TRAVIS COUNTY HEALTHCARE DISTRICT BOARD OF MANAGERS

AGENDA

Thursday, February 12, 2009 5:30 p.m.

1111 E. Cesar Chavez Street Austin, Texas 78702

Cesar Chavex Board Conference Room

CITIZENS' COMMUNICATION

REGULAR AGENDA*

1. Discuss a request from Daughters of Charity Health Services of Austin d/b/a Seton for approximately $350,000 to support funding the expansion of reconstructive and plastic surgery programs on the campus of the University Medical Center BICICkenridge that wlll help enable University Medical Center Brackenridge obtain Level l trauma st.atus.

2. Discuss and take appropriate action regarding the development of the organizational structure necessary to Implement a small emplayer health coverage program.

3. Receive and discuss information on the District's Fiscal Year 2009 first quarter activities in support of the District's strategic plan.

4. Discuss and take appropriate action regarding:

5.

i. An update on the status of the transfer of the City of Austin Community c.are Services Department to the District;

ii. An amendment to the Facilities, Equipment and Services Agreement between the Central Texas Community Health Centers and the Travis County Healthcare District regarding staffing issues; and

iii. Retirement issues affecting the transitioning Oty employees, induding a letter agreement between the City of Austin Employees' Retirement System and the Travis county Healthcare District.1

.... " .. ,,. ·- __ ..., .............. ._ ... " ... ,~ ...

6. Confirm the next regular Board meeting date, time, and location.

Note 1, Possible Executive Session discussion

* The Board of Managers may take items in an order that differs from the posted order.

The Board of Managers may consider any matter posted on the agenda in ExecutiVe Session if there are Issues that require consideration in Executive Session and the Board announces that the item will be

considered during Executive Session.

TOTAL P.004

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 1 Discuss a request from Daughters of Charity Health Services of Austin d/b/a Seton for approximately $350,000 to support funding the expansion of reconstructive and plastic surgery programs on the campus of the University Medical Center Brackenridge that will help enable University Medical Center Brackenridge obtain Level 1 trauma status.

(Back-Up – Recommendation Summary)

Travis County Healthcare District Request for Board of Managers Consideration

February 12, 2009 Board of Managers Regular Agenda Item: 1. Discuss a request from Daughters of Charity Health Services of Austin d/b/a Seton for

approximately $350,000 to support funding the expansion of reconstructive and plastic surgery programs on the campus of the University Medical Center Brackenridge that will help enable University Medical Center Brackenridge obtain Level 1 trauma status.

Recommended Board Action: Approve a $350,000 funding request from the Seton Family of Hospitals to support the proposed establishment of a Reconstructive Plastic Surgery practice at the University Medical Center at Brackenridge (UMCB), which will enable Brackenridge to obtain a Level 1 trauma designation and provide an anticipated 5,900 patient visits or surgeries in the first year of the Reconstructive Plastic Surgery practice.

TCHD Strategic Direction: SDS01(b): Maintain and promote the District’s role of “community steward” to further the overall viability of the safety net provider system. (b) measure and express the value of the lease with Seton for operation of Brackenridge Hospital and in collaborative planning efforts with Seton to determine how the District can best participate in the support of Brackenridge in filling in the gaps in the continuum of care. Resource Impact: The District has $350,000 available in the 2009 service expansion budget. Anticipated Result: The establishment of a Level 1 trauma facility in Austin would increase access to a wider array of services to all Travis County and Central Texas residents.

Background Summary:

Background: The Texas Trauma System has four recognized levels of trauma facility designation. They are Comprehensive (Level I), Major (Level II), General (Level III) and Basic (Level IV). The University Medical Center at Brackenridge is currently a designated Level II trauma facility. The differences between the required level of care for a Level I and Level II facility are outlined below.

A. Comprehensive (Level I) The Comprehensive trauma facility is a tertiary care hospital that maintains a distinct leadership role in the trauma system development, optimal care delivery, evaluation, training and research. It is the regional resource trauma center in a system and has the capability to provide definitive care for every aspect of injury, prevention through rehabilitation. Designation as a comprehensive facility requires a tremendous commitment of resources.

B. Major (Level II)

Like the Comprehensive facility a Major Trauma Center is a hospital that can provide definitive care to victims of trauma. However, there are a few circumstances which may require the transfer of a patient to a more specialized hospital/physician.

The Seton Family of Hospitals is working towards a Level 1 Trauma designation for UMCB. To this end, they need to provide a higher level of access to reconstructive plastic surgery to allow

individuals needing limb reattachments to obtain surgery here rather than having to be transported to another Texas city. Seton is proposing to create clinical space for a Reconstructive Plastic Surgery unit on the third floor of the Clinical Education Center (CEC) at Brackenridge. The proposed space is a former clinic and physician office space and is currently occupied by the newly created Office of Research Administration, which will need to relocate to another space in the CEC. Both areas within the CEC (a total of over 5,500 square feet) will need remodeling to support their new functions. The $350,000 being requested from the District would support the required remodeling. The Office of Research Administration currently has six full-time staff and is anticipated to recruit seven additional staff over the next two years to keep up with the growth in research that will be required to acquire and maintain a Level 1 trauma designation. Seton has developed a five year forecast for the Reconstructive Plastic Surgery practice that will increase the number of proposed surgeons from 4.9 FTEs in year one to 9.3 FTEs in year five. Based on data provided from the Texas State Patient Data Set, Seton has learned that no less than 60 patients per year in need of limb reattachment and an additional 600 patients per year in need of reconstructive surgeries have been transported outside of Central Texas for these services. Based on this data and the fact that a local, established hand surgeon will be bringing his current practice into the new unit, Seton has forecasted the following patient volumes for the first three years of the Reconstructive Plastic Surgery practice: Year 1 Year 2 Year 3 Physician Office Visits 5,250 6,900 8,550 Surgeries 650 1,100 1,550 Board Committee Coordination: COMMITTEE CHAIR COMMENTS DATE

CONSIDERED Board of Managers

Carl Richie 2/12/2009

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 2 Discuss and take appropriate action regarding the

development of the organizational structure necessary to implement a small employer health coverage program.

(Back-Up – Options)

Agenda Item 2:

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Options for organizational structure related to the implementation of a small employer health coverage program:

Option 1 - Create a 501 (c)(3) non-profit corporation with the Board composition to include representatives of the governmental entities contributing to the start up of the organization.

Option 2 - Establish an interlocal agreement with the governmental entities contributing to the start up of the organization. Create a 501 (c)(3) non-profit organization to carry ouUmanage the activities established in the interlocal agreement.

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 3 Receive and discuss information on the District's Fiscal

Year 2009 first quarter activities in support of the District's strategic plan.

(Back-Up – Reports)

MEMORANDUM

TO: TCHD Board of Managers (!~ FROM: Elaine Carroll, Director of Planning t, DATE: February 12, 2009

RE: Quarterly Reports

Over the past couple of years, District staff have provided three related reports on a quarterly basis to the District Board of Managers. These reports - Staff Progress Report, Strategic Planning Report, and Healthcare Expenditure Report - were intended to provide regular updates to you on the efforts of District staff and contracted providers to further the District's strategic goals and directions.

While the three reports provided a great deal of information, there was considerable redundancy within and between the reports and many pages for you to read through. For these reasons, we have developed a condensed report that will provide you with more readily accessible data on the progress of District staff within each of the strategic plan focus areas.

