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Home My WebLink AboutCC 1997-10-27 Agendas CITY OF N@)RTH RICHLAND HILLS Office of the City Secretary October 27, 1997 EMERGENCY POSTING ITEM ADDED TO THE OCTOBER 27,1997 CITY COUNCIL AGENDA This item is placed on the Agenda of October 27, 1997·as an emergency item because the sale of the platted property will be lost if it cannot be dosed at a scheduled closing of November 1, 1997. 14a. PS 97-46 Request of Roy and Eva Strickland for a Replat to be known as Lots 1 Rand 2R, Block 2, Morgan Meadows Addition (Located at the Southwest Corner of Meadow Creek Road and Hightower Drive) POSTED /Ó/p¡?jt1? Date /: '5 ~ Time~ /ÞJJ:i"'UV Sf'<CTetarv HI' ':'. /J,,_n... ._ ._ ...~._._.__._.__ ....".. "OW .. P.O. Box 820609 " North Richland Hills, Texas" 76182-0609 USA 7301 Northeast Loop 820" 817 -581-5502" FAX 817-581-5516 CITY OF NORTH RICHLAND HILLS PRE-COUNCIL AGENDA OCTOBER 27, 1997 - 5:55 P.M. For the Meeting conducted at the North Richland Hills City Hall Pre-Council Chambers, 7301 Northeast Loop 820. NUMBER ITEM ACTION TAKEN 1. GN 97-124 Amend Ordinance #1804 - Addressing Tobacco Use in City Parks - Ordinance No. 2249 (Agenda Item No. 20) (25 Minutes) 2. PS 97-44 Request of Laura Wauson for a Replat to be known as Lot 1, Block 6, Hewitt Estates Addition. (Located at 6802 Meadow Road) (Agenda Item No. 13) (5 Minutes) 3. IR 97-122 Feasibility Study: Columbia North Hills Hospital Tax Abatement Application (Agenda Item No. 15) (5 Minutes) 4. GN 97-121 Authorization of Eminent Domain Proceeding on Calloway Branch (B) - Chapman to Hightower - Resolution No. 97-49 (Agenda Item No. 17) (5 Minutes) 5. Discuss other Regular Agenda Items (10 Minutes) 6. IR 97-134 Discuss the Possibility of Meeting Room at Iron Horse Golf Course (10 Minutes) 7. IR 97-133 Review of Ethics Policies for City Council, Boards, Commissions, and Staff (5 Minutes) Page 2 NUMBER ITEM ACTION TAKEN 8. Other Informational Items (5 Minutes) 9. *Executive Session (10 Minutes) - The Council may enter into closed executive session to discuss the following: A. Consultation with Attorney Under Government Code §551.071 City vs. Bland Cause #153-171094 B. Deliberation Regarding Real Property Under Gov. Code Section § 551.052 Acquisition of Right-of-Way 110 I Adjournment - 7:20 p.m. I I *Closed due to subject matter as provided by the Open Meetings Law. If any action is contemplated, it will be taken in open session. POSTED ID/atJ!qr¡ / Da~ I 8>·'36 Tlmp f1J!= ~Itv S"rTP rv Bv~~~_ . CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA OCTOBER 27, 1997 For the Regular Meeting conducted at the North Richland Hills City Hall Council Chambers, 7301 Northeast Loop 820, at 7:30 p.m. The below listed items are placed on the Agenda for discussion and/or action. 1. Items marked with an * are on the consent agenda and will be voted on in one motion unless a Council Member asks for separate discussion. 2. The Council reserves the right to retire into executive session concerning any of the items listed on this Agenda, whenever it is considered necessary and legally justified under the Open Meetings Act. 3. Persons with disabilities who plan to attend this meeting and who may need assistance should contact the City Secretary's office at 581-5502 two working days prior to the meeting so that appropriate arrangements can be made. NUMBER ITEM ACTION TAKEN 1. Call to Order 2. Invocation 3. Pledge of Allegiance 4. Special Presentations a. "Yard of the Month" Awards b. Proclamation for "Texas Recycles Day" c. Proclamation for "National Animal Shelter Appreciation Week" Page 2 NUMBER ITEM ACTION TAKEN 5. Removal of Item(s) from the Consent Agenda 6. Consent Agenda Item(s) Indicated by Asterisk (7, 8,11,12,14,16,19,21, 22,23,24,25,26,27,28,29,30,31, 32, 33, 34, & 35) *7. Minutes of the Pre-Council Meeting October 13, 1997 *8. Minutes of the Regular Meeting October 13, 1997 9. PZ 97-40 Public Hearing to Consider the Request of Collin Equities Inc., to Rezone Lot 3, Block 1, Walker Branch Addition from C-1 Commercial & R-7 Multi-family to a Planned Development for an Assisted Living Facility. (Located in the 8400 Block of Emerald Hills Way) Ordinance No. 2245 10. PZ 97-41 Public Hearing to Consider the Request of Steven Bosaw for a Special Use Permit on Lot 9, Edgley Addition to Operate an Auto Upholstery Shop (Located at 4166 Wilman Avenue) Ordinance No. 2244 Page 3 NUMBER ITEM ACTION TAKEN *11. PS 97-12 Request of J-MC Oil Company and Barbara West for an Amended Plat of Lot 1 Rand 2R, Block 2, A.G. Walker Addition. (Located in the 7000 Block of Grapevine Hwy.) *12. PS 97-42 Request of Joyce E. and C. R. Pennington for a Final Plat of Lot 1, Block 1, Eaton Addition. (Located at the Southwest Corner of Rufe Snow Drive and Harmonson Road) 13. PS 97-44 Request of Laura Wauson for a Replat to be known as Lot 1, Block 6, Hewitt Estates Addition. (Located at 6802 Meadow Road) *14. PS 97-49 Request of Gary and Cindy Griffin for a Final Plat of Lot 1, Block 1, Griffin Addition. (Located at 7228 Bursey Road) 15. GN 97-116 Public Hearing for Consideration of Application for Tax Abatement by Columbia North Hills Hospital - Ordinance No. 2246 Resolution No. 97-46 *16. GN 97-120 Interlocal Agreement for Household Hazardous Waste Disposal with the City of Fort Worth Page 4 NUMBER ITEM ACTION TAKEN 17. GN 97-121 Authorization of Eminent Domain Proceeding on Calloway Branch (B) - Chapman to Hightower - Resolution No. 97-49 18. GN 97-122 Appointment to Park and Recreation Facilities Development Corporation *19. GN 97-123 Designation of Records Management Officer - Ordinance No. 2248 20. GN 97-124 Amend City Ordinance #1804 - Addressing Tobacco Use in City Parks - Ordinance No. 2249 *21. PU 97-89 Engineering Services for HV AC Chiller System Replacement *22. PU 97-90 Approve Sale of a Portion of Lot 25, Block 1-R, Holiday West Addition - Resolution No. 97- 48 *23. PU 97-91 Award Bid for Annual Contract for Top Soil, Sand and Flex Base to HJG Trucking in the Amount of $60,400 *24. PU 97-92 Authorize Purchase of Fire Incident Command Vehicle Through State of Texas Cooperative Purchasing Contract in the Amount of $33,900 Page 5 NUMBER ITEM ACTION TAKEN *25. PU 97-93 Award Bid for Police Department Electrical Renovation to Dickey Electric in the Amount of $11,496 *26. PU 97-94 Award Bid for Semi-Annual Traffic Materials Supply Contract to Roadrunner Supply in the Amount of $34,354 *27. PU 97-95 Award Bid for 1998 Truck with Aerial Device to Class/Durant Chevrolet in the Amount of $81,169 *28. PU 97-96 Award Bid for 1998 Vehicles *29. PU 97-97 Authorization to Extend Contract for the Printing of the Leisure Resource Guide with F.J. Business Forms *30. PU 97-98 Award Bid for Service Center Mezzanine Project to Team Design in the Amount of $ 92,300 *31. PAY 97-14 Authorize Payment to Information Access Company for CD-Rom Data Base Subscriptions *32. PAY 97-15 Authorize Payment to Motorola for Annual Mobile Data Terminal Antenna Site Fees - Resolution No. 97 -50 Page 6 NUMBER ITEM ACTION TAKEN *33. PAY 97-16 Authorize Payment to Motorola for Annual Mobile Data Service Agreement - Resolution No. 97-51 *34. PAY97-17 Authorize Payment to Motorola for the North Richland Hills Annual Consortium Radio Maintenance Contract - Resolution No. 97-52 *35. PAY 97-18 Relocation of Public Safety Radio Equipment 36. Citizens Presentation I 37. I Adjournment I I POSTED / via é/ /11______ _.0_ j Date I q~~Q-fM1l.. ~ City S _ etary -'CÞ-,:' By__~~ .. INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. ~ ~ Date: T Subject: October 20, 1997 New Fire Truck Viewing The new fire truck will be at City Hall for City Council to vieW 30 minutes prior to the Pre-Council Meeting on October 27. It will be parked on the east side of the City Hall for tho.se who are interesting in looking at our newest piece of equipment. L \........ ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS INFORMAL REPORTTO MAYOR AND CITY COUNCIL No. IR 97-132 '------- ~ Date: T Subject: October 27, 1997 1996/97 NRH20 Season Update Introduction The third season of NRH20 Family Waterpark is complete with strong showings in many areas. This summary report outlines some of the more noteworthy highlights and will be followed by a more comphrensive report at a later date. Master Plan The Master Plan for the development of NRH20 Family Waterpark is in its final stages and has been researched by staff to include the latest designs in waterpark attractions. Staff has worked with Brinkley-Sargent Architects and attraction vendors to develop rides that globally address the parks long-term growth, while still maintaining the "open space" appeal currently experienced throughout the park. 1,,-_> Financial Performance This is our third consecutive year of revenue growth. The inaugural season generated $1.7 million, growing to $1.9 million last year and reaching approximately $2.1 million this past season. The majority of the park revenue comes from gate admissions, group sales and season pass sales. Season pass sales as a whole were down, as anticipated, which partially accounted for the decrease in attendance from the previous season. Strong on-park revenue centers included the gift shop with over $100,000 in sales. "Beanie Baby" stuffed animals and the "Big Squirt" water toys were notable sellers. . Food and Beverages saw an increase in sales as well. The increase in sales coupled with the decrease in attendance resulted in higher per capita spending (on average) by our guests, which is a strong positive indicator of .the value of the service and guest experience. Attendance NRH20 posted attendance numbers of 202,957 for the 1997 season. As mentioned previously, this is down from the 222,986 attendance total from the 1996 season. Poor weather early in the season, coupled with the planned decrease in season pass sales resulted in the lower attendance numbers. However, the lower season pass sales helped to "boost" on-park spending because traditionally, season pass holders visit the park more often however they spend less money while visiting. ',,- . ISSUED BY THE CITY MANAGER NORTH RICH LAND HILLS, TEXAS ~- Survey Data Survey results have shown some interesting trends in relation to the demographics of our guests. The largest percentage of our guests are still coming from North Richland Hills, at 25 percent. This shows that NRH20 is still being well received by our residents. Over 20 percent of the guests surveyed reported that they were not from the local area. This is an increase over the last two years. Some of these "Not from Area" guests can be attributed to people who are visiting family (or others) in the area. This leaves the remainder who are either visiting the Dallas/Fort Worth area and have chosen to visit NRH20 over other attractions or those who have come to North Richland Hills just to visit NRH20. These guests bring additional revenue to the City of North Richland Hills as a whole in the form of additional sales taxes and purchases that help our local business. This is a positive trend that should be investigated and developed. Our length of stay (in hours) has risen slightly from the past two seasons. Length of stay is tied to "per capita" spending noted earlier in this report. As more attractions and activities are added to the park, length of stay will increase. In respect to the parks marketing efforts, the number one way people are finding out about NRH20 continues to be word of mouth. This strong word of mouth is reflective of the overall high quality entertainment service provided. Television is still the strongest media utilized, followed by radio. People are recalling the jingle utilized in our efforts, sometimes breaking into song and singing it to staff. Mothers and children are still the top decision makers in respect to visiting NRH20. They account for a combined total of over 50 percent of key decision makers from survey result data. It is interesting to note that while our guest service scores continued to improve, the ratings of our attractions and facilities actually decreased for the first time. In the comment section ofthe form, the overwhelming response dealt with expansion. Our guests want more slides, more slides and more slides. The Master Plan will outline new additions to the park that have been formulated based on guest survey information and staff industry research into which attractions best fit the requests from our guests. Respectfully submitted, -::::-- ~;:. 5 ~ &-- Jim Browne Director of Parks and Recreation JB/sm .,~ -INFORMAL REPORTTO MAYOR AND CITY COUNCil N IR 97-122 o. <~_\/ !/\F I Date: Monday, October 27,1997 Subject: Feasibility Study: Columbia North Hills Hospital Tax Abatement Application Attached is the Feasibility Study and Recommendation on the August 5, 1997 tax abatement application by Columbia North Hills Hospital. Columbia plans to spend $20.8 million in expanding and improving its acute care, outpatient and medical office facilities at 4251 and 4401 Booth Calloway Road--and is seeking tax abatement on $16.5 million of those improvements. I look forward to discussing this study with you Monday night. If you have any questions before then, please call me at 581-5534. Respectfull~\ submitted, !