child care and health-care related questions. finally, i want to note that the staff has reviewed what was published in march 2012 and found that the provisions in the agreement, to the extent that they include physical changes to the environment are adequately covered in the eir or other review documents. questions were also raised regarding potential -- draft eir. as discussed in the document on pages -- we circulation is only required when new information is significant. the draft eir is fundamentally adequate and conclusory. the ceqa guidelines document what is a new substantial impact, including the increase in impacts that cannot be mitigated, declining to adopt

feasible mitigation measures, differing from one previously analyzed, new information included in the document does not meet the definition of significant new information. the ceqa guidelines state that we circulation is not warranted when new information merely clarifies, amplifies, or makes any significant modifications to the eir. as detailed in the findings before you, evaluation issues contained in the eir found that implementation of the project would result in significant unavoidable in a carnival impacts that could not be mitigated to below significant levels. in a certain number of years. air quality and greenhouse gas emissions and another. the eir is an informational document come and it is supposed to inform you and the public about the potential impact that could result if the project were implemented and ways to reduce

or avoid these impacts. certification of the eir is not an action to approve or disapprove the project. the move to certify the eir basically means you believe the eir has provided you with sufficient information about and our model impact and potential mitigation measures. the information presented in the eir is accurate, and eir has come to a proper conclusion supported by appropriate evidence. we therefore recommend that you adopt this before you, certifying that the eir is accurate and adequate, and that it complies with ceqa, the ceqa guidelines, and chapter 31 of the administrative code. this concludes my presentation on this matter, and if any commissioners have any questions, i will turn the stage over to the next item. thank you.

commissioner: thank you. >> thank you, good morning, president fong, members of the commission. items 2a through 2n gather constitute the required approvals for the long-range develop a plan projects. they will provide updates on the development agreement, this is

an overview of the actions being requested it. for the contiguous public spaces. and most of these items are technical cleanup type of corrections, and staff is proposing one revision to the conditions of approval in response to commissioner borden's comments about creating advisory groups for the near term projects. these were previously proposed at campuses with a long-range project. there are several extra hard copies available for the public, and we will turn this over. >> good morning, commissioners.

i am ken, oewe. what we plan to do is amplify on the topics. the hearing elicited the most questions and comments from you. you will see the topics we propose -- sorry, on that slide. usd the topics proposed on the screen. in a few cases, we are proposing some changes to the development agreement. these are fairly minor in scope, and we will go over them when we get to them. before we go forward, i wanted knowledge two documents that we sent to you in the past few days. the first is a comprehensive memo that was sent out last week. the presentation today is basically a subset of that memo, and we are, of course, happy and willing to address other issues that may be of interest to you during the question period. the other documents sent out was a sheet, one of a couple that

you got. this document contains the rundown of all the suggested changes to the agreement since the version you saw at the last hearing. the majority of these are clean up in nature and other clarifications. they are not substantive. a few are more substantive, and we will be going over those. we will be asking you if you adopt them as part of the motion later on, and they will become part of the above agreement that goes to the board. at this point now, i want to ask the deputy director to come up and began going through some of the health-related provisions. >> good morning, commissioners. one of the -- can i have the overhead back, please? one of the issues that was raised at the initiation hearing had to do with the size of st. luke's hospital. i am going to paraphrase from a letter you may have seen written by dr. katz, garacia's

predecessor. it was said that a smaller one could be built. this makes sense because one would think we would want an equitable distribution of hospital beds across the city. however, that is not really feasible because highly specialized services cannot exist in all areas of the city. for one thing, it is because there are not enough specialists. secondly, to be very, very good at something, you have to do it a lot. there is not high demand for every service -- every possible to maintain competence. additionally, when people are very sick, they made services from a range of specialists, not just one, and they need to be available on site at the time needed. this is a reason why some large hospitals, such as the mayo clinic, have a broad range of services at one place. with hospital planners, that you