Attached is the initial draft of the revised report for your review and feedback. The report details the following -

• Strategic Focus Area 1: Healthcare Services Network ../ Service Levels and Trends for Primary Care, $pecialty Care, and Mental

Health , ../ Network Expansions for Primary Care, Specialty Care, and Mental Health ../ Service Expenditure Levels compared to budget

• Strategic Focus Area 2: Patient Coverage Programs ../ Enrollment Levels and Trends for all MAP plans ../ Service Utilization/ Access for MAP enrollees ../ Program Enhancements

• Strategic Focus Area 4: Efficiency and Integration of the Service Delivery System ../ Major Strategic Activities for the Quarter

• Strategic Focus Area 5: Regional Collaborations and Initiatives ../ Major Strategic Activities for the Quarter

• Strategic Focus Area 6: Infrastructure and Resources ../ Status of Tax Collections for Quarter ../ Payor mix for CommUnityCare

../ Source and Trends of District Funding

The third Strategic Focus Area in the District's Current Strategic Plan Update, CHC Transition, is not included in the revised report as the major strategic activities being conducted in this area are being reported on separately to you ' .

The hope with the revised format is that you will have handy, current service level and strategic activity data to assist you in your discussions with community members about the District. The new distribution schedule for the quarterly reports will be the first worksession following the month after the completion of the reported quarter to allow for sufficient time to receive all provider data reports. This new schedule would have reports distributed in February (Ql), May (Q2), August (Q3), and November (Q4 and annual review) .

After presentation of the new draft report by staff and further personal review, please forward your feedback on the new format to Elaine Carroll so that the report can be revised as needed to further meet your needs.

Primary Care

DRAFT TCHD Strategic Quarterly Report -- FY09 Q1

Strategic Focus Area: Healthcare Services Network

.,. 1 Setvice Levels and Trends 1 Visits FY09 1 Visits 0/o Chan e

Total Primary Care Medical CommUnityCare

El Buen Samaritano People's Community Clinic

Pro· ect Access Total Primary Care Dental

CommUni Care

.,. Network Expansions

39,621 37,648

0 1,833

140 6,173

40,936 37,865

1,055 1,841

175 6,355

+3°/o -8%

+100%

+25% +3°/o

• The CommUnityCare network added the William Cannon facility and the Red River Clinic. The District Board approved the purchase of property for a new North Central Community Health Center within the CommUnityCare network.

• The contracts with El Buen, People's, and Project Access were renewed at increased rates to allow for additional primary care service in the community.

Specialty Care >- 1 Setvice Levels and Trends

Service T e/Provider FYOS 1 Visits FY09 1 Visits 0/o Chan e Total Specialty Care Medical 5,546 6,624 +190/o

Project Access 227 214 -6% * S ecial Clinic at UMCB 5,319 6,410 +21 %

*Reflects total specialty clinic visits for self-pay, charity care, and MAP clients .

.,. Ql Network Expansions • Specialty Care access was increased for MAP enrollees and is reported under the

Patient Coverage Programs section.

Mental Health Care .,. !2J Setvice Levels and Trends Service Type/Provider FYOS Q1 FY09 Q1 010 Change

Visits Visits Total Primary Behavioral Health Care 2,915 2,793 -4°/o Visits (CommUnityCare E-Merge) * Total Inpatient BH Admissions 342 399 +17°/o

Austin State Hospital (ASH) 227 196 -14% Community-Based Hospital Admissions 115 203 +77°/o

Austin Lakes Hospital 0 99 +100% Seton Shoal Creek 115 104 -10%

*ASH funding is provided by the state. Funding for the community-based beds provided by ATCMHMR, state crisis funds, and District.

211212009

DRAFT TCHD Strategic Quarterly Report -- FY09 Q1

;. Ql Network Expansions • The Austin Lakes Hospital began receiving inpatient mental health admissions. • Crisis Respite services, supported with new state crisis funds, were initiated in

December. The inpatient portion scheduled to begin in January. • New District contract with Austin Lakes Hospital and Seton Shoal Creek will allow for

purchase of intensive outpatient services in addition to inpatient beds.

,. Annual Individual and Service Trends - Note that for current year YTD numbers will be reported and added to until the annual number is complete for FY09. Quarterly trends are reported above.

Individuals Served by Primary Care Service Type

70,000 -,----------.,........-~.......,.-------,

1~6~1~,5~8~0 ~::::======~:...._ ______ J 60,000 '

50,000 -1-----------_,.,_--------l

' 40,000 -!------------,-------!

30,000 -!--------------- -----!

20,000 -!-------------------! 12,628 11,833

10,000 -·~=~::========-~~-----=-===-1 4,235 ..... ___ ...,4,~5...,07~ ... ._.

FY07 FYOB FY09 Q1

~Primary Care Medical (CommUnityCare, El Buen, People's, Project Access)

- Primary Care Dental (CommUnityCare)

-A- Primary Care Behavio ral Health (CommUnityCare)

* Individuals are unduplicated by provider and service type but potentially duplicated across providers and service types.

Primary Care Visits by Type

180,000 +----=~-===--~...,._,.,.....--------1

150,000 +---------~~--------!

' 120,000 +------ ------ - ------'

90,000 -l------------'~--60,000 -1--------------'--30,00cr 23,593- 40,936

~~.,,.....------i11r-:1. 1,40Q: = = = = o :w..d-l-G-------......:...--=----_:_:=..~- 2,793

~~

-+-Prirrary Care Medical (ComrUnityO are, El Buen, People's, Project Access)

---Prirrary Care Dental (ComrUnity are)

.....,._ Prirrary Care Behavioral Health( Co UnityCare)

2/12/2009

DRAFT TCHD Strategic Quarterly Report -- FY09 Q1

Strategic Focus Area: Healthcare Services Network

.,. H /.h eat care E c1.· Xf2__en 1tures Provider Annual 1st Quarter 0/o of TCHD- TCHD-

Budget Annual Contracted Contracted Budget Services Populations

Ex_p_ended CommUnityCare $30,474,514 $7,527,428 25% Primary Care MAP, Self-Pay

Medical, Dental, Behavioral Health

El Buen Samaritano $163,728 $42,435 26% Primary Care Self-Pay Medical

People's $700,000 $253,359 36% Primary Care Self-Pay Community Clinic Medical Project Access $330,000 $75,000 23% Primary Care Self-Pay

Medical, S_Q_ecial!Y_ Care

Paul Bass Clinic $429,000 $20,989 5% Primary MAP (Continuity) Care

Seton Healthcare $4,067,304 $1,016,826 25% Hospital-Based MAP Network Services Seton MAP/TCHD $27,518,607 $6,879,554 25% Hospital-Based Self-Pay Medicaid Services UTMB $3,900,000 $969,262 25% Hospital-Based MAP, Self-Pay

Women's Health Services

Walgreen's $1,224,866 $252,763 21% Prescrl.Q_ti on s MAP, Self-P~ Seton Shoal $5,224,701 $775,039 15% Inpatient and Self-Pay Creek/ Austin Lakes Intensive Hospital Outpatient

Mental Health Report reflects recorded expenditures through 12/31/08.

2/ 12/2009

DRAFT TCHD Strategic Quarterly Report -- FY09 Q1

Strategic Focus Area: Patient Coverage Programs

MAP Plan FYOS 1 FY09 1 0/o Chan e Total Medical Assistance Program (MAP) Enrollment

10,317 10,196

9,757 333 106

-1%

MAP Full Benefit (Non-Pending SS!) MAP Full Benefit (Pending SS!)

