Commentary added by Jack Hickey

MEMORANDUM
Sequoia Healthcare District

The following District activities have occurred since my last report:

• Hospital Replacement Proiect: The committee charged with working to ensure a replacement hospital met with CHW representative on June 9. The parties discussed funding, rights and obligations and governance. The parties agreed that the District as a 50% member of SHS would develop a resolution authorizing funding in an amount up to $25M and would consider additional funding in the future. The parties further agreed there would be no changes in the governance structure of the Hospital. Resolution 04-2 will be considered at this Board meeting.  This meeting caused the cancellation of the June 2 regular meeting, resulting in this current meeting. The issue of governance has been raised at past meetings, and is one which should be discussed in public.

• Nursinq Proqram: At the District's December 16, 2003 meeting the Board approved entering into an agreement for not less than six years with San Francisco State University, Canada College and Sequoia Hospital for the purpose of developing a baccalaureate-nursing program. The MOU/Contract has been finalized. The anticipated class size of 32 students start in September 2004.  I opposed use of District (taxpayer) money to fund this expensive program (>$1,000,000/yr).  The Sequoia Healthcare District includes other healthcare providers, such as Kaiser and Palo Alto Medical Foundation, who, along with CHW/Sequoia, are logical participants for such a program.   And, the Nurse's Union should also participate.

• Public Communications: As I have indicated previously I believe the District need to retain professional assistance in communicating with the public. Two months ago we interviewed two firms, either of which could meet our needs. I would urge the board to consider either of these firms as soon as possible.  The last District Newsletter was published in Fall 2002.  We don't need a PR/Campaign firm to provide information to the public.

• Annual Audit: The local firm Pearson, delPrete, who has recently merged with Vavrinek, Trine, Day & Co., LLP, has performed our annual audit for the last five years. Item 6.a. on the agenda deals with engaging the firm to perform the annual audit for the period ending June 30, 2004. The price for this audit has increased 5% to $12,750 and is being recommended for approval.

• Buildinq Appraisals: Market appraisals for the District buildings located at 2900 Whipple and 525 Veterans Boulevard have been ordered and are expected to be completed within 30 days. Resolution 04-3 declaring that these properties are surplus would authorize the board to put these properties up for sale and will be considered at this meeting.

• Hospital Foundation: At your June 11, 2003 meeting the Board approved a matching grant in the amount of $1 M. The Foundation has met that goal and a letter notifying us of this is enclosed. The Foundation is also requesting a new matching grant for the coming fiscal year in the amount of $1 M. Given the expanding number of healthcare providers in the District boundaries, it is no longer appropriate for tax dollars to favor one provider over the others.

• 457(b) Deferred Compensation Plan: Agenda item 6.d requests your acceptance of an amendment to the 457 (b) Deferred Compensation Plan which allows participants to access funds they had previously rolled over. into this plan. Currently, access to these funds is not permitted until retirement or death. The IRS has recently allowed the amendment.

• Sequoia Hospital Emplovees Pension Plan: Enclosed in your Board packet you will find a copy of the Portfolio Performance as of March 31, 2004 for this pension plan. If you have any questions or would like to discuss it please do not hesitate to contact me.

• CEO Retirement: Given my retirement effective June 30, 2004, I would like to take the opportunity to thank current and past Directors for their support and the privilege to work for the District. .