should have community hospitals that are widely accessible and connected to a single specialty hospital, where people who are too sick at the committed to a hospital can rapidly transferred to. how does that impact the viability of st. luke's? the reason the committee did not recommend this for a rebuilt st. luke's is that they felt that the right bedsides needed to be based on demand. it does no good for a hospital to have more beds that will be occupied. by making statements and it will part -- and into parts, we do not have to worry that is viable on its own, but rather the viability of the whole system is what is at question. also addressed by you at your last meeting was the issue of mental health and psychiatric care. i thought it might be helpful to talk a little bit about hospital-based mental health- care services to give you a little background. psychiatric emergency services

is help people in psychiatric crisis entered the hospital system. psychiatric emergency services are provided only at san francisco general hospital here in san francisco. patients are often brought in by law enforcement under what is known as a 5150, which is when they are deemed a danger to themselves, a danger to others, or gravely disabled. patients are taken by law enforcement and others to the closest hospital emergency room. of the patients at san francisco general hospital that way, 30% are admitted to psychiatry. however, the majority of patients are waiting to stabilize on medication or are awaiting transfer to another type of treatment program that is more appropriate for their needs. the next level of hospital-based care, psychiatric care, is acute inpatient psychiatric care. this is an indication bed in a

hospital. the many hospitals provide psychiatric care, talking about this specifically since this is the most talked-about. there currently operating 54 psychiatric beds, acute psychiatric inpatient beds in san francisco. while those psychiatric beds are often filled to capacity, the vast majority of those patients could receive a lower level of care. the acute psychiatric beds on monday of this week, only 1% required acute-care. that means that 99% of the patients in those beds are eligible for other levels of services if they were available for them to move into. it is also important to note that the hospital does not get reimbursed for acute-care patients that do not need acute care. these non acute patients remain in the hospital because they need to stabilize on medication or because they are waiting for another more appropriate level

of care, much like the patient waiting. lastly, i want to talk about the other hospital experiences with psychiatric care. acute in patients psychiatry is provided at san francisco hospital, including st. francis, st. mary's, and also b. langley porter psychiatric hospital and another. all of these hospitals have acute beds that are operating below capacity. as mentioned previously, hospitals also receive psychiatric emergency patients in the emergency room when they are on condition red, and, of course, patients with psychiatric disorders may also present in the emergency room, not routed through the psychiatric emergency services. as with san francisco general and another acute unit, patients in the emirate since the rams of these other hospitals, whether because they are on diversion or because they presented in some other way to the emergency room, the majority of these patients

need to stabilize on medication or need to be transferred to a different type of treatment program. so the tick away here is that it is not really more psychiatric beds that are needed in san francisco but rather a lower level of care that is an appropriate place for people to stabilize or wait for transport to another type of treatment program. as i mentioned previously, there are 18 licenced inpatient beds at the pacific campus, which serves all the campuses, and that will continue after the rebuilt projects are complete. the draft development agreement amendment does not propose to change that. rather, it addresses the need i just expressed to create additional options for those hospital based psychiatric services i just described, whether acute psychiatric services or another. the amended to limit agreement

specifically allows for the innovation fund to support partnerships with the liberal health service providers to support community-based alternatives to inpatient psychiatric care that allows patients to receive services in the most appropriate and least restrictive setting. under this model, a community- based urgent-care center will be available 24 hours a day, seven days a week to accept patients who may be in need of high level services, such as medication support or counseling, but who do not need to be in a hospital to receive these services. the urgent care center, which currently partners with san francisco general hospital, is a good example of what we are envisioning. it was designed to assist san francisco general and other hospital emergency services by accessing patience with psychiatric crisis that do not need hospitalization but are currently taken there for

