Colorado Springs Mayor Steve Bach has sent Colorado Springs City Council a letter sharing his thoughts on the future potential operating lease of Memorial Health Systems (MHS).

Last August, Mayor Bach suggested to City Council that they conduct an RFP (Request for Proposal) process in order to explore all options for consideration. The Memorial Health Systems Task Force was formed and through a thorough RFP process, a wide variety of bids were submitted and examined. The Council, having accepted and approved the recommendation of the Memorial Health Systems Task Force, now enters into exclusive negotiations with the University of Colorado Health System, on such a lease.

Mayor Bach is now asking City Council to consider the following as the negotiations proceed:

• Solicitation and consideration of the Mayor's advice in the negotiations, and incorporation of identified key terms and conditions in the final agreement.
• Use of qualified, outside legal counsel to assist Chris Melcher, City Attorney and the City’s negotiator on the Lease, in the negotiations. MHS should advance all City negotiation costs and be reimbursed by the Lessee.
• A time limit for negotiations of 6 months or less, and a submission of the final lease to the voters in a timely manner thereafter. MHS should advance any City pre-election public information expenses and election costs and be reimbursed by the Lessee.
• A concrete solution on all PERA issues, including any City obligations, with a specific monetary guarantee from the Lessee to address and resolve any City liabilities.
• A Council affirmation in advance of Lease execution, and a commitment in the Lease, that all financial payments from Lessee, including upfront payments, annual lease payments, and surplus revenue sharing payments, are all transferred directly into a segregated account at the City or an escrow account under the City’s ownership and control, and not into the General Fund.
• Memorial management and board members should not participate in the actual negotiations, but should provide timely information and suggestions to the City Attorney when requested.
• The ballot initiative should include language establishing a Colorado Springs Healthcare Foundation with a stated mission, governance structure, and policy guidelines to be determined by the Mayor and Council jointly.
• Enhance local control, input, and management of MHS during the Lease to the maximum extent possible.
• A commitment on the disposition and use of the monies currently held by MHS in their cash and operating accounts.
• A commitment to develop a Level 1 Trauma Center at MHS.
• A commitment to maintain Tricare, Medicare and indigent care.
• A commitment that the Lessee will pursue a Branch Campus Medical School at UCCS, with a written timeline, stated deadlines for progress, and a firm guarantee for at least $3 million per year towards such effort.
• A commitment to continue the Sexual Assault Nurse Evaluators (SANE) program.
• A financial guarantee, and proof of sufficient financial resources, commensurate with the financial commitments of the Lessee over the full term of the Lease.
• Stated and measurable performance outcomes that ensure the community is receiving the appropriate level of care and performance from MHS, with clear reporting obligations, performance guarantees, and penalty provisions as appropriate.
• Clear and well structured termination provisions in the event the Lessee is unable to satisfy the obligations of the Lease, even after notice and a cure period.
• Clear and firm financial guarantees from Lessee on the additional funds that would be provided to the City if (1) the PERA issues are resolved for less than the stated amount necessary in the RFP process, and (2) an appropriate share of future MHS surplus revenues or profits based on improved operations.

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