A. * Recommended Nominees for Officers for Appointment by PPH Board of Directors.. Chair Vice-Chair Secretary

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1 PALOMAR POMERADO HEALTH (PPH) HOSPITAL, EMERGENCY CARE, TRAUMA CENTER IMPROVEMENT AND REPAIR MEASURE BONDS INDEPENDENT CITIZENS OVERSIGHT COMMITTEE (ICOC) NOTICE & MEETING AGENDA Wednesday, May 19, 2010 Admin Conf Room #2, Third Floor, Palomar Medical Center 3:00 p.m. 555 East Valley Parkway, Escondido, California Pg# Time Target I. CALL TO ORDER and ROLL CALL... 3:00 pm II. PUBLIC COMMENTS...5 3:05 pm (5 minutes allowed per speaker, with a cumulative total of 15 minutes per group for further details & policy, See Request for Public Comments notices, available in the meeting room) III. INFORMATION ITEM(S)...5 3:10 pm IV. * MINUTES ICOC Meeting April 28, 2010 (ADDENDUM A)...Ag :15 pm V. DISCUSSION AGENDA... 3:15 pm REPORTS A. * Recommended Nominees for Officers for Appointment by PPH Board of Directors.. Chair Vice-Chair Secretary... Ag :23 pm B. * Recommended Nominee(s) for Appointment to Advisory Panel by PPH Board of Directors.... Ag :30 pm VI. COMMITTEE MEMBER COMMENTS/AGENDA ITEMS FOR NEXT MEETING...5 3:35 pm VII. FINAL ADJOURNMENT... 3:35 pm NEXT MEETING: 3:00 P.M., THURSDAY, OCTOBER 28, ST FLOOR CONF ROOM, 456 E. GRAND AVENUE, ESCONDIDO, CA NOTE: If you have a disability, please notify us at hours prior to the event so that we may provide reasonable accommodations Asterisks * indicate anticipated action Action is not limited to those designated items

2 ICOC Meeting Minutes Wednesday, April 28, 2010 TO: Independent Citizens Oversight Committee MEETING DATE: Wednesday, May 19, 2010 FROM: Tanya Howell, Executive Assistant Background: The minutes from the Independent Citizens Oversight Committee (ICOC) meeting held on Wednesday, April 28, 2010 (ADDENDUM A) are respectfully submitted for Committee review and approval. RECOMMENDATION: Approval Motion: X Individual Action: Information: Required Time: 5 minutes Form A - Minutes.doc

3 ICOC Officers FY2011 TO: Independent Citizens Oversight Committee MEETING DATE: Wednesday, May 19, 2010 FROM: Tanya Howell, Executive Assistant Background: Pursuant to the Procedures, Policies & Guidelines (PP&G) of the Independent Citizens Oversight Committee (ICOC), the Palomar Pomerado Health (PPH) Board of Directors shall annually appoint a Committee Chair, Committee Vice Chair and Committee Secretary. Each appointment shall expire on June 30th of the following year; and no person shall serve as Committee Chair for more than three consecutive annual terms. The PPH Board of Directors has delegated the authority for appointment of ICOC Officers to the Chairs of the PPH Board and Board Finance Committee, both of whom sit on the Board Finance Committee. The FY2010 Officers are Margaret Moir, Chair; Bill Hoffman, Vice Chair; and John McIver, Secretary. Of the members remaining on the ICOC for FY2011, the following have expressed an interest in being nominated for office: Ron Klingensmith any office Alex Galenes any office John Amodeo Secretary RECOMMENDATION: As there will not be an ICOC meeting prior to the expiration of the current terms of office on June 30, 2010, it is recommended that a new slate of officers be nominated at this meeting and presented for appointment at the May 25, 2010, Board Finance Committee meeting. Motion: X Individual Action: Information: Required Time: 8 minutes Form A - Officers.doc