~\1/~ MartyWÌèder Director of Economic Development MBW ISSUED BY THE CITY MANAGER NORTH RICH lAND HillS, TEXAS COLUMBIA NORTH HILLS HOSPITAL APPLICATION FOR TAX ABATEMENT FEASIBILITY STUDY AND RECOMMENDATION NORTH RICH LAND HILLS ECONOMIC DEVELOPMENT DEPARTMENT OCTOBER 1997 Columbia Feasibility Study Page 2 The adopted Guidelines and Criteria for granting tax abatement in the City of North Richland Hills require staff to perform a Feasibility Study setting out the impact of the proposed reinvestment zone and tax abatement. QUALIFICATIONS TO APPLY Columbia North Hills Hospital qualifies to apply for tax abatement as a "Regional Health Care Facility". Such an operation is defined as "buildings and structures, including fixed machinery and equipment, used or to be used to provide health care services, from which a majority of revenues generated by activity at the facility are derived from outside North Richland Hills". Columbia will be renovating and modernizing 64,700 sq. ft. of existing hospital space, expanding the hospital by 16,400 sq. ft. and building a 54,000 sq. ft. medical office building. In addition to the cost of construction, Columbia plans to add personal property (which is exempt from abatement) including office furniture, office equipment (including computers, faxes, printers, copiers) and medical diagnostic equipment. As defined in our Guidelines & Criteria, expansion means "the addition of buildings, structures, fixed machinery or equipment for purposes of increasing production capacity". Modernization is defined as "the upgrading of existing facilities which increase the productive input or output, upgrades the technology or substantially lowers the unit cost of the operations. Modernization may result from the construction, alteration, or installation of buildings, structures, fixed machinery or equipment". IMPROVEMENTS The proposed remodeling and expansion by Columbia Healthcare Corporation will be at the company's North Hills Hospital facilities at 4401 and 4251 Booth Calloway Road. In Phase I, Columbia's contractors will renovate the hospital lobby. Phase II activities will be focused on site work and construction of a new parking lot on the south end of the medical campus. Shortly thereafter, contractors will begin placing foundation steel for the medical office building and hospital expansion (Phase III). Phase IV will cover all new construction associated with the medical office building, expansion and lobby. And internal renovations will comprise the fifth and final Phase. Columbia Feasibility Study Page 3 Construction Start: Anticipated Completion: Construction: Equipment: Information Systems October 1997 December 1998 $15,428,815 500,000 581,737 TOTAL $16,510,552 APPLICATION GUIDELINES/ECONOMIC QUALIFICATIONS An applicant must submit the Application for Tax Abatement prior to the commencement of construction. Columbia's application qualifies as it was received on August 5, 1997. For an expanded or modernized facility an applicant must invest not less than $1,500,000 in the facilities over a three-year period. Columbia's application qualifies as they expect to invest $20.8 million ($16.5 of which qualifies for abatement). An applicant must create and/or retain not less than 10 jobs associated with the production of goods and services at the authorized facilities. Columbia's application would qualify as they anticipate retaining 628 employees (the full-time equivalent of 515 positions) and adding the full-time equivalent of 93 employees (or 120 people) after completion of the expansion and improvements. Columbia has already added 195 new positions since consolidating its Northeast Tarrant County acute-care services at North Hills Hospital in June 1997. When combined with the projected new jobs, Columbia's North Hills Hospital employment base will exceed 700 (748)--and the Hospital will have the full-time equivalent of 608 jobs--upon the project's completion. As of October 6, the residences of Columbia North Hills Hospital's employees broke down as follows: North Richland Hills Hurst Watauga Haltom City Keller Colleyville Richland Hills 14.3% 7.5% 6.2% 4.1% 4.1% 2.9% 2.1% Columbia Feasibility Study Page 4 Thus 262 (or 41.7%) of the Hospital's employees live in or immediately adjacent to North Richland Hills. APPLICATION REVIEW The City received Columbia's application on August 5, 1997. The application and accompanying letter are attached for review. All requirements to make application for tax abatement have been met. Included are: a. Written Description of Project b. Statement of Improvements c. Map of Area d. Time Schedule e. Financial Information (included in the two most-recent Annual Reports) ECONOMIC EFFECT Columbia's expansion and modernization will have a positive economic impact on the City of North Richland Hills and its citizens. Areas of impact include: * The creation of the full-time equivalent of 93 new health care jobs--or 120 total new people employed. Based on Columbia's analysis of employee residency, North Richland Hills can expect to see 17 of the 120 employees live in the City and 33 of the 120 employees live in an immediately adjacent City if the company were to fill the positions at the present percentages. * According to a study conducted by the U.S. Chamber of Commerce (What 100 New Jobs Mean to a Community. 1993 Edition, by Martin Lefkowitz), an increase in 120 jobs will also result in an increase of 67 additional positions coming in the following industries: Construction 2.01 Manufacturing 10.72 Transportation, Communications, and Utilities 4.69 Wholesale and Retail Trade 16.76 Columbia Feasibility Study Page 5 Finance, Insurance and Real Estate Other Services Other 6.04 26.15 0.67 * An immediate increase in the City's personal property values with the addition of $3.46 million in new equipment which is ineligible for abatement. Such an increase will help strengthen North Richland Hills' economic base. * An excellent match for the health care and professional work force available in and around North Richland Hills In summary, the project is expected to have a total economic impact (direct and indirect) of: 187 new jobs $ 2.5 million in new or increased payroll at Columbia North Hills Hospital $3.46 million in new personal property, annually yielding $19,771.89 in new property tax revenues for the City TAX IMPACT Our guidelines for tax abatement allow for a 500% reduction in property taxes--on the improvements only--over a 5 or 10 year period. Based on our existing tax rate of .57 cents, abatement on the increased value of $16,510,552 would abate $470,550 in taxes over the life of the contract. Columbia officials have requested a 100% abatement over five years. It should be noted that taxes would not be abated on: 1) The existing structures owned by Columbia North Hills Hospital. 2) Land Value. 3) Personal Property. Columbia Feasibility Study Page 6 IMPACT ON CITY SERVICES Representatives of North Richland Hills' Finance (Utility Billing), Fire, Police and Public Works Departments have reviewed Columbia's expansion plans--and do not anticipate any significant impacts. Their specific observations include the following: While there are several water and sewer lines that will need to be added or relocated, the project engineer is aware that they will be installed at the Hospital's expense. The Hospital is developing a site plan that will minimize the impact on the adjacent flood plain. Hospital officials understand that all required drainage improvements will be made at Columbia's expense. Public Works does not expect increased road maintenance on the existing facilities. If it is determined that the increase in traffic may present an access problem, Public Works will request that the Hospital conduct a traffic study. And if, for example, there is a need for a future signal light at Booth Calloway and Rodger Line Drive, the Hospital will need to participate in the cost of installation. The amount of installation would likely meet or even exceed the impact cause by the proposed expansion. Police Department officials believe the renovation of the Emergency Room--where virtually all of their activity is concentrated--"will not appreciably increase the need for a greater amount of police involvement". Chief Stan Gertz does not expect the growth at North Hills Hospital to "have any affect in the operation of the Fire Department"--and noted that the Hospital will continue to receive the same level of service that it does now. Chief Gertz added that the Hospital's growth "should provide just one more reason why North Richland Hills is the best City in which to live and raise a family". FUTURE GROWTH Columbia's decision to consolidate its Northeast Tarrant County acute-care operations at North Hills Hospital--and later initiate a $20.8 million renovation/expansion to accommodate growth in a number of departments (including Women's Services, Outpatient Imaging, Surgical and Emergency Services) illustrates the company's long-term commitment to North Hills and our community. Columbia Feasibility Study Page 7 Likewise, demand for medical services will increase as Northeast Tarrant County's population continues to expand. Most of the land available to accommodate residential subdivisions are located northwest of the 820/121 Interchange--and Columbia North Hills is the only hospital in close proximity to this area. Columbia is a publicly-traded company and under the constant review of stockholders. Therefore, Columbia is working to stay on the cutting-edge of the health care industry. And in spite of recent federal accusations against the parent company, North Hills Hospital has maintained a spotless reputation when it comes to delivery of health care services. The Hospital received a perfect score in its recent reaccreditation. Moreover, North Hills Hospital has set an example for other North Rich/and Hills employers when it comes to being a good corporate citizen. The Hospital teamed up with the City's Park & Recreation Department several years ago to create the Corporate Challenge, donated much of the right-of-way (and is voluntarily paying its assessment) for the construction of Rodger Line Drive, annually supports the City's Head for the Hills Family Festival and has pledged to donate the land necessary for the future Calloway Branch creek hike/bike trail project. RECOMMENDATION After a comprehensive review of this material, the Economic Development Department recommends that the Application for Tax Abatement submitted by Columbia North Hills Hospital be approved. Re0~b:t Marty Wieder Director of Economic Development INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 97-134 \...... ~ Date: T Subject: October 27, 1997 Discuss the Possibility of Meeting Room at Iron Horse Golf Course For the past several months the Mayor and City Council have expressed interest in looking at the feasibility of adding a large meeting room at Iron Horse Golf Course. C.A. Sanford was asked to explore the cost estimates and possible financing options related to such expansion of the Iron Horse Club House. C.A. will be available at the Pre-Council Meeting to discuss some ideas and some preliminary information regarding the building expansion. The type of building is projected to accommodate approximately 300 people, using round tables for a banquet type meeting. However, the suggested room would be constructed to accommodate many different types of arrangements. At Pre-CouncU C. A. will be prepared to discuss the estimated construction cost, the annual debt service cost and the estimated operation cost, as well as the possible financing of the annual debt service. If Council is interested in pursuing a large meeting facility in North Richland Hills, it will be necessary to select an architect to begin working on designs and plans. We also need to begin thinking about a financing plan for the possible sale of Certificates of Obligation for the construction. Staff would appreciate direction on this matter. \....- Respectfully submitted, , /) /1 1 C7~ ,f¡. (céJUU1lú-nU Larry J. cun;{¡ngham I City Manager LJC~ ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 97-133 '-- ~ Date: T Subject: October 27, 1997 Review of Ethics Policies for City Council, Boards, Comissions, and Staff Councilman Frank Metts has requested to discuss ethic policies for City Council, Boards, Commissions, and Staff. It is my understanding that he is wanting to have an opportunity to review any policies, charter provisions, or other State provisions related to ethics of public officials. Respectfully submitted, d~¡. rJ &7MÙ/4.--V Larry f ~nnJngham City Manager LJC~ ~ , "-- ISSUED BY THE CITY MANAGER NORTH RICH LAND HillS, TEXAS NRH CITY Of NORTH RICHLAND HILLS PROCLAMATION WH£REAS, ~~cJ1 \.fl:~r 22 mmiot1 tot1S of solib WMtl: so mto TaM 1~t\bflns. Th~t' s morl: th~t\ ~ tot1 of S~rb~SI: pa T ~X~t\ cva\f \.fl:~r. Almost ~ percrnt of th~t s~rb~SI: m~\.f bl: rl:C\1d~bll:: ~t\b WH£REAS, to focus Ot\ thl: imporU.t\CI: of ~l:t'it\S r~C\1dit\S workit\S ln1 p14rcJ1~sit\S rl:C\1d~b prOb14ctS ~ stl:mt\S committl:l: of marl: th~t\ ot1l: J11.n1brl:b m~bas from busit\~ss, sovernm~t, scJ1001s, ~t\b orS~t\iuflot1s J1~VI: orS~t\iZ:l:b UT ~x~s RI:C\1dl:s D~\.f," ~t\b th~SI: sroUf'S, it\d14bit\S thl: Cit\t of North RkJ11~t\b Hi11s, ~r~ rnco14r~sit\S their ~plo\.f~~s, customas, m~bas ~t\b ~11 dflz:rns to I'll:bSI: to rl:C\1d~ ~t\b bu\.f rl:C\1dl:b prob14cts: ~t\b WH£R£AS, p~rticip~flt\S m TaM lkC\1dl:s D~\.f is ot\~ w~\.f th~ dflz:rns of this st~t~ C~t\ J1dp thl: CLEAN TEXAS 2000 p01114flot1prcvrnflot\ prosr~m of thl: T I:XM N~tur~1 ReSO\.frC1: Cot1sav~flot1 Commissiot1 ~ccompUsJ1 its so~1 to S14rp~SS thl: 40 pacrnt w~st~ rl:b1.4ctiot\ so~1 set b\.f th~ T ~X~S Ll:sisl~t\fr~ ln1 rl:b14cit\S thl: soUb w~stl: soit\S it\to T I:X~S 1~t\bfl11s b\.f ~O pacrnt ln1 thl: '11:~r 2000: ~t\b WH£REAS, st~tl: ~t\b comm1.n1it\t 1~~bas t\~l:b to sprl:~b thl: worb ~bo14t tJ1~ excdlrnt prosr~ms th~ J1~VI: I:S~bUsJ1l:b, thl: srowth of m~rkets for rl:C\1d~bll:s, thl: imporU.t\CI: of bu'1it\S r~C\1d~b prob1.4cts, th~ t\~l:b to I:xp~t\b thl: co11~ctiot\ of r~C\1d~bll: m~tm~ls, ~t\b th~ brnd1ts of it\vl:stmrnts it\ r~C\1c1it\sln1 sm~11 ~t\b l~rSI: busit\l:ss~s. NOW, TH£REfORE, 1, T omm\.f BroWt1, M~\.for of thl: Cit\t of North RkJ11~t\b Hi11s bo J1al:ln1 prod~im S~t\.frb~\.f, Nov~ba 1~, 1997, M: "TEXAS RECYCLES DAY· it\ tJ1~ Cit\t of North RkJ11~t\b Hi11s ~t\b 14rSI: ~11 ciflz:~s to ¡oit\ it\ this b~\.f of r~coSt\iflot1. n.