Lease terms of Memorial Health System available for review and comment
Friday, June 08, 2012
The terms of the potential lease of Memorial Health System (MHS) to the University of Colorado Hospital (UC Health) are now available for public review and comment on springsgov.com.
A team consisting of City Attorney Chris Melcher, City Councilmembers Merv Bennett and Brandy Williams, and lawyers from Fulbright & Jaworski, LLP (hired by the City) has been negotiating the terms of the lease agreement since early February. This team identified four important ways the proposed lease tracks with the Request for Proposal response initially used to vet interested partners. Those are:
Colorado Springs would receive an exponentially higher level of quality care.
- The 5,000 employees of MHS would team with a wide-range of health care institutions and specialists that includes University of Colorado Hospital, Poudre Valley Health Network, Children’s Hospital of Colorado and the University of Colorado Medical School.
- University of Colorado Health System has committed to maintain wherever possible, and in the future substantially increase, the level and type of health services currently offered at MHS. MHS would regain its position as the premier hospital in our community, and become a flagship hospital for all of Southern Colorado.
- Colorado Springs would receive nearly $1.9 billion from the deal.
- The City would receive $259 million up-front, with another $168 million from annual lease payments, and retain over $330 million in current cash and assets at MHS. These funds will retire the City’s outstanding PERA obligation for Memorial employees and defease the Memorial bonds and debt. In addition, UCH has committed to invest an average of over $28 million per year in MHS, for a total of $1.1 billion in capital improvements.
- Colorado Springs would preserve the 5,000 jobs for current MHS employees.
- Together with the scope of capital investments and the breadth of UCH’s network of health care providers, Memorial Hospital would be well positioned to maintain, and indeed expand in the future, the current hospital’s workforce.
- With the expected UCCS Branch of the CU School of Medicine, the City and the community would have a tremendous opportunity for more jobs and further economic investment in related health care businesses and technology.
Colorado Springs would continue to fulfill its obligations for those patients most in need.
- Commitment to provide charity care would continue.
- The new hospital partnership would result in a higher level of care for our military families and TRICARE beneficiaries.
In addition to those four main alignments with the RFP, the lease agreement also addresses funding a branch of the University of Colorado Medical School at the UCCS campus ($3 million per year for 40 years). In addition, local operational control would be maintained as seven of the 11 Board seats must be held by residents of El Paso County. The significance of this lease is to ensure the City of Colorado Springs is well positioned to provide the best local healthcare into the future.
City Council will take comments on the proposed lease agreement at a public hearing on June 12 at City Hall Council Chambers beginning at 3:30 p.m. Comments can also be sent to MemorialLease@springsgov.com. City Council will meet on June 26 to take action on referring the matter to voters in a Special Election August 28 that will be by mail-in ballot. Public comment will be taken at that meeting as well.
NOTE TO MEDIA: Chris Melcher, Merv Bennett and Brandy Williams will all be available for interviews on Tuesday after the Public Hearing.