WHEREAS, Laguna Honda Hospital and Rehabilitation Facility provides skilled nursing care to 1,065 frail elderly and disabled adults and has traditionally served 1200 resident; and,

WHEREAS, Laguna Honda Hospital must be rebuilt to comply with federal licensing and reimbursement standards and to ensure that the facility meets seismic safety standards; and,

WHEREAS, the Health Care Financing Administration has required the Department to reduce census at Laguna Honda to enhance resident privacy, and if Laguna Honda is not rebuilt at federal standards, then the Health Care Financing Administration may seek further reductions in the Hospital's census or decertification of the facility; and,

WHEREAS, projections indicate that there will be increased demand for skilled nursing care in San Francisco by the year 2010 and beyond, which support the need to continue Laguna Honda Hospital as a vital component of the long-term care delivery system; and,

WHEREAS, the San Francisco Health Commission supported the creation of a Planning Committee to bring recommendations on how to rebuild Laguna Honda Hospital to the Health Commission, Board of Supervisors and the Mayor; and,

WHEREAS, the Laguna Honda Hospital Replacement Planning Committee was formed to make programmatic, technical and financial recommendations on the rebuilding of the Hospital and the use of the Campus, and,

WHEREAS, the Laguna Honda Hospital Replacement Planning Committee and its sub-committees were diverse and represented the perspective of consumers, providers, advocates, community-based organizations, labor, business and other interested parties; and,

WHEREAS, the Laguna Honda Hospital Replacement Planning Committee adopted the following recommendations:  (1) rebuild Laguna Honda Hospital, (2)  rebuild Laguna Honda on the existing Forest Hill site,  (3) build a single skilled nursing building in Clarendon Valley,  (4) place 1,200 skilled nursing facility beds in the new facility,  (5) have a bed mix of 20% private and 80% semi-private rooms [this includes seven 4-bed rooms],  (6) expand the existing Adult Day Health Center, senior nutrition, and animal/horticultural therapy program, and develop a child care center for employees, and aqua therapy for residents,  (7) demolish Clarendon Hall and prepare the site for assisted living, and  (8) place at least 140 assisted living units on the former site of Clarendon Hall; and,

WHEREAS, assisted living is being proposed on the Laguna Honda Campus to ensure that the Campus has a range of housing opportunities, and to address a deficit in the number of assisted living/supportive housing opportunities for the elderly and disabled in the City

and County; and,

WHEREAS, the project cost of replacing Laguna Honda Hospital and providing a $15 million commitment for assisted living is $437,045,000, which includes financing costs; and,

WHEREAS, the recommendation of the Laguna Honda Hospital Replacement Planning Committee is that general obligation bond(s) and/or other evidence of indebtedness be used to finance this project; and,

WHEREAS, while the source or repayment for general obligation bonds is ad valorem property taxes, the Departmental also believes that other sources of funds can be used to pay a portion of the rebuilding costs; and,

WHEREAS, San Francisco expects to receive an estimated $585 million in tobacco settlement funds over the next 25 years; and,

WHEREAS, the Laguna Honda Hospital Replacement Planning Committee recommends using tobacco settlement funds for the replacement of Laguna Honda because it is consistent with using these funds for health-related purposes; and, 

WHEREAS, tobacco settlement receipts are recommended for debt service on construction, equipment and other related financing costs as the first and primary source to pay off capital costs of the project; and,

WHEREAS, the Department is working with its legislative delegations to determine whether State and/or federal funds are available to pay for a portion of the replacement costs, and if funding is received, then it would be applied to reduce the debt service on the bonds; and,

WHEREAS, the pro forma operating analysis indicates that the City and County General Fund subsidy for Laguna Honda will increase by $9.1 million in the new hospital's first full year of operation, and by $18 million by the fourth year of operation, based on the assumption that Medi-Cal reimbursement would remain stable and expenditures would increase; and,

WHEREAS, increased General Fund contribution would be required for Laguna Honda whether or not the Hospital is rebuilt given Medi-Cal reimbursement trends; and,

WHEREAS, the replacement of Laguna Honda Hospital is not in conflict with the goal of caring for individuals in the community, whenever it is appropriate to do so, because the Hospital is designed for elderly and disabled adults who cannot be cared for in either their homes and/or community-based settings; now, therefore, be it

RESOLVED, that the San Francisco Health Commission supports the need to continue providing skilled nursing facility care to ensure that elderly and disabled adults, who cannot be cared for in the community, have access to vital rehabilitative and restorative services; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission supports the proposal of the Laguna Honda Hospital Replacement Planning Committee to build a 1,200 skilled nursing bed facility and at least 140 assisted living units on the existing Forest Hills site of Laguna Honda at a project cost of $437,045,000; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission supports the use of San Francisco's entire tobacco settlement funds to cover a portion of the debt service related to the replacement of Laguna Honda; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission requests that the Department use its best efforts to secure the maximum reimbursement allowable from payers for the services of a distinct part skilled nursing facility; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission encourages continued planning on the Citywide effort to expand the array of home and community-based services for elderly and disabled adults; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission requests the Department of Public Health continue to evaluate the state-of-the-art of long-term care, (including a variety of options to care for the disabled and elderly in the community), propose well-balanced, integrated services for the coming decade and present regular updates on the progress of these efforts; and, be it

FURTHER RESOLVED, that the San Francisco Health Commission recommends to the Board of Supervisors and the Mayor to proceed with the placing of a general obligation bond(s) and/or other evidences of indebtedness on the November 1999 ballot.

I hereby certify that the foregoing resolution was adopted by the San Francisco Health Commission at its meeting of Tuesday, May 4, 1999.

Sandy Ouye Mori, Executive Secretary to the Health Commission