~.t~" I;~I.~.\" ~.'\"j · ~l~/ " \, ' 1~" (.'.~~' 1'1,,,)'[; j I I' .. ,. I " I I' "', v' " ",' .~) _.' - tI " - . ~ \ " I¡'lt 'it I~'~'- IN WITNESS WH£REOf, 1 J1~VI: J1aamto set m\.f J1~t\b ~t\b C~14Sl:b thl: s~~1 of th~ Cit\t of North RkJ11~t\b Hi11s to b~ ~fflxl:b this thl: 27th b~\.f of Octoba, 1997. NRH CITY Of NORTH RICHLAND HIllS l'ROClAMAT10N WHEREAS. this '1~~r ther~ ~r~ mor~ th~11 66 m111io11 c~ts ~11b ;8 m111io11 boss livi11S i11 J1014s~J1olbs ~cross th~ V11iteb Sutes. ~11b ~1'1'roxim~td'1 3".""" boss ~11b c~ts 1ivi11S i11 North RicJ1l~11b Hi11s: ~11b WHEREAS. i11biscrimi11~te br~ebi"s ~11oweb lni irrespOt1sible pct owt1ers wJ10 J1~ve 110t J1~b their ~11im~ls sp~'1~b or 11~tereb J1~s co"trib14t~b to pct ovcrpop14l~tio": ~11b WHEREAS. ~11im~l sJ1dter emplo'1e~s. 1i~ police officers ~11b emersrnC\1 mebic~l perso1111d. m14st respo11b to th~s~ comm\.mi1\1 problems ~11b crises: ~11b WH£REAS. ~11im~l sJ1dters ~ct ~s s~f~ J1~vrns for J1omd~ss ~"b ~b14s~b ~11im~ls. provibi11S them with comfort ~11b c~re: ~11b WH£REAS. ~11im~l sJ1dters J1dp both ~11im~ls ~11b p~opl~ i" m~"'1 w~'1s b'1 rct'wmi"S lost pcts to thcir owt1ers. rnforci11S ~11im~l c011trol l~ws. r~sC14i11S m114reb ~11im~ls. ~b14C~fu1S th~ p14blic. ~11b m~tcJ1i11S "'1' f~mi1ies with 11ew ~11im~l comp~11io11S: ~11b WH£REAS. th~ worlt of ~11im~ls sJ1dters ~11b th~ import~11t services th~ provib~ oftrn So 1411110tic~b ~11b 1411ber~ppr~ci~teb lni th~ citizrns. NOW. TH£REfORE. 1. T omm'1 Browt1. M~'1or of the Ci1\1 of North RicJ1l~11b Hi11s bo J1erelni proc1~im November 2 - 8. 1997. ~s. ''NA T10NAl ANIMAL SHELTER APPRECIATION W££K99 i11 the Ci1\1 of North RicJ1l~11b Hi11s i11 r~coS11itiOt1 of the A11im~l Services Crnter for provibi11S lif~s~vi11S servic~s to ~11im~ls ~11b peopl~ i11 014r comm14"i1\1 ~"b 14rs~ ~11 citizrns to 10i11 i11 this we~k of r~coS11itiOt1. . I- - '- ,. .' 1\ '.1 't , ' 'H - (. ." ,~ ,., IN WITNESS WH£REOf. 1 J1~v~ J1er~11to sct m'1 J1~11b ~11b c~14s~b the s~~l of th~ Ci1\1 of North RicJ1l~11b Hi11s to be ~ffix~b this the 27th ~ T omm'1 Browt1~ ~'10r ~\,..ta,. t:l¡t, '(,'~ ,,~, ,.~ 'f'¡ It~ ~. c..' It", . L .. ,-, Present: Absent: MINUTES OF THE PRE-COUNCIL MEETING OF THE CITY OF NORTH RICHLAND HILLS, TEXAS HELD IN THE PRE-COUNCIL ROOM AT CITY HALL, 7301 NORTHEAST LOOP 820 - OCTOBER 13,1997 - 6:15 P.M. Tommy Brown Byron Sibbet Lyle E. Welch Mack Garvin Frank Metts, Jr. JoAnn Johnson Don Phifer Cheryl Cowen Lyman Larry Cunningham Patricia Hutson Rex McEntire Greg Dickens Larry Koonce Thomas Powell Steve Brown Terry Kinzie Jerry McGlasson Marty Wieder Richard Albin Mayor Mayor Pro Tern Councilman Councilman Councilman Councilwoman Councilman Councilwoman City Manager City Secretary Attorney Public Works Director Finance Director Support Services Director Library Director Information Services Director Police Chief Economic Development Director City Engineer Randy Shiflet Assistant City Manager I ITEM I DISCUSSION I ASSIGNMENT I NORTHWOOD Mr. Wieder explained that the owners of the MARTY W.lGREG D. PLAZA SHOPPING Northwood Plaza Shopping Center have asked CENTER the City to approach TxDOT about reversing REQUEST the ramps on the north side of IH 820 between Holiday Lane and Rufe Snow. They will be willing to share in the cost if the State approves the reversal. The Council discussed the City's previous request in 1988 and how the interchange improvements would affect the traffic flow and the ramps. Some members of the Council expressed concerns that the ramp reversal could cause the traffic to bottleneck at Rufe Snow, The Council agreed that the poor access to the Shopping Center was a major factor in the declining occupancy rate. The consensus of the Council was for the City to make an official request to TxDOT for the r~v~rs;.ti of thp. r~mn~ Pre-Council Minutes October 13, 1997 Page 2 ! ITEM I DISCUSSION I ASSIGNMENT I REVISE CIP The City Manager advised that the CIP RANDY S.lGREG D. PROJECT Committee had met and was recommending SCHEDULES ON that North Richland Hills request Watauga to RUFE SNOW pay one-half the construction cost of Rufe DRIVE SECTIONS Snow from Fair Meadows to Bursey Road as uB" AND "C" half of Rufe Snow in this area is in the City of Watauga, They also are recommending that the City ask the County Commissioner to substitute the Rumfield Road, Phase III project (Davis Boulevard to Eden Road) with Rufe Snow from Fair Meadows to Bursey. The Rumfield Road project would be delayed one year. This would also enable the City to reconstruct the portion of Rufe Snow from North Park to Highlawn Terrace which was not originally in the reconstruction plans. Mayor Brown advised that there might be funds available from the Regional Transportation Council. The Council agreed with the recommendation of the CIP Committee. AUTHORIZE The Library Director briefed the Council on the STEVE B. SUBMISSION OF background of the Telecommunications TELECOMMUNI- Infrastructure Fund Grants. He explained the CATIONS GRANT grant funds would be used to improve Internet REQUEST access at the Library, In response to a question from the Council regarding the ongoing costs, he advised that there would be a telecommunication cost of approximately $3,000 annually and a service provider cost of approximately $3,000 annually. Pre-Council Minutes October 13. 1997 Page 3 I ITEM I DISCUSSION I ASSIGNMENT I REFURBISHING The City Manager requested Council to THOMAS P ./RANDY POLICE consider authorizing Staff to approve up to a VEHICLES total maximum of $80,000 for the refurbishing of ten police vehicles. He explained each vehicle will be evaluated by the dealership and a cost estimate given to the City. The City will make the decision as to whether it is cost effective to refurbish the vehicle. It is anticipated that an additional two years of vehicle use will be gained. He advised the transportation cost to ship the vehicles will range from $1.05 to $1.10 per mile. Councilman Welch advised that the transportation cost of $1,040 was a good rate, but he would not recommend paying anything higher, The consensus of the City Council was to proceed with the refurbishing program. BUY NRH The Economic Director outlined the updated MARTY W. "Buy NRH" program to the Council. The program will be a two-tier program - to inform and promote. He advised the informational strategy would include reprinting and distributing the "Buy NRH" brochures, renewing the public service announcements on City Cable, notifying the board and commission members, sending targeted mailings to sports groups and developing and running Citicable testimonials. The promotional strategy would include expanding "Buy NRH," printing and distributing bumper stickers, using billboards, attending community events and handing out information. Councilwoman Johnson suggested a door-to-door campaign that would consist of placing the information on the citizens doors. The Council was supportive of the "Buy NRH" strategy. Pre-Council Minutes October 13, 1997 Page 4 I ITEM I DISCUSSION I ASSIGNMENT I DISCUSS CITY'S Mayor Brown briefed the Council on the NAN INVOLVEMENT IN RAIL TRAN information he had received. He RAIL TRAN requested Council direction. He advised that in the past the Council's position has been that unless everyone in the County participates, the City would not participate. The consensus of the Council was to maintain their past position on the matter, OTHER ITEMS Mr. Kinzie advised the Council of the Volunteer NAN Fair on October 21 from 5:00 p.m, to 8:00 p.m. He asked for volunteers from the Council to help in the event. The Council was reminded of the Board and Commission Reception at Texas Star on October 23 at 7:00 p,m. Mr. Ross Hood, Town Hall Committee Chairman, advised the Council of the Town Hall Meeting set for November 6 at 7:00 p.m. He requested members of the Council to lead the Pledge and Invocation at the meeting. Mayor Pro Tern Sibbet will lead the pledge and Councilman Metts the invocation. The Council was briefed on the success of the Head for the Hills Festival October 11. ADJOURNMENT Mayor Brown announced at 7:03 p.m. that the NAN Council would adjourn to Executive Session for consultation with the City Attorney on Harper vs, NRH, et ai, Custom Homes, et al vs. NRH and pending contract for Community Services as authorized by the Local Government code, Section 551.071. ATIEST: Tommy Brown - Mayor Patricia Hutson - City Secretary MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 - OCTOBER 13, 1997 -7:30 P.M. 1. CALL TO ORDER Mayor Brown called the meeting to order October 13, 1997 at 7:30 p.m. ROLL CALL Present: Tommy Brown Mack Garvin Lyle E. Welch Frank Metts, Jr. JoAnn Johnson Don Phifer Byron Sibbet Cheryl Cowen Lyman Staff: Larry Cunningham Patricia Hutson Rex McEntire Greg Dickens Absent: Randy Shiflet Mayor Councilman Councilman Councilman Councilwoman Councilman Mayor Pro Tern Councilwoman City Manager City Secretary Attorney City Engineer Assistant City Manager 2. INVOCA TION Councilwoman Johnson gave the invocation. 3. PLEDGE OF ALLEGIANCE 4. SPECIAL PRESENTATIONS A. INTRODUCTION OF YOUTH ADVISORY COMMITTEE MEMBERS Mayor Brown introduced the Youth Advsiory Committee Chairman Michael Zamarripa. Chairman Zamarripa introduced to the Council the committee officers: Vice Chair - City Council Minutes October 13,1997 Page 2 David Harding; Secretary - Kristen McCartan; Treasurer - Katie Rainey; Social Chair- Lindy Williams; and the rest of the committee members. B. PROCLAMATION - "VOLUNTEER WEEK" Mayor Brown presented to Ms. Kathy Handler, representing Birdville Independent School Disrict, with a proclamation recognizing the week of October 20th as "Volunteer Week". Terry Kinzie, Director of Information Services, presented to the Council a video to be shown on Citicable to inform the citizens of "Volunteer Week." 5. REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA None. 6. CONSENT AGENDA ITEM(S) INDICATED BY ASTERISK (7,8,9,10,16,19,20,21,22,23,24,25,26,&27) APPROVED Councilman Metts moved, seconded by Councilwoman Johnson, to approve the Consent Agenda. Motion carried 7-0. *7. MINUTES OF THE BUDGET WORK SESSION AUGUST 2-3,1997 APPROVED *8. MINUTES OF THE CITY COUNCIL WORK SESSION SEPTEMBER 2, 1997 APPROVED City Council Minutes October 13, 1997 Page 3 *9. MINUTES OF THE PRE-COUNCIL MEETING SEPTEMBER 22, 1997 APPROVED *10. MINUTES OF THE REGULAR MEETING SEPTEMBER 22, 1997 APPROVED 11. PS 97-14 - REQUEST OF LEGACY CAPITAL FOR A REPLAT OF LOTS 1 & 2, BLOCK 1, BRENTWOOD ESTATES ADDITION. (LOCATED AT THE SOUTHWEST CORNER OF DAVIS BOULEVARD AND NORTH TARRANT PARKWAY) APPROVED Mayor Pro Tern Sibbet moved, seconded by Councilwoman Johnson, to approve PS 97-14. Motion carried 7-0, 12. PS 97-39 - REQUEST OF COVENANT GROUP FOR A FINAL PLAT OF LOT 1, BLOCK 1, COVENANT ADDITION (LOCATED AT 6155 HOLIDAY LANE) APPROVED Councilwoman Johnson moved, seconded by Councilman Metts, to approve PS 97-39. Motion carried 7-0. 13. PS 97-40 - REQUEST OF WESTERN RIM INVESTORS, INC., FOR A FINAL PLAT OF LOTS 2R1 & 2R2, BLOCK 2, WALKER BRANCH ADDITION. (LOCATED IN THE 8600 BLOCK OF GRAPEVINE HIGHWAY) APPROVED City Council Minutes October 13, 1997 Page 4 Mayor Pro Tern Sibbet moved, seconded by Councilman Phifer, to approve PS 97-40, subject to the installation of sidewalks along Grapevine Highway. Motion carried 7-0. 14. GN 97-114 - NOMINATIONS FOR TARRANT APPRAISAL DISTRICT BOARD OF DIRECTORS - RESOLUTION NO. 97-45 APPROVED Councilwoman Johnson moved, seconded by Councilwoman Lyman, to approve Resolution No. 97-45 nominating Mr. Mike Davis to the Tarrant Appraisal District Board of Directors. Motion carried 7-0. 15. GN 97-115· AUTHORIZE SUBMISSION OF TELECOMMUNICATIONS GRANT REQUEST APPROVED Mayor Pro Tern Sibbett moved, seconded by Councilman Phifer, to approve GN 97-115. Motion carried 7-0, *16. GN 97-117 - LEASE AGREEMENT WITH SPRINT PCS FOR CELLULAR TOWER LOCATED AT FIRE STATION 4 APPROVED 17. GN 97-118 - RESOLUTION SUPPORTING TXDOT TRAFFIC SIGNAL POLICY CHANGE - RESOLUTION NO. 97-47 APPROVED Councilwoman Johnson asked that a letter be sent to the Texas Municipal League and the state legislators voicing the Council's position on this matter. City Council Minutes October 13, 1997 Page 5 Councilwoman Lyman moved, seconded by Councilman Metts, to approve Resolution No. 97-47. Motion carried 7-0. 18. GN 97-119 - APPROVAL OF MAYOR'S APPOINTMENTS TO CIVIL SERVICE COMMISSION APPROVED Councilwoman Lyman moved, seconded by Councilman Phifer, to appoint Mr. Bill Fenimore to Place 3 and Mr. Danny Blakenship to the Alternate position on the Civil Service Commission. Motion carried 7-0. *19. PU 97-80 - AWARD BID FOR 1998 HEAVY DUTY AMBULANCE TO RELIABLE EMERGENCY VEHICLES IN THE AMOUNT OF $134,891 APPROVED *20. PU 97-81 - AUTHORIZE PURCHASE OF NETWORK COMMUNICATION HARDWARE FROM CAPCO IN THE AMOUNT OF $13,031 APPROVED *21. PU 97-82 - AWARD BID FOR ANNUAL SUPPLY OF UTILITY BILLS AND ENVELOPES TO OEI BUSINESS FORMS IN THE AMOUNT OF $15,029 APPROVED *22. PU 97-83 - AWARD BID FOR DIGITAL VIDEO COMPUTER TO THE Q GROUP IN THE AMOUNT OF $14,412 APPROVED City Council Minutes October 13, 1997 Page 6 *23. PU 97-84 -AWARD BID FOR MULTIMEDIA PROJECTOR TO TROXELL COMMUNICATIONS IN THE AMOUNT OF $6,284 APPROVED *24. PU 97-85 - AWARD BID FOR UNINTERRUPTED POWER SUPPLY TO QUALITY SOLUTIONS IN THE AMOUNT OF $10,879 APPROVED *25. PU 97-86 - AWARD ANNUAL CONTRACT FOR UTILITY MATERIALS TO ATLAS UTILITY SUPPLY IN THE AMOUNT OF $190,293 APPROVED *26. PU 97-87 - AWARD BID FOR HEWLETT PACKARD WORKSTATION TO TENSOR INFORMATION SYSTEMS IN THE AMOUNT OF $13,752 APPROVED *27. PU 97-88 - AUTHORIZE PURCHASE OF SELF LEVELING GUIDE TO CONLEY -LOTT NICHOLS IN THE AMOUNT OF $7,796 APPROVED 28. PW 97-23 - APPROVE CHANGE ORDER NO.1 IN THE AMOUNT OF $3,498.50 FOR WALKER BRANCH CHANNEL IMPROVEMENTS, PHASE II APPROVED City Manager Cunningham presented the need for the change order to the Council. Mayor Pro Tern Sibbet moved, seconded by Councilwoman Lyman, to approve PW 97-23. City Council Minutes October 13, 1997 Page 7 Motion carried 7-0. 