSURANCE — LBMMC's self -insured retention is $6,500,000. This consultant wants to waive the professional liability insurance required. ACORLt - DW Harper Group 6 Hutton Centre Drive, Suite 1280 Santa Ana, CA 92707 Phone (714) 444-4133 Fax (714) 444-4155 INSURED Memorial Health Services 17360 Brookhurst Street Fountain Valley, CA 92701 7/20/09 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE INSURERS AFFORDING COVERAGE INSURERA: Memorial Health Services Self Insurance INSURER R INSURER C: INSURER U. INSURER E THIS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUaEMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. POLICY POLICY INSR LTR TYPE OF INSURANCE POLICY NUMBER EFFECTIVE DATE EXPIRATION DATE MM M LIMITS GENERAL LIABILITY EACH OCCURRENCE $ 4,000,000 FIRE DAMAGE (Anyone rm) $ ® COMMERCIAL GENERAL LIABILITY MED EXP (My one person) $ 1:10 CLAIMS MADE ❑ OCCUR PERSONAL&ADV INJURY $ A ❑ MHS- Self Insured 06/01/09 06/01/10 GENERAL AGGREGATE $ 4,000,000 _ GEN'L AGGREGATE LIMIT APPLIES PER PRODUCTS-COMPIOP AGG $ 0 POLICY Q PROJECT O Loc AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ ANY AUTO (Ea accident) ALL OWNED AUTOS BODILY INJURY $ SCHEDULED AUTOS (Per pew) HIREDAUTOS BODILY INJURY $ (Per aaiden) NON-0WNED AUTOS DAMAGE - PROPERTY S (Per accident) GARAGE LIABILITY s Q�O AUTO ONLY -FA ACCIDENT $ a ANY AUTO E p ECG OTHER THAN ACC $ �V vl AUTOONLY: AGG $ EXCESS LIABILITY EACH OCCURRENCE $ AGGREGATE $ OCCURR CLAIMS MADE p DEDUCTIBLE $ RETENTION Self Insured Retention $ WC STATU- OTH- WORKERS COMPENSATION AND TORY LIMITS ER EMPLOYERS' LIABILITY $ E.L. EACH ACCIDENT EL DISEASE -EA EMPLOYEE $ EL. DISEASE -POLICY LIMIT $ OTHER $4,000,000 A Healthcare Professional Liao MHS -Self Insured 06/01/09 06/01/10 Self Insured DESCRIPTION OF OPERATIONSILOCATIONSIVEHCLESIEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISIONS Evidence of Healthcare Professional and General Liability Insurance Memorial Health Services. City of Huntington Beach is made additional insured with regards to Memorial Occupational Medical Services (OMS). CERTIFICATE HOLDER I M ADDITIONAL INSLIRPD- INSURFn I FTTPP' CANCELLATION Dale Mil[er-Jail Administrator SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF. THE ISSUING COMPANY WIILENDFAVOR TO MAIL 30 DAYS WRITTEN NOTICE Huntington Beach Police Department City of Huntington Beach TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL. SUCH NOTICE SHALL OR REPRESOSE NOVES. OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS TT AUTHORIZED REPRESENTATIVE 200 Main Street Huntington Beach, CA 92649 ACORD 25S (7-97) ©ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy (ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s) If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or after the coverage afforded by the policies listed thereon. ACORD 25-S 1988 CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION Long Beach Memorial Medical Center Years Ended June 30, 2008 and 2007 With Report of Independent Auditors Long Beach Memorial Medical Center Consolidated Financial Statements and Other Financial Information Years Ended June 30, 2008 and 2007 Contents Reportof Independent Auditors.......................................................................................................1 Audited Consolidated Financial Statements Consolidated Balance Sheets...........................................................................................................2 Consolidated Statements of Income.................................................................................................4 Consolidated Statements of Changes in Net Assets........................................................................5 Consolidated Statements of Cash Flows..........................................................................................6 Notes to Consolidated Financial Statements....................................................................................7 Other Financial Information Report of Independent Auditors on Other Financial Information.................................................27 Consolidating Balance Sheet — June 30, 2008...............................................................................28 Consolidating Statement of Income — Year Ended June 30, 2008................................................30 } MERNST&YOUNG Report of Independent Auditors The Board of Directors of Long Beach Memorial Medical Center Ernst & Young LLP 725 So. Figueroa Street Los Angeles, California 90017-5418 Tel: (213) 977 3200 www.ey.com We have audited the consolidated balance sheets of Long Beach Memorial Medical Center (the Corporation) as of June 30, 2008 and 2007, and the related consolidated statements of income, changes in net assets, and cash flows for the years then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Corporation's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 consolidated financial position of Long Beach Memorial Medical Center at June 30, 2008 and 2007, and the consolidated results of its operations, changes in net assets and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. September 23, 2008 1 oe,n.,k r fh r. of r5r^st s y u.in i.irrii?ri Long Beach Memorial Medical Center Consolidated Balance Sheets Assets Current assets: Cash and cash equivalents Investments Patient accounts receivable (less allowance for uncollectible accounts of $32,157 in 2008 and $31,515 in 2007) Due from affiliates Other receivables Estimated third -parry payor settlements Other current assets limited as to use Other current assets Total current assets Property and equipment, net Investments restricted to provide a permanent source of income Split -interest agreement trust assets Other assets Total assets June 30 2008 2007 (In Thousands) $ 13,797 $ 17,302 64,983 70,960 127,241 123,321 103,223 77,275 33,582 14,265 9,795 — 1,202 2,868 5,884 7,560 359,707 313,551 226,451 179,917 31,397 31,335 35,971 36,253 6,740 10,256 $ 660,266 $ 571,312 NA Liabilities and net assets Current liabilities: Accounts payable Accrued payroll and employee benefits Estimated third -party payor settlements Current maturities of notes payable Current portion of split -interest agreement liabilities Other accrued liabilities Total current liabilities Notes payable, less current maturities Split -interest agreement liabilities, less current portion Other long-term liabilities Total liabilities Net assets: Unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets See accompanying notes. June 30 2008 2007 (In Thousands) $ 30,690 $ 36,045 48,838 42,305 — 1,198 41 1,005 3,596 3,605 22,102 16,969 105,267 