4 ICOC Advisory Panel FY2011 TO: Independent Citizens Oversight Committee MEETING DATE: Wednesday, May 19, 2010 FROM: Tanya Howell, Executive Assistant Background: Pursuant to the Procedures, Policies & Guidelines (PP&G) of the Independent Citizens Oversight Committee (ICOC), the Palomar Pomerado Health (PPH) Board of Directors has established an Advisory Panel to the ICOC. The Panel shall consist of at least one member appointed by the PPH Board from a list of candidates submitted by the Committee Chair, with a term of office commencing on July 1 st of the current year and continuing through June 30 th of the following year. Of the eligible candidates on the attached listing, none of the prior members were contacted. The following current members have expressed an interest in being nominated to the Advisory Panel: Marguerite Jackson Dill John McIver Margaret Moir RECOMMENDATION: It is recommended that at least one candidate be nominated at this meeting, to be presented for review at the May 25, 2010, Board Finance Committee meeting, with that body s recommended to be forwarded to the June 14, 2010, Board meeting for appointment. Motion: X Individual Action: Information: Required Time: 7 minutes Form A - Advisory Panel.doc

5 List of Current/Former ICOC Members Eligible for Appointment to Advisory Panel For PPH Fiscal Year 2011 George Kung, MD Class of nd term expired 6/30/08 Kathy Leech-McKinney Class of nd term expired 6/30/08 Edward R. (Ed) Lehman Class of nd term expired 6/30/09 Bob Wells Class of nd term expired 6/30/09 William L. (Bill) Corwin Class of nd term expires 6/30/10 Marguerite Jackson Dill, PHD, RN, FAAN Class of nd term expires 6/30/10 John McIver Class of nd term expires 6/30/10 Margaret Moir Class of nd term expires 6/30/10

6 ADDENDUM A ADD A-1

7 PARTICIPANT ROSTER PALOMAR POMERADO HEALTH HOSPITAL, EMERGENCY CARE, TRAUMA CENTER IMPROVEMENT AND REPAIR MEASURE BONDS INDEPENDENT CITIZENS OVERSIGHT COMMITTEE District Construction Trailer Conference Room PMC West Site, 2185 W Citracado Parkway, Escondido, CA Wednesday, April 28, 2010 PARTICIPANTS MEETING DATES 4/29/10 MEMBERS JOHN A. AMODEO (AT LARGE) P WILLIAM C. BONNER (SENIOR CITIZENS ORG) E WILLIAM L. CORWIN (AT LARGE) P MARGUERITE JACKSON DILL, PHD, RN, FAAN (NURSE) E ALEX A. GALENES (AT LARGE) P WILLIAM HOFFMAN VICE CHAIR P RONALD D. KLINGENSMITH (TAXPAYERS ORG) E JOHN MCIVER (BUSINESS ORG) SECRETARY P MARGARET MOIR (AT LARGE) CHAIR P H. SCOTT PECK (AT LARGE) A DISTRICT SUPPORT STAFF BOB HEMKER, CFO P TANYA HOWELL, EXECUTIVE ASST SCRIBE P JANINE SARTI, GENERAL COUNSEL P KATHLEEN LEAK, BOND COUNSEL - ORRICK, HERRINGTON & SUTCLIFFE P SEE TEXT OF MINUTES FOR NAMES OF GUEST PRESENTERS [P = Present E = Excused A = Absent] 1 ADD A-2

8 Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 (I.A.) AGENDA ITEM/PURPOSE DISCUSSION/RECOMMENDATION ACTION/COMMENTS I. CALL TO ORDER & ROLL CALL The meeting was called to order at 3:05 p.m. by Chair Margaret Moir, followed by roll call. See roster for attendance II. ADJOURNMENT TO SITE TOUR After learning from DPR that there would not be a lift operator available at the originally scheduled time for the tour of the PMC-West construction site, Bob Hemker suggested that the site tour be held at the beginning of the meeting rather than at the end to afford the maximum opportunity in touring the new facility Based on Mr. Hemker s suggestion, Chair Margaret Moir adjourned the meeting at 3:10 p.m., and the members and invited guests joined Brian Gracz of DPR, who led them on a guided tour of the facility III. RESUMPTION OF MEETING Following the site tour, the all members and guests reassembled in the conference room, and the meeting was called to order at 4:04 p.m. by Chair Margaret Moir. IV. PUBLIC COMMENTS There were no requests for public comments filed V. ADJOURNMENT TO CLOSED SESSION Citing the following statutory authorization, Chair Moir adjourned the meeting to closed session at 4:05 p.m. Conference with Legal Counsel Anticipated Litigation Significant exposure to litigation pursuant to subdivision (b) of of the California Government Code: one potential case VI. RESUMPTION OF OPEN SESSION Chair Moir resumed the open session and called the meeting to order at 4:20 p.m. Action Resulting from Closed Session Discussions o There was no action taken based on the discussion in the closed session VII. INFORMATION ITEM(S) Healthcare Reform o Mr. Hemker stated that there is still a large amount of uncertainty surrounding the impact of the Healthcare Reform Act In the near term, there is very little change, as most of the provisions don t go into effect until 2014 There is also still a fair amount of legislation that hasn t yet been formalized regarding how the Administration will administer the law Cannot tell how it will affect district revenue stream without that information o He will continue to evaluate as more information comes available 2 ADD A-3