29. PW 97-24 - AWARD OF CONTRACTS FOR RIGHT-OF-WAY ACQUISITION SERVICES ON RUM FIELD ROAD, PHASE II APPROVED Councilwoman Johnson moved, seconded by Councilman Phifer, to approve PW 97-24. Motion carried 7-0. 30. PAY 97-13 - REFURBISHING POLICE VEHICLES APPROVED Councilwoman Johnson moved, seconded by Councilman Metts, to approve PAY 97-13. Motion carried 7-0. 31. CITIZENS PRESENTATION Ms. Laura Wauson, 6802 Meadow Road, appeared before the Council and requested their help in getting her property platted and through the Planning and Zoning Commission process as soon as possible. 32. ADJOURNMENT Mayor Brown adjourned the meeting. Tommy Brown - Mayor ATTEST: Patricia Hutson - City Secretary CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Public HearinQ to Consider the Request of Collin Equities Agenda Number: Inc., to Rezone Lot 3, Block 1, Walker Branch Addition from C-1 Commercial & R-7 Multi-family to a Planned Development for an Assisted Living Facility. (Located in the 8400 Block of Emerald Hills Way) Ordinance No. 2245 PZ 97-40 Collin Equities, Inc., is developing this 13.6 acre tract of land into an Assisted Living Facility containing 85 residential units. The development will have a density of 6.25 units per acre. The current multi-family zoning complicates development of this property as an Assisted Living Facility. Approval of the proposed Planned Development ordinance enables the City to "customize" the development regulations for this particular use. The issues associated with this Planned Development are as follows: 1, Masonry Screening Wall: The Planning & Zoning Commission recommended a masonry screening wall where this development abuts the Emerald Hills subdivision on the western side of this tract and a wrought iron fence where this development abuts the drainage open space along the south side of the development, but not within the 100 year flood plain. The developer has agreed to construct the masonry screening wall and the wrought iron fence. 2. Parking: The developer is proposing 60 parking spaces for this 85 unit facility. This parking ratio exceeds the minimum parking standards of .5 parking spaces per bed in the current regulations. 3. Landscaping: The site plan complies with the NRH Landscaping Requirements which require 15% of the lot be landscaped.. 4. Masonry Requirement: The NRH regulations require this structure to be constructed of 75% masonry on all elevations. The proposed facility will meet the masonry requirements for the City of NRH. 5. Dumpster Screening: The Planning & Zoning Commission has recommended a 6' masonry screen around all garbage dumpsters. The developer has agreed to this requirement. 6. Fire Lane: The developer has modified the site plan to provide a 90' fire lane turnaround as required. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Acct. Number Sufficient Funds Available Fln...ce DlrectOt Page 1 of CITY OF NORTH RICHLAND H/LLS ~ The Planning & Zoning Commission considered this request at its September 25, 1997 meeting and recommended approval subject to: o A 6' masonry screening wall and a 6' wrought iron fence be constructed along the west property line. o Sidewalk along Emerald Hills Way. o Masonry screening around all dumpsters. o Landscaping as per city regulations, RECOMMENDATION: It is recommended that the City Council hold the required public hearing and consider the recommendation of the Planning & Zoning Commission. "- ... '- CITY COUNCIL ACTION ITEM o~,..,o ^' ORDINANCE NO. 2245 AN ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AMENDING ORDINANCE NUMBER 1874, THE ZONING ORDINANCE, AS AMENDED, TO ESTABLISH PLANNED DEVELOPMENT DISTRICT NUMBER TWENTY-SEVEN; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Planning and Zoning Commission has reviewed a rezoning request on a tract of land identified in Case Number PZ 97-40; and WHEREAS, the developer has indicated an interest in establishing the proposed development as a planned development district under the guidelines of the North Rich/and Hills Zoning Regulations; and WHEREAS, the Planning and Zoning Commission has determined that the development conditions of this tract of land do not provide adequate opportunities for development under available existing zoning district regulations; and WHEREAS, after appropriate notice and public hearing, the Planning and Zoning Commission of the City of North Richland Hills as forwarded a recommendation to the City Council for amendment of the Ordinance No. 1874, as amended, by establishing Planned Development District Number twenty-seven, by changing said Zoning Ordinance as set forth herein; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: 1. THAT, in Case Number PZ 97-40, the following described property, attached as Exhibit 1, Location Map, shall be rezoned from C-1 Commercial and R-7-MF Multi-family Residential to establish Planned Development District Number twenty-seven: ALL of Lot 3, Block 1, Walker Branch Addition 2. THA T, the purpose of Planned Development District Number twenty-seven is to provide for an 85 unit assisted living facility, The permitted uses and development regulations for this planned development district shall be as follows: 1. Permitted Uses: An 85 unit Assisted Living Facility constructed at a maximum density of 6.25 units per acre and in accordance with the site plan attached as Exhibit NO.1. Ordinance 2245 Page I 3. That, the development regulations contained in the R-7-MF Multi-Family Residential Zoning District which are not in conflict with the terms of this Planned Development District shall govern development on said property, except as follows. The General Conditions as listed in Section 430-D of the Zoning Ordinance shall govern the development except: 1, A six (6) foot masonry screening wall must be constructed along the west property line that adjoins residential property within Emerald Lakes Addition. 2. A six (6) foot wrought iron and masonry column fence shall be constructed along the southwest property line until it abuts the residential property of Emerald Lakes Addition, but not within the 100 year flood plain. 3. Sidewalks shall be constructed in accordance with the standards of the City of North Richland Hills along property lines that abut Emerald Hills Way. 4. Required parking shall be sixty (60) spaces that conform to the standards of the City of North Richland Hills. 5. All and every refuse container on site shall have a masonry wall that serves to effectively screen it from view. 3. Garages and carports are not required. 4. Landscaping as per city specifications, 5. The recreational space is not required. 6. A gated entry is not required. 7. Additional site plan approval is not required. 4. That, all provisions of Ordinance No. 1874, the Zoning Regulations of the City of North Richland Hills, as amended, which are not in conflict with the terms of this Planned Development shall remain applicable on said property, except where amended herein. This ordinance is passed with the stipulation that a traffic study be completed by the City to determine the needs for signalization and lor additional traffic lanes on Harwood Road and any other street, alley or thoroughfare; and that the traffic needs be met by the owner at the time of platting of this property. 5. That, the Comprehensive Plan of the City of North Richland Hills is hereby amended to incorporate the changes in future land use described herein. 6. SEVERABILITY CLAUSE. That it is hereby declared to be the intention of the City Council that the section, paragraphs, sentences, clauses and phrases of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance Ordinance 2245 Page 2 shall be declared invalid or unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such invalid or unconstitutional phrase, clause, sentence, paragraph or section, 7. SAVINGS CLAUSE. That Ordinance Number 1874, the Comprehensive Zoning Ordinance of the City of North Richland Hills, Texas, as amended, shall remain in full force and effect, save and except as amended by this ordinance. 8. EFFECTIVE DATE. This ordinance shall be in full force from and after its passage. APPROVED BY THE PLANNING AND ZONING COMMISSION THIS 25TH DAY OF SEPTEMBER, 1997. Chairman, Planning and Zoning Commission Secretary, Planning and Zoning Commission PASSED AND APPROVED BY THE CITY COUNCIL THIS 27th DAY OF OCTOBER, 1997. Mayor, City of North Richland Hills, Texas ATTEST: City Secretary City of North Richland Hills, Texas APPROVED AS TO FORM AND LEGALITY: Attorney for the City Ordinance 2245 Page 3 10. PZ 97-40 PUBLIC HEARING TO CONSIDER THE REQUEST OF COLLIN EQUITIES, INC., TO REZONE LOT 3, BLOCK 1, WALKER BRANCH ADDITION FROM C- 1 COMMERCIAL & R-7 MULTI-FAMILY TO A PLANNED DEVELOPMENT FOR AN ASSISTED LIVING FACILITY. (LOCATED IN THE 8400 BLOCK OF EMERALD HILLS WAY) APPROVED Mr, LeBaron explained that this property is currently zoned multi-family except for the small tip at the very southern end, which is zoned commercial. The applicant was advised that assisted living centers are allowed by right in the C-1 zoning district, they could seek rezoning for a planned development, or they could simply build the facility as a multi-family facility under the multi-family regulations, The applicant decided to rezone for a planned development, giving them the opportunity to customize the regulations for their tract of land. Upon receipt of their site plan, staff chose multi-family as the standard to compare this facility too. Chairman Barfield opened the public hearing and called for any proponents. Mr, Patrick Barber, Aguirre Group, presented this request. Mr. Barber stated they are planning on putting fencing along the west property line where they abut the houses from Emerald Lakes and they wanted to leave the remaining southwest property line open, with landscaping along there. Much discussion ensued between the Commissioners regarding the masonry screening wall required along this property and the residential property in Emerald Lakes Addition, The Commissioners determined that they would like to see a masonry screening wall along the west property line where the residential homes from Emerald Lakes Addition abut; they would like to see a wrought iron fence with concrete columns from the southwest property line back up to where the residential homes in Emerald Lakes Addition abut, excluding the drainage channel. Additionally, the Commissioners stated they would like to see sidewalks, as required, all along Emerald Hills Way, and the developer stated they had no problem with this. Mr, Barber stated they were requesting a reduction in the parking spaces originally shown on the site plan from 85 to 60 - which is still within the required range of spaces for this type facility. The Commissioners stated they had no problem with this, There being no additional proponents, Chairman Barfield called for any opponents. Mr. Glenn Phelps of Emerald Lakes Addition spoke in opposition of this request. He voiced concerns about a lack of fencing and sidewalks between the future development of this area and his existing neighborhood, There being no additional opponents, Chairman Barfield closed the public hearing. Mr. Wood made the motion to approve PZ 97-40 subject to the following: a masonry screening wall along the west property line that adjoins residential property within Emerald Lakes Addition; a wrought iron and masonry column fence along the southwest property line until it abuts the residential property of Emerald Lakes Addition; reduced parking spaces to total 60, and masonry screening around all dumpsters, and that a 90° turnaround be required in the fire lane. Mr. Bowen seconded the motion and it carried 6 - 0, Mr, Wood asked about th special use permit for earing and asked for any proponents. lQ).'UJ ~ ~, LACE . W ~L, 8 \ \j r;.. .' 1. ì6 1 17 -1 .- .:~-=. -~ ~ -;:;-:;::.:-:'~'~--.-.':- ." ~ .- ---- .....-.-.-..-- : 18 '- --- ...., --:.¿.'. ._~'.. - .... - ---._._~-._....- . . . . L_. ~_ '. .. -.. ....-.------- .0 HILLS WAY T- .-, 2 4 1 3 . 5 " as as -EMERALD 16 17 18 . 19 ,,,. \ \ \ \ J . , \ \ \ \ I / ~ 2 15 24· 23 " 17 ~ --(f?. is G )c;'-?.3 S'.-\'7" ~2 Cf,+ '10 \ \ ¿¡If.. /·J1 I ". " ,"' 5 ¡.lIt, I!. NRH APPLICATION FOR A PLANNED DEVELOPMENT DISTRICT CIty Of No,," RiCIIIInc ffitls 7301 HE L.00p a:ro No.", Rk:hIand 104IJ~, Te>las 517 -581-5500 II'.... ~ _ ~... -"'J ~ I 4CO '"I «1r:ko:J8 of ~ ~ 1~3o~ A~~ PAP-/(CV Clly I 51.,., Zip Coø. tlt'l)petfy o,""r. ÞA L.-t.A~ No(t:, AtttK:h /tille, Or .fI1dtIy;, 4 AsSD~ I)-rES PART 3. DESCRIPTION OF REQUesT Cum,rJ( ZOIIInp 1fOtI: L R.., F Lur ?" ~f(. I o.-=rib6 In. nMIII9 of ItHIIKf1II)CSIfIå actMty MIa any PMf~ cltørac""_tit;, "'III Ú>IJ~ AJ.JD ~T£ It R n"lfZ.Ii: MI!AM- 'Rr;<tt.:.'';;'JI ~E. f)L- 10 u.. "_ 01 "'- ptfJpIJrty: 2. {gllf;.~ ~f'. ~~ vIJir I Z~"t~ -=- Silo pllM fl/ttldtød ...,,;c¡, Çf)If/onn!J wHit 'he teq4li"""t:n/s itrdutIed áoJ l/lis ø.cQl: œ Ye.ç 0 /IkJ Anrt1/1vU JI"~ ~ P'OØfIrty ~f If ~ I" net ewn.,.. c:J Yes c::J NQ lIe,."y ceftlfy m" I ~"", or IWNfIMttI. the IefJ:l/ owner I". P'OØfI"'f ~«nbtJd ... rIG ~y .Iclblfltf m., ~IIOJI fOr ~1IftI 01 · Pt~ DeWlicJpm.", Oi:;trict ta lit" ÞIeoninCJ ena IDr1În9 Com",¡s5ÌOt1 fbr ~.lion. Døla _,~q~ Prin, N-'~\e.. -:::\ dCcS\ ~ PART 4. FOR OFFICE USE ONLY Oðllf Of Plttnnrflq 0ntrI0 eomlPllU/OII Pu ~Qnng: "U PoiTJ7 t--.: Ye.s S~.tv~ ~ ~~~~ --. -- Ofte 01 City (ÀJur'ICi/ PlIO/if¡ Høllrlng: Li NO 0I.u M.i¥nbf:r. It(tf:d t:Jev./oøItIent ~,. Cl YU r--, No L-__ L-..; CooarbOrl.t 01 ApptovM· u.,nJ/i18K17 -- ;---, ;----1 '.$ L-1 A$Se$l"'''''II P,,1d'? : ;Vu 0 No 118: $300.00 No --.-...-.-- Thia lIPI*Miott ... nal be scIIfIC1IJItIc1 loT pwOIiç lleeI*!Q /llItil u.. ~ ~ /a teQlNeø. -_.