101,127 559 422 26,319 23,614 29,438 28,833 161,583 153,996 398,779 335,653 70,741 52,780 29,163 28,883 498,683 417,316 $ 660,266 $ 571,312 3 Long Beach Memorial Medical Center Consolidated Statements of Income Unrestricted revenues, gains and other support: Net patient service revenue Capitation premium revenue Other operating revenue Investment (loss) income Net assets released from restrictions Total unrestricted revenues, gains and other support Expenses: Salaries and wages Medical and other supplies Purchased services and other Capitation claims expense Depreciation and amortization Provision for bad debts Interest expense Total expenses Excess of unrestricted revenues, gains and other support over expenses Net assets released from restrictions for the acquisition of property and equipment Increase in unrestricted net assets See accompanying notes. Year Ended June 30 2008 2007 (In Thousands) $ 695,687 $ 646,996 37,155 36,423 68,781 65,660 (5,852) 12,339 9,144 6,136 804,915 767,554 373,212 332,830 134,581 130,867 187,699 172,169 20,686 15,279 24,840 22,117 32,828 48,449 40 146 773,886 721,857 31,029 45,697 32,097 26,580 $ 63,126 $ 72,277 0 Long Beach Memorial Medical Center Consolidated Statements of Changes in Net Assets Unrestricted net assets Excess of unrestricted revenues, gains and other support over expenses Net assets released from restrictions for the acquisition of property and equipment Increase in unrestricted net assets Temporarily restricted net assets Contributions Investment (loss) income Change in value of split -interest agreements Change in unrealized gains and losses on investments Net assets released from restrictions Increase in temporarily restricted net assets Permanently restricted net assets Contributions and other Investment loss Change in value of split -interest agreements Increase in permanently restricted net assets Increase in net assets Net assets at beginning of year Net assets at end of year See accompanying notes. Year Ended June 30 2008 2007 (In Thousands) $ 31,029 $ 45,697 32,097 26,580 63,126 72,277 64,179 35,315 (3,925) 1,441 (1,052) (2,231) — 4,194 (41,241) (32,716) 17,961 6,003 1,166 2,487 (333) — (553) 164 280 2,651 81,367 80,931 417,316 336,385 $ 498,683 $ 417,316 wi Long Beach Memorial Medical Center Consolidated Statements of Cash Flows Operating activities Increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Provision for bad debts Depreciation and amortization Change in net unrealized gains and losses on investments Changes in operating assets and liabilities: Patient accounts receivable Sales (purchases) of trading investments, net Estimated third -party payor settlements Prepaid expenses and other assets Split -interest agreement assets, net Accounts payable and other liabilities Net cash provided by operating activities Investing activities Purchases of property and equipment Net cash used in investing activities Financing activities Change in due from affiliates Decrease (increase) in assets limited to use Payments of notes payable Net cash used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year See accompanying notes. Year Ended June 30 2008 2007 (In Thousands) $ 81,367 $ 80,931 32,828 48,449 24,840 22,117 17,928 (10,293) (36,748) (53,458) (12,013) 2,297 (10,993) 376 (14,125) 2,423 2,978 (2,583) 6,916 8,773 92,978 99,032 (71,374) (55,633) (71,374) (55,633) (25,948) (34,481) 1,666 (2,868) (827) (1,355) (25,109) (38,704) (3,505) 4,695 17,302 12,607 $ 13,797 $ 17,302 C Long Beach Memorial Medical Center Notes to Consolidated Financial Statements June 30, 2008 1.Organization and Operations Long Beach Memorial Medical Center (LBMMC) and its affiliate, Memorial Medical Center Foundation (MMCF) (collectively, the Corporation) are California not -for -profit corporations located in Long Beach, California, which are exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code and applicable California Revenue and Taxation Code. Memorial Health Services (MHS), a not -for -profit California public benefit corporation organized in 1937 to provide community hospital services in Southern California, is the sole corporate member of LBMMC. LBMMC is the sole corporate member of MMCF. LBMMC is licensed as a 462-bed acute care hospital. Earl and Lorraine Miller Children's Hospital (Miller Children's Hospital), an operating division of LBMMC, has an additional 308 licensed beds. MMCF's purpose is to raise funds for the future support of LBMMC. MMCF regularly provides funds to LBMMC for research, education, and the purchase of equipment. LBMMC is a member of the MHS Obligated Group (Obligated Group). The Obligated Group was established to access capital markets to finance certain capital improvements at the health care facilities owned and operated by Obligated Group members. Other members at June 30, 2008 include MHS, Saddleback Memorial Medical Center, and Orange Coast Memorial Medical Center. Obligated Group members are joint and severally liable for the long-term debt outstanding under the Master Trust Indenture (see Note 6). 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of LBMMC and MMCF (collectively the Corporation). All significant inter -corporation balances and transactions have been eliminated in the accompanying consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 7 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Cash and Cash Equivalents The Corporation considers all cash and highly liquid debt instruments with maturities, on acquisition date, of three months or less to be cash equivalents. Charity Care LBMMC provides care without charge to patients who meet certain criteria under its charity care policy. Because LBMMC does not pursue collection of amounts determined to qualify as charity care, they are not reported as revenue. LBMMC maintains records to identify and monitor the level of charity care it provides. These records include the amount of charges foregone for services and supplies furnished under its charity care policy. In addition, LBMMC provides programs and services that contribute to the care of the poor and medically indigent. LBMMC also provides activities designed to benefit the health of surrounding communities. A summary of charity care and community benefits for the years ended June 30 consists of the following (in thousands): 2008 2007 Traditional charity care $ 40,297 $ 44,118 Unpaid costs of government programs 53,440 26,500 Other community benefits 5,764 14,812 $ 99,501 $ 85,430 Traditional charity care includes services provided to persons who cannot afford health care because of inadequate resources and/or who are uninsured or underinsured. This write-off is determined based upon the individual patient's financial situation and in compliance with its charity care policy. Unpaid costs of government programs include the unpaid costs of services provided to patients enrolled in government programs including Medicare, Medi-Cal and County programs. Other community benefit includes services that are beneficial to the broader community and include many nonbilled programs such as community education and health promotion, health clinics and screenings, and support, and self-help groups. This category also includes medical education costs. Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) LBMMC takes pride as an active caring member of the community providing compassionate, quality health care services to those in need. LBMMC offers its resources to fulfill the community's health care needs for the child, the senior citizen, the homeless, the mentally ill, and others needing care. Net Patient Service Revenue In addition to the direct charity care described above, LBMMC provides services and medical care directly to the community through local clinics and support organizations. LBMMC supports the broader community by actively engaging in health promotion and wellness programs while continuing to support many not -for -profit health organizations by dedicating time and financial resources. LBMMC has agreements with third -parry payors that provide for payments to LBMMC at amounts different from its established rates. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, and per diem payments. Net patient service revenue is reported at the estimated net realizable amounts from patients, third -party payors, and others for services rendered, including estimated retroactive adjustments under reimbursement agreements with third -party payors. LBMMC is reimbursed for services provided to patients under certain programs administered by governmental agencies. Net revenues from the Medicare and Medi-Cal programs accounted for approximately 22% and 25%, respectively, of LBMMC's net patient service revenue in 2008 (22% and 24%, respectively, in 2007). Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. LBMMC believes that it is in compliance with all applicable laws and regulations, and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. Compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicare and Medicaid programs. To address the growing concerns regarding the impact of payment errors occurring under current administrative procedures, and to ensure the payments made to providers are accurate, the Medicare Modernization Act of 2003 authorized the implementation of demonstration projects that use revenue recovery audit contractors (RACs) to identify over and under payments and, at least initially, recoup overpayments for payments made under Part A and Part B of Medicare. In 2005, the Centers for Medicare and Medicaid Services engaged several firms to perform claims E Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) reviews, piloted in New York, Calif6rnia, and Florida. The RACs verify billing errors and begin collections on these accounts, and the RACs are paid a percentage of their collections. Providers have a right to appeal the decisions made by the RACs. One initial diagnosis chosen, inpatient rehabilitation, has generated a large number of RAC review requests. In many cases, facilities report a high rate of denials related to this specific diagnosis, including rates as high as 100% in some instances. LBMMC has experienced similarly high denial rates related to this specific diagnosis for the periods reviewed (2002 — 2005 fiscal years). As such, LBMMC has recorded a liability for denials not yet recouped and an estimate of potential denials for open periods not reviewed but reasonably assumed to fall under the scope of this review. On March 27, 2008, the demonstration project ended. As a result, any potential claims subject to review under this project period but not reviewed by March 2008, were excluded from audit. In the Tax Relief and Healthcare Act of 2006, Congress authorized the expansion of the RAC program to all 50 states by 2010 and in this nationwide rollout program, RACs are not allowed to audit claims paid earlier than October 1, 2007. As a result, the estimated claims liability at June 30, 2007, for claims paid in the demonstration project period but not reviewed by RAC, were reversed and recorded in net revenues in 2008. This change in estimate amounted to approximately $802,000. Management believes any ultimate liability in excess of amounts accrued which could arise from the RAC audits would not materially affect the Corporation's consolidated financial position, results of operations or cash flows. During 2008 and 2007, LBMMC completed audits of its prior year cost reports and settled appeals of previously finalized cost reports with the Medicare and Medi-Cal fiscal intermediary. As a result, LBMMC recorded increases to net patient service revenue and excess of revenue over expenses of $12,897,000 and $4,547,000 for the years ended June 30, 2008 and 2007, respectively. The administrative procedures related to the cost reimbursement programs in effect generally preclude final determination of amounts due LBMMC until cost reports are audited or otherwise reviewed and settled upon with the applicable administrative agencies. Normal estimation differences between final settlements and amounts accrued in previous years are reported as adjustments of the current year's net patient service revenue. In the opinion of management, adequate provision has been made for adjustments, if any, that might result from subsequent review. 