evaluation. this is an alternative to hospitalization providing comprehensive, 24-hour on-site services. they have two components. domenica's staffed urgent care clinic and a short-term crisis residential treatment program. the clinic serves individuals in psychiatric crisis that do not require hospitalization or involuntary treatment. they have a position on site or on call 24/7, and patients generally stay for up to 24 hours. once they are stabilized at the clinic, patients may be transferred there, which is a short-term residential treatment program located on the very same site. the average linked -- length of stay is three days. they both provide crisis intervention, medical support, psychiatric counseling, assessment for the next level of treatment, and referral to that treatment. now, i'm going to turn the

situation over to the financial officer, greg wagner. >> i am not gregg, but he will be up in a minute. commissioners, we wanted to go over the st. luke 0 -- with you again because it is such an important central part of the agreement. per the development agreement, if they open the new cathedral hill hospital, they must first open the new state with a hospital. excuse me. once they open six weeks, they must continue to operate it for 20 years as a general acute-care hospital with an emergency room. the on the way out of this is it operating margin goes below 1% for two successive fiscal years. please note that this is the operating margin as a whole, not just six weeks, and in a moment, greg will be showing you some historical data on that figure. the operating margin is simply the proportion of the company's revenue that exceeds its cost of doing business. in the case of cpmc, which as a

nonprofit does not assure holders, these are typically reinvested in the business. we will show you some historical data. the effect of this provision on the agreement as if their financial health were to start to decline, they would use savings elsewhere, so what i would like to do is call up the chief financial officer at the department of public health, gregg, to go over in more detail with you some of the aspects of this. >> good morning, commissioners. chief financial officer, department of public health. so as ken said, i have a little bit of data on the screen in response to a specific question from commissioner borden asking about the metric, but in addition, i will talk about responses to some other questions. you asked about what the context

of these metrics is. as you can see from the chart on the screen here, over the last 10 years, their operating margin as varied between 8.7% and 19.5%. it has been significantly above the 1% operating margin metric that is set forth in the development agreement. just to put that in a little bit of further context, one of the things that we wanted to do as we were developing this agreement and this metric was not just where they are now but to try to look at where the financial industry standards are for evaluating the financial health and organization. so as part of this process, we looked at quite a bit of data, and we brought in some outside help to try to provide some financial industry benchmarks. one of those benchmarks is illustrated a little bit on this slide, and it has to do with

what the relationship is between the operating margin and the credit rating of hospitals, so as part of the database which does credit rating, thousands of companies and governments around the country including hospitals, they have come up with a metric which is the average operating margin for institutions at various credit rating levels, including hospitals, so just to put these numbers and a little bit of further context, you can see there are two points here on the slide. the first is the average operating margin for a hospital rated aa, which is a very solid credit rating. it is not at the top of the range, but it is a highly stable rating. it is investment grade, so that is about 4%. there is room for their operating margin, a significant

win for that metric to decline, in which they would still be in that range of fairly stable financial condition. beyond that, and the second point on this slide, the average operating margin for a hospital is rated bbb, which, as you know, is at the low end of investment-grade ratings. that is actually the lowest investment grade class. once you go below that, you are in non investment grade, or some call it junk status, but at that level, bbb, because it is at the low end of the spectrum, that is an indication that the financial market is having some pretty substantial issues. on average in the movies data, the operating margin metric, on average for those types of

hospitals is at about 0.9%, so that is right near the level that we had agreed upon as part of the development agreement, so, again, the point of this is just to indicate that that 1% threshold is not simply pulled out of thin air, but we try to tie it to some financial industry benchmarks. the next slide, to talk about how the operating metric works, we talked a little bit about this last time, but just to add a little more detail, as part of this process, it was not simply to develop a metric and have that be the be all and all.