MAP Su lemental Cevera e

9,747 391 179

-15% -41%

';- Ql Network Expansions • Expanded MAP primary care provider network to include Paul Bass (Continuity Care)

Clinic • Received Board approval to expand specialty care to be provided to MAP enrollees at

the Paul Bass Clinic • In process of initiating primary care services for MAP enrollees at Blackstock and Lone

Star Circle of Care • Developing solicitation to seek urgent care availability for MAP clients ·

»- Ql Service Utilization

FY09 Q1 MAP Visits by Encounter Type

7,000 ~--6-,.s+-11-------------------------~ 6,000 -1----.---------------------------l 5,000 4 ,000 3 ,000 2 ,000 1,000

0 -\-_L__L_~_L_-L_~_.L.-.l__~___L.-.J....._--,---""~---,..--1..-..J_-,-_L _ _J._-J ~ ~ ~

~ ~ &-Ci ~ ~·· Qq,~ .~c/ ~e; Q0 e):' ~e; ~e;

~<}. (b'

<Y~ <Y~ ~<Q ,<:--~ ,s~ cJ e;

~ 0 .if' ·~ .~<Y ,g<:S ~ ·~ ~'< «f' qf 1'5 e,<>

~'< q}/'5 .;:f i5 '"-:J~ ~~ o~ ~'5 ~ ~

cP c; o~ q}/'5 q}'fj c;

.,. Ql Program Enhancements • 462 individuals were certified utilizing the mail-in renewal applications • Implementing scanning of eligibility-related documents - will be fully implemented in

February • Identifying pilot sites to test virtual eligibility certification process • Reviewing current eligibility guidelines/ rules for possible changes that would maintain

program integrity while simplifying process for clients and staff such as reviewing feasibility of moving to 12 month coverage for all MAP enrollees (up from usual 6 months)

• Implemented point-of-service eligibility for sliding-fee-scale determinations at Will iam Cannon site

• Have requested data on employers of current enrollees to begin considering feasibility of purchasing or supplementing employer-based coverage

• Released solicitation to obtain consulting services for re-branding of program

2/12/2009

DRAFT TCHD Strategic Quarterly Report-- FY09 Ql

Strategic Focus Area: Efficiency and Integration of the Service Delivery System

Major 01 Strategic Activities • Working with safety net providers on standardizing documentation required for self-pay

clients to obtain discounted rates for healthcare services to facilitate access to services for this population. The efforts to expand the implementation and use of the NextGen system in all safety net clinics will facilitate the sharing of eligibility and healthcare information to also facilitate care. Presented project charter to the ICC in December.

• Coordinated community forum on access to healthcare issues with multiple community partners. Leading next phase of community planning process and working with consultant to develop plan to obtain community input on priorities for healthcare funding.

• Working with St. Davids Community Health Foundation on the coordination of dental services in Travis County.

Strategic Focus Area: Regional Collaborations and Initiatives

Major Ql Strategic Activities • Coordinated a community forum on access to healthcare issues with multiple community

partners. Leading next phase of community planning process and working with consultant to develop plan to obtain community input on priorities for health care access and funding .

• Continued to work with regional partners on the development of a small employer health coverage program which could provide an affordable option for small employers to help provide health coverage to their employees.

• Finalized legislative agenda for up-coming session. • Signed contracts and data sharing agreements with Children's Optimal Health program to

obtain maps reflecting all current safety net health care providers and specified demographics of Travis County population by small area to assist in planning of future services.

• Continued dialogue with Hays County to identify common interests.

Strategic Focus Area: Infrastructure and Resources

,,,. Status of Tax Collections • Current year tax collections as a percent of the total tax is 41 % through Ql which is the

same percentage as the prior year first quarter. 'r CommUnityCare Visit Payor Mix

• Medicaid as a percent of payor mix for the clinics is 22.8% through Ql of FY09. This is down slightly from the Medicaid percentage of 23.7% in Ql of FY08.

2/12/2009

DRAFT TCHD Strategic Quarterly Report -- FY09 Ql

Strategic Focus Area: Infrastructure and Resources Cont'd.

>- Trends in Source of District Funding • Trends in the source of District funding is provided below.

Travis County Healthcare District Actual Revenue

2005 2006 2007 2008 Property Tax Revenue 46,299,165 60% 49.533.162 53% 54 ,461,216 60% 58,502,840 62% DSH/UPL (Seton Lease) 28,029,577 36% 36.670,256 40% 28,434 ,895 31 % 28.168.429 30% Operating Lease Revenue 1,155,396 1% 1, 155,396 1% 1,155,396 1% 1,155,396 1% Investment Income 690,752 1% 2.803,272 3% 4.087,1 53 5% 3.733.1 73 4% Tobacco Settlement 1.165,771 2% 2,489. 720 3% 2.280.598 3% 2,993,571 3% Other/Miscellaneous 0% 820 0% 31 5 0% 6,250 0%

77 ,340.661 100% 92.652.626 100% 90.419.573 100% 94.559,659 100%

Audited f/s 77,340,661 92,652,626 90,419,573 94,559,659

1st Qtr 2009

26,322,972 8,716,182

288.849 613.028

125

35.941.156

35,941,156

2/12/2009

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 4 Discuss and take appropriate action regarding: (i) proposed leases of community health centers from the City of Austin and Travis County; (ii) post-transition agreements with the City of Austin, Travis County, and the Central Texas Community Health Centers, including:

(a) Interlocal Agreement for Close-Out and Post-Transition Services between the City of Austin and the Travis County Healthcare District; (b) A Records and Information Agreement between the City of Austin and the Travis County Healthcare District; (c) An Interlocal Agreement between the City of Austin and the Travis County Healthcare District for Emergency Medical Services; and (d) An amendment to the Facilities, Equipment and Services Agreement between the Central Texas Community Health Centers and the Travis County Healthcare Districts;

(iii) an update on the status of the transfer of the City of Austin Community Care Services Department to the District; and (iv) retirement issues affecting the transitioning City employees, including a letter agreement between the City of Austin Employees’ Retirement System and the Travis County Healthcare District.

(Executive Session)

Memo

Travis County Attome s Office

To: Travis County Healthcare District Board of Managers

cc: Patricia A. Young Brown

From: Sarah F. Churchill

Date: February 12, 2009, REVISED

Re: Agenda Item 4(ii): Discuss and take appropriate action regarding an amendment to the Facilities, Equipment and Services Agreement between the Central Texas Community Health Centers and the Travis County Healthcare District regarding staffing issues; and

Agenda Item 4(iii): Discuss and take appropriate action regarding retirement issues affecting the transitioning City employees, including a letter agreement between the City of Austin Employees' Retirement System and the Travis County Healthcare District.

Background

For the reasons outlined in the attached Retirement Proportionality Summary, staff is proposing that all transitioning CCSD employees become Travis County Healthcare District employees on March 1, 2009. Those employees who were scheduled to become employees of the Central Texas Community Health Centers (CTCHCs) will instead become District employees and assigned to staff the CTCHCs.

The CTCHC's CEO will be an employee of the District and will be assigned as the CEO for the CTCHCs with the direct responsibility for the supervision and control of the District-assigned employees for the services they provide to the CTCHCs.

Agenda Item 4(ii): First Amendment to the Facilities, Equipment and Services Agreement

The Facilities, Equipment and Services Agreement ("Agreement") was entered into between TCHD and the CTCHCs to provide for the CTCHC's access to TCHD's clinics, equipment and administrative assets. This agreement sets out the terms under which the clinics will be operated.

