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HomeMy WebLinkAboutCouncil Actions 07-31-95 SpMtg32590 SPECIAL SESSION ROANOKE CITY COUNCIL CII~( COUNCIL CHAMBER July 31, 1995 3:00 p.m. AGENDA FOR THE COUNCIL 2. 3. 4. 5. Call To Order -- Roll Call. Council Members Parrott and White were absent. Invocation. Pledge of Allegiance to the Flag of the United States of America. Statement of Purpose. Mayor Bowers. A report of the City Manager with regard to the sale of the Roanoke City Nursing Home. Adopted Ordinance No. 32590 on first reading. (5-0) Adjournment. DAVID A. BOWERS Mayor CITY OF ROANOKE OFFICE OF THE MAYOR 215 Church Avenue, S.W,, Room 452 Roanoke, Virginia 24011-1594 Telephone: (703) 981-2444 July 27, 1995 The Honorable Vice-Mayor and Members of the Roanoke City Council Roanoke, Virginia Dear Members of Council: Pursuant to Section 10, Meetines of Council, of the Roanoke City Charter, I am calling a special meeting of the Roanoke City Council on Monday, July 31, 1995, at 3:00 p.m., in the Roanoke City Council Chamber, for the purpose of discussing and taking possible action on a report and recommendation of the City Manager in connection with the sale of the Roanoke City Nursing Home. Sincerely, Mayor DAB:gd pc.' W. Robert Herbert, City Manager James D. Ritchie, Sr., Assistant City Manager Wilburn C. Dibling, Jr., City Attorney James D. Grisso, Director of Finance Mary F. Parker, City Clerk Robert H. Bird, Municipal Auditor Willard N. Claytor, Director of Real Estate Valuation Honorable Mayor, members of City Council, I bring you greetings from the Human Resource Advisory Board. The inevitable transfer of our beloved City Nursing Home to the private sector of nursing home management has brought groat concern to all of us. We have been so proud of the compassionate, professional, home-like cato of the staff. But the time has come for change. Our advisory board has been aware from the very~eginning of the processes of decision necessary to bring us~his moment. We have been fully informed by Director Glenn Radcliff. We have devoted entire meetings to discussion, questions, alternative avenues of approach. Nothing has been decided which has not had our input. And we concur with these recommendations today without one voice of descent. The over riding concern in these decisions before you today, were the residents, their families and the staff. Never once I detected even a trace of anything else. I commend the administrative staff of our city for their compassionate concern through all of this so far. And I know that this attitude will continue. Our advisory board will continue to monoter and be a viable part of these proceedings. With regret and grief, the time has come for us to turn the corner. We have no other realistic choice. Many, many hours of time and energy, and specific concern for the future of the residents and the staff has and will continue to assure us that the turning of the corner will be okay. ~ July 31, 1995 Honorable Mayor and Member of City Council Roanoke, Virginia Dear Mayor Bowers and Members of Council: Subject: Roanoke City Nursing Home I. Background on the subject in chronological order is: The rocess to date for reviewing future service delivery options for the Roanoke City Nursing Home has consisted of the following steps: March 13, 1995 - City Council approved the appropriation of $70,000 for legal assistance to fully explore the option of allowing a private developer/operator to construct and operate a new facility. Crews & Hancock, P.L.C., of Richmond was selected as the City's legal advisor because of their prior experience in this area. March 23, 1995 - The nursing home study team members met with the legal firm to discuss strategy and conditions under which such a service delivery change might take place. April 5 and June 6, 1995 - Two briefings were conducted for the Human Development Advisory Board that were very similar in nature to those provided earlier to City Council. Auril 11, 1995 - A Nursing Home Personnel Committee consisting of administrative staff (Jim Ritchie, Glenn Radcliffe and Ken Cronin) and nursing home employees (R.F. Hyatt, Martha Hartley, Kathy Crawford, Shelby Barbour, Kathleen Manning, Dorothy Shelbume, Maxine Matthews, Lisa Frye, Frances Roope and Helen Meador) was formed to address the following issues: Hear concerns ofemDloye~ and develop appropriate responses or proposals for consideration during negotiations. Develoo a process for working with nursing home employees regarding the following: Employees who wish to remain employed with the City (how the job application and referral process will function); Retirement benefits and options; Page 2 Sick and vacation leave transfer; and