10 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) LBMMC qualified for and received funding as a disproportionate share hospital from the state of California under the DSH Replacement Fund (previously SB855) and DSH Supplemental Fund (previously SB 1255) programs. The DSH Replacement Fund program pays qualifying hospitals supplemental amounts for the provision of health care services to low income patients. Amounts to be received in future years for the DSH Replacement Fund are subject to annual determination. The DSH Supplemental funds are paid from the "Emergency Services and Supplemental Payments Fund" and are determined by contract negotiations. The funding has to be applied for and determined each year. The following table summarizes the amounts recorded by program, which are recognized in net patient service revenues for the years ended June 30 (in thousands): 2008 2007 DSH Replacement Fund (previously S13855) $ 14,693 $ 11,484 DSH Supplemental Fund (previously S131255) 11,500 11,500 $ 26,193 $ 22,984 Amounts due from the state of California under the DSH Funds totaling $963,000 and $2,385,000 at June 30, 2008 and 2007, respectively, are included in other receivables in the consolidated balance sheets. Capitation Premium Revenue LBMMC has agreements with various health maintenance organizations (HMOs) to provide medical services to subscribing participants. Under these agreements, LBMMC receives monthly capitation payments based on the number of participants, regardless of services actually performed by LBMMC or other health care providers. Such payments are recorded as capitation premium revenue. The HMOs make additional payments to LBMMC for certain covered services based upon discounted fee schedules which are included in net patient service revenue. Capitation Claims Expense The cost of health services provided by other health care providers to the participants, including administrative costs, out -of -area or emergency services, and services contracted for but not provided by LBMMC, are included in capitation claims expense. Such amounts are accrued in 11 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) the period in which the services are provided based in part on estimates, including an accrual for services provided by others but not reported to LBMMC. The accruals amounted to $5,677,000 and $3,051,000 at June 30, 2008 and 2007, respectively, and are included in other accrued liabilities. Investments Investments in equity securities with readily determinable fair values and all investments in debt securities are measured at fair value in the balance sheets. Fair value is established based on quoted prices from recognized securities exchanges. Management determines the appropriate classification of all marketable securities at the date of purchase and reevaluates such designations at each balance sheet date. MMCF determined that all investments held are designated as trading securities, as the investments are externally managed without restrictions within the guidelines of MMCF's investment policy. Accordingly, the change in unrealized gains and losses on marketable securities designated as trading is reported in investment income above the excess of revenues, gains and other support over expenses. Investment income or loss on investments, including realized and unrealized gains and losses on trading investments, interest and dividends, and equity interest in gains and losses on alternative investments, is reported in unrestricted revenues, gains and other support unless the income or loss is restricted by donor or law. Investments are classified as current assets, except for investments that collateralize borrowings, investments under split -interest agreements, investments in assets limited as to use, and those restricted to provide a permanent source of income. MMCF's alternative investments include limited partnerships and a limited liability company that seeks positive returns regardless of market direction and which are not restricted to any particular asset class. Some of these alternative investments invest in other similar partnerships or funds and employ a "Fund of Funds" strategy. Some of these alternative investments have specific industry focus in their investment assets. At the investment manager's direction, these alternative investments may invest in both registered and nonregistered securities in the U.S. and globally, with exposure to both emerging and developed markets. These entities employ a range of investment strategies including but not limited to long/short equity positions, derivatives, forward and futures contracts, and currency hedges. 12 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) MMCF accounts for the change in fair value of its ownership interests in the alternative investments under the equity method of accounting, and such change is included in investment income (loss) in the consolidated statements of income. As of June 30, 2008 and 2007, these alternative investments comprised approximately 29% and 22%, respectively, of the Corporation's total investments, including investments restricted as to use. Concentrations of Credit Risk Financial instruments which potentially subject the Corporation to concentrations of credit risk consist primarily of investments and patient accounts receivable. The investment portfolio is managed within the guidelines established by the board of directors. Concentrations of credit risk with respect to patient accounts receivable are limited due to the large number of payors comprising the Corporation's patient base. Fair Value of Financial Instruments The Corporation's consolidated balance sheets include the following financial instruments: cash and cash equivalents, short-term investments, other receivables, accounts payable and accrued liabilities, and estimated third -party payor settlements. All equity and debt securities owned are carried at market value. The Corporation considers the carrying amounts of all other current assets and current liabilities in the consolidated balance sheets to approximate the fair value of these financial instruments because of the relatively short period of time between origination of the instruments and their expected realization, or in the case of the split -interest agreement liabilities, such liabilities have been discounted to fair value based on interest rates which are estimated to be market rates. Accounting for the Impairment of Long -Lived Assets and for Long -Lived Assets to he Disposed Of The Corporation reviews long-lived assets for impairment when events or changes in business conditions indicate that their carrying value may not be recoverable. The Corporation considers assets to be impaired and writes them down to fair value if expected associated cash flows are less than the carrying amounts. Fair value is the present value of the associated cash flows. The Corporation has determined that no long-lived assets are impaired at June 30, 2008 and 2007. 13 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are those whose use by the Corporation has been limited by donors to a specific time period or purpose. Permanently restricted net assets have been restricted by donors and are to be maintained by the Corporation in perpetuity. Unconditional promises to give cash and other assets are reported at fair value at the date the promise is received. The gifts are reported as either temporarily or permanently restricted net assets if they are received with donor or government stipulations that limit the use of the donated assets. When a donor or government restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets used in operations are reclassified as unrestricted net assets and reported in the consolidated statements of income as net assets released from restrictions. Donor or government restricted contributions whose restrictions are met within the same year as received are reflected as unrestricted contributions in the consolidated statements of income. Resources temporarily restricted by donors or government for additions to property and equipment whose purpose has been met are recorded in the consolidated statements of income as net assets released from restrictions for the acquisition of property and equipment (increase in unrestricted net assets). Split -Interest Agreements MMCF has received contributions from various types of split -interest agreements in which MMCF is the trustee, including charitable remainder annuity trusts and charitable remainder gift unitrusts. Under a charitable gift annuity arrangement, MMCF recognizes the agreement in the period in which the contract is executed. The assets from the donor are recognized at fair market value and the liabilities to the donor or beneficiaries designated by the donor are recognized at the present value of the estimated future payments to be distributed by MMCF to such individuals as determined by reference to Internal Revenue Service guidelines. These assets and liabilities are recorded by MMCF as temporarily or permanently restricted. The amount of the temporarily restricted contribution revenue is the difference between these assets and liabilities. Adjustments to the fair market value of the trust assets, amortization of the discount, and changes in the actuarial assumptions during the term of the trust are recorded as changes in split interest agreements in the accompanying consolidated financial statements. 14 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Estimated maturities of the trust payments under split -interest agreements, discounted to present value, due to the donors for the years subsequent to June 30, 2008, are as follows (in thousands): 2009 $ 3,596 2010 3,425 2011 3,262 2012 3,107 2013 2,958 Thereafter 13,567 $ 29,915 The interest rates used to discount the estimated future payments to be distributed by MMCF ranged from 3.8% to 8.8% at June 30, 2008. Pledges and Bequests Unconditional promises to give are generally recognized as revenue when the promises are made at the present value of the expected future payments. Pledges and bequests receivable in temporarily restricted net assets are scheduled to be received as follows (in thousands): Due in one year or less Due after one year through five years Less: Allowance for uncollectible pledges Amount representing interest Pledges receivable, net June 30 2008 2007 $ 4,099 $ 3,882 5,130 9,540 9,229 13,422 149 1,035 334 508 $ 8,746 $ 11,879 Pledges and bequests receivable are included in other receivables and other assets in the accompanying consolidated balance sheets. 15 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Property and Equipment Property and equipment acquisitions are recorded at cost. Depreciation is provided over the estimated useful life of each class of depreciable asset and is computed using the straight-line method. Interest cost incurred on borrowed funds during the period of construction of capital assets is capitalized as a component of the cost of acquiring those assets. The Corporation provides for depreciation using the straight-line method over the following estimated useful lives: Buildings and improvements 3 to 40 years Equipment 3 to 10 years Gifts of long-lived assets such as buildings or equipment are reported as unrestricted support, and are excluded from the excess of unrestricted revenues, gains and other support over expenses, unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long- lived assets are placed in service. Accrued Self -Insurance Claims The Corporation is self -insured for certain employee health care claims. The Corporation accrues employee health care claims including management's estimate of incurred but not reported claims based on the Corporation's claims experience. The Corporation has various levels of insurance for workers' compensation risks that vary by accident year, as follows: Self -Insured Accident Year Risks Insurance Coverage January 1990 through August 2002 $ 500,000 $1,000,000 each occurrence September 2002 through October 2003 $ 1,000,000 $1,000,000 each occurrence November 2003 through June 2008 $ 2,000,000 $2,000,000 each occurrence 16 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Accruals for uninsured claims and claims incurred but not reported are estimated by an actuary based on the Corporation's claims experience. The accruals, which totaled $18,863,000 and $18,455,000 at June 30, 2008 and 2007, respectively, were recorded using a 4.22% and 4.5% discount factors, respectively. The current and long-term portions of the accruals are included in accrued payroll and employee benefits and other long-term liabilities, respectively. The state of California may require the Corporation to maintain a letter of credit to cover certain potential unpaid workers' compensation claims. At June 30, 2008, there was no such requirement. The Corporation has various levels of insurance for general and professional liability risks that vary by accident year as follows: Accident Year Self -Insured Risks Insurance Coverage January 1993 through $3,000,000; 50% of 50% of next $5,000,000, up to $25,000,000 April 2004 next $5,000,000 covered by occurrence basis policies May 2004 through $4,000,000; 50% of 50% of next $5,000,000, up to $35,000,000 April 2005 next $5,000,000 covered by occurrence basis policies May 2005 through $4,000,000; 50% of 50% of next $5,000,000, up to $35,000,000 June 2008 next $5,000,000 covered by claim made basis policies Accruals for uninsured claims and claims incurred but not reported are estimated by an actuary based upon the Corporation's claims experience. The accruals, which totaled $17,934,000 and $17,585,000 at June 30, 2008 and 2007, respectively, were recorded using a 4.22% and 4.5% discount factors, respectively. The current and long-term portions of the accruals are included in other accrued liabilities and other long-term liabilities, respectively. Adoption of New Accounting Standards In June 2006, the Financial Standards Board (FASB) issued Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109. FIN 48 provides guidance on how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. It also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position 17 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) taken or expected to be taken in a tax return, among other things. The provisions of FIN 48 were effective for the Corporation beginning July 1, 2007, and the adoption of FIN 48 did not have a material effect on the Corporation's consolidated financial position, results of operations, or cash flows. In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit value measurements and, accordingly, SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is effective for the Corporation's fiscal year beginning July 1, 2008. The Corporation is evaluating the impact the adoption of SFAS No. 157 will have on its consolidated financial statements. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159), which permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. SFAS No. 159 is effective for the Corporation's fiscal year beginning July 1, 2008. The Corporation is evaluating the impact the adoption of SFAS 159 will have on its consolidated financial statements. Reclassifications Certain 2007 amounts have been reclassified to conform to the 2008 presentation. 3. Related Party Transactions Cash of LBMMC that is recorded in MHS' financial statements is held in concentration accounts. The Corporation's share of the concentration accounts is reflected in due from affiliates in the accompanying consolidated balance sheets. In addition to the related party transactions disclosed in Notes 6 and 7, LBMMC recognized expenses of $34,745,000 and $25,660,000 in fiscal 2008 and 2007, respectively, related to allocations from MHS. These allocations were made for corporate overhead expenses including executive salaries, wages and benefits, and information systems, marketing, and human 18 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 3. Related Party Transactions (continued) resources related costs. These allocations were made on a fair and rational basis, however, there is no assurance that such amounts are reflective of costs that would have been incurred by the Corporation on a stand-alone basis. Also, MHS charged LBMMC $736,699 and $750,000 in fiscal 2008 and 2007, respectively, for insurance premiums related to workers' compensation and general and professional liability insurance policies. In 2005, LBMMC purchased certain outpatient imaging center assets from National Healthcare Services (NHS), an affiliate of MHS, and issued a note which was payable over 36 months plus interest at the prime rate. The note balance outstanding at June 30, 2008 and 2007, is $0 and $837,000, respectively. Another note was issued to NHS for the purchase of equipment. The outstanding balance of this note at June 30, 2008 and 2007, was $0 and $162,000, respectively. During March 2005, LBMMC entered into an agreement with NHS to lease certain facilities. Lease rentals paid to NHS totaled $255,768 and $247,000 for the years ended June 30, 2008 and 2007, respectively. Future minimum rent expense under the noncancelable operating lease as of June 30, 2008, is as follows (in thousands): 2009 $ 217,825 4. Property and Equipment Property and equipment consist of the following (in thousands): Land and improvements Buildings and improvements Major movable and fixed equipment Accumulated depreciation and amortization Construction in progress June 30 2008 2007 $ 12,589 $ 12,385 183,914 174,215 173,815 162,847 370,318 349,447 (252,646) (231,102) 108,77961,572 $ 226,451 $ 179,917 19 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 5. Investments Investments included in current assets, stated at fair value, consist of the following (in thousands): June 30 2008 2007 Common stock $ 200 $ 181 Marketable securities 40,118 34,381 Alternative investments 21,318 33,396 Other 3,347 3,002 $ 64,983 $ 70,960 Investments held under split -interest agreements, stated at fair value, consist of the following (in thousands): Common and preferred stock Marketable securities Other June 30 2008 2007 $ 523 $ 814 29,683 29,287 5,765 6,152 $ 35,971 $ 36,253 Investments restricted to provide a permanent source of income, stated at fair value, consist of the following (in thousands): Marketable securities Alternative investments Common stock Pledges receivable Other Less split -interest liabilities June 30 2008 2007 $ 13,970 $ 16,622 13,045 10,409 594 318 6 11 3,782 3,975 31,397 31,335 (2,234) (2,452) $ 29,163 $ 28,883 20 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 5. Investments (continued) Included in investments to provide a permanent source of income and held under split -interest agreements are restricted assets of $8,640,000 and $7,940,000 at June 30, 2008 and 2007, respectively, consisting of amounts required by the California Department of Insurance to be held in reserve for the payment of liabilities under charitable gift annuities. Investment income (loss) includes the following (in thousands): Interest and dividends Realized and unrealized (losses) gains (including equity in the (losses) earnings of $(1,771) and $2,976 for the years ended June 30, 2008 and 2007, respectively of ownership interests in alternative investments 6. Notes Payable Year Ended June 30 2008 2007 $ 2,736 $ 2,636 (12,846) 15,338 $ (10,110) $ 17,974 Notes payable as of June 30 consists of the following (in thousands): Note payable to related party, payable in monthly installments of 8.25% at June 30, 2007) (see Note 3) Note payable to related party, payable in monthly installments of $17 through May 1, 2008, variable interest rate 9.25% at June 30, 2007) Other — unsecured note bearing interest of 7.5% and note collateralized by real property bearing interest of 6% Less current maturities 2008 2007 $ — $ 837 — 162 600 428 600 1,427 (41) (1,005) $ 559 $ 422 21 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 6. Notes Payable (continued) Principal maturities on all notes payable at June 30, 2008, are as follows (in thousands): 2009 $ 41 2010 44 2011 46 2012 49 2013 29 Thereafter 391 $ 600 For the years ended June 30, 2008 and 2007, interest costs incurred and paid totaled $40,000 and $146,000, respectively (including interest paid to MHS). LBMMC, as a member of the Obligated Group, is jointly and severally liable for $349,267,000 of outstanding Obligated Group debt at June 30, 2008 issued under the MHS Master Trust Indenture (Indenture). The Indenture provides for, among other things, gross revenue pledged as collateral, compliance with certain financial covenants, including limitations on the amount of additional debt it may incur and financial ratios. At June 30, 2008 and 2007, the Obligated Group was in compliance with all financial covenants stipulated by the Indenture. No amount due under the Indenture by the Obligated Group has been reflected in these financial statements. 