- PLANNED DEVELOPMENT CO - 415 (5197) ~ -ar=-m ~8S T 8B¿ ZlB cRfX) JdcYl(lStj:ar O':ì:OT LB. VO--"60 9Tl. 'ON :nr..¡ 917 ; eo LSf" -C;0-<:'() sO',j \. CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Public Hearing to Consider the Request of Steven Bosaw fOrAgenda Number: a Special Use Permit on Lot 9, Edgley Addition to Operate an Auto Upholstery Shop. (Located at 4166 Willman Avenue) Ordinance 2244 PZ 97-41 Mr. Stephen Bosaw operates an automobile interior repair service from his facility on Willman Avenue. His company provides auto interior repair services to area auto dealerships; no automotive repair is conducted at this location. His facility on Willman Avenue is operated as an office for dispatching and for overnight storage of his service vehicles. Mr. Bosaw recently contacted the NRH Planning Office to inquire about the possibility of working on customer's vehicles during the day at his facility. Mr. Bosaw was advised that automotive repair work is not allowed in the C-1 district and he would have to seek rezoning to C-2. At the September 25, 1997 public hearing, the Planning & Zoning Commission expressed concern about rezoning this property to C-2 because the list of permitted uses includes uses which are quite intense for this particular location. It was their recommendation to authorize a Special Use Permit for an Auto Upholstery Shop at this location and the owner agreed with this recommendation. Notices have been sent to all property owners having property within 200 feet of this lot. Staff has not received any adverse comments regarding this rezoning request. The Planning & Zoning Commission considered this request at its September 25, 1997 meeting and recommended approval of a Special Use Permit for an Auto Upholstery Shop. RECOMMENDA TION: It is recommended that the City Council hold the required public hearing and consider the recommendation of the Planning & Zoning Commission. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ er Acct. Number Sufficient Funds Available ',--- ead Signature CITY COUNCIL ACTION FlnllnC8 Dlrecto, Page 1 of --_.._---_._~-_._._-~-_.~-~--~----_. _._~ ORDINANCE 2244 AN ORDINANCE BY THE CITY OF NORTH RICHLAND HILLS, TEXAS AMENDING ORDINANCE NUMBER 1874, THE ZONING ORDINANCE, TO AUTHORIZE SPECIAL USE PERMIT NUMBER FORTY-FOUR FOR AN AUTO UPHOLSTERY SHOP; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, after appropriate notice and public hearing, the Planning and Zoning Commission of the City of North Richland Hills, Texas, has forwarded a recommendation to the City Council for amendment of Ordinance No. 1874 by changing said Zoning Ordinance as set forth herein; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: 1. THAT, in case number PZ 97-41, Special Use Permit Number Forty-four (44) be hereby authorized for an Auto Upholstery Shop on the property described as follows: Lot 9, Edgley Addition (4166 Willman Avenue) 2. SEVERABILITY CLAUSE. That it is hereby declared to be the intention of the City Council that the section, paragraphs, sentences, clauses and phrases of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared invalid or unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such invalid or unconstitutional phrase, clause, sentence, paragraph or section. 3. SAVINGS CLAUSE. That Ordinance Number 1874, the Zoning Ordinance of the City of North Richland Hills, Texas, as amended, shall remain in full force and effect, save and except as amended by this Ordinance. Ordinance No. 2244 Page 1 4. EFFECTIVE DATE. This ordinance shall be in full force and effect from and after its passage, APPROVED BY THE PLANNING AND ZONING COMMISSION THIS 25th DAY OF September 1997. ~æ~ --¿-~ Chairman, Planning and Zoning Commission Secretary, Planning and Zoning Commission PASSED AND APPROVED BY THE CITY COUNCIL THIS 27TH DAY OF OCTOBER 1997. ATTEST: Mayor City of North Rich/and Hills, Texas City Secretary City of North Rich/and Hills, Texas APPROVED AS TO FORM AND LEGALITY: Attorney for the City Ordinance No. 2244 Page 2 r. Barber stated they were requesting a reduction in the parking spaces 'nally shown on the site plan from 85 to 60 - which is still within the require ran f spaces for this type facility. The C 'ssioners stated they had no problem with this, There being n opponents. itional proponents, Chairman Barfield called f Mr, Glenn Phelps of Emer He voiced concerns about a la "~ncing and sid development of this area and his e '. ition of this request. s between the future od. There being no additional opponents, C hearing. , leld closed the public ~ rove PZ 97-40 subject to the west property line that adjoins ... ntial akes Addition; a wrought iron and masonry west property line until it abuts the residential prop ädition; reduced parking spaces to total 60, and masonry und all dumpsters, and that a 90° turnaround be required in the fir Mr. Wood made the motion masonry screening wall property within Erne fence along the Emerald L scree!) la . 11. PZ 97-41 PUBLIC HEARING TO CONSIDER THE REQUEST OF STEVEN BOSAW TO REZONE LOT 9, EDGLEY ADDITION FROM C-1 COMMERCIAL TO C-2 COMMERCIAL (LOCATED AT 4166 WILLMAN AVENUE) APPROVEQ Mr. LeBaron explained that earlier in the year the Commission had approved a zoning change request at this property so Mr. Bosaw could operate his mobile vehicle interior repair service, His business has expanded and some customers are requesting Mr. Bosaw repair there cars onsite, which will require a C-2 zOning, Mr. Wood asked about the possibility of leaving the zoning C-1 and granting a special use permit for this particular use. Mr. LeBaron stated that he had asked the applicant this and he had no problem with it. Chairman Barfield opened the public hearing and asked for any proponents, Mr. Steven Bosaw, applicant, presented this request. He stated that he had no problem leaving the zoning C-1 and receiving a Special Use Permit. There being no additional proponents. Chairman Barfield called for any opponents. Seeing none, the public hearing was closed. Mr. Wood made the motion to approve PZ 97-41 as a Special Use Permit for an auto interior repair shop in the C-1 zoning district. Mr. Bowen seconded the motion and it carried 6 - O. . ~ .-- - - STAFF REPO LeBaron thanked the Commissioners for their attendance at the Work id-Cities Overlay Zone and stated the minutes of that meeti e next meeting. There were none. David Barfield, Chairman - --- 4 .I: U 9 H ~ 3 Z w ~ 2 10R o 1R 7.8789 AC 12 13 14A 15A SPT 1 11 ~ 10 I 3A ~ 1 B TR,gw3A 1R 4.86 AC \ ) 14 I I 14A) 23 VIVIAN LN r - TR,8F1 TR.BE 4 3 TR.8H .24 AC .24 A a:::. TR.9F . 5.08 AC TR.BF TR.BC 4 3 EPT 3 3 9 10 - - ~o e 7 6 5 12 11 13 o C r- 4 ~ ~ I r- ~.- -~- I ¡ t q! l J .... :;r I ~ . ,.." 1 " t ~ e ¡ C'û , f.n-. : .~ & I <) CIc ' "'- ~ ' ~ ~~~ ~ .~~"" ~ ;:. zö';'- - ~....-.. C¡{q I /' /" -...- .-- ¡-- -í- - ì : '1 ! I cå J I I i/r;' 1 I I ~ t-.: c..J ~ (1')" '-!I.~ ~ ~'···I £:;-s- I' I " ~~ L:j I f"¡fI,I . , I I , I I I ¡ ...._.~ -.-- Lf/ ¿,& --,. ..- WIL.LMAJJ AVE:: I I , I , ~ I '" ~ a YCALC ¡" _ ~30' t.or - 27. . tel/()" ~. ßJ-. r Ni~H (Please print or type all responses) APPLICATION FOR A ZONING DISTRICT CHANGE City of North Richland Hills 7301 NE Loop 820 North Richland Hills, Texas PART 1. APPLICANT INFORMATION 817,581-5500 Jame of applicant I agent: t'V1 ~ \3~!o.\rJ ))174 Stre1:dzrf apPlica~: ~en: C' t- F\~ ~~~t t Code o~ ,ntl ~t~~s 4 PART 2. PROPERTY INFORMATION C~~~~l~ Se.\J,c~ ~~ Co~ 1 Telephone number of applicant I agent: ~\{, '6Co"\ ' q 1 {\ 1')(. (~'öeJ Wt.sJ. 0ctl(~c~ Proposed use of the property: C - j A \^~ ~b (\ ~ ~ (' R'::~:n:~~ctcht~~ìt~a~ _~~~~=;_~ __ -P., . ~~I'_-=_ Yes I No ed from properrj owner if applicant is not owner: Surveyor map attached as required by application: No PART 3. PROPERTY OWNER INFORMATION me of property owner: 13o~l <Sit \ \A. r~ Street address '\' r. ~. Telephone number of property owner: ~~ - 1..~/- fc'3') 8 ffidavit from property owner if different from applicant I agent: Date.· Q. - '! . Or! I hereby certify that I am, or described above and do he zoning district change to th . __H__.__ __._..___ Print Name: ,¡\. --s- ~ð~ç...\,JSignature ~ -- --- --- --- -.-_._ - --. _·'_·__n.._.._ . PART 4. FOR OFFICE USE ONLY Date of Planning & Zoning Commission Public Hearing: Taxes Paid? Yes Case Number: No Date of City Council Public Hearing: Fee: Yes No Zoning District Change Approved: Yes No Yes $300.00 No r""ditions of Approval: -.. -.._- ---.,-,.---.-.---.--,.~-- --.-_._--- ------.. .-- ._-----_._---_.._~ .'--.- . -- -- .-. This application will not be scheduled for public hearing unttl application fee is received. Zoning District Change CD - 407 (2/97) " CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Request of J-MC Oil Company and Barbara West for an Agenda Number: Amended Plat of Lot 1R and 2R, Block 2, AG. Walker Addition (Located in the 7000 Block of Grapevine Highway) PS 97-12 J-MC Oil Company and Barbara West are the owners of these two lots located in the 7000 block of Grapevine Highway. The applicants have submitted an Amended Plat to adjust a property line between the two lots due to an encroachment over a common property line. The plat satisfies the requirements of the North Richland Hills Public Works Department and has met all the comments of the Public Works Department. The Planning & Zoning Commission considered this request at its October 9, 1997 meeting and recommended approval. RECOMMENDATION: It is recommended that the City Council approve the recommendation of the Planning & Zoning Commission. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Ot Acct. Number Sufficient Funds Available ',,-- -d~¡~~ e a ment Head Signature ' . City a ger CnYCOUNC~ACnON~M Page 1 of Finance Director 4. PS 97-12 REQUEST OF J-MC OIL COMPANY AND BARBARA WEST FOR AN AMENDED PLAT OF LOTS 1 RAND 2R, BLOCK 2, A.G. WALKER ADDITION (LOCATED IN THE 7000 BLOCK OF GRAPEVINE HIGHWAY) APPROVED Vice Chairman Davis explained that this is an amended plat to correct a building line encroachment and that all staff requirements have been met. Mr, Bowen made the motion to approve PS 97-12. Ms. Spicer seconded the motion and it carried 7 - O. 5. Vice Chairm rezoned earlier need to be shown that the P& Z uilding line will Mr. Wood made the mati 25' building lines being sho that the C-2 zoning be indicate Ject to the addition of the e and Harmonson Road and Mr. LeBaron remin Tuesday, Octob eting would be on t meeting. ~ !11 - t~ o .....:: ..... ~..~ ~i! . \ ii t~ ,..,., J~ C I.¡ ~~ " ..; c! I· " ., I " ¡ i --~._--~--~--' ~ <: \..:; ,J PO 11, . ¡,off-, PO(h ::"'7 ,\3-~1J ~h: ¿ Q I h : IO~ ~ If' - .... \ --t-l : " I I ~r;, I I ---_.~ ::J ... JOlh 1, 0 If.., bOI ---- ~, 'J - 20lh h9(h --'- OOlh ~-;- YJl/7 Ilh c·.;!) o IO~h I - I .... I I \ -, o - ---""-.-.--- - a: I ...-. ('"'J :n L hi ¿'O'lh :. :¡L I' (:) ~Z\t-~").II I '',I p ~ -- ()' ! ~L II:Lbfn:;--ro¡¡::;-, "0! 'J ,- --: i \ :-- ~ , / , ~---...-._- ;~- / '........., ~,¿I' I / ..... -......:::. h· )_/7', ~!!~..: 0~~:. :"..... ' cfr/t., . .<):,. ' ~ ( /1 '~ .... ..~~, ~ ..... ,) .', a a i :E \:-( I .... - ---- ì: ,~ 1° 'I I 01 Q eJl ì'- - COff-, l 11, '~ o Þ /, ./ . '. .r'\\/' ~'v, /, -:-;...... / -::// '" / ....../ ~/' ". .'"TJ /' // l~ ~ .... <:' ,... >- .... = .<.( gzot> .... :'M'\' '''>'1 ^?l':C ~. . t ('J u ~" '",- '" " ~ ''--. "-.. "- '--" ~ / , (.:1/' ': / ' , ,/ :.:, / / /! ~~ ~. \7~, \ u ,~ >- ~ <:t H Œ. \D 0 \..'0 CL \- Œ. 'ï- ~ -z.. ill 7- a 2- ill ~ L 0 0 \...) C~ ::=:';~':, O;:~S; I ! I G: i :D I 1 i . I -~ \ ~cY;.. ..-~~~ '.: N - '-n -= ~~\ .~ (,j ..' .. '-1 ~ -- -- --- ¿-Icþ P cq-,. ~s :~;~-;'~~'~~~ ~--, i /L., r 5'2br !7b[ i L!br i :L ¡ ~ Þ -v I ¡' 0& \.f').' "-'-, --. I _ ' d' ~ ·1· £.: ;:;;;- ~ ,i. \ ,i; · ~l.. i r-... I· :... -' ._~ ....: '.c::l.:~- i -" I...., ; .. o.ri 1.1 . -r :a::. ; C)L : , , ,.' ~ I I:" \~_ _ ~ .', '1 ;.:! L___._.O~l~_..,_.\o,\______:__. ~._._._, \'.\ .-.J -4., 't"j .<___,__ \ ?/. /. ~ :/x·.,..... j "/ ~ :: "Q! ;~ i~: :: 4.. ?,-\, ~ ,( :s : lÇfJ¡, he<) C?çoo ... ;. : 3:!J:/Z !-f.9;£ ¡ J I _ .--:~ SSS:-,Y::;S , I i L-;-'--< :_I:; ':":;, ~....:. ' .j " '".....l.__.... -::. ., ,..J -: L£ 0V- L-z.r::&. rzi:" L:u,l-; U~h 1/ ç.~: <;;t:!!7 '., -:- , - c n5 I ,~ I \ ~ iT~l ~ ::> ;::> I-~ I I¿ " I ¡ bi § ... '" ". I, ·/~ CITY OF N*RTH RICHLAND HILLS Public Works August 22, 1997 MEMO TO: Planning and Zoning Commission FROM: Julia W. Skare, P.E., Staff Engineer SUBJECT: PS97 -12; A. G, WALKER ADDITION; Block 2, Lots 1 R & 2R; Amended Plat We have reviewed the subject documents submitted to this office on August 12, 1997. The following items are for your consideration, 1. POINT OF BEGINNING The Point of Beginning needs to be clearly labeled on the plat. 2. TESCO EASEMENT The existing Plat for Lot 1, Block 2 shows a TESCO easement. This easement needs to be shown on the Amended Plat. If the easement has been vacated, show easement and volume and page of vacation on the Amended Plat. This review was based on the Amended Plat. The plat was not reviewed to meet the current Platting and Subdivision Regulations. ~' ~Ar~ Ju a W. Skare, p.E. Staff Engineer JWS\pwm97133 cc: Kevin B, Miller, P.E., Assistant Public Works Director Barry LeBaron, Director of Planning & Inspection Services Wendell Hancock\1721 HaltomRoad\Fort Worth, Texas 76117 P.O. Box 820609 . North Richland Hilts, Texas" 76182-0609 7301 Northeast Loop 820 ·817-581-5521 . FAX 817-656-7503 NRH (PI..se pnnl or Iyøe all ",sponses) APPLICATION FOR AN AMENDED PLAT City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills. Texas 817-581-5500 Existmg Subdivision Name: According to the Texas Local Government Code, an Amending Plat may be approved only for certain purposes. Check the appropriate number(s) below which applies to this application: to correct any other type of scrivener or clerical error or omission previously approved by the municipal authority responsible for approving plats, including lot numbers, .acreage, street names, and identification of adjacent recorded plats to correct an error in courses and distances of lot fines between two adjacent lots if: a, both lot owners join in the application for amending the plat b, neither lot is abolished c. the amendment does not attempt to remove reCDrded CDvenants or restrictions d. the amendment does not have a material adverse effect on the property rights of the other ownership in the plat D 7. to relocate a lot line to eliminate an inadvertent encroachment of a building or other improvement on a lot line or easement GJ 8. to relocate one or more lot lines between one or more adjacent lots if: a. the owners of all those Jots join in the application for amending the plat b. the amendment does not attempt to remove reCDrded CDvenants or restrictions c. the amendment does not increase the number of lots D 9, to make necessary changes to the preceding plat to create six or fewer lots in the subdivision or part of the subdivision covered by the preceding plat if: a. the changes do not affect applicable zoning and other regulations of the municipality b. the changes do not attempt to amend or remove any CDvenants or restrictions c. the area covered by the changes is located in an area that the municipal planning commission or other appropriate governing body of the municipality has approved, after a public hearing, as a residential improvement area D 1. D 2. 