Comparable health insurance coverage April, 1995 - A "notice of intent" was advertised in the Roanoke Times on April 8th, 16th and 23rd. This notice requested that parties interested in acquiring certain assets of the nursing home under conditions to be specified submit preliminary inquiries by April 28th. In addition, Crews & Hancock contacted twenty other potential sendce providers from a list provided by the study team and from their own internal files. April 28, 1995 - Nine of twenty providers expressed an interest in considering the acquisition based on the criteria originally discussed with City Council: Transfer of residents - Provide the option for all nursing home residents at the opening date of the new facility to transfer to the new facility. Hirino of employees - Hire all nursing home employees who wish to transfer at the same salary for a minimum of one year. Continuation of employment - Do not terminate those employees that are hired by the buyer except for "good cause shown" during the first year. Comparable employee fringe benefits - Provide a comparable health insurance, vacation and sick leave benefit package for a minimum of one year. Employee sick and vacation leave balances - Assume a level of sick and vacation leave balance accruals. Employee retirement - Provide a defined contribution program to which employees can contribute. Medicaid occupancy - Maintain a Medicaid occupancy percentage consistent with the annual Virginia Statewide Medicare and Medicaid occupancy percentage averages for licensed Virginia nursing facilities. Aoril 28 - May 5, 1995 - Confidentiality agreements were signed by interested providers and relevant confidential nursing home information was distributed to each. Page 3 Il. III. IV. May 22, 1995 - Service providers still interested in acquiring the city's nursing home business were advised that proposals would be due by May 31, 1995. June 21, 1995 - Crews & Hancock reviewed the top-ranked proposal with members of the study team and the proposer. Current situation is: An agreement has been negotiated with the top-ranked proposer, Smith/Packett Meal-Com. Inc., (with headquarters in Roanoke). The agreement is contingent upon issuance ora Virginia Medical Care Facility Certificate of Public Need by the State Health Commissioner authorizing the construction of a new facility. Under this agreement, the following assets of the Roanoke City Nursing Home would be acquired by Smith?Packett Med-Com, Inc.: Certain capital equipment not disposed of in the ordinary course of business prior to closing; 2. Goodwill related to the operation of the Nursing Home; The unconditional right to relocate the City's fifty-eight nursing home beds; and Medical records~ patient lists, files, reports and correspondence relative to nursing home residents. Smith/Packett Med-Com. Inc. has executed the agreement and is ready to proceed in good faith with the acquisition process. Issues in order of importance are: B. C. D. E. F. Conformance of the agreement with stated criteria Fair treatment of affected employees Timing Budgetary_ imoact Location of the new facility Communications Alternatives in order of feasibility are: City Council authorize the City Manager to enter into an aoreement with S mith-Packett Med-Com, Inc. for the acquisition of certain specific assets of the Roanoke City Nursing Home as previously stated and further detailed in the agreement document. Page 4 Conformance of the agreement with stated criteria - All criteria identified by the study team as having to be met under such an acquisition have been met with this agreement. 1. Transfer of residents Yes 2. Hiring of employees Yes~ 3. Continuation of employment Yes 4. Comparable employee fringe benefits Yes2 5. Employee sick and vacation leave balances Yes - up to $100,000 aggregate total3 6. Employee retirement Yes 7. Medicaid occupancy Yes - for 5 years Employee salaries will be equal to those being paid as of the closing date. Employee fringe benefits will be comparable to those being awarded as of the closing date. Employees will have the option of(l) being paid for vacation or paid leave balances by the City as of the end of the transition period, (2) having the buyer assume vacation, paid and sick leave balances (up to an aggregate cap for all employees of $100,000 in value), or any combination of(l) and (2). 