HomeMy WebLinkAboutResolution No. 12-7323RESOLUTION NO. 12 -7323
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY APPROVING A
REIMBURSEMENT AGREEMENT BY AND BETWEEN CITY OF DOWNEY AND
DOWNEY REGIONAL MEDICAL CENTER HOSPITAL, INC. TO ALLOW FOR THE
REIMBURSEMENT OF COSTS AND FEES INCURRED BY THE CITY OF DOWNEY
IN THE NEGOTIATION AND ADMINISTRATION OF A DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT THAT
FACILITATES THE FINANCING OF THE OPERATION OF THE DOWNEY REGIONAL
MEDICAL CENTER
WHEREAS, the City of Downey is a municipal corporation and a charter city organized
and existing under the Constitution of the State of California ( "City "); and
WHEREAS, City is the owner of the real property located at 11500 Brookshire Avenue,
Downey, California (the "Premises "); and
WHEREAS, City entered into a Lease of the Premises between City of Downey and
Downey Community Hospital Foundation, dated as of February 8, 1983, as extended for a
further 44 years by letter dated October 25, 1988, and as amended by an Amendment of Lease,
dated August 11, 2009 (collectively, the "Lease "); and
WHEREAS, Downey Regional Medical Center Hospital, Inc. ( "DRMC ") is the successor
in interest to Downey Community Hospital Foundation under the Lease; and
WHEREAS, certain lenders (collectively, the "Lenders ") have entered into or are entering
into certain financing transactions with DRMC, and, to facilitate such financing, DRMC has
requested that City enter into a Deed of Trust, Assignment of Leases and Rents, and Security
Agreement ( "Deed of Trust ") for the benefit of the Lenders; and
WHEREAS, City has significant costs, and may incur significant future costs,
including without limitation costs of in -house staff and attorney reviews, costs of outside counsel
services, and costs of acquisition of title insurance) in connection with the evaluation,
negotiation, and implementation of the Deed of Trust, the evaluation of the bankruptcy
proceedings and filings of DRMC, and other associated financing transactions ( "Costs "); and
WHEREAS City and DRMC agree that City should not be required to bear the Costs,
and that past and future Costs should be reimbursed by DRMC to City in the manner provided
by the Reimbursement Agreement attached hereto as Attachment 1.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and determines that the activities contemplated in
the Reimbursement Agreement have no likelihood of causing any environmental impact
because they will result in no physical change in the environment, and are therefore not subject
to and are exempt from analysis under the California Environmental Quality Act.
SECTION 2. The City Council DOES HEREBY APPROVE the Reimbursement
Agreement substantially in the form attached as Attachment 1.
RESOLUTION NO. 12 -7323
PAGE TWO
ATTEST:
SECTION 3. The City Clerk shall certify the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 1� day of February, 2012.
A
RO C. BROSS■ER, Mayor
ADRIA M. JIMEF&IEZ,'CMC
City Clerk
I HEREBY CERTIFY that the foregoing is a true copy of a Resolution adopted by the
City Council of the City of Downey at a regular meeting thereof held on the 14th day of
February, 2012, by the following vote, to wit:
AYES: COUNCILMEMBERS: Guerra, Marquez, Vasquez, Gafin, Mayor Brossmer
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN: COUNCILMEMBERS: None
ADRIA M. J1MENI7, CMC
City Clerk —
REIMBURSEMENT AGREEMENT
TH REIMBURSEMENT AGREEMENT ( "Agreement ") is made and entered into as of
February I , 2012 by and among CITY OF DOWNEY, a municipal corporation ( "Landlord "),
DOWNEY REGIONAL MEDICAL CENTER HOSPITAL, INC. (d/b /a Downey Regional
Medical Center), a non - profit public benefit corporation organized under the laws of the State of
California (together with any successors and assigns, "Company ").
A. Landlord is the owner of the real property located at 11500 Brookshire Avenue,
Downey, California, and as more fully described in Appendix A attached hereto (the
"Premises ").
B. Landlord has entered into that certain Lease between City of Downey and
Downey Community Hospital Foundation, dated as of February 8, 1983, as extended for a
further 44 years by letter dated October 25, 1988, and as amended by an Amendment of Lease,
dated August 11, 2009, with respect to which a Memorandum of Ground Lease has been
recorded with the Los Angeles County Recorder's Office (as the same has been amended,
assigned, modified, substituted or extended, the "Lease "). Company is the successor in interest
to Downey Community Hospital Foundation under the Lease and the tenant thereunder.
C. Certain lenders (collectively, the "Lenders ") have entered into or are entering into
certain financing transactions with Company, and, to facilitate such financing, Company has
requested that Landlord enter into a Deed of Trust, Assignment of Leases and Rents, and
Security Agreement (collectively, the "Landlord Deed of Trust ").
D. Landlord has incurred significant costs, and may incur significant future costs,
including without limitation costs of in -house staff and attorney reviews, costs of outside counsel
services, and costs of acquisition of title insurance) in connection with and/or relating to the
evaluation, negotiation, and implementation of the Landlord Deed of Trust, the evaluation of the
bankruptcy proceedings and filings of Company, and the financing transactions generally
described in Recital C ( "Costs ").
E. Landlord and Company (collectively, the "Parties ") agree that Landlord should
not be required to bear the Costs, and that past and future Costs should be reimbursed by
Company to Landlord.
NOW, THEREFORE, in consideration of Landlord's facilitation of the financing
transactions generally described in Recital C, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Prior to Landlord's execution of the Landlord Deed of Trust, Company shall
reimburse to Landlord, in good and sufficient funds, all Costs incurred by Landlord, in an
amount not to exceed forty thousand dollars ($40,000).
2. Following Landlord's execution of the Landlord Deed of Trust, Company shall
reimburse to Landlord any additional Costs incurred by Landlord ( "Future Costs ") within thirty
(30) days of receipt of an invoice therefor. Invoices shall be presumed received by Company
three (3) days after mailing by Landlord.
CHICAGO / #2280652.3
3. Prior to execution of the Landlord Deed of Trust, Company shall deposit fifteen
thousand dollars ($15,000) into a trust account to be maintained by Landlord, from which
Landlord may deduct Future Costs if they are not timely paid by Company in accordance with
Paragraph 2.
4. Company shall fully indemnify, defend and hold Landlord and Landlord's agents,
employees, consultants and contractors, harmless from and against any claim, action, cause of
action, demand, liability, obligation, loss, cost, damage or expense (including actual attorneys'
fees and costs) which may arise or which Landlord or Landlord's agents, employees, consultants
and contractors, may sustain or incur by reason of or in connection with any representation or
warranty of Landlord appearing in the Landlord Deed of Trust, provided however that Company
shall have no responsibility, indemnity obligation or liability for any act or representation of
Landlord or Landlord's agents, employees, consultants and contractors, that constitutes a breach
of the Lease.
5. All notices and invoices hereunder shall be in writing, sent by certified mail,
return receipt requested, to the respective parties and the following addresses:
If to Company at:
If to Landlord at:
31134865v2
Downey Regional Medical Center
11500 Brookshire Avenue
Downey, CA 90241
Facsimile: (562)904 -5309
Attention: Rob Fuller
Executive Vice President and Chief Operating Officer
City of Downey
11111 Brookshire Avenue
Downey, CA 90241
Attn: Attn: City Manager
Tel: (562) 904 -7284
Facsimile: (562) 904 -6388
6. Miscellaneous. This Agreement may be executed in any number of several
counterparts, shall be governed and controlled by, and interpreted under, the laws of the State of
California, without regard to internal laws of conflicts.
(Signature pages follow.)
2
IN WITNESS WHEREOF, intending
caused this Reimbursement Agreement to be
mentioned.
COMPANY:
LANDLORD:
CHICAGO/ #2280652.3
Signature Page to Reimbursement Agreement
to be legally bound, each of the parties have
duly executed the day and year first above
DOWNEY REGIONAL MEDICAL
CENTER HOSPITAL, INC. (d/b /a Downey
Regional Medical Center)
B T 1
Name: w6' P ,E . EGG Lc e72___
Title: ,/y° t9
CITY OF DOWNEY, a municipal
c• .o. ion
By:
Name:
Title:
r
CHICAGO / #2280652.3
APPENDIX A
COPY OF LEASE OF PREMISES
See attached.
A -1
y _ • 4
_ `r. • •r •
• •
LEASE
BETWEEN
CITY OF DOWNEY AND
DOWNEY COMMUNITY HOSPITAL FOUNDATION
EXHIBIT 2
t: J
1 •
TABLE OF CONTENTS
Paragraph P age
1. Demised Premises 3
2. Term 4
3. Rent 5
A. Basic Rental 5
B. Replacement and Repair Fund 5
C. Rent Subsequent to Termination of Agreement. 6
4. Indemnification 7
5. Public Purpose 8
A. Maintenance of JCAH Accredited Hospital 8
B. Limit on Rates 9
C. - Daily Hospital Service Charge 9
D. Salaries 11
E. Bit 12
F. Reporting After Defeaeance 14
6. Obligations of Lessee 15
7. Improvements 16
8. Liens' 19
9. Taxes 20
10. Utilities 21
11. Insurance 21
12. Co..,c..kumv ci on 22
13. New-C..-ce. Structures 23
14. Assignment, Sublet and Encumbrances 23
15. Compliance with Law 24
F
Paragraph Page
16. Nonprofit Status 25
17. Board Membership and Inspection Rights 25
18. Surrender -of Premises 27
19. Holdover 27 -
20. Easements and Mineral Rights 28
21. Default 29
22. Defeasance 30
23. Notice 30
24. Prior Lease 31
25. Other Agreements 31
26. Waiver 31
27. Applicable Law 31
28. Successors and Assigns 31
29. Severability 31
30. Entire Agreement 32
31. Consent of Lessor 32
32. Reimbursement 32
LEA S E
THIS LEASE entered into this 8th day of February
1983, between the CITY "OF DOWNEY, a municipal corporation,
(hereafter referred to as "Lessor" or "City ") and DOWNEY COMMUNITY
HOSPITAL FOUNDATION, (hereinafter referred to as "Lessee" or
"Hospital ") is made with reference to the following facts.
A. Lessee is a nonprofit corporation, no part of
the net earnings of which can, under its articles of incor-
poration, inure to the benefit of any private individual.
Lessee has for many years maintained and operated a hospital in
Downey for the treatment of the sick and injured, without regard
to race, creed or color. Any earnings in excess of its necessary
expenses have been devoted to the acquisition of additional
hospital facilities to improve the quality of hospital care
provided to the public, and no private person has ever received,
directly or indirectly, any part of the earnings of the hospital.
B. The people of Downey at an election held on
October 29, 1963, expressed their desire to have a municipal
hospital.
C. On March 9, 1964, the City Council of Downey
adopted a Resolution No. 1340 declaring its support of a City
of Downey hospital.
D. Lessor and the County of Los Angeles by Agreement
dated May 23, 1967 entered into a Joint Powers Agreement for
the creation of a City of Downey Community Hospital Authority
for the construction and maintaining of a general hospital
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within the City of Downey. By Agreement dated August 3, 1967
(hereinafter called the "Ground Lease ") the Lessor leased that
certain parcel of real property described in Exhibit A attached
hereto and made a part hereof (hereinafter referred to as the
"Property ") to the City of Downey Community Hospital Authority
(hereinafter called the "Authority ") and by an Agreement dated
August 3, 1967 (hereinafter called the "August 3, 1967 Lease ")
the Authority agreed to construct a hospital building upon said
site and lease it back to the Lessor under the terms and condi-
tions contained in said lease.
E. Lessee has transferred to Lessor all of the
Lessee's right, title and interest in and to the Stewart and
Gray property owned by the Lessee, and transferred to Lessor
the Fifth Street property owned by Lessee which properties are
located in the City of Downey as described in the October 16,
1968 Lease.
F. By agreement dated October 16, 1968 (hereinafter
called the "October 16, 1968 Lease "), Lessor leased to the
Hospital the general hospital and Property for a term of 35
years.
G. On November 24, 1981 the City Council of the
City adopted Resolution No. 4046. Resolution No. 4046 purported
to grant, convey and transfer to the Hospital all of the City's
reversionary interests in the Property and general hospital and
approved an amendment to the October 16, 1968 Lease entitled
"Addendum to Lease and Grant of Reversionary Interests ".
• •
H. On May 11, 1982, the City Council of the Lessor
adopted Resolution No. 4100 for the purpose of rescinding the
purported grant of its reversionary interests to the Hospital
and other agreements contained in Resolution No. 4046.
I. Lessor and the Hospital desire to insure that
high - quality medical care will continue to be available to the
citizens of the City for a period of time longer than that pro-
vided for in the October 16, 1968 Lease. The Lessor and the
Hospital now agree that they should enter into a new long -term
lease for an initial term of 55 years with an option for an
additional 44 years, and on other terms and conditions that
recognize the rapidly changing health care environment.
J. It is the intention of the Lessor and the Hospi-
tal that the Hospital shall have the right to quiet enjoyment
of the Property, general hospital and any other real and personal
property located on the Property, and use thereof in accordance
with the terms of the long -term lease.
NOW, THEREFORE, in consideration of the respective
covenants of the parties, and subject to the terms and condi-
tions of the above- referred to ground lease from the Lessor to
the Authority and the leaseback from the Authority to the Lessor:
1. Demised Premises.
A. Lessor does hereby lease to Lessee: (i) the
Property_ described in Exhibit "A "; (ii) the one - hundred fifty -
one bed general hospital (more fully described in Exhibit "B ",
attached hereto and made a part hereof and hereinafter referred
to as the "Hospital Facility "); (iii) Group 2 and Group 3 equip-
ment as defined by the California State Department of Public
Health to the extent such equipment was purchased or leased
for, and was originally located within the Hospital Facility,
and all other equipment purchased or leased by the City. and
located on the Property (hereinafter collectively referred to
as the "Equipment "); and (iv) all other buildings, improvements
and fixtures owned or held by Lessor and now located on the
Property, except for buildings, improvements and fixtures added
or constructed by Lessee subsequent to the date of the original
certificate of occupancy for the Hospital Facility.
B. Lessor hereby grants, conveys and transfers to
Lessee all of Lessor's right, title and interest in and to all
builds, improvements, additions, fixtures, personal property
and equipment purchased or leased, other than a lease from
Lessor, by Lessee and constructed or added to the Property,
Hospital Facility or other health care facility located on the
Property, subsequent to the date of issuance of the original
certificate of occupancy for the Hospital Facility. It is
understood and agreed that Lessee shall retain title to, and
from time to time may remove or replace, any personal property
and equipment as provided in Paragraph 7 of this Lease. Said
PJ.w Ly, Health Facility, Equipment, and other buildings,
i,►y 1 - Ls and fixtures, excluding those items described
above to.which Lessee holds title or leases, shall hereinafter
be collectively referred to as the "Demised Premises."
2. Term.
A. The initial term of this lease is for a period
, . •
of fifty -five (55) years from the date hereof. Lessee may extend
the term of this Lease for an additional term of forty -four
(44) years on the same terms and conditions as herein provided
by giving written notice to Lessor of Lessee's exercise of such
option by delivering such notice to Lessor at any time prior to
the expiration of the original term hereof.
B. Unless otherwise provided, whenever the phrase
"term of this lease" is used, it shall mean the initial 55 year
term plus the 44 year optional term.
3. Rent.
A. Basic Rental. Lessee shall pay as rental a sum
of money sufficient to reimburse the Lessor for all Base Rental
and Additional Rental required to be paid by Lessor under the
provisions of Section 4 of said leaseback from the Authority to
Lessor, rental payments shall be semi - annual and shall be paid
to Lessor sufficiently in advance of Lessor's obligation to the
Authority so that Lessor may make timely payment to the Authority.
The terms "Base Rental" and "Additional Rental"
shall have the meaning provided in Section 4 of the August 3,
1967 Lease.
B. Replacement and Repair Fund. In addition thereto
there shall be created by Lessee a special separate fund for
major replacement and repairs including replacement and repairs
of major_ equipment whether owned by Lessor or Lessee. Said
fund shall be created by the deposit therein of $50,000.00
concurrently with the execution of this Lease and at the end of
any year thereafter that said major replacement and repair fund
• •
has less than $50,000.00 in it Lessee shall deposit in said
fund the difference between the amount in said fund and
$50,000.00 but in no event shall Lessee be required to deposit
more than $10,000.00 in said fund for any one year. The major
replacement and repair fund shall be kept in a separate bank
account subject to withdrawal for the purpose of major replace-
ments or repairs upon approval by Lessor. In the event of a
termination of this lease by default of Lessee said funds shall
become the property of Lessor.
C. Rent Subsequent to Termination of Agreement. On
the termination of the Agreement between Lessor and the Authority
and the termination of Lessor's liability to make payments of
whatsoever character under said Agreement Les - see shall
annually to Lessor One Dollar ($1.00) plus a sum of money suf-
ficient to reimburse the Lessor each year for all monies required
to be paid by Lessor for all taxes; assessments of any nature
whatsoever, including but not limited to, excise taxes, ad
valorem taxes, ad valorem and specific lien and special assess-
ment and gross receipts taxes if any levied upon the subject
matter of this lease; expenses reasonably incidental to admin-
istering this lease; insurance which is reasonable and proper;
and all costs and expenses the Lessor may incur in consequence
of any ci$ult by the Lessee under this lease, including reason-
able aLLw.4..,Am4To fees and costs of suit or action at law to enforce
the terms and conditions of this lease. It is the intent of
this paragraph that there shall be no net cost to Lessor for
the operation and maintenance of this facility during the term
of this lease.
-6-
•
4. Indemnification.
A. If this lease should be held invalid, for any
reason, by a final court decision, Lessee may remove its personal
property. Fixtures, as defined in Civil Code Section 660, even
though purchased and installed by Lessee, shall remain as part
of Lessor's property. If this lease be held invalid for any
reason, by a final court decision, there exists the possibility
that an illegal expenditure of public funds would have occurred.
For the separate, independent consideration of the execution
and delivery of this document by Lessor to Lessee, Lessee agrees
to indemnify and keep and save Lessor, its officers, agents and
employees, individually and collectively, free and harmless
from any and -all liability, claims or demands which may be
asserted against them by reason of any alleged improper or
illegal expenditure of public funds, in any manner arising out
of this lease.
B. The Lessee shall at all times keep and save
Lessor, its officers, agents and employees, free and harmless
from any and all claims or demands including reasonable costs of
defense which may arise by reason of any negligence of the Lessee,
and any of its agents, servants or employees, in the conduct and
maintenance of its business or in the condition of or mainte-
nance of the Demised Premises together with all buildings,
structures and improvements located on the Property. In partial
performance of such obligation, the Lessee, throughout the term
of this Lease, shall keep in force and effect with a company or
companies authorized to transact such business in the state or
other insurance companies providing such coverage which are accept-
able to both Lessor and Lessee a policy or policies of public
liability insurance, property damage insurance and malpractice
insurance, naming Lessor 'Si an additional insured and covering
damage to property of others in any accident, in the minimum
amount of $10,000.00, and death of or injury to one or more
persons in any accident or incident in the minimum amount.of
$1,000,000.00.
5. Public Purpose. It is recognized that Lessee is
fully as concerned as Lessor that its operation should at all
times subserve a proper public purpose. In order to assure
that the use of the facilities furnished by Lessor hereunder
shall at all times be for a proper public purpose, the Lessee
hereby agrees to the following conditions:
A. Maintenance of JCAH Accredited Hospital. Lessee
shall maintain a hospital on and within the leased property and
facilities which shall, as a minimum, be operated in accordance
with the standards set forth in the Accreditation Manual for
Hospitals as are now and hereafter shall be adopted and applied
by the Joint Commission on Accreditation of Hospitals, or its
duly constituted successor. The continued accreditation of
said hospital by the Joint Commission on Accreditation of Hospi-
tals shall be prima facie evidence of the fulfillment by the
Lessee of this condition. If the Lessee loses accreditation
for said hospital, the City Council may, by majority vote,
either:
(i) Waive the requirements of this paragraph to
permit specific exemptions to the standards set forth in the
Accreditation Manual for Hospitals referred to herein; or
(ii) Terminate this Lease; provided, however, that
Lessor may not terminate this Lease unless a breach of this
Paragraph SA continues beyond the longer of (1) the period
provided in Paragraph 21 of this Lease; (2) the period specified
by the JCAH to correct any deficiencies contributing to the
loss of accreditation (provided Lessor is furnished evidence by
Lessee that Lessee is proceeding in good faith to correct defi-
ciencies); or (3) the period required to exercise all of Lessee's
administrative and judicial appeal rights relating to loss of
JCAH accreditation.
B. Limit on Rates. Lessee shall charge fair and
reasonable rates at all times for all services rendered in such
hospital. The level of rates shall be such that the annual
income in excess of expenses shall not exceed the requirements
for exemption specified in Section 214 of the Revenue and Taxa-
tion Code of the State of California. If the Lessee loses this
exemption the City Council may, by majority vote, either:
1. Waive the requirements of this paragraph; or
2. Terminate this Agreement subject to the provisions
of paragraph 21 of this Agreement.
C. Daily Hospital Service Charge.
_ (i) The daily hospital service charge to be charged
by Lessee for the performing of, or providing of, any services
at, through or from said hospital shall be only such daily
service charge as has been approved by the City Council; provided,
however, that once such daily service charge as has been approved
by the City Council, such charge may be reduced by Lessee without
prior written approval of Lessor but shall be subject to the
approval of Lessor. In determining the daily service charge to
be established, Lessee or Lessor both shall be guided by, without
being bound by, the average of such charges for like specific
services at the St. Francis Hospital of Lynwood, Presbyterian
Intercommunity Hospital, California Hospital, The Hospital of
the Good Samaritan, and Cedars -Sinai Hospital. The daily service
charge approved by the City Council of Lessor may be higher or
lower than the daily service charge of said listed hospitals.
(ii) In determining the charge for the specific ancil-
lary services Lessee and Lessor both shall be guided by, without
being bound by, the "Guiding Principles for Hospitals" of the
Hospital Council of Southern California.
(iii) The Lessor acting through its City Council shall
have the right to review any and all rates charged by the Lessee
to determine whether or not this criterion is being met. The
Lessee on or before July 1 of each year shall file with the
City Council a comparison of the rates charged by Lessee with
those charged by the above listed hospitals and at all other
times shall notify the City Council in writing of any proposed
rate changes approved by the Board of Directors of Lessee. At
no times shall the Lessee be required to charge rates less than
similar charges of the above named hospitals.
(iv) The City Council shall have no discretion to
withhold approval of new charges proposed by the Hospital if
• •
the proposed charges are equal to or less than the average of
similar charges of the benchmark hospitals referred to in this
Paragraph 5C. The Chief Executive Officer of the Hospital
shall submit a certificate setting forth the charges of the
benchmark hospitals in order that the City Council may make
this determination.
(v) If the Hospital wishes to establish a charge
which is higher than the average charge at the benchmark hospi-
tals, Lessor's City Council shall have the right to request any
information or documents which it believes necessary or desir-
able in order to evaluate the proposed increase.
(vi) If the Chief Executive Officer of the Hospi-
tal- submits -a certificate to Lessor's City Council which states
that the Hospital is unable to obtain current information from
the benchmark hospitals referred to in this Paragraph 5 concern-
ing charges, the Hospital agrees that it will not impose rates
or charges which would result in net revenues to the Hospital
which exceed the levels permitted by Section 214 of the Califor-
nia Revenue and Taxation Code or the comparable provisions of
any successor statute.
D. Salaries.
(i) On or before the commencement of the term of the
lease, Lessee shall file with the City Council of Lessor the
salary range for the classes of employees set forth in Exhibit
"C" attached hereto and by this reference made a part hereof.
Such salary ranges shall be subject to the approval of the City
Council of Lessor. Any time after the filing of such salary
r
• •
ranges with the City Council of Lessor, the same shall not be
increased by Lessee without approval of Lessor. Notice of any
proposed increase shall be given in writing to Lessor. In the
event Lessor does not disapprove such proposed increase within
thirty days after receiving notice thereof, such increase shall
be deemed approved. In the event any salary range as first
filed or as proposed to be increased is disapproved by Lessor,
such salary range shall be established at a level approved by
the Lessor. Salary ranges established shall reflect the recom-
mendations of the Hospital Council of Southern California.
(ii) Lessor's City Council shall have no discretion
to disapprove salary ranges which do not exceed by more than
ten percent (10 %) those guidelines published by the Hospital
Council of Southern California. The Chief Executive Officer of
the Hospital shall submit a certificate setting forth the guide-
lines published by the Hospital Council in order that Lessor's
City Council may make the determination as to the relationship
between a proposed increase in salary range and the ranges
proposed by the Hospital Council. If the Hospital requests an
increase in a salary range which exceeds by more than 10% those
guidelines published by the Hospital Council, the City Council
shall have the right to request any information or documents it
deems necessary or desirable in order to evaluate the proposed
salary range increase.
E. Budget.
(i) Lessee shall establish a fiscal year commencing
on July 1. On or before June 1 of each year, Lessee shall
• •
submit to the City Council of Lessor Lessee's proposed budget
for the ensuing fiscal year in a form consistent with Exhibit D
attached hereto and incorporated herein. This proposed budget
shall clearly demonstrateLessee's financial soundness and
ability to make lease payments.
(ii) Lessee shall be deemed to have demonstrated its
fiscal soundness and ability to make lease payments, and Lessor's
City Council shall have no discretion to propose recommended
changes or disapprove the proposed budget, if:
(1) Cash flow Available for Lease Payments (defined
below) as reflected on the proposed budget equals or exceeds
one hundred fifty percent (150 %) of the lease payment for that
year-; and_
(2) Cash flow Available for Lease Payments during
the most recent complete fiscal year of the Hospital equaled or
exceeded one hundred fifty percent (150%) of the lease payment
made in that year.
(iii) For purposes of this paragraph 5E, the phrase
"Cash Flow" shall mean for any period the revenues of the Hospi-
tal derived from the operation of its hospital facilities for
such period, less all expense items properly chargeable against
that revenue except depreciation which the Hospital is required
to take on the leased hospital facilities for financial reporting
other non -cash items. For purposes of this Para-
graph 5E the phrase, "Cash Flow Available for Lease Payments"
for any period shall mean the cash flow of the Hospital for
that period, plus payments made to Lessor in accordance with
the Lease during that period. The ratio of 150 percent (150%)
is predicated upon the formula used for bond indenture solvency
by Connecticut General Life Insurance Company.
(iv) The Hospital's Chief Executive Officer shall
certify that the lease payments and Cash Flow Available for
Lease Payments as set forth in the proposed budget are correct.
If the two tests set forth above are not met, Lessor's City
Council shall be entitled to make reasonable inquiries concern-
ing the Hospital's budget and the Hospital shall respond to
such inquiries and under the provisions of the lease shall be
obligated to revise its budget to establish its financial sound-
ness.
F. Reporting After Defeasance.
Upon defeasance of the bonds issued pursuant to
the Joint Powers Authority Agreement between Lessor and the
Authority, the daily hospital service charge, salary and budgetary
reporting requirements of Lessee as set forth in these paragraphs
SC, D and E respectively shall be modified to thereafter only
require the furnishing of (a) annual financial statements prepared
by an independent Certified Public Accountant; and (b) whenever
the hospital changes its daily service charge'or salaries, a
written determination prepared by an independent certified public
accountant acceptable to Lessor, as to whether the hospital
daily service charge and salaries are within the guidelines set
forth in paragraphs 5C and D. After defeasance, the Hospital
shall not be required to submit its budget to Lessor's City
Council for approval; provided, that Hospital's budget may be
• •
included as part of Exhibit "E." If the written determination
concludes that the daily Hospital service charge or salaries
are within the guidelines set forth in Paragraphs SC and 5D,
then Lessor's City Council shall have no discretion to withhold
approval of such charges or salaries. Said written determina-
tion shall include supporting data which provides the basis
for the certification. The form of the written determination
shall be substantially consistent with Exhibit "E ".
6. Obligations of Lessee. It is agreed that, with-
out any limitations upon the provisions of other paragraphs
hereof, Lessee shall maintain and operate upon the leased prop-
erty a hospital for the treatment of the sick and injured dur-
ing the term of this lease, and in particular shall:
A. Be responsible for the management of said hospital
and shall bear any losses or operating deficits resulting from
such management.
B. Operate such hospital for the primary benefit of
the residents of Downey in all reasonable respects, and shall
give preference in admission to such residents in nonemergency
cases provided, however, that this subparagraph shall not oper-
ate to limit in any way Lessee's ability to admit to the Hospi-
tal Facility or provide care to Medi -Cal or Medicare patients
pursuant to any contractual or any other arrangement with the
State of_California or the United States of America; provided,
further, that this subparagraph shall not operate to limit in
any way Lessee's ability to admit or provide care to Medi -Cal
-15-
WILMS
E. Provide without cost to the Lessor all furnish-
or
Medicare patients in order to obtain any local, California
or federal approval or to comply with any local, California or
federal law or regulation.
C. Operate such hospital without regard to the
race, creed or color of its patients;
D. Provide facilities for an emergency service of
reasonable scope for the residents of Downey and others present
in the City;
ings, equipment, supplies and services not otherwise furnished
by the Lessor necessary to operate and maintain said hospital
in accordance with the standards of the Joint Commission on
A0. of Hospitals.
7. Improvements.
A. Lessee shall have the exclusive use of all build-
ings and improvements which are now or which may hereafter be
placed upon the leased property for health care and other related
purposes. Lessee may, at its own expense and risk, erect,
maintain and operate upon the leased property additional build-
ings, and improvements for health care and other related purposes
including, but not limited to, a physicians office building, as
long as doing so will not place Lessee in default under any
agreement to which it is a party and as long as Lessee has
obtainers all required local, California or federal approvals.
Except as otherwise provided below, title to all buildings,
improvements and fixtures purchased or leased by Lessee and
constructed or added to the Property, Hospital Facility or
•
other health care facility located on the Property, subsequent
to the date of the original certificate of occupancy for the
Hospital Facility, shall at all times vest in Lessee and shall
remain the sole property of Lessee and shall not become a part
of the Property until the expiration or sooner termination of
this Lease.
B. Subject to the provisions of Paragraph 7C, all
buildings, improvements and fixtures located upon the Property
shall become the property of Lessor upon the expiration or
sooner termination of this Lease and shall remain upon and be
surrendered with the Demised Premises. Provided that in the
event the Lessee shall be held liable to Lessor for and on
account of the indemnification provided in Paragraph 4 hereof,
Lessee shell be entitled to an offset and credit for the reason-
able depreciated value of such additional buildings, improve
and fixtures, excepting that no such offset or credit shall be
allowed for indemnification of any individual or collective
liability of Lessor's officers, agents and /or employees.
C. Lessee shall retain title during the term of this
lease to all personal property, fixtures and equipment purchased
or leased by Lessee, other than a lease from Lessor, and added
to, or placed upon, the Property, Hospital Facility or other
facility located on the by the Lessee at any time
s't to the date of the original certificate of occupancy
for the Hospital Facility. Except as provided in Paragraph 7D
Lessee shall have the right, at any time during the term of
this Lease and for a reasonable period thereafter, to remove
any and all of said personal property and equipment from the
Property; provided, that all damage or injury done to the
Demised Premises by Lessee as a result of such removal shall be
repaired or paid for by Lessee; provided, further, that any
such personal property or equipment not removed by Lessee as
provided herein, shall become the sole property of the Lessor.
D. Lessor may, at its option, purchase the equipment,
accessories, and stock on hand at the expiration of the lease
for its then fair market value. In the event Lessor exercises
its option and the parties cannot agree upon a selling price,
the question of price shall be determined by arbitration; Lessor
and Lessee shall each appoint an arbiter who, in turn, shall
appoint a third arbiter. Each of said arbiters shall be an
appraiser duly qualified and experienced to appraise the property
in question. The decision of a majority of such arbiters shall
be binding upon the parties hereto.
E. Lessee, at its own expense and risk, shall main-
tain the leased properties and all buildings and improvements
now or which may hereafter be placed thereon in good condition
and repair and Lessor shall not be obligated to repair or main-
tain any thereof. Any required major repairs or maintenance
may be paid for out of the reserve fund provided for in Para-
graph 3 subject to the provisions of numbered Paragraph 11.
Lessor shall have the right at all reasonable times and without
unreasonable interference with Lessee's use and occupancy of
the premises to enter upon and inspect the same.
• •
8. Liens.
A. Except as otherwise provided in this Paragraph 8,
Lessee shall keep the leased property and all buildings and
improvements thereon free of all liens of mechanics, material-
men and others and shall, at its own expense and risk, pay for
all labor, services, supplies, equipment and materials of every
kind for which it may become obligated in connection with the
performance of its obligations hereunder. At least five days
before commencing any work which, if not paid for, could subject
any part of the leased property or any buildings or improvements
thereto to a mechanic's, materialman's or other lien, Lessee
shall notify Lessor in writing thereof with sufficient informa-
tion to permit the timely filing of a notice of nonresponsibility
and Lessor shall have the right at all times to post and keep
posted such notices as it may desire to protect Lessor and the
leased property against any such liens.
B. If a lien is filed against the Demised Premises,
within sixty (60) days after Lessee receives notice of the
filing thereof or the assertion thereof against the Demised
Premises, the Lessee shall either cause the same to be discharged
of record, or proceed in good faith to prevent the enforcement
or foreclosure thereof by contest, payment, deposit, bond,
order of court or otherwise. Nothing in this subparagraph
shall require the Lessee to satisfy or discharge any such lien
so long as the validity thereof shall be contested in good
faith and by appropriate legal proceedings.
• •
C. Notwithstanding any provision of this Paragraph
8 to the contrary, Lessor agrees that Lessee may create or
permit the creation of a lien, charge, mortgage or other encum-
brance on the Demised Premises, Lessee's interest in this Lease,
or any part thereof, to the extent necessary to enable Lessee
to borrow money or otherwise finance the purchase or lease of
real and personal property at the most favorable rates and upon
the most favorable terms available; provided, further, that
Lessor expressly agrees that when requested by Lessee, Lessor
shall cooperate with Lessee and take whatever steps are neces-
sary to enable a lender to obtain a security interest in the
City's interest in this Lease, the Demised Premises, or any
part thereof, including, but not limited to, subordinating
Lessor's right, title and interest in this Lease, the Demised
Premises, or any part thereof, in order to enable Lessee to
borrow money or enter into other financing arrangements at the
most favorable rates and upon the most favorable terms available.
Without limiting the foregoing, Lessor agrees to cooperate with
Lessee in obtaining any subdivision or parcel maps and any
other governmental approvals that may be necessary or desirable
in connection with any improvements to be made to the Property
by Lessee.
9. Taxes. Lessee shall pay before delinquency all
taxes and asseoa.�.�.Ls that may, from time to time, be levied or
assessed upon the leased property, the furnishings, or any
possessory interest therein arising out of or based upon the
leasehold interest.
• •
10. Utilities. The Lessee shall pay for all elec-
tricity, gas, water, telephone and other utility services used
in connection with the leased premises, including the cost of
all necessary connections`for all of said services.
11. Insurance.
A. Except as otherwise provided in this Paragraph
11, Lessee shall with respect to the Demised Premises procure
from insurance companies authorized to transact business in the
State of California or other insurance companies providing such
coverage, insurance coverage that is acceptable to both Lessor
and Lessee and Lessee shall pay in advance the premium on poli-
cies of insurance insuring all buildings and improvements now
or hereafter located on the Demised Premises against loss from
fire, explosion and the hazards covered by the customary
aoo,.a;ed coverage endorsement". Such insurance shall have
such policy limits as may from time to time be approved by the
City Council, not exceeding the replacement value,of the insured
property. Lessor shall be named as an additional insured upon
all such insurance. If any portion of the Demised Premises is
destroyed, Lessee and Lessor shall devote the entire proceeds
of any such insurance collected by Lessee or Lessor to repair,
reaction, or repla L, as the case may be, of the
Demised Premises as may be agreed upon by Lessee or Lessor.
_ B. Lessor and Lessee agree that, at Lessee's request,
any and all provisions of this Paragraph 11 shall be modified
or supplemented, to the extent necessary to enable Lessee to
borrow money or enter into other financing arrangements at the
• •
most favorable rates and upon the most favorable terms available.
12. Condemnation.
A. Except as otherwise provided in this Paragraph
12, in the event all or any portion of the Demised Premises or
any buildings, improvements, additions, fixtures or personal
property located on the Property, is taken under the exercise
of the power of eminent domain, any award made or any compensation
paid by reason of or as a result of such taking shall be paid
to Lessor and Lessee in proportion to their respective interests
in the Demised Premises including all buildings, improvements,
additions, fixtures or personal property located on the Property;
provided, however, that Lessee shall receive any award for the
tabooing of any real or personal property to which it has title,
or any part of its interest in this Lease and option, interrup-
tion of its business, its moving expenses and Joss of its good-
will. In the event such taking is a taking of the entire Demised
Premises and all buildings, improvements, additions, fixtures
and personal property located on the Property, then this lease
shall terminate upon the taking being effected. In the event
such taking is only of a portion of the Demised Premises. and
buildings, improvements, additions, fixtures and personal prop-
erty located on the Property, then and in that event Lessee shall
remain obligated under the terms of this lease the same as though
said taking had not occurred unless such taking is of such character
and such amount that the Demised Premises are rendered unusable for
their intended purpose, in which case the Lease shall terminate
upon the taking being effected.
• •
B. Lessor and Lessee agree that, at Lessee's request,
any and all provisions of this Paragraph 12 shall be modified
or supplemented to the extent necessary to enable Lessee to
borrow money or enter into ` other financing arrangements at the
most favorable rates and upon the most favorable terms available.
13. New Corporate Structures. Lessee shall have the
right, among other things, to form new corporations and to
transfer its assets and activities to said corporations so long
as such transfers do not violate this Lease or Lessee's charit-
able purposes as set forth in its articles of incorporation.
14. Assignment, Sublet and Encumbrances.
A. Except as otherwise provided in Paragraph 8 and
this Paragraph 14, Lessee shall not assign or sublet, voluntar-
ily or involuntarily, the Demised Premises, or any part thereof,
shall not permit any transfer of this lease or its rights here-
under, in Whole or in part and shall not mortgage or in any
manner encumber any of its interest therein, without first
obtaining in writing the consent thereto of Lessor's City
Council. Any such assignment, sublet or transfer, mortgage or
encumbrance, or any attempt to make and execute the same, without
such consent first obtained in writing shall be void. Lessor
shall not unreasonably withhold such consent. Lessor shall
cooperate with Lessee in providing necessary subordination
agreements and other financing documents in order to allow
Lessee to pursue such addition and expansion programs as Lessee
considers necessary and appropriate.
B. Notwithstanding any other provision of this
Paragraph 14, Lessee shall have the right to assign or sublet
the Demised Premises, or any part thereof, and to otherwise
transfer its rights under` this Lease with respect to such prop-
erty, without the consent of Lessor, if such assignment, sublet
or transfer is to
(i) an affiliate of the Lessee ( "affiliate" shall
mean any person, partnership, corporation or other organization
that controls, is controlled by or is under common control with
the Lessee);
(ii) any person, partnership, corporation or other
organization if the assignment, sublet or transfer is made on
an arms - length basis and is not a lease of the Hospital Facility;
(iii) a member of the Lessee's medical staff; provided,
that the lee is not of the Hospital Facility; or
(iv) an employee of the Lessee; provided, that the
lease is not of the Hospital Facility.
Any assignment, sublet or other transfer made pursuant
to this Paragraph 14 shall be made subject to the terms and
conditions of this Lease.
15. Compliance with Law.
A. No building, structure or improvement of any
kind shall be erected, placed upon, operated or maintained on
the leassd premises, nor smell any business or operation be
conducted or carried on therein, or thereon, in violation of
any ordinance, law, statute, by -law, order or rule of any gov-
ernmental agency having jurisdiction thereover.
B. Nothing in this Paragraph 15 shall require the
Lessee to take any action so long as the time for such action
has been extended by the appropriate governmental entity or so
long as the necessity thereof shall be contested by the Lessee
in good faith and by appropriate legal proceedings.
16. Nonprofit Status. Lessee warrants that it is
now, and will remain during the entire term of this lease, a
nonprofit corporation, in compliance with the Nonprofit Corpora-
tion Laws of the State of California and the Internal Revenue
Code of the United States of America.
17. Board Memberships and Inspection Rights.
A. Except with the prior approval of the City Council,
Lessee warrants that it has and will continue to have a board
of directors, who may be designated as "trustees ", of not less
than fifteen members, a majority of whom shall be legal residents
of the City of Downey and the balance either having a place of
business, work, or interest in the City or the citizens thereof.
In addition to the regular members of the Board the Mayor, City
Council and City Manager of Lessor shall serve as ex- officio
members of the Board without right to vote. Members of Lessor
City Council, the Mayor and the City Manager in their capacity
as ex- officio members of the Hospital's Board of Directors do
not have the full right of inspection provided to members of
the Board of Directors in general, but rather one limited to
the inspection necessary to determine the performance of the
warranties as provided in this paragraph. In lieu of the City
Board.
making an inspection each year there will be delivered to the
City by the Lessee the following documents:
(i) A copy of Hospital's tax returns for the previous
year (Federal and State):
(ii) A copy of the Hospital's license issued by the
State of California.
(iii) A copy of a certificate of good standing as a
corporation duly organized, subsisting and in good standing
under the Nonprofit Corporations Law of the State of California
from the California Secretary of State.
(iv) A copy of the accreditation certificate issued
by the Joint Commission on Accreditation of Hospitals.
(v) Board of Directors' Profile showing the member-
ship of the Board and that there is compliance with the provi-
sions of this paragraph with respect to the composition of the
(vi) A copy of the Report on Examination of Combined
Financial Statements prepared by the Hospital's independent
Certified Public Accountant reconciling the Combined Statement
of Revenues and Expenses with column "a" on Exhibit "D "..
(vii) A statement signed by the Hospital's Chief Execu-
tive Officer certifying the balance in the repair fund required
by the Lease.
(viii) A statement signed by the Hospital's Chief Execu-
tive Officer to show that the liability insurance carried by
the Hospital covers the City, its officers, agents and employees
as required by the Lease. The statement shall verify that such
insurance is in effect.
-26-
• •
B. If following an examination of the above- designated
documents, Lessor contends that Lessee is not in compliance
with the warranties set forth in this paragraph 16 and 17, then
it may make a demand upon`Lessee for an opportunity to inspect
the books and records of Lessee to the extent necessary to
determine whether the warranties are being performed. In the
event of any controversy or claim arising out of or relating to
the inspection rights set forth hereinabove, such controversy
or claim shall be settled before a panel of arbitrators by
arbitration in accordance with the American Arbitration Associa-
tions' rules.
C. Notwithstanding the foregoing, as Ex- Officio
members of the Board of Directors of Lessee, City Council mem-
bers and the City Manager shall receive from Lessee notices of
reguar meetings of the Hospital Board of Directors.
18. Surrender of Premises. At the expiration of the
term of this lease or upon the sooner termination thereof,
Lessee shall peaceably surrender said premises including all
buildings, improvements and fixtures located on the property,
in a good and substantial state of repair, reasonable wear and
tear and damage by fire, flood, explosion, and the elements
19. Hold Over. In the event the Lessee holds over
the leased premiss, or any part thereof, after the expiration
of the term of this lease, with the consent, express or implied,
of Lessor, such holding shall be construed to be a tenancy from
month to month only. In the event the Lessee holds over, all
i •
of the terms and conditions of this Lease shall apply to such
hold over period, including the provision for rent set forth at
Paragraph 3 of this Lease.
20. Easements and Mineral Rights. It is understood
and agreed by the parties hereto that the premises herein leased
are taken by said Lessee subject to any and all existing ease-
ments or other encumbrances and that Lessor shall have the
right to install, lay, construct maintain, repair and operate
such sanitary sewers, drains, storm water sewers, pipe lines,
manholes, connections, water, oil or gas pipe lines, and tele-
phone, telegraph and power lines, and such other appliances and
appurtenances necessary or convenient to use in connection
therewith, over, in, upon, through, across and along the herein -
above described premises, or any part thereof, as will not
interfere with Lessee's operations hereunder, and to enter
thereupon for any and all such purposes; also the right to bore
and maintain such water, oil or gas wells in said land, and
place and operate on said premises any and all such machinery
necessary or convenient therefor and to place, operate and
maintain thereon all such pumping plants, reservoirs, tanks or
other equipment necessary or convenient therefore, to construct
and maintain thereon any and all such buildings necessary or
convenient therefor, and for any and all purposes to go upon
and across said premises with such materials, machinery; appli-
ances and laborers as will not interfere with Lessee's opera-
tions hereunder, and also the right to grant such franchises,
easements, rights of way and permits in, over, upon, along, or
• •
across any and all portions of said premises as Lessor may
elect so to do; provided, however, that no right of Lessor
provided for in this paragraph shall be so exercised as to
unduly interfere with Lessee's operations hereunder; provided,
further, that the proceeds of any water, oil, gas or other
minerals removed from the Demised Premises by Lessor shall be
used by Lessor for the health care of the citizens of the City.
21. Default.
A. Should Lessee default as to any of the covenants
herein and Lessee neither remedies the default nor proceeds in
good faith to do so within one- hundred eighty (180) days after
receipt of written notice thereof to Lessee, (except any default
in the payment of rental, shall be remedied within fifteen
days) the Lessor may declare a forfeiture of this lease and
pursue any remedy or action provided by law; provided, however,
if a bona fide dispute should arise between Lessor and Lessee
as to whether Lessee has in fact defaulted under this Lease,
then Lessor agrees that such termination shall become effective
unless Lessee shall remedy such default within thirty days
after settlement of such dispute by agreement of the parties or
by final judgment of any court of competent. jurisdiction unless
Lessee has either remedied the default, if any, or proceeded in
good faith to do so, within said thirty day period.
B. If possession of any interest in the Demised
Premises is taken by virtue of any attachment, execution or
receivership, and Lessee has neither regained possession within
ninety (90) days thereafter nor proceeded diligently and in
good faith within the ninety day period to regain possession,
it shall constitute a default by Lessee under the Lease and
result in the immediate termination of the Lease.
C. In the event any default by Lessee hereunder
constitutes a default by Lessor under said lease between Lessor
and the Authority the provisions of such lease as to default
shall control.
22. Defeasance. Lessor will cooperate with Lessee
in the defeasance of the bonds issued pursuant to the Joint
Powers Authority Agreement between Lessor and the Authority.
23. Notice. Any notices to be given under this
lease or otherwise may be served by enclosing the same in a
sealed envelope addressed to the party to receive the same
at the address hereinafter stated and deposited in the
United States Post Office as regular mail, postage prepaid.
When so given, such notice shall be effective from the time
of the mailing of the same. For the purposes hereof, unless
otherwise provided in writing by the parties hereto, the
address of Lessor and the proper person to receive any
such notices on its behalf is:
City Council
City of Downey
8425 Second Street
Downey, California 90241
and the address of the Lessee is:
Chief Executive Officer
Downey Community Hospital Foundation
11500 Brookshire Avenue
Downey, California 90241
• 1
24. Prior Lease. That certain lease by and between
the parties hereto and dated October 16, 1968 hereby is term-
inated.
25. Other Agreements. So long as the Ground Lease
and the August 3, 1967 Lease, between the City and the Authority,
remain in effect, no provision of this Lease shall apply to the
extent that it is inconsistent with the terms of the Ground
Lease or the August 3, 1967 Lease.
26. Waiver. The failure of either party to insist
in any instance upon strict compliance with any provision con -
tained in this Lease shall not be construed as a waiver or
relinquishment of the right of such party to hereafter require
coMpIismte with such provision or to require such compliance
with any other provision of this Lease.
27. Applicable Law. This Lease shall be governed by
the laws of the State of California.
28. Successors and Assigns. All the terms, provi-
sions, and conditions of this Lease shall be binding upon and
inure to the benefit of the parties and their respective succes-
sors and assigns.
29. Severability. If any term or provision of this
Lease shall, to any extent, be determined by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of
this Lease 12. not be affected thereby, and each term and
provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
30. Entire Agreement. This Lease contains the entire
agreement between the parties to this Lease and supersedes any
and all prior agreements, arrangements, or understandings between
the parties relating to the use and occupancy of the Demised
Premises. This Lease can only be modified with the written
assent of each party.
31. Consent of Lessor. Notwithstanding any other pro-
vision of this Lease, Lessor agrees that it shall not unreason-
ably withhold its consent or approval with respect to any matter
for which such consent or approval is required by this Lease.
32. Reimbursement. Lessor and Lessee acknowledge
that it is in the best interests of the citizens of the City
that. Lessee receive maximum allowable reimbursement from Medi-
care, Medi -Cal and any future governmental programs. Accord-
ingly, Lessor and Lessee hereby agree to make future modifica-
tions to this Lease to the extent necessary to maximize reim-
• .
bursement to Lessee; provided, that any such modifications
shall be made without cost to the Lessor.
IN WITNESS WHEREOF, the parties hereto have caused
these presents to be duly executed with all the formalities
required by law on the respective dates set forth opposite
their signatures.
agbruary 8. 1983
(Date)
CITY OF DOWNEY
a municipal corporation
DOWNEY COMMUNITY HOSPITAL
FOUNDATION
7
Mao.
Lessor
Presi
Lessee
By 41 - A.00
Secrets
Lessee
That portion of the Rancho Santa Gertrudes in the
City of Downey, County of Los Angeles, State of California,
described as follows:
Beginning at the intersection of the centerline of
Brookshire Avenue 80 feet wide, formerly Church Street 40 feet
wide as shown on Map of Tract 9457 recorded in Book 171, Page 7
of Maps in the office of the County Recorder of said County,
with the centerline of Manatee Street 60 feet wide, formerly
South Street as shown on Map of Tract 14296 per Map recorded in
Book 304, Pages 29 -31 of Maps in the office of the County
Recorder of said County; thence North 32 East along said
centerline of Brookshire Avenue, 30.07 feet to the northwesterly
prolongation of the northeasterly line of said Manatee Street;
thence South 61 ° 19'40" East thereon and along said northeasterly
line 56.19 feet to a point of cusp with a curve concave easterly
and having a radius of 15 feet and the true point of beginning
for this description; thence northerly along said curve 24.62
feet to a point of tangency with the southeasterly line of
Brookshire Avenue 80 feet wide lying 40 feet on each side of
the above described centerline; thence North 32 ° 41'45" East
along said southeasterly line 718.37 feet to the southwesterly
line of land described in Deed to S. Huston recorded in Book
152, Page 404 of Deeds in said Recorders Office; thence South
57 °20'25Y East thereon 420.39 feet to
EXHIBIT "A"
the northwesterly line
• .
of the southeasterly 243.41 feet of land so described in said
Deed to Huston; thence North 31 ° 42'45" East thereon 177.28 feet
to the southerly corner of Margaret Street as described in Deed
recorded in Book D2353, Page 721 in said Recorders Office;
thence South 57 ° 15'20" East along the prolongation of the south-
westerly line of said Margaret Street 213.44 feet to the north-
westerly line of Patton Road 60 feet wide lying 30 feet on each
side of the northwesterly line of Lot "P" of the Rancho Santa
Gertrudes per Map recorded in Book 32, Page 18 of Miscellaneous
Records in said Recorders Office; thence South 31 ° 42'45" West
thereon 852.28 feet to the beginning of a tangent curve concave
northerly and having a radius of 15.00 feet; thence westerly
thereon 22.77 feet to a point of tangency with said northeasterly
line of Manatee Street; thence North 61 ° 19'40" West thereon
616 feet to the point of beginning.
The Basis of Bearings for this description taken as
the centerline of Brookshire Avenue as shown on County Surveyors
Map Number B2383 on file in the office of the County Surveyor
of said County.
EXHIBIT "A"
Page 2
• •
A Class "A" hospital building consisting of a 75,732 square
foot nursing tower and basement with a 47,861 square foot ancil-
lary wing, basement and mechanical building and a 5,000 square
foot detached storage building.
EXHIBIT "B"
• •
S Assistant Director of Nursing 505
S Nursing Supervisor 505
H Head Nurse 301 -340
H Assistant Head Nurse 301 -340
H Staff Registered Nurse 301 -340
H Licensed Vocational Nurse 301 -340
H Surgical Technician 330 -338
H Nurse Aide 301 -340
H Male Nurse Technician 301 -340
H Ward Clerk 301 -340
H Transportation Orderly 300 -355 -365
H Graduate Nurse 300
H Pharmacist 345
H Pharmacy Assistant 345
S Central Supply Supervisor 350
H Central Supply Technicians 350
S Chief X -Ray Technologist 355
H Radiological Technologist 355
S Special Procedures Technician 355
H Dark Room Technician 355
H Ultrasonic Technician 384
S Nuclear Medicine Technician 385
S Chief Laboratory Technologist 365
H Senior Medical Technologist 365
H Licensed Medical Technologist 365
H Deiner 365
H Tissue Technician 365
H Laboratory Assistant 365
H Inhalation Therapy Technician 380
H Cardiopulmonary Technician 381
H ECG/EEG Technician 381 -382
H Registered Physical Therapist 383
H Physical Therapy Aide 383
S Therapeutic Dietician 500
H Food Service Worker 500
H Cook 500
H - Cooks Helper 500
H Baker 500
H Salad Girl 500
H Clerk, Diet 500
H Clerk, Storeroom 500
EXHIBIT "Cu
• •
H Inservice Instructor 510
H Audio - Visual Technician 510
H Housekeeping Supervisor 522
H Housekeeping Aide 522.
H Janitor 522 -500
H Medical Transcriber 516- 355 -598
H Clerk, Medical Records 516
H Licensed Steam Engineer 535
H Craftsmen 535
H Maintenance Man 535
H Maintenance Helper 535.
S Administrative Secretary 540
H Department Secretary 540 -542 -etc.
H Clerk, General Office 540
H Junior Clerk 540
S Business Office Manager
S Clerk, Accounts Receivable
S Credit Manager
Clerk, Accounts Payable
Clerk, Data Processing (V.C. )
Clerk, Admitting
H PBX Operator 559
PBX Supervisor 559
Storekeeper 544
H Storekeeper's Helper 544
S Department Head
EXHIBIT "C"
PAGE 2
REVENUE
•
ICU
OCU
Medical
Surgical
Orthopedics
Obstetrics
Nursery
Delivery Room
Operating Room
Surgical Center
Central Service
Laboratory
Pulmonary Function
EKG
EEG -EMG
Radiology & ECHO
Nuclear Medicine
Pharmacy
Inhalation Therapy
Physical Therapy
Emergency Room
CAT Scanner
CPR Lab
Cardiology
Pacemaker
Hand Rehabilitation
Back Rehabilitation
Stroke Rehabilitation
Bio Feedback
EPIC
Gastro Lab
Renal Dialysis
Miscellaneous
Total Patient Revenue
Deductions From Revenue
Net Patient Revenue
Other Operating Revenue
Net Revenue
FISCAL YEAR
1980 -1981
a b
ACTUAL
ACTUAL ANNUALIZED
1978 = 79 1979 -80
EXHIBIT "D"
•
c
BUDGET (b-c)
1980 -81 VARIANCE
ACTUAL
OPERATING EXPENSES 1978 -79
Salaries & PR Related
Supplies & Expense
Depreciation & Amortization
Professional & Public Liab.
Interest Expense
Contingency For Mid -Yr. Adj.
a b
ACTUAL
ANNUALIZED
1979 -80
Miscellaneous
Total Operating Expense
Net Income. Retained For Capital Expenditures
EXHIBIT "D"
PAGE 2
•
c
d
BUDGET (b-c)
1980 -81 VARIANCE
ICU
0CU
Medical
Surgical
Orthopedics
Obstetrics
Nursery
Delivery Room
Operating Room
Surgical Center
Central Service
Laboratory
Pulmonary Function
EKG
EEG -EMG
Radiology :& ECHO
Nuclear M dieine
Pharmacy
Inhalation Therapy
Phoal Therapy
Ei.,10..Acy -Room
CAT Scanner
CFR Lab
Cardiology
Pacemaker
Hand Rehabilitation
Back Rehabilitation
Stroke Rehabilitation
Bio Feedback
EPIC
Gastro Lab
Renal Dialysis
Miscellaneous
Total Patient Care
•
BUDGETED EXPENSES (DEPARTMENTAL)
FISCAL YEAR 1980 -1981
a b c d e
ACTUAL
ACTUAL ANNUALIZED BUDGET (b -c)
DIRECT PATIENT CARE 1978 =79 1979 -80 1980 -81 VARIANCE %
EXHIBIT "D"
PAGE 3
a
ACTUAL
INDIRECT EXPENSES 1978
Dietary
Laundry & Linen
Housekeeping
Maintenance & Operations
Grounds, Gardens & Security
Administration
Medical Records
Nursing Administration
Inflation Contingency
Miscellaneous Expense
Total Indirect Expense
Total Departmental Expense
EXHIBIT "D"
PAGE 4
b
ACTUAL
ANNUALIZED
1979 -80
•
BUDGETED EXPENSES (DEPARTMENTAL)
FISCAL YEAR 1980 -1981
c
d
BUDGET (b -c)
1980 -81 VARIANCE
Beginning Balance
SOURCE
Receipts
Operations
Receipts - Other
TOTAL SOURCE
APPLICATION
Operations
Salaries
Non- Salaries
Fixed Expense
Rent
TOTAL
Debt Retirement
*Capital Expenditure
(A -C Priority Only)
TOTAL APPLICATION
Cash Over (Short)
Ending Balance
*Capital Expenditure
(D -E Priority)
• •
DOWNEY COMMUNITY HOSPITAL
OPERATING FUNDS
CASH FLOW BUDGET
EXHIBIT "D"
PAGE_ 5
City Councel of Downey
Downey, California
Gentlemen:
•
Pursuant to the Lease Agreement between the City of
Downey, as Lessor, and Downey Community Hospital, as Lessee, we
have determined the following:
I. Daily Service Charges
JNM2SL
Based upon Downey Community Hospital's daily hospital
service charges, dated , and the certificate
setting forth the charges of the benchmark hospitals
submitted to us by the Chief Executive Officer of Downey
Community Hospital, we have determined the daily hospital
service charges are equal to or less /more than
the average of similar charges of the benchmark hospitals.
The calculation was determined as follows:
Downey Community
Hospital
Benchmark Hospital:
1. Whittier Pres.
.2. Cedars Sinai
3. Good Sam. L.A.
4. Calif. Med. Ctr.
5. St. Francis
Average of Benchmark
Hospitals
Benchmark Hospitals'
Average Daily Service
Charges in Excess of
Downey Community
Hospital's Average
Daily Service
Charges
Private Semi- Ward ICU CCU
Private
Exhibit "E"
II. Salary Increases
Jb 23L- 010683
•
Based upon Downey Community Hospital salary ranges,
dated , a copy of which is attached hereto,
and the certificate setting forth the Hospital Council
guidelines submitted to us by the Chief Executive
Officer of Downey Community Hospital, a copy of which
is attached hereto, we have determined that no salary
range by job classification as listed in Exhibit C of
the Lease exceeds by more than 10 percent the salary
guidelines as published by the Hospital Council of
Southern California except for those listed below:
Job
Classification
Downey
Community Hospital Percentage
Hospital Council Comparison
Very truly yours,
C.P.A. Company
Exhibit "E"
Page 2