0 3. D 4. 0 5. 0 Ô. to add a course or distance that was omitted on the preceding plat. to correct an error in a course or distance shown on the preceding plat. to indicate monuments set after the death. disability, or retirement from practice of the engineer or surveyor responsible for setting monuments. to show the location or character of a monument that has been changed in location or character or that is shown incorrectly as to location or character on the preceding plat. Name and Address of Current Property Owner: Barbara Kurtz West Josh W. Davis 3901 Tamblewood Dr. 6501 Riddle Dr. Colle ville, TX 76034 Ft. Worth, TX 76180 I hereby certify that I am, or represent, the legal owner of the property described above and do hereby submit this Amended Plat 10) to the Planning and Zoning Commission for consideration. 'k ')' 1,..l..: . , " West 817-354-4815 ~l{1 \ Date: ~ -l ~ --q, 3-1-047) Applicant's Phone No.: Davis 817-281-1436 c.~ \)Q. T tf" Print Name IOc:h W n.:lvic; Signature: ,. Barbara Kurtz West OFFICE USE ONLY T Case Number 'P~ q7 --l ~ Taxes Paid Liens Paid Assessments Paid Recording Fee: AMENDED PLAT CD - 405 (2/96) _..~ .....' CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Request of Joyce E. and C.R. Pennington for a Final Plat Agenda Number: of Lot 1, Block 1 Eaton Addition (Located at the Southwest Corner of Rufe Snow Drive and Harmonson Road) PS 97-42 Joyce E. and C. R. Pennington are developing this 1.38 acre tract of land at the southwest corner of Rufe Snow Drive and Harmonson Road. The property is currently zoned C-2 Commercial. The issues associated with this plat are as follows: 1. Street Lights: The developer has agreed to install additional street lights that will be coordinated with the Public Works Department and TU Electric. The developer has agreed to pay TU Electric directly for costs incurred. The plat satisfies the requirements of the North Richland Hills Public Works Department and has met all the comments of the Public Works Department. The Planning & Zoning Commission considered this request at its October 9, 1997 meeting and recommended approval. RECOMMENDATION: It is recommended that the City Council approve the recommendation of the Planning & Zoning Commission. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Ot Acct. Number Sufficient Funds Available '-- Head Signature CITY COUNCIL ACTION FI.....,. Olreclor Page 1 of _-c-."",_.__ _;.=. -.. ,.--....-.:..,~._..- REQ AMENDED PLA (LOCATED IN T PS 97-12 -MC OIL COMPANY AND BARBARA WEST FOR AN 'L~ AND 2R, BLOCK 2, A.G. WALKER ADDITI CK OF GRAPEVINE HIGHWA ~--... -. - 5. PS 97-42 REQUEST OF JOYCE E. AND C.R. PENNINGTON FOR A FINAL PLAT OF LOT 1, BLOCK 1 , EATON ADDITION (LOCATED AT THE SOUTHWEST CORNER OF HARMON SON ROAD AND RUFE SNOW DRIVE APPROVED Vice Chairman Davis explained that this is the final plat of property that the P& Z rezoned earlier in the summer. Mr, Davis explained that a 25' building line will need to be shown on Rufe Snow Drive and Harmonson Road, Mr. Wood made the motion to approve PS 97-42 subject to the addition of the 25' building lines being shown on Rufe Snow Drive and Harmonson Road and that the C-2 zoning be indicated on the plat. Mr. Ferguson seconded the motion and it carried 7 - O. -" ...-.-- " :;;;o_..---~ .-- --:--". 7. CITIZEN COMMENTS _..--:: , (.," v~\ i- ~ w ~.¢ ~ 'u '! :c. "J _",,:, ,:/ /f\) Q' l. :-' W t, C' '-. 2: .~ " go 2 VI -- c f IU / 1-'\ C: . : I ;:::¡f '~ o ¡y JJ"""..... ::::1 (.t' -: '-J ZS:; .t. 'J T, ..~-- "-- ~ V1 ...... D: ~\ ~... --.-, ~ .~ .:0':1 î;'-.-- - W .~ "" ~. .~ ~ - ,... .... (. ......-.~ O(¡ ~ ''G £--~ c.. ~. F' .... ~ .. ..... r\. f u., f aJ ~ ~ '-J ~ 'd :"1 oc:. U, !; (' .. N ~ i'¡ ~ ,'J ~ ~ ~ ¡u ..... C ~ ¡.::; .... VI ~ .... aJ ~ r-' ..J -.J f: :-r¡ 'j. ~ u: w ..n µ. c-.. ..f\) r- -l: v. C"\ " W ~ f iJ "" -oJ <P ~~~ f:: ...... µ :5 _ ~.~. . II!-- IS:::- '0 iÇj t~' '0 ~ - -i ~ ~ ~ f Ç) -I ("ú " " "(j t \L )þ '-\ .-' £J:~.'-/. <' L~' '~. ...... ,)/l.t , ·T<ll-.çe hhl.t. . };1.L to C-I I. ,I -\~%~ I,\J \T\ . o (.J) ( :r IT . J. .~ ~/~ . -::1'- J7'2S =-- Fi..'::CjY s;- ocL(, 7·· \.J'\ vJ I'\J ---4 :>;:~ :-,... ~'-J () .... '-J ~::! C1 ... ~~ ~ ":!''; /- -- (J -j 4,'-? - h. r'ù 3- " ~ -'. '-\ï:~~-- -.::. .- ÎJ G, '-./ I',> .~ _. ---- ---.---- (J,.: ... --------,...-. , j ,J ¿, r % 1> Z. -j -j GJ ... r r ;0 I.J 't-\ L Z. .,; ~ rJ ~. µ 77y/ r-.. s~ow D~. q~1: OI.J. ciS£" I I I I w rJ ru 'J :J~¿/ -----~-._.- J: þ JJ -1:<: ""TJ(oJ-j ~ Þ:>;::1' èñ o Z ~ N _~CJ þ -<. ~ -- - ~ f\) r-j .t. :r: þ -.. -.J r· ~-¡ ;:'::r: ~ 00 -~: Vl (,J f...tJ '11 i0 L'I f.J -j Þ:>;::r I\J ~ ('oJ -L w- u.) JJ ç' 0 V1 ~ 6" I\J.... ~ :;':r <..11 ~ W ('V IJ -j (1:r (i'. V'1 I.) _.~ W'::r -:1w Q W \.:]:) '" @ ~ o () ,-; \ r'{:r ~d - ~):r :"1 ~ f\)-j -- Ç}- W....¡... (.- TA 282H1 .15 e ....... ;""r 'J r'..) ~. ::!. I\J Þc;- lÌ I , I I ¡ ./ -r-~ i I ______, .- -r oC~ .,., µ , :~qn· w ¡ ! , i ! ; CITY OF N@RTH RICHLAND HILLS Pu::iic INorks September 30, 1997 MEMO TO: Planning and Zoning Commission FROM: Julia W. Skare, P.E., Staff Engineer SUBJECT: PS97-42; EATON ADDITION; Block 1, Lot 1; Final Plat We have reviewed the subject documents submitted to this office September 16, 1997. The following items are for your consideration, 1. TOPOGRAPHICAL DRAWING A Preliminary Drainage Analysis including a topographical drawing is required by the Subdivision Ordinance, Section 435 and defined in the Public Works Design Manual, Section 1-05, Subsection C. Public Works is not opposed to a "site specific engineered grading plan" in lieu of the Drainage Analysis. The engineered grading plan has not been submitted. The plan must be submitted to and approved by the Public Works Department prior to a building permit being issued on the lot. 2. DRIVEWAY SPACING Currently there are three driveway approaches along Harmonson Road and one along Rufe Snow Drive. No additional access drives will be allowed along Rufe Snow Drive or Harmonson Road. 3. ZONING The current zoning of the proposed lot needs to be shown on the Plat. 4. SIGNATURES The appropriate signatures need to be added to the owner's Acknowledgment and Dedication on the Final Plat. P.O. Box 820609 . North Richland Hills, Texas· 76182.0609 7301 Northeast Loop 820 . 817-581-5521 . FAX 817-656-7538 5. STREET UGHTING Street Lighting is required by Section 1-06 of the Design Manual. An additional street light is required based on current ordinances and needs to be coordinated with Public Works and TU Electric. The cost for installation of any additional street lights will be paid by the developer directly to TU Electric. This review was based on topographical plan and the Final Plat. The marked- up blue lines need to be returned with the next submittal. 1 ~ M·,~v- . W. Skare, P.E/ Engineer JWS\pwm97163 cc: Kevin B. Miller, P.E., Assistant Public Works Director Barry LeBaron, Director of Planning & Inspection Services Shaun Spooner\352 West Hurst Boulevard\Hurst, Texas 76053 FROM SPOONER & ASSOCIATES, INC. PHO~jE NO. 8172826981 Oct. 01 1997 03:~~PM P02 Page 1 of :2 SPOONBR AND ASSOCIATES, INC_ REGISTERED ÞROFESSIONAL LAND SURVEYORS 352 W. HURST BLVD, HURST, TEXAS 76053 (817) 282-6981 October 01, 1997 City of North Richland Hills 7301 N.E. loop 820, P.O. Box 820609 North Richland Hills, Tx 76182-0609 Attn. Julia W. Skare, P.E. Re: PS97-28, Eaton Addition Block 1, Lot 1 Final Plat This is a letter response to the comments on the plat dated September 30, 1997. 1) It is understood that a site specific engineered drainage plan needs to be submitted and approved by Public Works before a building permit can be issued on the Lot. 2) The 3 existing driveway approaches are shown on the topo drawing and it is understood that no additional access drives will be allowed along Rufe Snow or Harmonson. 3) The current zoning of CU PUD will be shown on the final plat. 4) The signatures will be added to the owner's Acknowledgment and Dedication on the mylar of the Final Plat. S) The locations of existing street lights will ce shown on the plans. Additional street lights that will be required will be coordinated with public works and TU Electric and the cost for installation will be paid by the developer directly to TU Elec- tric. If there are any further questions on thlS matter please contact me. ~. Shaun Spoon CITY OF NORTH RICHLAND HILLS Î' Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Request of Laura Wauson for a Replat to be known Agenda NumberPS 97-44 as Lot 1, Block 6, Hewitt Estates Addition (Located at 6802 Meadow Road) Sometime during the early part of September, Ms. Wauson contacted the North Richland Hills Inspection Department about renovating an existing single family home at 6802 Meadow Road. Ms. Wauson was advised that a renovation project which exceeds 50% of the value of the home would require the property be platted and all public improvements installed at the expense of the developer, Meadow Road has no curb and gutter and the area lacks adequate drainage, water and sewer facilities. At the Sept. 25, 1997 Planning and Zoning meeting, Ms. Wauson stated that she would sign covenants for her share of the public improvements. However, members of the Commission asked her if she knew how much she was obligating herself to pay by signing the covenants. Ms. Wauson stated she was not aware of the total costs. The Commission tabled action on her replat to allow Ms. Wauson to get with city staff and determine the costs of her part of the required public improvements and to allow staff time to review the plat and offer comment. The next morning, Ms. Wauson called a member of the city planning staff and stated she was reducing the value of her renovation project to less than the 50% threshold and would not be proceeding with the replat due to the short time frame for completing the renovation project. The following week, Ms. Wauson advised staff that she had decided to proceed with the replat and she was furnished a copy of the Public Works comment letter which identifies cost estimates for the various public improvements. The total cost of all required improvements is $76,829. Attached is a copy of the public works comment letter. Ms. Wauson is requesting a waiver of signing any covenants for these improvements. At the October 13, 1997 City Council meeting, Ms. Wauson addressed the Council seeking help in getting her property platted and was advised to meet with staff. City Management staff met with her on Oct. 15th where she stated that she only had sufficient funds to complete less than 50% of the proposed renovation work and that it would be possibly sometime in 1998 when she would have funds to complete the remodeling project. She also stated that she had sold her home in Hurst and had to be out of it by December 1 and needed to have this renovation project finished as soon as possible. The following is a summary of the issues associated with this replat: Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other J3 . J "- Acct. Number Sufficient Funds Available ep rtment Head Signature C"Y COUNCIL ACTION í FinMce OW.Clot Page 1 of CITY OF NORTH RICHLAND HILLS 1 I 1. Drainage: The NRH Public Works department has estimated the drainage improvement costs associated with this replat at approximately $50,000. Ms. Wauson is requesting a waiver of providing a covenant for this improvement. 2. Streets: Buck Street and Meadow Road require street improvements which are estimated at $21,151. Ms. Wauson is requesting a waiver of providing a covenant for these improvements. 3. Water. A six inch water line extension is required within the Buck Street right-of-way which is estimated to cost $2,839. Ms. Wauson is requesting a waiver of providing a signed covenant for this improvement. 4. Sewer. A six inch sewer line extension is required within the Buck Street right-of-way. This sewer line is estimated to cost $2,839. Ms. Wauson is requesting a waiver of providing a covenant for this improvement. 