7. Retirement Plans LBMMC participates in a defined contribution retirement plan sponsored by MHS. Under the Plan, LBMMC employees may make voluntary contributions to the plan. The Corporation also makes annual contributions to participants that are seniority based, ranging from 5% to 10% (prior to January 1, 2006, the range was 4% to 9%) of defined compensation, subject to statutory limits. Participants must have at least 1,000 hours of service in each plan year to qualify to receive a contribution for that year. Expenses incurred and paid to MHS under the plan totaled $14,175,000 and $12,790,000 for the years ended June 30, 2008 and 2007, respectively. 22 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 8. Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are available for the following purposes (in thousands): .tune 30 2008 2007 Time restricted under split -interest agreements and other S 10,763 $ 14,946 Patient care, health education and research 24,588 25,619 Medical equipment and buildings 35,390 12,215 $ 709741 $ 52,780 During 2008, net assets were released from donor restrictions by satisfying the restricted purpose of acquiring property and equipment, and the funding of the construction and expansion of Miller's Children's Hospital (Note 9) in the total amount of $32,097,000 and patient care services, health education and research, and time restrictions in the amount of $9,144,000. During 2007, net assets were released from donor restrictions by satisfying the restricted purpose of acquiring property and equipment, and the funding of the construction and expansion of Miller's Children's Hospital (Note 9) in the total amount of $26,580,000 and patient care services, health education and research, and time restrictions in the amount of $6,136,000. Permanently restricted net assets are restricted to (in thousands): Investments to be held in perpetuity, the income from which is expendable to support the following: Health education, research and others Patient care services Property acquisition .Tune 30 2008 2007 $ 10,651 $ 11,535 15,881 14,716 2,631 2,632 $ 29,163 $ 28,883 23 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 9. Commitments and Contingencies Leases The Corporation leases office space and certain medical and office equipment under operating leases. The following is a summary of minimum noncancelable lease commitments (including leases with related parties — see Note 3) for the years ending June 30 (in thousands): 2009 $ 6,309 2010 3,239 2011 2,412 2012 1,689 2013 613 $ 14,262 Rental expense under the operating leases (including leases with related parties — see Note 3) totaled approximately $9,731,000 and $8,650,000 for the years ended June 30, 2008 and 2007, respectively. Litigation The Corporation is involved in legal actions in the normal course of business, some of which seek substantial monetary damages, including claims for punitive damages, which are not covered by insurance. These actions, when finally concluded and determined, will not, in the opinion of management after consultation with the Corporation's counsel, have a material adverse effect on the Corporation's financial position, results of operations, or cash flows. Capital Expenditures Legislation adopted in California during 1994 requires each acute care hospital in California to either comply with new hospital seismic safety standards or cease acute care operations by January 1, 2008. Delays in compliance with the January 1, 2008 deadline will be permitted if a hospital owner shows that capacity lost in the closure of a facility cannot be provided by another facility in the area or if a hospital owner agrees that, on or before January 1, 2013, services will be provided by moving into an existing conforming building, relocating to a newly built building, or continuing in the building as retrofitted to comply with the standards. It should be noted, however, that the standards have not been established. LBMMC applied for and was granted an extension to 2013. 24 Long Beach Memorial Medical Center Notes to Consolidated Financial Statements (continued) 9. Commitments and Contingencies (continued) The Corporation has contracted for remodeling and equipment purchase commitments of approximately $73,054,000 (unaudited) as of June 30, 2008. Also, the Corporation will incur significant amounts of demolition costs in the near future. In April 2007, Miller Children's Hospital was awarded a $73,944,000 grant from the state of California under Proposition 61, a proposition passed in November 2004 authorizing the sale of general obligations bonds for grants to eligible children's hospitals. The grant is designated for the expansion and renovation of Miller Children's Hospital, which when completed, will increase the number of beds from 308 to 338. The grant will supplement the LBMMC funding of the project estimated to cost up to $189,700,000. As of June 30, 2008 and 2007, $32,097,000 and $18,628,000, respectively, was reported as net assets released from restrictions for the acquisitions of property and equipment since management determined the conditions for use of the grant funds in constructing the Miller Children's Hospital were satisfied. Of the grant funds awarded, $23,219,000 remains in temporarily restricted net assets and will be released when conditions for use of the grant funds are satisfied. In addition, the remaining $22,018,000 of grant funds awarded but not yet received has been recorded by LBMMC in other receivables. As part of the ongoing strategic and community needs planning process, MHS periodically assesses near term and long-term capital needs of the Obligated Group. This capital needs assessment includes evaluation of the renovation and replacement needs for existing acute care hospital facilities in order to comply with California's seismic safety standards. At June 30, 2008, management of MHS estimated that the construction costs to comply with the necessary seismic safety standards for the acute care hospital facilities of all subsidiaries are approximately $500 million (unaudited). The cost for the Corporation is between $200 million and $500 million (unaudited). In 2006, the Corporation adopted FASB Interpretation No.47 (FIN 47), Accounting for Conditional Asset Retirement Obligations (ARO). FIN 47 requires an entity to recognize a liability for the fair value of conditional asset retirement obligations if the fair value of the liability can be reasonably estimated. The fair value of a liability for conditional asset retirement obligations must be recognized when incurred, generally upon acquisition, construction, or development, and/or through the normal operation of the asset. As the Corporation is currently evaluating its renovation and replacement needs for existing acute care hospital facilities in order to comply with California's seismic safety standards, the Corporation's plans for renovation are not complete and the date and amounts for which the 25 Long Beach Memorial Medical Center Notes to Consolidated Finandial Statements (continued) 9. Commitments and Contingencies (continued) ARO would be settled are unknown. The Corporation concluded it could not reasonably determine or estimate the fair value of a liability, and no amounts have been recorded in the consolidated balance sheets. Instead, the Corporation will record a liability, if material, in a future period when the fair value can be reasonably estimated. 