9 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS o o o The District must also review as an employer as there are some provisions that will affect our employees Coverage of children to age 26 Provisions regarding pre-existing conditions Again, in FY2011 it is likely that there will be no material impact on the District Feel free to contact Mr. Hemker s office if you have any questions The California Hospital Association (CHA) and the American Hospital Association (AHA) both issued executive summaries covering the reform bills that are in excess of 100 pages, which emphasizes the complexity of the issue VIII. MINUTES ICOC MEETING NOVEMBER 12, 2009 The minutes from the November 12, 2009, meeting were distributed via during the first two weeks of January 2010 o Assistant Tanya Howell reminded the members that the minutes had been vetted via vote, and the formal vote at this meeting was merely to commemorate actions previously taken After ICOC review, comment and correction as necessary, an original was signed by Chair Margaret Moir and Secretary John McIver and forwarded to the District Board s Finance Committee The District Board s Finance Committee then forwarded the minutes for inclusion in the District Board s permanent records MOTION: By John McIver seconded by Alex Galenes and carried to formally vet the approval of the Minutes of the November 12, 2009, ICOC Meeting IX. DISCUSSION AGENDA REPORTS A. REVIEW OF PROCEDURES, POLICIES & GUIDELINES (PP&G) Duties & Roles of the ICOC o Mr. Hemker, introduced Bond Counsel Kathleen Leak, who provided an update on the topic o The accountability provisions for the formulation of an ICOC were voluntarily included by the District in Measure BB Unlike school districts, there is not a legal requirement for hospital districts to do so The District felt strongly about the transparency having oversight provided and included the ICOC in the measure o The ICOC provides financial oversight, with focus on the permitted expenditures of GO Bond proceeds Duties are spelled out in the PP&G, bottom line is for the review of GO Bond expenditures and a report on findings back to the District Board o In context, it was noted that the Facilities Master Plan (FMP) includes sources of revenue other than the GO Bonds: GO ties to ICOC Revenue Bonds Philanthropy Operating revenues MOTION: By John Amodeo seconded by John McIver and carried to approve both 5.6(a) and 11 of the amended PP&G as presented 3 ADD A-4

10 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS Creation of an Advisory Panel o Suggestion from ICOC went through District governance and was approved o To provide for continuity, the District Board added 11, creating an Advisory Panel o o o o Comprised of at least 1 member, to be appointed by the District Board from a list submitted by ICOC Chair No maximum number dependent upon availability and interest 1-year term, with automatic appointment for second term (a) Can only serve 2 consecutive terms, consistent with ICOC membership Must have previously served on ICOC Continued agreement to comply with ethics and conflict of interest provisions Advisory capacity only No exercise of any rights or duties of ICOC members Non-voting Didn t include detailed procedures, leaving access to the Advisory Panel resource up to the members of the ICOC 4 current members are terming out by statute The last 4 of the originally seated members Members of the ICOC that it would be beneficial to new members to have continuity from past experiences, and the District Board agreed All materials available to the ICOC are publicly available in accordance with the provision of the Brown Act Therefore, they would be available to the Advisory Panel Panel members would remain on the distribution list As non-voting members, the Panel could not participate in general discussions at meetings Suggested that future agendas might include an Advisory Panel item (a) Would recognize their status and distinguish them from members of the public (i) Members of the public are only allowed 5 minutes per topic at the beginning of a meeting to address the ICOC (b) Addition of agenda item would provide a specific placeholder for input of Panel Addition of Criteria to Allow Former Members to Reapply in the Future o When reviewing the PP&G, Counsel made note of the fact that those members who term out had no ability to reapply for future consideration o Suggested addition of 5.6(a), which added that provision, and District Board approved in the PP&G revision Is it really needed at this point, considering ICOC will only remain extant until final GO Bonds are expended? Ms. Leak indicated it was a good time since we were already amending the PP&G Consistent with ICOC membership terms of office, the sun-setting period was established as 2 years Ensures that members would have been off for one full term before being able to reapply 4 ADD A-5

