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Home My WebLink About2007-01-09 - AGENDA REPORTS - INDEPENDENT HMNMH STUDY (2)Agenda Item: _/— CITY OF SANTA CLARITA AGENDA REPORT NEW BUSINESS City Manager Approval: Item to be presented by: Fred Follstad DATE: January 9, 2007 SUBJECT: CONTRACT TO PREPARE AN INDEPENDENT HOSPITAL AND MEDICAL OFFICE BUILDING SPACE STUDY FOR THE HENRY MAYO NEWHALL MEMORIAL HOSPITAL MASTER PLAN. DEPARTMENT: Community Development RECOMMENDED ACTION City Council to direct the City Manager to execute a contract between the City and HFS Consultants to prepare an independent hospital analysis, subject to the review of the City Attorney. BACKGROUND The City has been processing a master plan for the existing Henry Mayo Newhall Memorial Hospital campus located at McBean Parkway and Orchard Village Road. The project is currently finishing up the Planning Commission review process and is tentatively scheduled to be presented to the City Council in the upcoming months. At the October 24, 2006, City Council meeting, Councilmember Keller requested that staff return to the City Council with an item that would include a contract to prepare an independent review and analysis of the Hospital's Master Plan. The report would include an analysis of the hospital's future growth and the correlation to the community's needs in the future. In addition, the study would examine the appropriateness of the proportionality of the square footage of medical office space to hospital space. The study will be completed prior to the Hospital Master Plan proposal being presented to the City Council as part of its review. After contacting a number of health care facility specialists, staff selected Gordon Johnson of HFS Consultants who would conduct the study on a time and materials basis. HFS Consultants projects that they will complete the study with a summary report in one month. The consultant contract is not anticipated to exceed $25,000. ALTERNATIVE ACTIONS Any action as determined by the City Council. FISCAL IMPACT The study will be funded by the applicant, with the City managing the contract with HFS Consultants. Therefore, there would be no fiscal impacts to the City, as proposed. ATTACHMENTS Scope of Work Orriploe Sc rtions far Healthcare Managernent 5J5.FowlpaMh Siree� Fifth kinor I oalt:7nd LA 99612 113io'76F. i6e r sio,768.oml l hfscwstjlunts.coni December 15, 2006 Mr. Fred Follstad Senior Planner, Plannin & Economic Development City of Santa Clarita 23920 Valencia Blvd, Suite 300 Santa Clarita, CA 91355-2196 Via Email to FFollstad@Santa-Clarita.com Re: Study Plan for Analysis of need for Medical Office Building space Dear Mr. Follstad: It has been a pleasure to talk to you, Lisa and Paul regarding the process related to expansion at Henry Mayo Newhall Memorial Hospital. Based on our discussions and review of the Planning Commission meeting tapes you provided, HFS Consultants (HFS) is pleased to submit this proposal to conduct a review of data related to Medical Office Building (MOB) space in relation to Henry Mayo Newhall Memorial Hospital (HMNMH). We also understand that that the primary issue you hope to address is the appropriateness of the proposed density of MOB space surrounding the hospital. In order to address this issue, HFS is proposing to review the proposed building plans and compare the expected density of MOB space to the density of MOB space surrounding other hospitals of similar size. We plan to provide written comments regarding the range of MOB space found within walking distance of HMNMH and other hospitals, and discuss the proposed MOB developments at HMNMH in light of these existing and (to the extent we find examples) planned MOBs in other locations. The work outlined in this letter will be conducted by Gordon Johnson of our firm with support from other HFS consultants as needed. Mr. Johnson has specialized in market feasibility studies and valuations of medically related properties for the past 20 years. A copy of Mr. Johnson's qualifications is included as an attachment to this letter. We plan to provide this service on an hourly basis. Our principal investigator, Gordon Johnson, will perform the majority of the tasks, at a rate of $185 per hour. Other staff may be used on the engagement and will be billed at their appropriate hourly rates. In addition, we will bill separately for out-of-pocket expenses at our cost, including travel, report preparation, data acquisition, etc. We understand that this engagement needs to be completed expeditiously, and we are ready to begin work as soon as formal approval of the engagement is received. We estimate that the actual time to complete the engagement