San Andreas, CA…At this morning’s board meeting the Mark Twain Health Care District Board voted 4-0 to approve a new lease for the Mark Twain Medical Center for Dignity Health. This is the first of several pieces on this great news. Enclosed is details of the proposed agreement that were released a few weeks ago. The formal & finalized agreement will no doubt have several changes but this should give you an generalized idea of the agreement…

Mark Twain Health Care District (District) and Dignity Health propose to restructure the relationship by which Mark Twain Medical Center (MTMC) leases its hospital facilities from the District and by which MTMC is governed. The restructuring would establish a new long-term lease between MTMC and the District to: • Maintain the continuity of the health care delivery system in Calaveras County • Ensure community involvement and oversight of the quality of care, medical staff credentialing and privileging, and input on strategic planning and services offered to the community • Enable the District to exchange most of its reversionary interest in MTMC for cash from Dignity Health

Proposed Affiliation Details
The District and Dignity Health negotiated intermittently from late 2015 to the present. Below are key highlights of the proposal:
1. Dignity Health would give the District a one-time $12.5 million payment in exchange for a larger share of the reversionary interest in MTMC.

2. The District would use a portion of these proceeds to purchase MTMC’s unamortized improvements, making a payment of approximately $9 million to MTMC.

3. The District and MTMC would execute a new lease, with a 10-year initial term and four consecutive automatic five-year renewals (30 years total). MTMC would pay rent to the District of approximately $102,000 per month.

4. For the entire 30-year term of the new lease, MTMC would commit to operating a general acute care hospital with 24/7 emergency services. Consistent with the 1989 lease, other than specified utilities, MTMC would be responsible to pay all costs of the leased premises, including but not limited to: insurance; maintenance; repair; painting; tenant improvements; County assessments; janitorial; building services equipment maintenance, repair and replacement; and hospital equipment maintenance, repair and replacement.

5. Dignity Health would commit to maintaining a full-time Chief Executive Officer at MTMC, and would commit to making a $2 million contribution to the MTMC (philanthropic) Foundation within 90 days of closing.

6. MTMC’s bylaws would be changed, such that:
a. MTMC’s Board of Directors would establish a new Community Board comprised of seven members, six of whom would be Calaveras County residents. The Community Board would be responsible for Medical Staff credentialing and privileging, quality oversight and providing the Board of Directors with strategic guidance.
b. The MTMC Board of Directors structure would be modified and would include an elected member of the District Board.

7. The proposed lease would be placed on the June 2018 ballot. A simple majority favorable vote would authorize the District to proceed with the new lease.

8. Assuming a favorable outcome, the prior lease would be terminated, and the new lease and other provisions would begin during the second half of 2018.

Background
In 1989, Dignity Health (through its predecessor, St. Joseph’s Medical Center of Stockton) and the District formed MTMC for the purpose of saving the hospital from financial turmoil and ensuring access to care for the residents of Calaveras County. MTMC was established as a standalone 501(c)(3) tax-exempt corporation to operate the hospital. The District retained ownership of the hospital, leasing it to MTMC for 30 years (i.e. 1990 through 2019).

Simultaneously, MTMC executed a 30-year management agreement by which Dignity Health manages MTMC.

The arrangement set forth that upon termination: (a) the District would purchase any unamortized improvements from MTMC, including real property improvements (e.g. the 1997 replacement hospital) and all the equipment acquired by MTMC (approximately $9 million), and (b) upon dissolution MTMC’s proceeds (i.e. the reversionary interest of approximately $25 million) would be split 50/50 between the District and Dignity Health.

State law requires the District to obtain voter approval of its next lease. Without a majority of voters in support of the new affiliation, the District is unable to extend the existing affiliation.

12-13-2017 to Pub -Term Sheet 2017-11-27 (2)

12-13-2017 to Pub -Term Sheet 2017-11-27 (1)

12-13-2017 to Pub – MTHCD Lease Exec Summary 12-13-2017

Agenda – January 24, 2018 MTHCD Board Meeting
P. O. Box 95
San Andreas, CA 95249
(209) 754-4468 Phone
(209) 754-2537 Fax

Meeting of the Board of Directors
Wednesday January 24, 2018
7:30 am
Mark Twain Medical Center Classroom 2
768 Mountain Ranch Rd,
San Andreas, CA

Agenda
Mark Twain Health Care District Mission Statement
“Through community collaboration, we serve as the stewards of a community health system that ensures our residents have the dignity of access to care that provides high quality, professional and compassionate health care”.