11 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS Allows a member of the Advisory Panel to serve a full term in that capacity, then reapply for voting membership Alex Galenes had inquiries regarding the members duty to review each annual expenditure report to ensure expenditures were made in accordance with Measure BB o Inquired as to whether each member actually reviewed everything in the boxes and/or if there was a subcommittee appointed to that task o Mr. Hemker responded that the ICOC is annually required to go through and make a report that all expenditures were in compliance, not necessarily to review every invoice o Basic premise of Measure BB is to reimburse expenditures made for bricks and mortar Members must view themselves as the auditors As such, the entire group reaches the decision that: They can rely on Mr. Hemker for the paper flow of the dollars from bond money, through the bank and to the vendor As individuals, each member is provided the opportunity to go into the boxes, testing as a sample or performing a 100% review of all documents Sampling of invoices relies on controls in place within the District If a vendor is requesting payment, how do the District and experts validate that request? Each request is validated utilizing internal controls (a) The District reviews how the bills are paid and whether expenditures are both legitimate under Measure BB and legitimately charged/invoiced pursuant to the contract (i) The internal controls in effect to ensure funds are accounted for are reviewed by internal and external auditors (ii) Historically, the District staff has asked that Committee members obtain a comfort level with controls that are in place If the Committee members were to be uncomfortable approving a specific expense, the District merely reverses those items out of GO Bond proceeds and paid for them utilizing other means o When the ICOC inquired about hiring their own auditor, it was identified that not only was there was a lack of a funding source to do so, but also that the Committee is really the auditor Internal Audit department of the District supplements these efforts with its own audit work Tom Boyle s department (a) Tom has a direct reporting relationship to the District Board and to CEO The construction auditor s work was fee-based, not contingency based (a) The auditor has authority to review Finance and Construction Departments and all treasury aspects (b) Position has previously been staffed externally via contract with Jeff Miller, but Tom is currently interviewing for an on-staff position 5 ADD A-6

12 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS o Chair Moir commented that she and the Committee have become much more comfortable in their auditing role after Jeff & Tom started participating in the meetings and providing their input B. REVIEW OF COSTS AT PMC-WEST Mr. Hemker began the discussion o Will continue to provide ongoing informational updates on various processes and where the project stands Important to keep the Committee apprised Had spoken about the bidding process and will talk this evening about change orders and procedures and protocols of why change could occur o Mike Shanahan, Director of Facilities Planning and Development, and Wendy Cohen, Director of Facilities Construction, will both be attending the ICOC meetings in the future Complexity of the constructions projects resulted in a shift of Mr. Shanahan s duties and the addition of another position Mr. Shanahan has been performing a yeoman s job, covering both design and construction for all projects, and he can now shift his focus back to design Mrs. Cohen was selected to fill the new position related to facilities construction, and is an industry expert on construction Utilizing the attached presentation (Attachment 1), Mrs. Cohen presented information and answered questions o District Policy Regarding Change Orders (Pg 1) o On this project, and on any other large construction project, change orders are to be expected o District decided not to go to a general contractor, instead opting for having a construction manager in DPR There are over 75 standard trade contracts, managed by DPR Contracts are generally lump sum, hard bid either with an allowance in their contract or hold out options The District holds the contracts and DPR manages them All contracts use standard language that was vetted by numerous groups both internally and externally There are also 6 custom contracts that contain terms and conditions that are slightly different from standard trade contracts Exterior Cladding System with Shengxing is unique from standard due in large part to transport issues from China Drywall contract with DPR is a guaranteed maximum price (GMP) contract subject to actual expenditures (a) This contract was put out to bid using the standard bid process, but the District ensured that it was treated as any other Request for Proposal, with no review of or input regarding bids from other vendors by DPR personnel Berg & University Mechanical were brought in early in the construction (a) Change orders are really additional phases that brought them up to their full scope of work, and added an audit clause to their contracts Information only 6 ADD A-7