2. Fair treatment of affected employees In addition to the criteria regarding employees that have been previously defined and addressed in the agreement, it is recommended that aH regular employees on payroll as of July 31, 1995, who remain employed by the Nursing Home until the new facility opens receive a continuity bonus. This bonus will be calculated based on each employee's final rate of pay just prior to the new facility opening. The bonus would be equivalent to one week's pay for each year of service or fraction thereof, with a minimum of four weeks' pay and maximum of twenty-six weeks' pay or 50% of annual salary, and would serve as an incentive for current employees to continue to provide quality service to residents at the nursing home through the transition period. In addition, it is recommended that employees on payroll as of July 31st, 1995, who remain employed by the Nursing Home until the new facility opens and leave the employment of the city (resignation, retirement or transfer to the employment of the buyer) will receive seoaration pay equivalent to four weeks of pay. Page 5 Separation pay will also be calculated based on each employee's final rate of pay just prior to the new facility opening. Employees who either accept another City position or leave the employment of the City through resignation or retirement prior to the opening date of the new facility will not be eligible for either a. or b. above. Timing - Smith/Packett Med-Com, Inc. has negotiated in good faith and is ready to begin the acquisition and construction process estimated to take twenty-four months. Budgetary impact - Total compensation paid to the City by Smith/Packett Med-Com, Inc. will be $455,000 ($420,000 for assets acquisition and $35,000 for consultation services during the transition period), plus up to $100,000 in assumed employee vacation and sick leave balances. Total estimated expenditures by the City during the transition period are affordable within the total compensation figure, and are itemized as follows: Continuity Bonus for Employees $ 270,000 Separation Pay for Employees 82,000 Legal Expenses 70,000 Payment of Accrued Vacation Leave 33,000 The long-term budgetary impact after the transition is complete is the elimination of the General Fund operating supplement to the nursing home ($504,210 for Fiscal Year 1995-96) and the generation of new tax revenue from the new nursing home business. Location of the new facility - The new facility will be constructed on a mutually agreeable site. Smith/Packett Me&Cora, Inc., has indicated a desire to construct the facility within the City of Roanoke and has identified four possible sites for consideration. Communications - Nursing home employees have been briefed on the details of the agreement and employee compensation plan. The Human Development Advisory Board and other key community stakeholders have also been briefed. Finally, a press conference was held to alert the media of this pending action. All of these activities took place during the week ending Friday, July 28th. City Council not authorize the City Manager to enter into an a~reement with Smith-Packett Med-Cora, Inc. for the acquisition of certain specific assets of the Roanoke City Nursing Home as previously stated and further detailed in the Page 6 agreement document and continue to operate the facility directly or under a management agreement. Recommendation is as follows: City Council approve (1) the recommendation to authorize the City Manager to enter into an agreement with Smith-Packett Med-Com, Inc. for the acquisition of certain specific assets of the Roanoke City Nursing Home as previously stated and further detailed in the agreement document and (2) the recommended emnloyee compensation package detailed under sections IV.A. 1, and IV.A.2. of this report. Respectfully submitted, ,¥ CC~ Wilbum C. Dibling, City Attorney James D. Grisso, Director of Finance Mary F. Parker, City Clerk James D. Ritchie, Assistant City Manager Glenn D. Radcliffe, Director, Human Development Barry L. Key, Manager, Management and Budget IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA AN ORDINANCE authorizing a certain Agreement to be entered into between the City and Smith/Packett Med-Com, Inc., by which the City agrees to sell certain tangible and intangible assets of the Roanoke City Nursing Home; authorizing the City Manager to execute an Agreement relating to the terms and conditions of such sale, a bill of sale and such other documents on behalf of the City as may be necessary to close this transaction; authorizing the City Manager to agree to one or more sites for construction of a new nursing home facility; authorizing the City Attorney to issue a certificate and opinion in connection with the closing of this transaction; authorizing officials of the City to consult and assist the buyer in connection of the closure of the existing Nursing Home and issuance of a certificate of public need for and construction of a new facility; and authorizing continuity bonus and separation pay programs for certain employees