Travis County Attome 's Office

The First Amendment to this Agreement adds an additional section to the recital section and two new sections to the main body of the Agreement concerning staffing matters. The first of the additional sections provides that the District may employ professional and administrative staff to provide services that support the CTCHCs. It also provides that these employees are employees of the District and are subject to District's policies. While these employees are assigned to the CTCHCs, they will also be subject to the policies and procedures of the CTCHCs. The new section also states that the District is responsible for payment of all wages, fringe benefits and other compensation to its personnel. The CTCHCs are also given the right to request that a particular employee assigned to it by the District be removed from that assignment if that removal is in the best interest of the CTCHCs. The second additional section states the CTCHCs will reimburse the District for all reasonable costs related to providing the staffing services, including salaries and benefits of employees performing services for the CTCHCs, lease expenses and other administrative services.

Agenda item 4(iii): Letter Agreement between COA ERS and TCHD

In accordance with this resolution, a letter agreement has been drafted and agreed upon by the City of Austin Employees' Retirement System (COA ERS) and the District staff. In this letter agreement, both parties agree that COA ERS will recognize service credit earned by District employees in the District's retirement system as proportionate service credit for purposes of vesting and retirement eligibility under COA ERS. The letter also provides that the District will continue to pursue the IRS approval of the District's retirement plan under Section 401 (a) and that the District will re-submit and continue to pursue its request for an advisory opinion from the U.S. Department of Labor stating that the District's affiliated 501 ( c)(3) non-profit corporation is an agency or instrumentality of a governmental unit.

Recommendation

Based on the above information, staff is recommending that the Board vote to approve the First Amendment to the Facilities, Equipment and Services Agreement. Staff also recommends that the Board vote to approve the Letter Agreement between the City of Austin Employees' Retirement System and the Travis County Healthcare District.

2

ADMINISTRATIVE, EQUIPMENT AND FACILITIES AGREEMENT BETWEEN

TRAVIS COUNTY HEALTHCARE DISTRICT AND

CENTRAL TEXAS COMMUNITY HEALTH CENTERS

This Agreement between the Travis County Healthcare District and the Central Texas Community Health Centers ("Agreement,,) is made and entered into by and between the following parties: Central Texas Community Health Centers, a Texas non-profit corporation (the "Co­Applicant CHC''), and the Travis County Healthcare District, a hospital district created under Chapter 281 of the Texas Health & Safety Code ("Grantee").

RECITALS:

The Grantee has as its primary purpose the promotion and the provision of cost-effective and quality healthcare through the arrangement and delivery of healthcare services to the public designed for the care and treatment of the indigent, which is currently accomplished in part through the operation of the Austin!f ravis County Community Health Centers.

The Grantee desires to support a healthcare delivery system that increases access to primary and preventive healthcare hi the community.

Currently, the City of Austin has been granted Federally Qualified Health Center ("FQHC") status from the U.S. Department of Health and Human Services (''the Department") for community health centers operated pursuant to Section 330 of the Public Health Services Act.

The City of Austin desires to transfer this FQHC status to the Grantee.

Central Texas Community Health Centers is a non-profit corporation created to facilitate the delivery of primary and preventive healthcare to the indigent population of Travis County, Texas as an FQHC pW'Suant to Section 330 of the Public Health Services Act. The delivery of such healthcare shall be in collaboration with other providers and through the provision of primary and preventive healthcare in the clinics, a list of which is attached hereto as Exhibit "A" (collectively, the "Clinics"), owned and operated in cooperation with the Grantee. The Co-Applicant CHC is governed by a board of directors (the Co-Applicant CHC Board).

The Grantee and the Co-Applicant CHC are co-applicants under a public entity model for the transfer of FQHC status from the City of Austin to the Grantee and intend to collaboratively operate a public entity model clinic as authorized by the Department.

The Grantee and the Co-Applicant CHC accept the responsibility of collaboratively overseeing the provision of primary and preventive healthcare and complying with applicable laws and regulations.

1 1617ll·I

The Grantee owns certain medical services equipment necessary or useful in providing healthcare services in the Clinics, an inventory of which is attached hereto as Exhibit "B" (the "Equipment"), Tue parties acknowledge and agree that the Equipment inventory may be supplemented or otherwise revised after execution of the Agreement, and as needed from time to time, in accordance with the terms hereof.

The Co-Applicant CHC desires to obtain access ("Access") to the Clinics, the Equipment and the administrative personnel, operations and services necessary or useful to the maintenance and operation of the Clinics and the Equipment (the "Administrative Assets") for the sole purpose of delivering healthcare services to patients in accordance with the Co-Applicant Agreement, as defined in paragraph 2.6 hereof. This Agreement is intended to document and describe the terms and conditions pursuant to which Grantee grants such Access to the Co-Applicant CHC.

In consideration of the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the Grantee and the Co-Applicant CHC agree to the following terms and conditions.

ARTICLE I-TERM

1.1 This Agreement shall be effective on the date detennined by Tue Department (''Effective Date'')

1.2 This Agreement shall be for an initial term of two (2) years (the ''Initial Term"), commencing on the Effective Date. The Agreement shall automatically renew for subsequent two (2) year terms unless sooner terminated in writing as provided herein.

ARTICLE II - RESPONSIBILITIES OF THE PARTIES

Responsibilities of Grantee:

2.1 ACCESS. The Grantee hereby agrees to and shall grant to the Co-Applicant CHC, and the Co-Applicant CHC shall hereby obtain, Access to the Clinics, the Equipment and the Administrative Assets as described herein. The terms and conditions governing such Access will be addressed in a separate instrument.

2.2 EQUIPMENT MAINTENANCE. The Grantee shall have secondary responsibility for ensuring proper operation, maintenance and repair of the Equipment as described in paragraph 2.7 below.

2.3 ADMINISTRATIVE SERVICES. During the term of this Agreement, the Grantee may provide a variety of administrative services (the "Administrative Services,,) to the Co-Applicant CHC, or the parties may share responsibility for provision of the Administrative Services, such as grants management, accounts receivable management, reporting and information system support, and other services, as mutually agreed upon, to begin on the Effective Date.

2 161732· 1

2.4 USE OF CLINICS. The Clinics shall be used only for the management and provision of healthcare services and for no other purpose whatsoever without the written consent of the Grantee. The Co-Applicant CHC agrees to comply with all Clinic Facility Policies and Procedures established by the Grantee, a copy of which the Grantee shall provide to the Co-Applicant CHC.

Responsibilities of Co-Applicant CHC:

2.6 GENERAL. The Co-Applicant CHC will be responsible for overseeing the provision of the healthcare services, including primary and preventive care services in accordance with and pursuant to the Co-Application Agreement between the Travis County Healthcare District and the Central Texas Community Health Centers (the "Co-Applicant Agreement"), to be executed contemporaneously with this Agreement.

2.7 EQUIPMENT MAINTENANCE. Exceptasprovidedherein, theCo-ApplicantCHC shall have the primary responsibility for ensuring proper operation, maintenance and repair of the Equipment. The Grantee shall cooperate with and assist the Co-Applicant CHC in perfonning these operation, maintenance and repair responsibilities as necessary and upon the Co-Applicant CHC's request. With respect to information technology equipment and services, operation, maintenance and repair responsibilities may be determined on a case-by-case basis, as mutually agreed upon by the parties.

2.8 ALTERA TIO NS BY CO-APPLICANT CHC . The Co-Applicant CHC may not make any alterations, improvements, or other modifications of any kind to the Clinics, the Equipment or the Administrative Assets without first obtaining the Grantee's prior written consent.