13 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS (b) Purely a cost of work contract only get charged for what they spend (c) Contract does include a shared savings ability (d) Viewed as Phase I and Phase II of contract as opposed to looking at those as actual change orders Best Interiors is also a GMP contract subject to actual expenditures Herrick Steel includes a shared savings provision o The construction at PMC-West is considered an Incremental Permitted Project Instead of waiting 4-5 years for all permits to be approved, Mr. Shanahan worked with the State to allow incremental permits Allowed us to save approximately a year Also allows us to have transparency in where the money is going Poses an interesting concept for bidding contractors because what they re bidding on may not be a fully developed drawing There are allowances/placeholders for the portions that weren t yet fully developed at time of bid Mrs. Cohen also distributed a Change Order Workflow sheet that provides an overview of the specific checks and balances process (Attachment 2) o Mr. Hemker stated that he is very comfortable with the process and approvals being utilized Cost Data Analysis via Gantt Chart (Attachment 1 Pgs 2-3) o The Gantt Chart presented is a rolled-up schedule showing the highlights of a very detailed 35-page document o The construction team uses a last planner system, which is built around the last possible moment something can be started Each new step of construction is pushed from the field rather than from the office Gets into the principles of Lean Construction Projected Original Budget Vs. Current Costs (Attachment 1 Pg 4) o $299M has been spent on bricks and mortar The frequency with which all the teams are going through and keeping this up to date is key Everyone is keeping in touch with the months of spend-down that are needed o Biggest cost to us is time for every month the doors are not open, it becomes a loss of revenue and cost of carry o Monthly budget process Collaborative effort from project managers in field to the Directors of Construction and Finance Constant evaluation of use of money and risk assessment o Current goal is to get through the rainy season without delays Chair Moir asked about the close to $100M that has been expended on architectural costs o Case in point was the amount of money pre-expended with University Mechanical and a large change order Shouldn t change orders of that magnitude be absorbed by the architects? 7 ADD A-8

14 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS For those contracts, terminology in the traditional sense of a change order doesn t apply it falls into the phased contracting category o The update for University Mechanical reads as a change order because it is in addition to the original contract Can t be reviewed as a change order as changes were completion in scope not included in original contract with them Historically architects have been held to errors/omissions, but these changes were not due to an architectural mistake, they just hadn t yet been requested o How will we get the building finished with what Chair Moir sees as exorbitant architectural fees? Explained there are hard costs vs. soft costs The percentage that falls into each of those buckets is considered by both Mr. Shanahan and Mrs. Cohen to be normal for a project of this size The overall project costs are not out of line with the industry, and the architect s costs are not tied to project costs but are instead based on specific tasks When Mr. Shanahan was hired by the District in 2003, he was brought in as an internal architect who could challenge the ideas of the external architects The first few years, the ICOC has been dealing with the soft costs, and now the hard monies are starting to take over The $23M paid to DPR was not all for management fees as their overall fees include a drywall contract in total amount of $53M C. RECOMMENDED NOMINEES FOR OFFICERS FOR APPOINTMENT BY DISTRICT BOARD OF DIRECTORS Before Chair Moir began the discussion for nominees, she acknowledged member Bill Hoffman, who stated that he was presenting a verbal resignation from the Committee o In his professional life, he recently was involved in the sale of a medical building Nothing associated with the District, but he no longer feels comfortable continuing on the Committee due to potential real or perceived conflicts of interest that might arise in the future and potential to have to preclude business opportunities o Chair Moir accepted Mr. Hoffman s resignation and thanked him for his service Based on the fact that there were four members absent, Chair Moir suggested tabling nominations for officer and nominations to the Advisory Panel to a special meeting o Meeting should take no longer than 30 minutes o Mr. Hemker reminded the Committee that the meeting would have to be publicly noticed as a special meeting An can be sent to the members, soliciting interest in office (either as officers or as nominees to the Advisory Panel) o The meeting should be scheduled by the first week in June to allow report-out to the Board before the end of the fiscal year Special meeting to be scheduled by first week in June 8 ADD A-9