the reasoning there is they did not want to have something where there was a highly unusual event that would push them below that met and have them have these be triggered. we wanted to let the process that followed to give a longer enough time to work with them. this begins a process. there is essentially a two-year process for the city and them to address the situation together. the provisions would be that if

they reach that margin in any year, they notify the city, and that begins a process where the city and cpmc will meet to talk about that issue and what solutions will be mutually agreeable to address it. also in the agreement, there is a position that they must take commercially reasonable efforts to avoid meeting that benchmark. so there is a reason for them to in good faith negotiate. if those negotiations fail, and if in the second year again they have reached that 1% operating margin threshold, then they would be able to begin the process of closing st. luke's, and that process is spelled out in the development agreement,

but as part of that process, if the city disputes the cpmc has breached that, the city would have the ideas they could reach -- they could to arbitration. that is the process and the thinking behind the 1% operating margin metric. >> so moving on, i am happy to say we have reached an agreement for employees and retirees. this agreement will protect the city from unexpected rate increases for the employees to use these hospitals. the agreement has two main components. first, they agreed to cap their

rate increases with the insurance companies that contract with them in years 133 and no more than the medical inflation rate plus 1.5% in year four through 10. as you see in this light, it has been about 4%. this portion of the agreement was already in place at the last hearing we had with you and has not changed. i will do a couple of explanatory points. this agreement does not mean, and i want to emphasize this, that the city is required to agree to wage increases at those levels. it just means that they may impose under this contract. the city retains all of the same ability to negotiate, as noted to negotiate below the cap. the best way to think of this provision is it adds another tool to the city arsenal, when we would not have had without the development agreement. i also want to point out that

the negotiated cap to us is an appropriate level. we started talking to them using inflation as the cap, which is clearly the common- sense approach to this. they were willing to agree to this but asked for a slight correction in order to lock this agreement down for 10 years. we looked at the idea of medical plus, and it did not seem like a large increase and the potential hit to the city was insignificant, so we decided it was a good agreement to make, and we are getting this lot down to 10 years, so the city now knows that those rates can only go up by that much for 10 years. the rate cap i described apply to patients that are in network,, meaning they have chosen one doctor through their city health insurance. this constitutes the majority of charges, as i mentioned, and the city will be protected by the cap in these cases. however, there are also times

when a city employee is primary medical coverage is not with them might end up in their facility. one common way is having to go to the emergency room, the ambulance takes you to the closest emergency room, and it is not your hospital. we negotiated an agreement for the charges in these cases. to be sure, this is a higher rate. they do not get the same rate if they are out of network ads in network patients get. they have agreed in the development agreement to limit these charges to out of network city patients to the same rate it gives blueshield, which is a large insurer, for all of the blueshield business, so we know we are getting that same type of customary rate. that is all i have to say about that, but what i would like to do now is handed over to greg

from the planning department, and he is going to switch topics for us and begin going over the transportation and circulation issues. >> good morning, commissioners. i am with the san francisco planning department. the transportation planner. i will show you a little slide show and give you an overview of the traffic circulation for the campus, and i will talk about construction as it relates to transportation at the campus, and then we will touch on the van ness area. so this live right here just shows an overview of the campus. at the bottom is geary.

at the middle, bottom left, you can see the hospital's debt, and on the bottom right is the office building site, and the upper left, the office building, so this is focused on this new building. i am going to zoom into each of these graphics and a second, so do not kill your eyes too hard on that, but one thing i'd like to point out is that there are no -- on van ness avenue, ok? so here is a zoom in to the hospital side. the blue eras indicate vehicular access in and out, and the purple arrows are pedestrian access, so you will notice that cars in bound to the hospital parking garage are going to enter geary, the area on the south, or they can enter on the

top. those are the two access points into the parking garage, and from there, you can see the passenger loading zone. all of that passenger pick-up and drop-off will be inside the hospital and not on the street. cars exiting the hospital are only going to exit on to post street on the north. there is a secondary egress point on to geary, and that will be used for an emergency situation. that every day exit will be closed, so the exit will only be on those two for traffic. on the west off of franklin street on the left side, you can see the loading dock. a large loading facility where trucks can pull in, maneuver inside the loading facility or back into their loading dock and then exit on franklin street as well. north of the loading dock, you can see the emergency drop-off area, so the