2.9 RECORDKEEPING. The Co-Applicant CHC shall maintain financial, program, and property management systems and records in accordance with 45 CFR Part 74 and any amendments to such regulations and the Financial Policies and Procedures established by the Grantee and as thereafter provided or amended. The Co-Applicant CHC agrees to make such records available to the Co-Applicant CHC Board, the Department, the Texas Comptroller General and Grantee during normal business hours.

2.10 ACCEPTANCE OF EQUIPMENT AND THE FACILITY. The Co-Applicant CHC acknowledges that the Clinics, the Equipment and the Administrative Assets are suitable for the purposes for which the same are intended and are in good and satisfactory condition, and hereby and waives any and all defects affecting the foregoing. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE GRANTEE HEREBY PROVIDES, AND THE CO-APPLICANT CHC HEREBY ACCEPTS, THE CLINICS, THE EQUIPMENT AND THE ADMINISTRATIVE ASSETS "AS-IS," "WHERE-IS" AND "WITH ALL FAULTS," WITHOUT ANY REPRESENTATION OR WARRANTY BY GRANTEE, AND GRANTEE MAKES NO REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, AND SHALL NOT IN ANY WAY BE LIABLE FOR ANY REPRESENTATIONS OR WARRANTIES CONCERNING: (A) THE DIMENSIONS OF THE CLINICS OR THE ACREAGE OF THE REAL PROPERTY ONWIDCH THE SAME ARE SITIJATED; (B) THE NATURE, QUALITY, OR CONDffiON OF THE CLINICS, THE EQUIPMENT OR THE ADMINISTRATIVE ASSETS; (C) ANY APPLICABLE ENVIRONMENTAL, BUILDING, ZONING OR FIRE LAWS OR REGULATIONS OR WITH RESPECT TO COMPLIANCE THEREWITH OR WITH RESPECT TO THE EXISTENCE OF OR

3 161732· 1

COMPLIANCE WITH ANY REQUIRED PERMITS, IF ANY, OF ANY GOVERNMENT AL AGENCY; AND/OR (D) THE ABSENCE OF ASBESTOS OR ANY HAZARDOUS OR TOXIC MATERIAL OR SUBSTANCE. THE CO-APPLICANT CHC ACKNOWLEDGES TO THE GRANTEE THAT THE CO-APPLICANT CHC SHALL HAVE THE OPPORTUNITY TO FULLY INSPECT THE CLINIC, THE EQUIPMENT AND THE ADMINISTRATIVE ASSETS AND THE CO-APPLICANT CHC ASSUMES THE RESPONSIBILITY AND RISKS OF ALL DEFECTS AND CONDITIONS AFFECTING ANY OF THE FOREGOING, INCLUDING SUCH DEFECTS AND CONDITIONS, IF ANY,THAT CANNOT BE OBSERVED BY CASUAL INSPECTION.

ARTICLE III - ASSIGNMENT OF AGREEMENT

3.1 ASSIGNMENT. The Co-Applicant CHC may not sublet, assign, pledge, transfer or mortgage this Agreement, or any part thereof, and may not grant licenses, commissions, or other rights with respect to all or any part of the Clinics, the Equipment or the Administrative Assets without first obtaining the Grantee's prior written approval.

ARTICLE IV - LIABILITY FOR LOSS

4.1 The Grantee shall not be liable for any claims or damages arising from the negligent, wrongful, or illegal acts or omissions of the Co-Applicant CHC or the Co-Applicant CHC's employees or agents in relation to the Access granted hereunder or the use of the Clinics, the Equipment and/or the Administrative Assets.

4.2 The Co-Applicant CHC shall not be liable for any claims or damages arising from the negligent, wrongful, or illegal acts or omissions of the Grantee or the Grantee's employees or agents in relation to the Access granted hereunder or the use of the Clinics, the Equipment and/or the Administrative Assets.

4.3 If both the Grantee and the Co-Applicant CHC are liable for any claims or damages arising from the negligent, wrongful, or illegal acts or omissions of either party or its employees or agents in relation to the Access granted hereunder or the use of the Clinics, the Equipment and/or the Administrative Assets, Grantee and the Co-Applicant CHC shall be liable for the portion of the claims and damages that arise from the negligent, wrongful or illegal acts or omissions of that party as detennined by the court adjudicating the matter or as agreed in any settlement.

4.4 The Co-Applicant CHC agrees that all personal property brought into the Clinics shall be at the Co-Applicant CHC 's risk only, and that the Co-Applicant CHC shall not be liable for any damage thereto or loss, theft or disappearance thereof unless caused by the willful misconduct or gross negligence of the Co~Applicant CHC or its agents, employees or contractors.

4.5 Provisions of this section shall survive the termination of this Agreement with respect to any damage, injury or death occurring prior to such termination. The Co-Applicant CHC and the Grantee shall not be liable or responsible to the other for any loss or damage to any property or death or injury to any person occasioned by theft, fire, act of God, public enemy, criminal conduct of third

4 161732-1

parties, injunction, riots, strike, insurrection, war, court order, requisition or other governmental body or authority, or any other matter beyond the control of that party.

ARTICLE V - TERMINATION

5.1 TERMINATION FOR DEFAULT. If either party defaults in the perfonnance of its obligations (including compliance with any covenants) under this Agreement and such default is not cured within thirty (30) days of the receipt of written notice thereof, then the non-defaulting party shall have the right (in addition to any other rights it may have) by further written notice to terminate the Agreement on any future date that is not less than thirty (30) days from the date of that further notice.

S.2 TERMINATION FOR OTHER CAUSE. The Grantee may terminate this Agreement, and have no further liability or obligation hereunder unless expressly stated in this Agreement, if the Co­Applicant CHC voluntarily files a petition in bankruptcy or makes an assignment for the benefit of creditors or otherwise seeks relief from creditors under any federal or state bankruptcy, insolvency, reorganization or moratorium statute, or is the subject of an involuntary bankruptcy, which is not set aside within sixty (60) days of its filing.

5.3 TERMINATION WITHOUT CAUSE. The Grantee may tenninate this Agreement upon one hundred eighty (180) days advance written notice.

ARTICLE VI-NON-WAIVER

6.1 Any act of forbearance by either party to enforce any provision of this Agreement shall not be construed as a modification of this Agreement or as a waiver of any breach or default of the other party which then exists or may subsequently exist. The failure of either party to exercise any right or privilege granted in this Agreement shall not be construed as a waiver of that right or privilege.

6.2 All rights of both parties under this Agreement are specifically reserved. Any payment, act or omission by a party shall not impair or prejudice any remedy or right of that party under this Agreement. Any right or remedy stated in this Agreement shall not preclude the exercise of any other right or remedy under this Agreement, the law or at equity. Any action taken in the exercise of any right or remedy shall not be deemed a waiver of any other rights or remedies.

ARTICLE VII - RECORDS

7.1 CONFIDENTIALITY.

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(a) The Grantee and the Co-Applicant CHC agree to comply with all applicable laws and regulations regarding the security and confidentiality of any individually identifiable health infonnation relating to a Consumer, as such term is defined in the Co-Applicant Agreement, received by the Co-Applicant CHC or the Grantee, including the Health Insurance Portability and

5

Accountability Act of 1996 ("HIP AA") and the regulations promulgated thereunder.

(b) The Grantee and the Co-Applicant CHC agree to comply with all applicable laws and regulations regarding the confidentiality of any information other than individually identifiable health information relating to a Consumer.