15 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS o John Amodeo requested that it be prior to June 7 th, as he is going out of town that date John McIver and Chair Moir both went ahead and expressed an interest in serving on the Advisory Panel PRESENTATIONS A. CONSTRUCTION AUDITOR S REPORT Utilizing the presentation attached in the agenda packet as Addendum C, Internal Audit Officer Tom Boyle provided a construction audit update o Has performed additional risk assessments with all trades and subs o Early on in review of special contracts Initial reactions in dealing with University Mechanical are positive especially in terms of the openness of the contractor In our best interests to be in partnership with them passing info along as we re looking at things o Mrs. Cohen has done initial notification to trade contractors that it is standard operating procedure for all contracts to be audited Allows them to be prepared for the audit Information only B. MASTER FACILITY PLAN STATUS REPORT Utilizing the presentation attached in the agenda packet as Addendum D, Mrs. Cohen and Mr. Shanahan presented an update for all facilities Process for administration of contracts and invoices is an ongoing process (ADD D-6) o In order to speed the process up, District and DPR managers review the documents at the same time o ADD D-7 Credits are a point of risk as special rate contractors are required to return credits to the District when received o ADD D Benchmark room sign off is not just construction, it includes sign off by clinical staff Most of items listed are already complete since this is the end of April o ADD D-15 Special Seismic Certification (SSC) will continue to be a risk until the entire site is signed off on o ADD D-17 Shelled spaces won t be completed (e.g., will be stubbing in utilities, etc., but wouldn t complete all the work) Provides available space for future growth o ADD D-20 Remaining Trades Not much left to finalize on trade contracts Still finalizing what the District wants to do with regard to signage Information only 9 ADD A-10

16 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS o ADD D Patient Zone/Bathroom Changes Requests from clinical end-users and service providers based on mock-up rooms Current phase of expansion at Pomerado Hospital is wrapping up (ADD D-26-29) o Future phase will have a bridge to the hospital from the Pomerado Outpatient Pavilion (POP) Building Scheduled to bid this summer, with construction to begin this fall o $71.4M has been spent at this time o 107 beds on the acute side and 96 at Villa Pomerado Rancho Peñasquitos (ADD D-31) o Official zoning change was approved by the City of San Diego o Now undergoing a review and project assessment phase Ramona (ADD D-32) o Approved by San Diego County o 37K sq ft were approved C. YTD DISTRICT EXPENDITURE REPORT FOR FISCAL YEAR 2010 Mr. Hemker presented an interim report on expenditures reimbursed YTD (Addenda E-K of the agenda packet) o Included as an interim just so the magnitude of the entire bulk would not have to be reviewed at one sitting o Mr. Hemker highlighted general aspects to help the members understand the flow The first tranche was fully spent down in March 2010 (ADD E-6) The tie-out to the banking reference can be found on ADD E The tie-out to actual expenditures are listed on ADD E-2-5 (a) Mr. Hemker encouraged the Committee to re-reference these documents as we move to the Fiscal Year End (FYE) (i) What tranche was used? 1. (e.g. Series 2007A) (ii) How does that tie to the banking reports? 1. (e.g. ADD E-6) (iii) How does that tie to the internal financial reports and supporting documents? 1. (e.g., Draw Schedule #27 on ADD E-5 ties to ADD G-49-54, which can further be broken down in summary by vendor name/by description of services in ADD I and J or in full detail in ADD K) o Contact Mr. Hemker s office if you have any questions after further review and we can pull documents and get them out to you The LAIF referenced in the banking statements is the Local Agency Investment Fund o Wells Fargo is also utilized for unspent Bond proceeds Consensus that all expenditures appeared to have been appropriately reimbursed 10 ADD A-11