of the Nursing Home on July 31, 1995. BE follows: 1. IT ORDAINED by the Council of the City of Roanoke as For and on behalf of the City, the City Manager is authorized to execute and the City Clerk is authorized to attest an Agreement between the City and Smith/Packett Med-Com, Inc., a Virginia corporation (Smith/Packett), by which the City agrees to sell certain tangible and intangible assets, including Nursing Home equipment, good will, the unconditional right to relocate the City's fifty-eight Nursing Home beds and medical records, patient lists, files, reports and correspondence relative to residents, of the Roanoke City Nursing Home located at 4365 Coyner Springs Road in Botetourt County (Nursing Home) to Smith/Packett in consideration of $420,000 and Smith/Packett's agreement to build a new nursing home facility at a site acceptable to the City and to relocate to the new facility all residents of the current Nursing Home who desire to be in the new facility, such agreement being conditioned upon issuance of a certificate of public need to Smith/Packett by the appropriate agencies of the Commonwealth and being subject to such other terms and conditions as are more particularly described in the report of the City Manager, dated July 31, 1995 (Agreement). 2. The City Manager is authorized to execute a bill of sale and assignment in connection with the tangible and intangible assets described in Paragraph 1 of this ordinance and to execute such other documents on behalf of the City as may be necessary to close this transaction. The Agreement and all documents in connection with this transaction shall be in such form as is approved by the City Attorney. 3. Pursuant to Section Manager is authorized to agree, 5.10 of the Agreement, the City for and on behalf of the City, to one or more sites proposed by Smlth/Packett for construction of a new nursing home facility. 4. The City Attorney is authorized to issue the certificate required of the seller pursuant to Section 8.02 of the Agreement confirming and certifying that all representations and warranties of the seller contained in the Agreement are true and correct and to issue his opinion as required by Section 8.03 of the Agreement in connection with closing of this transaction. 5. Officials of the City are authorized to consult with and assist Smith/Packett as required by Section 6.02 of the Agreement. 6. The City Manager is authorized to establish and implement the continuity bonus and separation pay programs for certain employees of the Nursing Home on July 31, 1995, more particularly described in the City Manager's report to this Council, dated July 31, 1995. 7. As required by Section 6.05 of the Agreement, it is agreed that, after the date that residents of the current Nursing Home are relocated to the new facility to be constructed by Smith/Packett, the City will not use the site of the existing Nursing Home as a nursing home or health care facility. ATTEST: City Clerk. DAVID A. BOWERS Mayor CITY OF ROANOKE CITY COUNCIL 215 Church Avenue, S.W, Room 456 Roanoke, Virginia 24011-1536 Telephone: (703) 981-254l July 27, 1995 Council Members: Elizabeth T. Bowles John S. Edwards Delvis O. "Mac" McCadden John H. Parrott William White, Sr. Linda F. Wyatt The Honorable Mayor and Members of the Roanoke City Council Roanoke, Virginia Dear Members of Council: Please be advised that I will not be present for the special meeting of City Council scheduled for Monday, July 31, 1995, inasmuch as I will be out of the City on vacation. You have my best wishes for a successful meeting. Sincerely,/ //~ John H. Parrott Council Member JHP:gd pc: W. Robert Herbert, City Manager Wilburn C. Dibling, Jr., City Attorney James D. Grisso, Director of Finance Willard N. Claytor, Director, Real Estate Valuation Robert H. Bird, Municipal Auditor ~,Mary F. Parker, City Clerk DAVID A. BOWERS Mayor CITY OF ROANOKE CITY COUNCIL 215 Church Avenue, S.W., Room 456 Roanoke, Virginia 24011-1536 Telephone: (703) 981-2541 July 27, 1995 Council Members: Elizabeth T. Bowles John S. Edwards Delvis O. "Mac" McCadden John H. Parrott William White, Sr. Linda F. Wyatt The Honorable Mayor and Members of the Roanoke City Council Roanoke, Virginia Dear Members of Council: Please be advised that I will not be present for the special meeting of City Council scheduled for Monday, July 31, 1995, due to a previous business commitment. You have my best wishes for a successful meeting. Sincerely, _ William whIte,~r. / Council Member WW:gd pc: W. Robert Herbert, City Manager Wilburn C. Dibling, Jr., City Attorney James D. Grisso, Director of Finance Willard N. Claytor, Director, Real Estate Valuation Robert H. Bird, Municipal Auditor ~Mary F. Parker, City Clerk