7.2 BUSINESS RECORDS. Each party agrees to maintain appropriate accounting and other business records of costs, expenses, and payrolls of Clinic employees, officers, agents, and other persons providing services necessary or integral to the Clinic operations, together with documentation of evaluations and study results, in accordance with all applicable Co-Applicant CHC requirements. Each party further agrees that the other party, or its duly authorized representatives, shall have access to any and all books, documents, papers and records of the other party that are directly pertinent to this Agreement for the purposes of making audits, examinations, excerpts, and transcriptions.

7.3 REMEDIES. The Co-Applicant CHC acknowledges that its breach of this Article VII would result in irreparable damage to the Grantee and, without limiting any other remedies which may exist for a breach of this Article vn, the CoMApplicant CHC agrees that this Article VII may be enforced by temporary restraining order, temporary injunction, or permanent injunction restraining violation thereof, pending or following trial on the merits. The Co-Applicant CHC hereby waives the claim or defense that an adequate remedy at law for such a breach exists. The covenants contained in this Article VII shall survive any termination of this Agreement.

7.4 MAINTENANCE OF RECORDS. Pursuant to 42 U.S.C. 1395X(V) (1) and 42 C.F.R. 420.300-420.304, the parties agree that each party shall, until the expiration of four ( 4) years after the furnishing of the services under this Agreement, retain and make available, under written request by the secretary of the U.S. Department of Health and Human Services, or upon written request, by the U.S. Comptroller General, or any of their duly authorized representatives, the contract and books, documents and records of that party that are necessary to verify the nature and extent of the cost of the services under this Agreement. If either party carries out any of the duties of this Agreement through a subcontract, with a value or costof$10,000.00 or more over a twelve (12) month period with a related organization, such subcontract shall contain a clause to the effect that, until the expiration of four ( 4) years after the furnishing of such services pursuant to such subcontract, the related organization shall retain and make available, upon written request by the Secretary of the Department, or upon written request by the U.S. Comptroller General, or any of their duly authorized representatives, the subcontract and books, documents or records of such organization that are necessary to verify the nature and extent of such costs of the subcontracted services. In the event ofa request for access, each party agrees to notify the other party of the response that that party will make to the request.

ARTICLE VIIl - NOTICES

8.1 In order to be effective, any notice or other communication required or permitted hereunder must be in writing and given to the respective party at its address for notices shown herein by hand-delivery; overnight U.S. Mail; Federal Express or other receipted courier or delivery service; telecopy; or certified U.S. Mail, return receipt requested, postage prepaid:

6 1617Jl-1

The address of the Co-Applicant CHC for all purposes under this Agreement shall be:

David B. Vliet (or his successor) Chief Executive Officer Central Texas Community Health Centers City of Austin, 15 Waller Street Austin, Texas, 78702

The address of the Grantee for all purposes under this Lease shall be:

Patricia A. Young Brown (or her successor) President and CEO Travis County Healthcare Grantee 1111 E. Cesar Chavez St., Suite B Austin, Texas 78702

Either party may change its address for purposes of this paragraph by written notice delivered in accordance herewith.

ARTICLE IX - MISCELLANEOUS

9.1 MISCELLANEOUS. This Agreement, including the Recitals and all exhibits, attachments and appendices hereto, constitutes the entire agreement of the parties related to the subject matter herein. Any other statement, representation, agreement or promise, either oral or written, relating to the subject matter of this Agreement that is not contained in this Agreement or incorporated herein by reference shall not be binding or valid.

9.2 AMENDMENTS. Th.is Agreement may not be altered, changed or amended, except by instrwnent in writing signed by both parties.

9.3 SUCCESSORS. This terms and conditions contained in this Agreement shall apply to, inure to the benefit of, and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives.

9.4 FAIR MARKET COMPENSATION. The parties agree that the total compensation paid for Access to and use of the Clinics, the Equipment and the Administrative Assets provided pursuant to this Agreement does not exceed, or is less than, the fair market cost at which the paying party could have obtained the same equipment and facilities from other competing providers of such facilities, equipment and assets.

9.5 INDEPENDENT CONTRACTOR. Nothing contained herein shall be construed as creating the relationship of employer and employee between the Grantee and the Co-Applicant CHC , insofar as the Grantee will not direct the Co-Applicant CHC in the performance of its services or in any manner interfere with the professional judgment of the Co-Applicant CHC . The Co-Applicant CHC shall be

7 16!732·1

deemed at all times to be an independent contractor.

9.6 TEXAS PUBLIC INFORMATION ACT. To the extent that compliance with any provision of this Agreement would result in either party's non-compliance with TEX. Gov'T CODE ANN. ch. 552, as amended (the "Texas Public Information Act" or the "TPIA''), that portion of this Agreement shall be of no force or effect. Disclosure of any information obtained by either party or any of its officials, employees, agents or representatives in connection with this Agreement shall be subject to the provisions of the TPIA and all legal authorities relating thereto, including but not limited to opinions, decisions and letter rulings issued by the State Attorney General's Office.

9. 7 DISPUTE RESOLUTION. In this Agreement, "Dispute') means any and all disagreements, questions, claims, or controversies arising out of or relating to this Agreement, including the validity, construction, meaning, performance, effect, or breach of the Agreement.

In the event of a Dispute between the parties, the parties shall promptly, amicably, and in good faith attempt to resolve the Dispute through informal negotiations. A disputing party shall give written notice of the Dispute to the other party that shall contain a brief statement of the nature of the Dispute. If the parties are unable to resolve the Dispute within thirty (30) days of the receipt by the adverse party of the written notice of the Dispute, the parties may submit to mediation as set forth herein.

If a Dispute arises between the parties that cannot be resolved through negotiation, the parties may submit that Dispute to mediation. The parties agree to use a mutually agreed upon mediator, or someone appointed by the Court having jurisdiction, as the provider of mediators for mediation as described in Section 154.023 of the Texas Civil Practice and Remedies Code. Unless both parties are satisfied with the result of the mediation, the mediation will not constitute a final and binding resolution of the dispute. All communications within the scope of the mediation shall remain confidential as described in§ 154.073 of the Texas Civil Practice and Remedies Code, unless both parties agree, in writing, to waive the confidentiality.

9.8 SEVERABILITY. If any portion or portions of this Agreement are ruled invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, the remainder of this Agreement shall remain valid and binding.

9.9 GOVERNING LAW. All obligations and undertakings permitted under this Agreement are performable in Travis County, Texas. This Agreement is governed by and construed in accordance with the laws of the State of Texas. Venue for any dispute arising out of this Agreement will lie in the appropriate court of Travis County, Texas.

9 .10 FORCE MAJE URE. Neither party shall be liable nor deemed to be in default for any delay or failure in performance under this Agreement (other than the obligation to pay money) resulting, directly or indirectly, from acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquakes, floods, failure of transportation, machinery or supplies, vandalism, strikes, or other work interruptions beyond the reasonable control of either party. However, both parties shall make good faith efforts to perfonn under this Agreement in the event of any such circumstances.

8 l61'1:l2· 1

9.11 PATIENT REFERRALS. The benefits to the Co-Applicant CHC or the Grantee under this Agreement do not require, are not payment for, are not in any way intended to induce, and are not contingent on the admission, referral, or any other arrangement for the provision of any item or service offered by the Co-Applicant CHC or the Grantee to the Co-Applicant CHC or the Grantee in any facility or laboratory controlled by the Co-Applicant CHC or the Grantee.

9.12 FAILURE TO FUND. Notwithstanding anything to the contrary within this Agreement, at any time during the Agreement term the Grantee's Board of Managers fails to provide funding for this Agreement for the following fiscal year of the Grantee, the Grantee may, upon giving the Co­Applicant CHC written notice of such failure to fund and tennination, terminate this Agreement without any further liability, effective as of the earlier of (a) the last day of the then current fiscal year of the Grantee or (b) thirty (30) days after the Grantee notifies the Co-Applicant CHC in writing of such failure to fund and termination.