will be approximately three weeks. Mr. Fred Follstad City of Santa Clarita December 18, 2006 If you should have any questions regarding the material in this letter, please call Rich Gianello at (510) 768-0066 or Gordon Johnson at (213) 250-5391. Very truly yours, M Consultants Richard A. Gianello Principal Gordon M. Johnson Director, Appraisal and Market Analysis Enclosure ACCEPTANCE OF ENGAGEMENT TERMS; City of Santa Clarita Sign: Print: Title: Date: 2of4 Mr. Fred Follstad City of Santa Clarita December 18, 2006 Appendix A Standard Terms and Conditions HFS CONSULTANTS 1. Collection Costs. The Client shall be responsible for any expenses (including attorneys' fees and court costs) incurred by Healthcare Financial Solutions (11FS) in collecting its fees or expenses billed pursuant to this contract, whether or not legal action is instituted. 2. Arbitration. The parties agree that any dispute arising in connection with this Agreement shall be resolved by arbitration conducted in Alameda County, California, United States in accordance with. the commercial arbitration rules of the American Arbitration Association. The prevailing party in such arbitration shall be entitled to an award of reasonable attomeys' fees and costs of arbitration. 3. General Provisions. This Agreement constitutes the entire understanding of the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings. This Agreement may only be amended by a written agreement signed by both parties. This Agreement shall be binding on, and inure to the benefit of, the parties and their successors and assignees. This Agreement may be executed in counterparts, by signatures transmitted by telecopier, each of which shall be deemed an original, and which together shall constitute one and the same agreement. California law (without regard to conflicts of law) shall govern the interpretation and enforcement of the Agreement. This Agreement has been approved by the client's governing body, and is signed by a duly authorized officer. 3 of 4 Mr. Fred Follstad City of Santa Clarita December 18, 2006 APPENDIX B GORDON A JOHNSON Oualifications In Health Care and Retirement Housina Gordon Johnson has devoted his entire professional career to the health care industry. His 20 - year -long background includes experience in finance and planning in health care settings, as well as in consulting to hospitals, retirement communities, home health organizations, preferred provider organizations, multi -hospital systems, hospital management firms and medically - oriented real estate developers. Mr. Johnson's areas of specialization include the following: • Development and implementation of Strategic Business Plans for hospitals, assisted living communities and Continuing Care Retirement Communities; • Marketing and feasibility studies for hospitals, retirement communities, medical office buildings and other medically -oriented real estate projects; • Joint Venture structuring for health care providers, retirement facility operators, banks and REITs; • Development and evaluation of corporate restructuring alternatives; and • Appraisal of retirement and healthcare -oriented real property. Mr. Johnson's prior experience includes work as a financial analyst and planner for a for-profit hospital management firm, management responsibilities for the Southern California office of a major public accounting firm, operation of a private consulting firm catering to retirement housing operators, lenders and other consultants in related fields. In these positions he has overseen finance, planning and budgeting for hospitals, directed many studies related to development of retirement housing projects, medical office buildings, and joint ventures between non-profit, health care providers and for profit developers. Recent projects include structuring of a joint venture between a major retirement center chain and a well-known real estate syndicator, development of a limited partnership including a hospital and physicians' medical group, and numerous market and feasibility studies and appraisals for residential and health care -related projects. Mr. Johnson is Past President of the Southern California Chapter of the Healthcare Financial Management Association. He has spoken to various professional groups, including HFMA, the California Assisted Living Facility Association (CALA), and the Arizona Senior Industries Conference. He has written several articles which have appeared in various publications. Mr. Johnson received his B.A. degree from the University of California, Berkeley, and an M.B.A. in Health Care Finance from UCLA. He is also a licensed Certified General Appraiser in the State of California. 4of4