1. Call to order:
2. Roll Call:
3. Approval of Agenda: Action

4. Public Comment on matters not listed on the Agenda:
The purpose of this section of the agenda is to allow comments and input from the public on matters within the jurisdiction of the Mark Twain Health Care District not listed on the Agenda. (The public may also comment on any item listed on the Agenda prior to Board action on such item.) Limit of 3 minutes per speaker. The Board appreciates your comments however it will not discuss and cannot act on items not on the agenda.

5. Consent Agenda: Action
All Consent items are considered routine and may be approved by the District Board without any discussion by a single roll-call vote. Any Board Member or member of the public may remove any item from the Consent list. If an item is removed, it will be discussed separately following approval of the remainder of the Consent items.
• Un-Approved Minutes – November 29, 2017 Special Board Meeting.
• Un-Approved Minutes – December 11, 2017 Special Board Meeting
• Un-Approved Minutes – December 13, 2017 Special Board Meeting
• Un-Approved Minutes – December 18, 2017 Special Board Meeting
• Un-Approved Minutes – January 19, 2018 Special Board Meeting
• Un-Approved Minutes – December 6, 2017 Special Finance Committee Meeting
Agenda – January 24, 2018 MTHCD Board Meeting

6. New Business:
• Fair Market Value Report – VMG Health, LLC:…………………………………………….Dr. Smart
• Resolutions Presented to the Board:………..………………………………………………Dr. Smart
o Resolution 2018 – 1: Action by Roll Call Vote:
 Resolution to Approve Terms for a New Lease and Related Agreements with Dignity Health:
o Resolution 2018 – 02: Action by Roll Call Vote:
 Call for June 5, 2018 Ballot Measure Election and Consolidation:

7. MTHCD Reports:
A. Presidents Report: …………………….…………..…..….……..….…….……..…….……Ms. Reed
o Association of California Health Care Districts (ACHD):
B. Executive Director Report:………………………….……..………………………..……..Dr. Smart
o Strategic Planning Meeting – March 2018
o USDA Distance Learning Grant:
C. Corp. Board Report: ……………………..…….……….…….Ms. Reed / Ms. Atkinson / Mr. Diehl

8. Committee Reports:
A. Finance Committee:……..………………..………….………..…………Ms. Atkinson / Ms. Radford
o Recommendation for Approval of November 2017 Financial Statements: Action
o Recommendation for Approval of December 2017 Financial Statements: Action
o Audit Report – JWT & Associates, LLP, CPA, (2017): Action……….…………..Rick Jackson
B. Ad Hoc Lease Committee:…………………….…..…………………….………….………Ms. Reed
C. Ad Hoc Grants Committee:
o Update on Sponsorships:……………………….…………..…….…..Ms. Radford & Ms. Sellick
o Update on Grant Applications and Sponsorships:…………….……Ms. Radford & Ms. Sellick
Agenda – January 24, 2018 MTHCD Board Meeting
D. Ad Hoc Real Estate: ……..…….….………….…….………………………………………………….Ms. Reed
• Update on Valley Springs Clinic:
o Architect: :.……….…………..…….……….……….…..……….…….………………….Dr. Smart
o Opinion of Probable Costs:.……….…………….…….………….………….……..……Mr. Krieg

9. Board Comment and Request for Future Agenda Items:
A. Announcements of Interest to the Board or the Public:

10. Next Meeting:
A. February 28, 2018

11. Closed Session: ………………………………..………………..……………………….…..Ms. Reed
A. Conference with Real Property Negotiators (Govt. Code section 54956.8). Property: Mark Twain Medical Center, 768 Mt. Ranch Road, San Andreas, CA. Agency Negotiator: Lin Reed, President Chair of the Board. Negotiating parties: Mark Twain Medical Center, Inc.; Dignity Health, Inc.; Under negotiations: Price and Terms of Lease.

12. Reconvene to Open Session:
A. Report of Action taken (if any) in Closed Session:

13. Adjournment: Action: