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AGENDA ITEM NO._________
AGENDA ITEM NO.
REPORT TO MT. DIABLO HEALTH CARE DISTRICT
TO CHAIR AND MEMBERS OF THE
MT. DIABLO HEALTH CARE DISTRICT BOARD:
DATE: June 25, 2013
SUBJECT:
ADOPT RESOLUTION NO. 13-004, APPROVING TECHNICAL AMENDMENTS
TO JOHN MUIR HEALTH BYLAWS
Report in Brief
The purpose of this staff report and proposed Resolution 13-004 is to obtain Board approval of
amendments to the Amended and Restated John Muir Health Bylaws. These amendments are technical in
nature, reflecting the reduction in the number of directors (from 5 to 3) appointed by the District Board to the
John Muir/Mt. Diablo Community Health Fund Board that was approved when the District was reorganized
in 2012.
Background
The Mt. Diablo Health Care District (District) was formed in 1948, with voters approving the District
formation and a special parcel tax to build the Mt. Diablo Medical Center. When initially formed, the
District’s boundaries included the cities of Clayton (portions), Martinez, Lafayette (portions), Concord, and
Pleasant Hill (portions), along with the unincorporated communities of Clyde and Pacheco.
In 1996, District voters approved a Community Benefit Agreement (CBA) between the District and
John Muir Medical Center (hereinafter “John Muir Health”). Under the terms of the CBA, the District
transferred all rights and title in the Mt. Diablo Medical Center to John Muir Health, in exchange for certain
assurances regarding healthcare services and funding.
Under the CBA, John Muir Health is required to operate and maintain the Mt. Diablo Medical Center
for the benefit of the communities served by the District. John Muir Health is also required to contribute One
Million Dollars ($1,000,000 million) per year to a Community Benefit Corporation, known as the John
Muir/Mt. Diablo Community Health Fund (“CHF”), to fund programs and events that address health issues
and promote a healthy community. The CHF Board is comprised of 10 directors, who play a key role in
determining how the annual $1,000,000 contribution by John Muir Health is allocated.
ADOPT RESOLUTION NO. 12-004, APPROVING TECHNICAL
AMENDMENTS TO JOHN MUIR HEALTH BYLAWS
June 25, 2013
Page 2
In 2012, the District was reorganized as a subsidiary district of the City of Concord. Consistent with
the reorganization, the members of the Concord City Council now collectively serve as the ex officio Board of
Directors of the District. As part of the reorganization, the District’s boundaries were redrawn to include only
the cities of Concord and Pleasant Hill (portions).
Prior to the reorganization, the District appointed 5 members to the 10 member Community Health
Fund Board, with John Muir Association appointed the remaining 5 members. As one of the conditions to
reorganization of the District, the Contra Costa Local Agency Formation Commission (“LAFCO”) reduced
the number of District-appointed CHF Directors to three (3), giving Pleasant Hill appointment power as
respects the two (2) remaining non-John Muir CHF directorships. Both Concord and Pleasant Hill had
recommended that LAFCO adopt this condition, recognizing that Pleasant Hill’s populace—which
contributes a portion of its property tax to the District— should have representation on the CHF Board. In its
first meeting following the reorganization, the District Board adopted Resolution 12-003 providing that of the
three District-appointed CHF Board Members, a maximum of two shall be members of the District Board.
Recently, the CHF Board approved revisions to the CHF’s Amended and Restated Bylaws, reflecting
the changes in director appointments to the CHF Board described above (Attachment 2). John Muir Health,
in turn, is seeking to amend its own Restated and Amended Bylaws to mirror this change (Attachment 3).
Amendments to the portions (Section 4.8 and 5.6) of the John Muir Health Bylaws addressing CHF require
the approval of the District, inasmuch those sections address the composition, funding, and operation of the
CHF. Staff is hereby recommending approval of the proposed revisions.
Discussion
Recently Sections 2.1 and 5.4 of the Amended and Restated Bylaws of the CHF were amended as
follows:
Section 2.1. The CHF as a California nonprofit public benefit corporation is a private entity not encompassed
by the Brown Act. The Mt. Diablo Health Care District appoints three (3) of the ten members of the CHF
Board of Directors and the City of Pleasant Hill appoints two (2) of the ten members; provided that no more
than two (2) elected officials from any one governmental agency may be appointed to the CHF Board of
Directors. The Mt. Diablo Health Care District appoints five of the ten members of the CHF Board of
Directors. When the District appoints three or more of its members to serve on the CHF Board, the full Board
meetings must be noticed and held publicly as an accommodation to the Brown Act’s coverage of the District,
not because the Brown Act is applicable to the CHF itself.
Section 5.4. Selection of Directors and Terms. The Mt. Diablo Health Care District shall appoint three (3)
members, and the City of Pleasant Hill shall appoint two (2) members, and five (5) members shall be
appointed by the John Muir Association, a nonprofit public benefit corporation. No more than two (2) elected
officials from any one governmental agency may be appointed to the CHF Board of Directors. The Mt.
Diablo Health Care District shall appoint five (5) members, and five (5) members shall be appointed by the
John Muir Association, a nonprofit public benefit corporation.
ADOPT RESOLUTION NO. 12-004, APPROVING TECHNICAL
AMENDMENTS TO JOHN MUIR HEALTH BYLAWS
June 25, 2013
Page 3
Consistent with these amendments, John Muir Health is proposing amendments to its own Amended
and Restated Bylaws. Attachment 3 to this report is a memorandum from John Muir Health General Counsel
Nancy Olson describing the proposed amendments, along with the amendments themselves. The proposed
amendments requiring District approval are excerpted and highlighted in bold typeface as follows:
Section 4.8. Board Action.
(c) Major Corporate Actions. This subsection restates, in these Bylaws, Section 7.5 of the
Community Benefit Agreement between the Corporation and the Mt. Diablo Health Care
District (the “District”). In the event the Corporation desires to take a major corporate action
outlined in Section 4.8(b) or below in this section Section, it must comply with both sections
Sections. The Corporation shall not, without the prior written consent of the District board and
the John Muir Association, (i) sell, transfer, or otherwise dispose of all or substantially all the
assets of the Corporation; (ii) issue a membership to any person or entity; (iii) merge with any
other person or entity, unless the Corporation is the surviving corporation in the merger; or
(iv) amend Section 5.6 of these Bylaws.
Section 5.6. John Muir/Mt. Diablo Community Health Fund.
The Articles and Bylaws of the John Muir/Mt. Diablo Community Health Fund... shall
provide for a ten (10-) member board of directors, five (5) of which shall be appointed by the
Association and five, three (53) of which shall be appointed by the District District’s board
of directors, and two (2) of which shall be appointed by the City of Pleasant Hill;
provided, however, that not more than two (2) elected officials from any one
governmental agency may be appointed to the John Muir/Mt. Diablo Community
Health Fund Board of Directors…Counsel for the District has determined that the
requirements of the Brown Act would could apply to this the John Muir/Mt. Diablo
Community Health Fund but not to the Corporation Board. If, for any reason, it is determined
by a court or government agency or counsel for the Corporation that the Brown Act applies to
the Corporation as a result of the District’s right to appoint five three (3) John Muir/Mt.
Diablo Community Health Fund directors, then from the date of that determination all five
three (53) directors shall be appointed by the Corporation Board.
As noted above, the proposed amendments are technical in nature. They do not change any of John
Muir Health’s obligations as respects the Community Health Fund; rather, they appropriately reflect the
change in methodology of appointments to the CHF Board that was adopted when the District was
reorganized. The reference to potential application of the Brown Act as respects CHF Board meetings
underscores that the Brown Act would only apply to Board meetings if certain scenarios that currently do not
exist took place; for example, if either Concord or Pleasant Hill provided funding for CHF grants or programs.
Fiscal Impact
The proposed amendments to the John Muir Health Bylaws would have no fiscal impact.
ADOPT RESOLUTION NO. 12-004, APPROVING TECHNICAL
AMENDMENTS TO JOHN MUIR HEALTH BYLAWS
June 25, 2013
Page 4
Public Contact
The agenda has been posted in accordance with the Brown Act. The Agenda has also been e-mailed to
John Muir Health and the City of Pleasant Hill.
Recommendation for Action
Staff recommends that the Board adopt Resolution 13-004 approving the proposed amendments to the
Amended and Restated John Muir Health Bylaws.
Prepared by:
Valerie J. Barone
City Manager
[email protected]
Mark S. Coon
City Attorney
[email protected]
Reviewed by: Valerie J. Barone
City Manager
[email protected]
Attachment 1 – District Resolution No. 13-004
Attachment 2 – Recently adopted Amendments to Amended and Restated Bylaws of John Muir/Mt. Diablo
Community Health Fund
Attachment 3 – June 6, 2013 Memorandum from John Muir Health General Counsel Nancy Olson regarding
proposed amendments to John Muir Health Bylaws; and excerpts of proposed amendments
Attachment 1
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BEFORE THE MT. DIABLO HEALTHCARE DISTRICT
IN THE CITY OF CONCORD, COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA
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A Resolution Approving Proposed Amendments to
Sections 4.8 and 5.6 of the Amended and Restated
Bylaws of John Muir Health.
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Resolution No. 13-004
/
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WHEREAS, the Mt. Diablo Health Care District (“MDHCD” or “District”), previously the
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Concord Hospital District, was formed in 1948, with voters approving the District formation and a
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special parcel tax to build the Mt. Diablo Medical Center;
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WHEREAS, MDHCD’s boundary previously included the cities of Clayton (portions),
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Martinez, Lafayette (portions), Concord, and Pleasant Hill (portions), along with the unincorporated
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communities of Clyde and Pacheco;
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WHEREAS, in 1996, District voters approved a Community Benefit Agreement (CBA)
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between MDHCD and John Muir Medical Center (“John Muir Health”). Under the terms of the CBA,
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MDHCD transferred all rights and title in the Mt. Diablo Medical Center to John Muir Health,
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including land, buildings and equipment, in exchange for certain assurances regarding healthcare
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services and funding to be provided within the District. Under the CBA, John Muir Health is required
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to operate and maintain the Mt. Diablo Medical Center for the benefit of the communities served by
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the District. John Muir is also required to contribute One Million Dollars ($1,000,000 million) per
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year to a Community Benefit Corporation, known as the John Muir/Mt. Diablo Community Health
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Fund (“CHF”), to providing monetary funding to programs and events that address health issues and
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promote a healthy community. The Community Health Fund Board is comprised of 10 members, who
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play a key role in allocating how John Muir Health’s annual $1,000,000 contribution is allocated.
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WHEREAS, pursuant to the Community Benefit Agreement, John Muir Health may not,
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without the approval of the District Board, amend Sections 4.8 or 5.6 of the John Muir Health Bylaws,
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inasmuch those sections address the composition, funding, and operation of the Community Health
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Fund;
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WHEREAS, on August 8, 2012 the Contra Costa Local Agency Formation Commission
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approved reorganization of the Mt. Diablo Healthcare District as a subsidiary district of the City of
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Concord. As part of the reorganization, the District boundaries were redrawn to include only the cities
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Res. No. 13-004
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of Pleasant Hill (portions) and Concord;
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WHEREAS, the Board of Directors of the CHF is comprised of ten (10) members, five (5) of
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whom are Appointed by John Muir Health. Prior to the District’s 2012 reorganization, the remaining
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five (5) members of the CHF Board consisted of the District Board. However, one of the conditions of
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the reorganization is that henceforth, three (3) CHF Board directors shall be appointed by the District
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(two of whom shall be District Board members and the third of whom may not be a member of the
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Board), while the remaining two (2) CHF Board directors shall be appointed by the City of Pleasant
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Hill;
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WHEREAS the Restated and Amended Bylaws of the Community Health Fund have been
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revised to reflect the post-reorganization change in methodology of appointing Community Health
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Fund Board Directors;
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WHEREAS John Muir Health wishes to revise Sections 4.8 and 5.6 of its Amended and
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Restated Bylaws to reflect the post-reorganization change in methodology of appointing Community
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Health Fund Board Directors (Section 4.8 and 5.6 of the Amended and Restated John Muir Health
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Bylaws with proposed revisions and an explanatory memorandum by John Muir Health General
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Counsel Nancy Olsen are collectively appended to this Resolution as Exhibit A);
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WHEREAS the revisions proposed by John Muir Health to its Amended and Restated Bylaws
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are technical nature, do not change any of John Muir Health’s obligations as respects the Community
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Health Fund, and appropriately reflect the manner in which Directors of the Community Health Fund
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Board are now appointed as a result of the reorganization.
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NOW THEREFORE, THE MT. DIABLO HEALTH CARE DISTRICT, RESOLVES AS
FOLLOWS:
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Section 1.
The Mt. Diablo Health Care District hereby approves adoption of the
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amendments proposed by John Muir Health to Sections 4.8 and 5.6 of the Amended and Restated
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Bylaws of John Muir Health.
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Res. No. 13-004
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PASSED AND ADOPTED by the Board of Directors of the Mt. Diablo Health Care District
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on June 25, 2013 by the following vote:
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AYES:
District Board Members -
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NOES:
District Board Members -
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ABSTAIN:
District Board Members -
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ABSENT:
District Board members -
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I HEREBY CERTIFY that the foregoing Resolution 13-004 was duly and regularly adopted
at a regular meeting of the Mt. Diablo Health Care District Board of Directors on June 25, 2013.
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Daniel C. Helix, Chair
Mt. Diablo Health Care District
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Mary Rae Lehman, CMC
City Clerk/District Secretary
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APPROVED AS TO FORM:
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Mark S. Coon
District Counsel
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Exhibit A: Proposed revisions to Amended and Restated Bylaws of John Muir Health
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Res. No. 13-004
Exhibit A
Attachment 2
Intentionally left blank
Atttachment 3
Intentionally left blank