17 (I.A.) AGENDA ITEM/PURPOSE Independent Citizens Oversight Committee Meeting Minutes Wednesday, April 28, 2010 DISCUSSION/RECOMMENDATION ACTION/COMMENTS X. BOARD MEMBER COMMENTS/AGENDA ITEMS FOR NEXT MEETING The next meeting will be scheduled as a Special Meeting as it relates to nomination of officers and nomination of at least one member to the newly created Advisory Panel XI. ADJOURNMENT Meeting adjourned at 6:09 p.m. DRAFT REVIEWED AND APPROVED FOR SUBMISSION TO DISTRICT BOARD CHAIR SECRETARY Margaret Moir John McIver APPROVED BY DISTRICT BOARD CHAIR SECRETARY Bruce G. Krider, MA Jerry Kaufman, MAPT 11 ADD A-12

18 ATTACHMENT 1 ATT 1-1 ADD A-13

19 Change Order Policy Project Structure Trade Contracts held by PPH Comprehensive Budget Developed Incremental Design through OSHPD Trade Contracts Over 75 Standard Contracts 6 Contracts w/special Considerations Exterior Cladding System - Shengxing Drywall DPR, Inc. Electrical Berg Electric Mechanical / Plumbing University Mechanical Exterior Metal Studs Best Interiors Structural Steel Herrick Steel Change Orders Expected Incremental Design, Unforeseen Conditions, Owner Changes, etc. Specific Process w/ Checks & Balances Unit Pricing & Guidelines within Trade Contracts ATT 1-2 (1) ADD A-14

20 Gantt Chart (2) ATT 1-3 ADD A-15

21 Gantt Chart ATT 1-4 (3) ADD A-16

22 Projected Original Budget vs. Current October 2010 Budget vs. Most Current Published Forecast October 2010 Budget Current Forecast (Feb 2010) Expended to Date (Feb 2010) Construction $ 617,042,394 $ 635,317,643 $ 299,093,072 Soft Costs $ 266,047,523 $ 273,017,973 $ 125,130,813 Contingency $ 42,510,083 $ 17,264,384 0 Total $ 925,600,000 $ 925,600,000 $ 424,223,885 ATT 1-5 (4) ADD A-17

23 ATTACHMENT 2 ATT 2-1 ADD A-18

24 Change Order Workflow Do Not Proceed Required Flow Optional Flow Palomar Medical Center West DPR Construction, Inc. Rev EVENT HAPPENS CO Prepare Change Docs / Obtain Agency Approval (If Required) Official Notification to DPR/IOR/PPH Docs Available on Plan Center Review & Acknowledge Acceptance Letter (If Required) EVENT HAPPENS Change in TC Contract Scope Identified (3-4) 1) Receive Notice 2) Triage 3) Assign PCI # (3-4) Distribute Docs to Trades Issue RFQ to Trades 'DNP' (10-20) (1-2) Review & Assemble Quotes Issue PCI Acceptance Letter (2-3) Review Terms & Conditions to TC CO Post TC CO No - T&C Changes (2-4) (1-2) Issue TC CO's to Trade Contractor Receive TC- Executed CO's & Transmit to PPH to Sign (1-2) Receive PPH- Executed TC CO's & Distribute to Trade Contractors (3-5) Trade Contractors (10-20) Prepare Final Pricing Yes - T&C Changes Receive & Execute TC CO's OK to Invoice TC CO < $250K TC CO > $250K (1) Receive Fully Executed TC CO's IOR Receive Notice (3-5) (1) (1) (2-4) (2-4) (1-2) Receive Notice Review & Approve PCI Acceptance Letter (1) (1-3) (1) Matt K PPH Travis PM Review T&C Changes to TC CO Receive & Forward T&C Changes Review & Execute TC CO's Review & Fwd TC CO's for Signature Receive & Fwd Executed TC CO's to DPR PPH Offsite (2-4) Approve/Comment on T&C Changes (3-5) Review & Execute TC CO's ATT 2-2 ADD A-19