9 .13 GENDER AND NUMBER. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires.

9.14 CAPTIONS. The captions contained in this Agreement are for convenience ofreference only, and shall not in any way be construed to limit or enlarge the terms and conditions of this Agreement.

9 .15 CONSTRUCTION. Contemporaneously with this Agreement, the parties are executing the Co-Application Agreement. It is the intention of the parties that the Co-Applicant Agreement and this. Agreement, both of which pertain to the same or closely related transactions and are being executed for the same or closely related purposes, shall be read and construed together, and that the terms of both agreements shall be given effect. Notwithstanding the foregoing, in the event of inconsistency or disagreement between the provisions of the Co-Applicant Agreement and those of this Agreement, the provisions of the Co-Applicant Agreement shall take precedence.

ARTICLE X - EXHIBITS

10.1 EXIllBIT LIST. The following exhibits attached to this Agreement and referred to herein are incorporated into this Agreement and made a part hereof for all intents and purposes.

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Exhibit "A" -- List of Clinics Exhibit "B" -- Equipment Inventory

9

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Effective Date.

TRAVIS COUNTY HEALTHCARE DISTRICT

By: Qi)ll,.; '6,,. @.efu o') Name: -€lat'ke Heidrick ~Y'"'\ S . R \chi e ~. Title: Chairperson, Board of Managers ' Date: 1/J/4 /o=t

> I

CENTRAL TEXAS COMMUNITY HEALTH CENTERS

By: Name: Title: Chairperson, Board of Date: '1}~?/09: r ,

161732-1 10

161732·1

EXHIBIT "A"

LIST OF CLINICS

11

Furniture

Medical Services Equipment

EXHIBIT"B"

EQUIPMENT INVENTORY (AS OF FEBRUARY 28, 2009)

Infonnation Technology Equipment

12 161732-1

FIRST AMENDMENT OF ADMINISTRATIVE, EQUIPMENT, AND FACILITIES AGREEMENT BETWEEN

THE TRAVIS COUNTY HEALTHCARE DISTRICT AND

CENTRAL TEXAS COMMUNITY HEAL TH CENTERS

This First Amendment ("First Amendment") of the Administrative, Equipment and Facilities Agreement ("Agreement") is entered into by and between the Travis County Healthcare District, a hospital district created under Chapter 281 of the Texas Health and Safety Code ("Grantee"), and Central Texas Community Health Centers, a Texas non-profit corporation (the "Co-Applicant CHC"), effective upon the latest signature date below (the "Effective Date").

WHEREAS, the Parties entered into the Agreement under which the Grantee agreed to grant Access to the Clinics, the Equipment and the Administrative Assets to the Co-Applicant CHC for the sole purpose of delivering healthcare services to patients in accordance with the Co­Applicant Agreem~nt; and

WHEREAS, the Parties need to provide for additional terms and conditions pursuant to which Grantee !:,rrants Access to the Co-Applicant CHC concerning staffing matters; and

WHEREAS, Section 9.2 of the Agreement permits the Parties to amend the Agreement through a written instrument signed by both Parties; and

WHEREAS, the Paiiies desire to amend the Agreement to provide additional tenns concerning certain staffing matters;

Now, THEREFORE, for and in consideration of the mutual benefits received by these changes and other good and adequate consideration as specified herein, the Parties agree to the terms and conditions stated in this First Amendment.

I. AMENDMENT

1.0 The parties amend the Recitals to add, prior to the last paragraph that begins with "In Consideration," the following paragraph:

The Co-Applicant CHC may, from time to time, desire to secure the services of the employees of Grantee to perfonn services supp01iing the Co-Applicant CHC. Grantee is capable of providing such staff.

2.0 The parties amend Article II, entitled "RESPONSIBILITIES OF THE PARTIES," to add a new Section 2.5 to read as follows:

2.5 STAFFING. Dming the tenn of this Agreement, the Grantee may employ professional and administrative staff consistent with the approved budget, to perform services supporting the Co-Applicant CHC. All such employees are employees of the Grantee and are subject to the Grantee's

1

policies and procedures. Grantee sha11 be responsible for payment and provision of a11 wages, fringe benefits, and other compensation to its personnel. While such employees are assigned to perfonn services for the Co-Applicant CHC, all such employees shall also be subject to the policies and procedures of the Co-Applicant CHC but shall remain employed by Grantee. Co-Applicant CHC may request that any employee assigned to it be removed from his or her assignment to Co-Applicant CHC if in the good faith judgment of Co-Applicant CHC removal is in the best interest of Co-Applicant CHC.

3.0 The parties amend Article II, entitled "Responsibilities of Co-Applicant CHC" to add a new Section 2.11 to read as follows:

2.11. REIMBURSEMENT OF EXPENSES. Co-Applicant CHC shall reimburse Grantee for all reasonable costs, as provided in the budget, in providing the services described herein including, but not limited to, salaries and benefits of employees performing services for Co-Applicant CHC, lease expenses and other Administrative Services.

4.0 Except as provided herein, all terms, conditions, and provisions of the Agreement remain unchanged and in full force and effect.

IN WITNESS WHEREOF, this First Amendment has been executed and delivered on behalf of the Grantee and the Co-Applicant CHC by their duly authorized representatives in one or more counterparts, which shall together constitute one agreement.

TRAVIS COUNTY HEAL TH CARE DISTRICT

By: _ _ _________ _

Name: Carl S. Richie, Jr. Title: Chairperson, Board of Managers Date: , 2009

4236404.1 52 196.1

2

CENTRAL TEXAS COMMUNITY

HEALTH CENTERS

By: ___________ _ Name: Hal S. Katz Title: Chairperson, Board of Directors Date: , 2009

Draft – 1/29/09

January 29, 2009

Stephen C. Edmonds Executive Director City of Austin Employees’ Retirement System 418 E. Highland Mall Blvd. Austin, Texas 78752-3720

Re: Proportionate Retirement Agreement

Dear Steve:

The purpose of this letter is to set out the terms of the agreement between the City of Austin Employees’ Retirement System (COA ERS) and the Travis County Healthcare District (District) concerning COA ERS’s recognizing service credit earned by District employees in the District’s retirement system.

COA ERS and the District agree to the following:

(1) All employees of the City of Austin (City), who are also members of COA ERS, who are transferred by the City to the District in connection with the transfer of the Federally Qualified Health Center (FQHC) status will become employees of the District.

(2) On February 1, 2008, the District requested IRS approval of the District’s retirement plan under Section 401(a). The District agrees to continue to pursue that approval and will amend the plan or take such other action as reasonably necessary to obtain IRS plan approval.

(3) The District will re-submit its request to the U.S. Department of Labor (DOL), seeking an advisory opinion that the District’s affiliated section 501(c)(3) corporation is an agency or instrumentality of a governmental unit and will continue to pursue the issuance of that advisory opinion. The District will either amend the plan or take such other action as reasonably necessary to obtain issuance of a favorable advisory opinion or will determine that it cannot reasonably take action to amend the plan so that the affiliated section 501(c)(3) corporation meets both the DOL and FQHC requirements and will therefore not seek proportionate service credit for service earned in the section 501(c)(3) corporation under Section 803.204 of the Texas Government Code.

