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File Number: 14-233 <br />memorializes conditional payments of $1,000,000 per year for three years, for a total of <br />$3,000,000, from the City to the Alameda Health System (AHS) to subsidize the emergency <br />services department and acute in-patient services at San Leandro Hospital. The term of the <br />Agreement commences June 30, 2014, the due date of the first $1,000,000 grant payment, <br />and continues until June 30, 2016, the date of the final $1,000,000 grant payment. The <br />Agreement automatically terminates thereafter. The payments are conditioned upon <br />Alameda Health System maintaining an emergency services department and acute in-patient <br />services at San Leandro Hospital. If either or both of those two services cease to exist at San <br />Leandro Hospital during the three-year period, the City may terminate the Agreement , and any <br />forthcoming subsidy payments. Although the City has no control now, and will not gain any <br />control over Alameda Health System or the management and operation of San Leandro <br />Hospital by approving the Agreement , it was the City Council’s stated intent on November 5, <br />2012 that the subsidy should assist Alameda Health System in the transition of San Leandro <br />Hospital from its previous management under Sutter Health to AHS , and that emergency <br />services and acute in-patient services must continue at the San Leandro Hospital, or else the <br />subsidy payments would terminate. The negotiated agreement captures that intent. <br />Previous City Council Action <br />On November 5, 2012, the City Council by motion approved an agreement in principle to grant <br />a financial subsidy of up to $1,000,000 per year for three years in support of San Leandro <br />Hospital, and further authorized the City Manager to enter into time limited negotiations with <br />the Alameda County Medical Center to reach an agreement , subject to the approval of the <br />City Council, on the terms of the subsidy. <br />Legal Analysis <br />The City Attorney assisted in the negotiations , and review of the DRAFT agreement , and finds <br />that it meets the City Council’s action on November 5, 2012, such that it is approved as to <br />form. <br />Fiscal Impacts <br />The $1,000,000 per year over the next three years for a total of $3,000,000 will be paid out of <br />Account No. 010-14-010, General Fund unrestricted reserves. It is the Finance Director’s <br />opinion that the City has enough in this account to meet this obligation for the agreed upon <br />term. The use of the unrestricted reserve will cause the City to fall short of its Reserve <br />Guideline to retain a 20 percent reserve in its operating expenditures in the forthcoming fiscal <br />year. <br />ATTACHMENT <br />·Draft of the Hospital Services Grant Agreement <br />PREPARED BY: Richard D. Pio Roda, City Attorney <br />Page 2 City of San Leandro Printed on 6/10/2014