10. Functional Expenses The Corporation provides general health care services to residents within its geographic location. Expenses related to providing these services are as follows (in thousands): Health care services General and administrative Year Ended June 30 2008 2007 $ 713,016 $ 664,505 60,870 57,352 $ 773,886 $ 721,857 c Other Financial Information p Ernst 8 Young LLP > � J 725 So. Figueroa Street Los Angeles, California 90017-5418 Tel: (213) 977 3200 www.ey.corn Report of Independent Auditors on Other Financial Information The Board of Directors of Long Beach Memorial Medical Center Our audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The accompanying consolidating balance sheet as of June 30, 2008, and the consolidating statement of income for the year ended June 30, 2008, are presented for purposes of additional analysis and are not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in our audit of the basic consolidated financial statements and, in our opinion, the information is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. ff>� -f �7 UP September 23, 2008 27 Long Beach Memorial Medical Center Assets Current assets: Cash and cash equivalents Investments Patient accounts receivable, net Due from (to) affiliates Other receivables Estimated third -party payor settlements Other current assets limited as to use Other current assets Total current assets Property and equipment, net Investments restricted to provide a permanent source of income Split -interest agreement trust assets Other assets Total assets 28 Consolidating Balance Sheet June 30, 2008 (In Thousands) Long Beach Memorial Foundation Eliminations Consolidated $ (62) $ 13,859 $ - $ 13,797 - 64,983 - 64,983 127,241 - - 127,241 106,568 (3,345) - 103,223 27,093 6,489 - 33,582 9,795 - - 9,795 1,202 - - 1,202 5,884 - - 5,884 277,721 81,986 - 359,707 226,451 - - 226,451 - 31,397 - 31,397 - 35,971 - 35,971 2,093 4,647 - 6,740 $ 506,265 $ 154,001 $ - $ 660,266 Long Beach Memorial Medical Center Consolidating Balance Sheet (continued) June 30, 2008 (In Thousands) Liabilities and net assets Current liabilities: Accounts payable Accrued payroll and employee benefits Estimated third -party payor settlements Current maturities of notes payable Current portion of split -interest agreement liabilities Other accrued liabilities Total current liabilities Notes payable, less current maturities Split -interest agreement trust liabilities, less current portion Other long-term liabilities Total liabilities Net assets: Unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets 29 Long Beach Memorial Foundation Eliminations Consolidated $ 30,690 $ - $ - $ 30,690 48,838 - - 48,838 - 41 - 41 - 3,596 - 3,596 22,102 - - 22,102 101,630 3,637 - 105,267 559 - 559 - 26,319 - 26,319 29,438 - - 29,438 131,068 30,515 - 161,583 351,977 46,802 - 398,779 23,220 47,521 - 70,741 - 29,163 - 29,163 375,197 123,486 - 498,683 $ 506,265 $ 154,001 $ - $ 660,266 Long Beach Memorial Medical Center Consolidating Statement of Income Year Ended June 30, 2008 (In Thousands) Unrestricted revenues, gains and other support: Net patient service revenue Capitation premium revenue Other operating revenue Investment income (loss) Net assets released from restrictions Total unrestricted revenues, gains and other support Expenses: Salaries and wages Medical and other supplies Purchased services and other Capitation claims expense Depreciation and amortization Provision for bad debts Interest expense Total expenses Excess (deficit) of unrestricted revenues, gains and other support over expenses 30 Long Beach Memorial Foundation Eliminations Consolidated $ 695,687 $ - $ - $ 695,687 37,155 - - 37,155 76,276 2,475 (9,970) 68,781 758 (6,610) - (5,852) - 9,144 - 9,144 809,876 5,009 (9,970) 804,915 370,568 2,644 - 373,212 134,444 137 - 134,581 185,858 11,811 (9,970) 187,699 20,686 - - 20,686 24,840 - - 24,840 32,828 - - 32,828 40 - - 40 769,264 14,592 (9,970) 773,886 40,612 (9,583) - 31,029 Long Beach Memorial Medical Center Consolidating Statement of Income (continued) Year Ended June 30, 2008 (In Thousands) Excess (deficit) of unrestricted revenues, gains and other support over expenses Net assets released from restrictions for the acquisition of property and equipment Transfers Increase (decrease) in unrestricted net assets 31 Long Beach Memorial Foundation Eliminations Consolidated $ 40,612 $ (9,583) $ — $ 31,029 32,097 — — 32,097 2,435 (2,435) — — $ 75,144 $ (12,018) $ — $ 63,126 CTI'Y OF IIITNTINGTON BEACH ?W��ssi��1•� G-- Se>rvice Agreements. Purchasing Certification 1. Date: 10/05/2009 � 417?erBC-T j1;4-7 700 2. Department: Police 3. Requested By: DALE A. MILLER, Detention Administrator 4. Name of Consultant: Long Beach Memorial Medical Center 5. Amount of Contract: $10,000.00 6. Are sufficient funds available to fund this contract? Yes ® No 7. Company Number and object code where funds are budgeted: 10070601 8. Is this contract less than $50,000? Yes ® No ❑ 9. Does this contract fall within $50,000 and $100,000? Yes ❑ No 69300 10. Is this contract over $100,000? Yes ❑ No (Note: Contracts requiring City Council approval need to be signed by the Mayor and City Clerk. Make sure the appropriate signature page is attached to contract.) 11. Were formal written proposals requested from at least three available qualified firms? Yes ❑ No If no, explain: Qt4y®ne comet regx ded-te-rem est-€arprapq,aL 12. Attach list of vendors from whom proposals were requested (include name of company, address, contact person, and telephone). 13. Attach proposed scope of work. Yes 14. Attach proposed payment schedule. Yes Department Head Signature Central Services Division