(4) Until such time as the IRS makes a final determination that the District plan is not a qualified plan under Section 401(a) of the Code, the IRS notifies COA ERS that recognition of the District plan is not approved, or the District gives COA ERS notice under paragraph (3) above, COA ERS will recognize service credit earned by District employees in the District's

Stephen C. Edmonds January 29, 2009 Page 2

retirement system as proportionate service credit for purposes of vesting and retirement eligibility under COA ERS.

If this letter accurately reflects the terms of our agreement, please sign and date the agreement below.

AGREED TO AS TO FORM AND SUBSTANCE:

__________________________________ Stephen C. Edmonds Executive Director City of Austin Employees’ Retirement System

__________________________________ Patricia A. Young Brown President and CEO Travis County Healthcare District

Elizabeth Gonzales Board Chair City of Austin Employees’ Retirement System

__________________________________ Carl S. Richie, II Chairperson Travis County Healthcare District Board of Managers

Retirement Proportionality Summary February 12, 2009

Current Situation:

The Travis County Healthcare District obtained legislation in 2007 to permit proportionate retirement between the District’s retirement plan and the City of Austin Employees Retirement System for all transitioning CCSD employees, including those transferring to employment with the 501(c)(3) corporation, Central Texas Community Health Centers (CTCHC) (d/b/a CommUnityCare). For proportionality to be implemented, there must be determinations that the plan is a qualified government plan under the Internal Revenue Code and that the CTCHC 501(c)(3) corporation that was created by the District is an “agency or instrumentality” of a governmental unit.

The federal agencies that typically make these determinations, the IRS and the U.S. Department of Labor, have declared a moratorium on issuing determinations. Since the moratorium makes it impossible to obtain these determinations prior to the date of transition, March 1, the planned retirement system proportionality for those City of Austin employees transitioning directly into employment with CommUnityCare is now being questioned by the City of Austin Employees' Retirement System (COA ERS). COA ERS has indicated that it will recognize proportionality for employees of the District, since the District is clearly a governmental entity.

Proposed Interim Resolution:

All transitioning CCSD employees will become Travis County Healthcare District employees on March 1. Those employees who were scheduled to become employees of CommUnityCare will instead become District employees and assigned to staff the CommUnityCare health center system. This plan provides the following for all transitioning employees who will be assigned to CommUnityCare:

� Employees will receive the salary offered in December 2008; � Employees will receive the benefits they selected during the open enrollment period in

December 2008/January 2009 � Employees will also participate in the District’s retirement program – both the 401(a)

retirement plan and the voluntary 457 deferred compensation plan; and � This resolution preserves the employees’ proportionate service in the COA ERS.

CommUnityCare will continue as a nonprofit corporation as originally planned. The Co-Applicant Agreement, outlining the respective roles and responsibilities of the District and CommUnityCare, will remain in place and has not changed. The District and CommUnityCare’s current Administrative, Equipment and Facilities Agreement will include a provision for the assignment of the staff for the operations and administration of CommUnityCare.

The FQHC Board will continue to perform the functions and responsibilities as an FQHC governing body as described in its Bylaws and the Co-Applicant Agreement. The Board has the responsibility to select, discipline and dismiss the CEO.

The CEO will be an employee of the District and will be assigned as the CEO for CommUnityCare, with the direct responsibility for the supervision and control of the District-assigned employees for the services they provide to the CommUnityCare health centers. The CEO will continue to be responsible for the management and day-to-day operations of the CommUnityCare health centers.

Employees assigned to CommUnityCare for the delivery of healthcare services will continue implementing the transition to the new CommUnityCare health center identity, the new systems and the new approach of the system. As employees of the District they are subject to the District’s policies and procedures. As employees assigned to perform services for CommUnityCare, they are also subject to the appropriate policies and procedures of CommUnityCare.

This resolution is intended to serve as a bridge until such time as the federal approvals are obtained, and COA ERS agrees that retirement proportionality is available for CommUnityCare 501(c)(3) corporation employees. Once that occurs, the District would then expect to transfer the employees to the CommUnityCare 501(c)(3) corporation and the employees would maintain retirement proportionality.

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 5 Discuss and take appropriate action regarding the purchase of the following insurance:

(a) Property insurance; (b) General liability insurance; (c) Professional liability insurance; (d) Auto liability insurance; (e) Umbrella coverage; (f) Crime coverage; and (g) Workers’ compensation insurance.

(Back-Up – Powerpoint & Recommendation)

Travis County Healthcare District

Insurance Coverage Recommendations for TCHD and

CommUnityCare

Process

• Met with City of Austin risk management staff and District’s insurance agent, Frost Insurance

• Determined types of insurance coverage to pursue based on scope of operations for both entities and coverage already provided based on Federal Tort Claims Act, Texas Tort Claims Act, etc.

Process

• Provided information to Frost on operations: – Number, size of clinics– History of operations– Number, types of employees / employment

practices and trends – Types of services provided, number of visits– Contractual agreements with third parties

Process

• Frost approached 17 different insurance companies for various coverage lines

• Some declined to quote for various reasons – in-house company turnover, lack of time, etc.

• Frost ruled out quotes that were not competitive and narrowed our consideration to two: Hartford/Landmark and CNA

Recommendation is Hartford/Landmark

Property $24,324General 14,642Professional 40,128Auto 2,606Umbrella 2,778Crime – CTHC 2,886Directors/Officers – CTHC 14,500Total $101,864

CNA Alternative• All or none – had to cover both entities• CNA higher in all categories - $189,692 vs.

$101,864• Professional liability especially higher - $96,259

(general + professional) vs. $54,770 • Professional liability included “gap coverage” for

all CTCHC activities, including those not covered by FTCA (primarily 3rd party contracts)

• Instead recommend 3rd party contracts be covered by requiring insurance coverage from 3rd party and indemnification of TCHD

Requested Action

• Authorization to negotiate and execute recommended insurance coverage

• Authorization to negotiate and execute adding CTCHC employees to District’s workers’ comp policy through Texas Mutual – estimated annual cost of $100,000

Travis County Healthcare District / Central Texas Community Health CentersCurrent Insurance Coverage and Coverage Recommended to TCHD Board 2/12/09 (does not include Workers Comp)

Coverage Now in Place (Annual Premiums)

TCHD Property 12,575$ General liability 2,100$ Employee benefits liability 500$ Directors & Officers/Crime 15,600$ Commercial Auto 675$ Total in place 31,450$

Recommended Coverage (Annual Premiums)

Hartford CNA Hartford CNA NotesProperty 24,324$ 33,643$ Property quotes reflect TCHD ownership of assetsGeneral 3,993$ 10,752$ 10,649$ 85,507$ CNA quotes for general liability include professionalProfessional (thru Landmark) 40,128$ Hartford professional liability quote also covers CTCHCAuto (inc. Hired&Non-owned) 2,269$ 3,983$ 337$ 350$ Umbrella 1,313$ 5,350$ 1,465$ 26,490$ Crime 2,886$ 9,116$ Directors & Officers (thru Chubb) 14,500$ 14,500$ Not included in recommended action - FQHC board

will approve separatelyTotals 72,027$ 53,728$ 29,837$ 135,963$

Comparision of Quotes

CNA total for both entities 175,191$ excluding CTCHC D&O thru Chubb CNA quote is "all or none" - coverage selected must be Hartford total for both entities 87,364$ excluding CTCHC D&O thru Chubb for both entities.Difference 87,827$

.

TCHD CTCHC

already in placealready in place

Travis County Healthcare District Board of Managers Meeting

February 12, 2009

Agenda Item 6 Confirm the next regular Board meeting date, time, and

location. (No Back-Up)