5. Street Light The NRH regulations require the developer to install a street light at this location. Ms. Wauson ¡s requesting a waiver of this improvement. The plat satisfies the requirements of the North Richland Hills Public Works Department and has met all the comments of the Public Works Department. The Planning & Zoning Commission considered this request at its October 21, 1997 meeting and recommended approval, subject to her signing covenants for the required public improvements, and requiring installation of the street light. RECOMMENDATION: It is recommended that the City Council approve the recommendation of the Planning & Zoning Commission. CITY COUNCIL ACTION ITEM D'"),...t"'\ '"'~ Chronology of Replat of Lot A 10, Hewitt Estates Early Sept. - Laura Wauson inquired about a building permit for house on Meadow Road. Advised by staff she needed to replat the property. Meeting in Sept. - Ms. Wauson inquired about the platting process and advised about public improvement requirements. Meeting in Sept. - Ms. Wauson contacted Randy Shiflet who agreed to have the plat placed on the next agenda of the Planning and Zoning Commission if she would get the plat prepared and submit an application. Sept. 17, 1997 - Ms. Wauson came by the office to sign the plat application. Sept. 25, 1997 - Plat delivered to planning staff on this afternoon. Sept. 25, 1997 - Planning and Zoning Commission review plat and table action. Sept. 26, 1997 - Ms, Wauson calls Valerie Taylor, Planning and Inspections secretary and advises she is withdrawing plat and scaling down renovation project to less than 50%, Oct. 7, 1997 - Christopher Baker calls Ms. Wauson for written verification of plat withdrawal. Oct. 8th or 9th - Ms. Wauson furnished copy of Public Works plat review letter, Oct. 9, 1997 - Ms. Wauson obtained approval of a scaled down building permit to allow her to get started on the renovation project. Oct. 13, 1997 - Plat is scheduled for the next P&Z meeting on October 21, 1997. CITY OF N$RTH RICHLAND HILLS October 15, 1,997 Planning & Inspection Ser,,"¡\:es Jon Derek and Laura Wauson 309 Brazil Drive Hurst TX 76054 RE: PS 97-44 - Replat Process & Requirements Lot 1, Block 6, Hewitt Estates Mr. & Ms. Wauson: The following is a list of enumerated tasks that need to be completed for the replat to be placed on the City Council agenda for October 27, 1997. DATE TASK PRODUCT REQUIRED/PRODUCED 10/16/97 Plat submittal for P&Z packet 1. 15 copies of corrected plat 2. Letter of intent to ask for waiver of Covenants (copies of Covenants will be furnished) 10/17/97 P&Z packets delivered to Commissioners 10/21/97 P&Z Work Session 6:45 p.m. 1. Possible disucssion of issues at the request of members P&Z Meeting 1. Applicant requested to be present 7:30 p.rn. 2. P&Z recommends approval or denial of replat to City Council 10/22/97 CC Meeting Requirements 1. 24 copies of replat required for CC agenda 2. Staff prepares Council cover sheets 10/23/97 Council packets delivered to members 10/27/97 Council meeting 7:30 p.m. 1. Applicant requested to attend meeting 2. Council approves or denies replat of land 10/28/97 Council approval of replat 1. Project continues successfully Council denies replat 1. Project halts Should you have additional questons, please contact me. Ä~o.~ Christopher Baker Planner cc: Larry Cunningham, City Manager Randy Shiftlet, Assistant City Manager Barry LeBaron, Director of Planning & Inspections Gregory Dickens, Director of Public Works P.O. Box 820609 . North Richland Hills. Texas· 76182-0609 USA 7301 Northeast Loop 820 -817-581-5514 - FAX 817-656,7503 prove the minutes of the Sep r seconded the motion and it carried 6 - O. 5. PS 97-44 REQUEST OF LAURA WAUSON FOR A REPLA T TO BE KNOWN AS LOT 1 BLOCK 6, HEWITT ESTATES. (LOCATED AT 6802 MEADOW ROAD) APPROVED Mr. LeBaron explained that this item had been tabled at the Sept. 25, 1997 meeting to allow staff to review and comment on the Replat documents and to allow Ms. Wauson to determine an estimated dollar amount of her obligations for the covenants she had agreed to sign, Mr. LeBaron explained that Ms. Wauson had previously signed covenants for all the items mentioned in the P&Z cover sheets which included drainage, water, sewer and street improvements. A street light is also required for this location. However Ms. Wauson is requesting a waiver of these covenants. Additionally she is requesting a waiver of the required street light and masonry screening fence, Ms. Retha Templin, 6728 Meadow Road, voiced concerns regarding the reduction in the building line along Meadow Road from 25 feet to 20 feet. It was explained to Ms. Templin that right-of-way was being dedicated for the future extension of Holiday Lane as a collector street and the reduction in the building line was to keep the existing structure on this property from encroaching on a building line. Mr. Charles Templin, 6728 Meadow Road, voiced concerns on waiving the masonry fence and asked about how access to this property was going to be achieved. Mr. Templin stated that he believes this entire situation has been handled improperly because of the limited access off of the future Holiday Lane thoroughfare; it is being violated automatically by allowing this drive approach. He believes the front of this house should face Buck Street, and believes it could easily be done since the degree of this remodel is so extreme. Ms, Wauson stated that because the way her house will be situated, the driving entrance will come off Meadow Road and she will have a rear entry garage. Mr. Davis made the motion to approve PS 97-44 subject to engineers requirements; reducing the building line to 20' from the required 25' along Meadow Road; that all covenants be in place for drainage, streets, water and sewer improvements; require the street light and waive the fence along Meadow Road. Mr. Wood seconded the motion and it carried 6 - 0, Mr. LeBaro west side of E The drainage cha channel and the dev extended across the fro way north on Emerald Hills lot is developed, it will be the de that time. ract on the ving facility. Ire a concrete ill need to be e done about 2/3 of the en the northern part of this Ibility to extend the sewer at Mr, Wood made the motion to appr comments. Mr. Miller seconded the mo . 7. PS 97-49 RY & CINDY GRIFFIN FOR A FINAL PLA IFFIN ADDITION. (LOCATED AT 7228 BURSEY APPROVED ade the motion to approye P-8~,- -., - . er--~he motion and it carried 6 - O. , ' r\...t"hûr 1 h. 1 00" \.../\.-LVV\"'"! .LV, í././, Planning and Zoning Commission City of North Richland Hills This letter is in response to the corIUnents provided by Kevin Miller on October 8, 1997 c:onceming the platting of6802 Meadow Rd., also retèlTed to a.,;; PS97-44 HEVvTIT ESTATES: Block 6, Lot 1. Th~ signatures, title block, and zoning changes have been made on the plat as requested. I am requesting a waiver of the covenants in regards to the tòllowing improvements: Drainage along Meado\-v Rd. and Buck Stred Street and sidewalks along Meadow Rd. and Buck Street \Vater and sewer along Buck Street r am also requesting that the street light requirem~nt be waiwd. Your consideration in this matter is greatly appreciated. Sinc~¡,d~y, / .//~". / I I . \, . -:?_u....',~\ t::;-y'-, Laura \Vauson ~ ,--- CITY OF N@RTH RICHLAND HILLS ¡:J~b¡íc '¡'larks October 8, 1997 MEMO TO: Planning and Zoning Commission FROM: Kevin B. Miller, P,E. Assistant Public Works Director SUBJECT: PS97-44; HEWITT ESTATES; Block 6, Lot 1 We have reviewed the subject documents submitted to this office on September 25, 1997. The following items are for your consideration. A topographical drawing is required by the Subdivision Ordinance. This drawing was not submitted with the Final Plat. Without a topographical drawing, existing drainage patterns through the property cannot be analyzed. In addition, there is an existing building on this site. The location of the building within the lot and it's proximity to building lines is unkno'M1. This review 'Në3S based solely on the information provided and existing records at City Hall. Field verification of structures, utilities and drainage patterns should still be done by a Registered Land Surveyor. 1. SIGNATURES: The appropriate signatures need to be added to the O'M1er's Acknowfedgment and Dedication prior to filing the Final Plat. 2. TITLE BLOCK: The title block needs to be revised as sho'M1. There was never an approved Final Plat for lots 1-11, block 6 of Hewitt Estates. This lot should therefor be renumbered as lot 1. 3. ZONING: The current zoning needs to be clearly indicated on the face of the plat. This includes the proposed lot and the adjacent lots. 4 ESCROW - $76,829.21: If escrow is to be collected in lieu of covenants for this plat, the total dollar amount would be $76,829.21. The dollar amount is divided as sho'M1 below A) DRAINAGE - $50,000: This area was studied during a Preliminary Plat of Hewitt Estates, lots 2-8, block 5 and lots 3-11, block 6. This plat was not returned as a Final Plat due to the significance of the necessary public improvements. A plan was developed to bring storm drain pipe from Calloway Branch, near North Forty, to the P.O. Box 820609 . North Rich/and Hills. Texas. 76182-0609 7301 Northeast Loop 820 . 817-581-5521 . FAX 817-656-7538 pwm97t 70 pwm97170, Page 2 October 8, 1997 north of Frankie B, The concept estimate for the necessary drainage improvements was near $300,000, The engineering has not been resubmitted, but we have reviewed the preliminary design and find that the improvements adjacent to this lot will be approximately $50,000. A covenant was signed by the owner prior to the September 25 meeting. B) STREETS - $21,150.81: This is a corner lot at Buck Street and Meadow Road. Meadow road is a bar ditch road which ultimately needs to be improved to a 48 foot wide thoroughfare. The escrow amount for half of this street and sidewalk is $13,736.65. Buck Street does not exist today. This street needs to be installed and eventually extended to the east. The escrow amount for half of this street and sidewalk is $7,414.16. The total street escrow due from this lot is $21,150.81. A street and sidewalk covenant was signed for both streets prior to the September 25 meeting. C) WATER - $2,839.20: There is no water currently installed in the Buck Street right-of-way. A six inch water line needs to be extended to the east for circulation and fire protection. The estimated cost of the water line adjacent to this lot is approximately $27.30 x 104.00 ft. = $2,839.20. D) SEWER - $2,839.20: There is no sewer currently installed in the Buck Street right-of-way. A six inch sewer line needs to be extended to the east for future extension and collection. The estimated cost of the sewer line adjacent to this lot is approximately $27.30 x 104.00 ft. = $2,839.20. 5. SETBACKS: The building setback along Meadow Road should be revised to 25 feet. 6. MASONRY WALL: The Subdivision Ordinance requires masonry walls along properties which side on major collectors. Meadow Road is a major collector. The address for this property is also on Meadow Road. If Buck Street were constructed, the proposed improvements could possibly utilize Buck Street as the frontage. If that were the case, a masonry wall could be built along Meadow. 7. STREET LIGHT: Street Lighting is required by section 1-06 of the Design Manual. An additional street light is required based on current ordinances. The pwm97170, Page 3 October 8, 1997 installation of the light will need to be coordinated with Public Works and TU Electric, The cost for installation of the street light will be paid by the developer directly to TU Electric, This review was based on no plans and was therefore only cursory. The intention of this letter is to comment on items of significant importance to the general concept. A detailed review will be processed if and when the final plans are submitted. ~ß~ Kevin B. Miller, P,E. Assistant Public Works Director KBM/pwm9717o CC: Randy Shiflet, Assistant City Manager Gregory W. Dickens, Public Works Director Barry LeBaron, Director of Planning and Inspections . , :; ..1 ' . . \., -1 .¡ :! l::,¡·~,~~¿;··.:t '. ;b-~~ -,;:; i ~r' ¡- -,- r í: f: '~;Il ;¿: i 5 III : C ....:;! ~ :: h:;~' ' ! I.. ;' . i /' I:;.~ '. :::'i~l'(':" I : 1 . ....._ ._ ~ I J ", I,T .:n--, , ~ 1 .~-1 '- /'..··1 .... '.. .'~' Ci::J ~;. 'f"~:'8 ;....77.?.:..!~~1 I.D "~: I ¡ c:>F.i - ~ j.; ~ í. ~ i. ~ í ~ -;!! ç:; : : ..::: ! t : ô: ",~." , i I ¡ ~ . ; .,~ ~._ " ". ' - -- - .. --, , - ~ - - .. , - . _" L _.. _ _.?~.;:~;. .. . (?Or ~HEE,\ ÏJ {,j>OO I ..J 0 r' :0 - -I c.- -< I ~ (.:J :::J I I I I I I m "3:."3:. \1\0 þ"].) i OQ oþ ~z. ·::rt.~ .~' };':'"':' . :. ;~~_:.." ·:~t~::. "~'. C/O,. _ - - J:¿ 6 ?d'Y .. .- .... ....- ~ ~ ~..~:.. 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"- - ~-- ~. . ---. <:.'=' > .0 .... ~ '." ....:. ~' I CD --,~ "I..~ ... t\J \T\ c ", n :;' ~ ^:;.. ..c..... ~~:. -- ~--=- ...... -I - ç ~ ,.., \---\---.. <:. -- d- ct r,; :. t\J :. ~~:'i >. --'OL1"\ , ..t. '" <:- À- v-> CJ1 ~ ~, 4 ~'..J " . " ~ ~ ~ ....¡1> :7'Þ- \ ð~ ~(.:J - I r co I I '-J ~ C1 (1 I ORO. NO. -.J -J 0 0 t\J ¡II I õ ~. O~ :J -' 0 t\J :i:. V1 rP en w C!) C1 -I w c:>'" :0 I m -J m .::. "'oJ --J -J ,"-' ., UJ ~-- -.J o -" w Ni~H [?!!!as.a :r.r;: or :ype all .--eSQcns.e:¡:j APPLICA TJON FOR A REPLAT City of Nor.,., Rich/and Hills 7301 Northeast Loop 820 Nor.h Richland Hills, Ti!xas Pro,cosed S~'bCÎyision Name: 817,581,5500 C/ ;\),( Á/' CCL;;j CU~i!nrLeqaIOescnpljon: " .:; / J<-<:- 2fhk: her:{ ~5 LI ¡:¿ V';Ç lj Nafi:e ar.d ~=dress of Current ,:Jtoperty Owner: ,Tel""; DER.£ K. ~ LAI.-£~ Ii, ¿Ù~Ll>_~Iv' 3(~'9 BR.A ?J L 7)¡:¿ IJUR.Sí/7;r 7(-C5<-( Phone No. ?i7 - (/9?- tf33¿! :f'/ 7- 3~G-;)33? Name and Address of Previous Owner:(ll purchased dunng last (Welve months) µ¡1- Name and ":ddri!SS of Developer: _5" Ii rn E. a s c u f:. (2;Ç I\..:T P /2 () f~r::5 C¿v AJ é~ ¡:¡ &J v E Phone No - ,yam~ and ~é~r2Ss of EngIneer: 7JOf..<.G LC'A..)G- Phone No d-s? / - 51 / éJ.... / Type ojAJeve!opment Being Proposed: ....-\: SF Pesldential : I MF Residential _ OU:;le,( ResidentIal ~ Other 1---; CommerClalllncu SInai Application Fee: 1. Application Fee 1 7.. O. CJC) I. ') 0 2. Number of residential lots @ S 1.50 per lot: 3. Number of non-residential lots @ S5.00 per acre - 4. Number of street intersection signs @ S65.00 each 5. County plat filing fee: - 5""8".00 TOTAL FEE /77,sc; Date Cj //7 /cì7 , . I "~reoy certify tnat I am. or represent. t,'1e leg31 owner of the property descnOed aDove and do he~by suOmlt thIs Replat to the Planning and Zonmg CommIssion for conSideration (":'::ac:1 affidavit WTth all properry owners names when more than one Owner mvolved ) L ¡:; L{ R.~ (jj¡qCA50A.) OFFICE USE ONL Y f A:;;;/¡cant's Phone No . ,>f7 7 - t¡ 1,'f' - Lj 3 3t..~Æ/ 7 - 3(k-: ;233>? ~'"""ro .~ 0~~ Pnnr Name se Number P 5 '17 - 4- t.¡. Taxes Paid Liens Paid Assessments Paid I REPLA T CD - 403 (2196) ¡;:; CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Request of Gary and Cindy Griffin for a Final Plat of Lot 1, Block 1, Griffin Addition (Located at 7228 Bursey Road) Agenda Number: PS 97-49 This parcel contains approximately 2.0 acres of land and is currently zoned R-1-S Special Single Family. The property directly to the north is in the Keller city limits. The major issues associated with this plat are as follows: 1. Sanitary Sewer Service: The applicant has applied for a septic tank system permit from Tarrant County. The County has approved this request and the NRH Public Works Department is not opposed to the septic tank. 2. GPS Coordinates: The applicant has agreed to establish and supply GPS coordinates. They will be added on the face of the mylar plat and according to city regulations. The plat satisfies the requirements of the North Richland Hills Public Works Department and has met all the comments of the Public Works Department. The Planning & Zoning Commission considered this request at its October 21 1997 meeting and recommended approval. RECOMMENDA TION: It is recommended that the City Council approve the recommendation of the Planning & Zoning Commission. Finance Review Source of Funds: Bonds (GO/Rev,) Operating Budget _ Other 13 Acct. Number Sufficient Funds Available ì ð-e IQGù ment Head Signature CITY COUNCIL ACTION IT, Finance Director Page 1 of PLAT TO BE KNOWN AS N. (LOCATED IN THE 8400 ILLS WAY) Mr. LeBaron explained that Call' uities is de west side of Emerald Hills W his will be an 8 The drainage channel th " s through this prope channel and the deve has agreed to this. The se extended across t nt of their property and this will be way north on E d Hills Way. However, if and when the , It will be the developers responsibility to exte ing this 13 acre tract on the assisted living facility. require a concrete ill need to be about 2/3 of the ern part of this e sewer at 7. PS 97-49 REQUEST OF GARY & CINDY GRIFFIN FOR A FINAL PLAT OF LOT 1, BLOCK 1, GRIFFIN ADDITION. (LOCATED AT 7228 BURSEY ROAD) APPROVED Mr. Wood made the motion to approve PS 97-49. Mr. Miller seconded the motion and it carried 6 - O. _._--_._-_._..._-----_..._----_.~-------------..~,---_.....-. -~-"---"._---~-~-_._--_._.._~--_..-- CITY OF N$RTH RICHLAND HILLS Public Works October 13, 1997 MEMO TO: Planning and Zoning Commission FROM: Julia W. Skare, P.E., Staff Engineer SUBJECT: PS97 -49; GRIFFIN ADDITION; Block 1, Lot 1; Final Plat We have reviewed the plat submitted to this office October 8, 1997. The following items are for your consideration, 1. GRADING PLAN A site specific grading plan has been submitted with the Plat. There a few revisions required by the Engineer on this plan. The revised grading plan will need to be submitted before a building permit is issued, 2. SANITARY SEWER There are no existing sanitary sewer mains within 300 feet of the property. The developer is requesting a septic system. Percolation tests must be submitted to the City and County Health Department with results showing that a septic tank and absorption field can be developed in accordance with State and County criteria. A County Permit is required for the septic system. The County is waiting for City approval before issuing the permit. 3. SCREENING WALL Section 355 of the Subdivision Regulations requires the developer of a newly platted subdivision to construct a masonry screening wall along and adjacent to a thoroughfare C4U or larger. Bursey Road is designated as a C4U, In the past, single lots have been addressed on a case by case basis. Public Works is not opposed to a waiver of this requirement. The P&Z Commission waived this at the time of the Preliminary Plat. 4. GPS COORDINATES The City has obtained a Global Positioning System (GPS) Horizontal Control Survey, City policy requires that all new plats be tied by survey to the GPS, This will allow the City to keep the GIS up-to-date. The Public Works Department has written descriptions for all of the GPS Benchmarks located around the City. The Final Plat needs to include the NAD83 Texas State Plane Coordinates for at least two property corners. The coordinates need to be determined by a survey tied to the City's GPS monuments. P.O. Box 820609 " North Richland Hills, Texas" 76182-0609 7301 Northeast Loop 820" 817-581-5521 * FAX 817-656-7538 5. SIGNATURES The appropriate signatures will need to be added to the O'M1er's Acknowledgment and Dedication on the Final Plat. 6. STREET LIGHTING Street Lighting is required by Section 1-06 of the Design Manual. The locations of any existing street lights need to be sho'M1 on the topographical or Utility drawing to confirm compliance with current ordinances. Any additional street lights 'Which may be required based on current ordinances, needs to be coordinated with Public Works and TU Electric. The cost for installation of any additional street lights will be paid by the developer directly to TU Electric. ;Z::' ~ .¡:; r Julia W, Skare, P.E. Staff Engineer JWS\pwm97172 cc: Kevin B, Miller, P.E., Assistant Public Works Director Barry LeBaron, Director of Planning & Inspection Services Steve Slater\P.O. Box 16593\Fort Worth, Texas 76162 Grant Engineering\6244 Hemphill\Fort Worth, Texas 76110 '--P-Oj 1 - Grant Engineering October 15. 1997 -. Ms. Julia W. Skare, P.E., StaifEntPneer Public Works Department City of NoM Rieh1and Hills P.O, Bo~ 820609 North Rich1and Hills, Texas 76182-0609 re: PS97-49 Griffin Addition 4431-97 DeIt MJ, SkIrc, We are in receipt of your memo to the Planning and Zoning Commission dated October 13, 1997, and offer the fonowing responses to RlJl comments: 1. GPS Coordinates Our firm is not equipped to perfonn GPS services. We have made arrangements to coatract with another surveying firm to establish the çoordinatea at twO lot corners. Ai soon as we have the information in hand, we will add them to the face of the plat. All work win be in aœordanc;e with NAD83 requirements. 2. SipaturCl When the mylar copy of the plat is submitted to the City, the appropriate signatures and tdmow1edpeats 'Will be affixed to the dedication instrument. We believe the other four comments are being addressed for Mr, and Mrs. Griffin by Steve Slater. - I Engineers 3244 Hemphill Surveyors Fort Worth, Texas 76110 Planners 817-923-3131 NRH APPLICATION FOR A FINAL PLAT City ot North Richland Hills 7301 Northeast Loop 820 North RichJand Hills, Texas 817-581-5500 (Pl.... pMt or type ." r..pon...) Proposed Subdivision Name: Lot 1, Block 1, Gr,iffin Addition Cu"ent Legal Descriplion: See attached Name and Address of Current Property Owner: Gary and Cindy Griffin 7700 Rolling Ridge Court North Richland HillE, TexaE 76180 Phone No 581-3840 Name and Address of Previous Owner:(if purchased during last twelve months) Char leE Pennington P.O. Box 155 Ar Ie Texa£ 76226 Name and Addre~s of Developer: NA Phone No. Name and Address of Engineer: Engineer Steve Slater 817-923-6102 P. O. Box 16593 Fort Worth, TexaE 76162 Surveyor John A. Grant, III 3244 Hemphill Street 817-923-3131 Fort Worth, TexaE 76110-4041 Phone No. Type of Development Being Proposed: lKJ SF Residenlial o Duplex Residential D MF Residential D Commercial/Industrial o Other Application Fee: 1. Application Fee 2. Number of residential lots @ $1.50 per lot: 3. Number of non-residential lots @ S5,OO per acre 4. Number of street intersection signs @ S65,OO each 5. County plat filing fee: 1;20 ,'DO ~ l So TOTAL FEE I J. L .ÇO I hereby certify that I am, or represent, the legal owner of the property described above and do hereby submi thl to the Planning and Zoning Commission for consideration. ate: j[j~ 1- q¿/ . (' ¡ t.J I) '1 (;r:. /..{.-f¡ ~ G-A~'1 b Signature: OFFICE USE ONLY Case Number rs ) 1· Y J FINAL PLAT CD - 402 (2196) ~. ~-------' -- --.- _.~----".. -..----- CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Council Meeting Date: 10/27/97 Subject: Request of Roy & Eva Strickland for a Replat to be Agenda Number: Known as Lots 1 R & 2R, Block 2, Morgan Meadows Addition. (Located at the Southwest Corner of Meadow Creek and Hightower Drive) PS97-46 Mr. & Mrs. Strickland are the owners and developers of Lots 1 & 2, Block 2, Morgan Meadows Addition which contains approximately 3.1 acres of land. These two lots are zoned R-1-S, Special Single Family Residential. The major issues associated with this plat are as follows: 1. Water: Water service is available to the lots. 2. Sanitary Sewer: Sanitary sewer is available to the lots. 3. Street Improvements: This replat fronts on Meadow Creek Road. Meadow Creek Road needs to be improved to provide curb and gutter along the west right-of-way, as well as improve half of the street, or 15', to meet current city standards. The owner is requesting to sign a covenant with the city on this issue. 4. Sidewalks: The owner has acknowledged the requirements of constructing sidewalks. 5. Screening Walls: The Subdivision Regulations require that the developer of a newly platted subdivision construct masonry screening walls along adjacent thoroughfares identified as C-4-U's or higher. Hightower Drive, which the property fronts on, is designated as a C-4-U. The owner is requesting a waiver of constructing the masonry screening wall. All other issues associated with this plat have been resolved. They have agreed to the engineering comments. The Planning & Zoning Commission considered this at its October 21, 1997 meeting and recommended approval subject to the owner signing a covenant for the street improvements and waiving the masonry screening wall requirements. RECOMMENDA TION: It is recommended that the City Council approve the recommendation of the Planning & Zoning Commission. Finance Review Source of Funds: Acct. Number Bonds (GO/Rev.) _ Sufficient Funds Available Operating Budget _ ~h~ - /J --=:> ~ [-1("Ý1Il/L~c7\@ J ÕOA...oA ' q'jpartment Head Signature - CITY COUNCIL ACTION Finance DnctOf Page 1 of 8. PS 97-46 PUBLIC HEARING TO CONSIDER THE REQUEST OF ROY & EVAN STRICKLAND FOR A REPLA T TO BE KNOWN AS LOTS 1 R & 2R, BLOCK 2, MORGAN MEADOWS ADDITION (LOCATED AT THE SOUTHWEST CORNER OF MEADOW CREEK ROAD AND HIGHTOWER DRIVE) APPROVED Mr. LeBaron explained that the applicant has asked for a waiver of the required screening wall, will sign a covenant for the street improvements and they have agreed to sidewalk installation at the time of building permits being issued. Chairman Barfield opened the public hearing and asked for any proponents. Ms. Eva Strickland stated that everything was in order for this replat. Chairman Barfield called for any additional proponents. Seeing none, Chairman Barfield called for any opponents. Seeing none the public hearing was closed. Mr. Davis made the motion to approve PS 97-46 as presented and waiving the required masonry fence along Hightower Drive. Mr. Nehring seconded the motion and it carried 6 - 0, REQUEST OF BARFIELD DICKINSON JOINT VENTURE FO PRELIMINARY PLAT OF LOTS 1 & 2, BLOCK 1, NOB HI (LOCATED NEAR THE NORTHWEST INTERSECTION AND PRECINCT LINE ROA i!7' - APPROVED ~, Chairman Barfield stated that due t nflict of interest he would be abstaining from this issue. , 'property is on Precinct Line Road, is zoned C-1 commercial and is platted into two lots. Mr. LeBaron stated there are some things s ~ auld like to see on the final plat that include: dimensions on the access ement, it should be indicated that a sign easement exists and that easem ows for signage for both lots 1 & 2, the size of the sign easement sh e indicated as well. r. Barfield further explained that the water line wa ~~.~~~--'~-~-----_.... (Please print or type all responses) APPLICATION FOR A REPLAT City of North Richland Hills 7301 Northeast loop 820 North Richland Hills, Texas 817-581-5500 NRH Proposed Subdivision Name: j. "T /- .4^,~ 49TZ-/(. ðL,-,C-"k 2 /J'J"I2.GAAI /YJ{; Current Legal Description. t.tJT / A~ ~c.>T.2 ßt...ðC< 2 /'J1ð/f.,CA-/V /J7L:';1ItJoWS ¡) ¡T't)n 335-1.3 I'~' So Name and Address of Current Property Owner: AI) jð ¿. Sv:.ICIl/-A.AlL) /?/f,tJ 4Ii~€ ev,f Jbtf 51'-<IC!çt.../]NLJ Phone No. S 17 ZIti -Ç2C'~ ('ttJ9 /J1Ð1¡}ðúJ C~é~,é,l(()4¡) IV,,,( (~¡¡¿.~""þ /f;¿..i-? r.-x _ 7'/90 Name and Address of Previous Owner:(if purchased during last twelve months) Name and Address of Developer: Phone No. Phone No. 812 2J'j 55:) T o Duplex Residential o MF Residential o Commercial/Industrial o Other Application Fee: 1, Application Fee 2. Number of residential lots @ $1.50 per lot: 3, Number of non-residential lots @ $5,00 per acre 4. Number of street intersection signs @ $65,00 each 5. County plat filing fee: rz o. I"".?- ':3 . rl NJA (, ~. ", - co eM) t.;..- TOTAL FEE 15'¿ ~6,.~ð I hereby certify that I am, or represent, the legal owner of the property described above and do hereby submit this Replat to the Planning and Zoning Commission for consideration. (Attach affidavit with all property owner's names when more than one owner involved.) Date: '1-/ ý-tj 7 , Applicant's Phone No.: S-/ 7 ,2¡'¡, ¿.2 t 5/ Print Name: ¡?ó Y 1. S '/Æ'I c:"r ~A- Ml Signature: , I ~ ~~-/ OFFICE USE ONLY Case Number Ps ~ 7 . t.j (p Taxes Paid liens Paid Assessments Paid REPLAT CD . 403 (2/96) ~~..._-----~ -_._--~~---~--- --~--_.__.~ CITY OF N$RTH RICHLAND HILLS ---- Public Works September 29, 1997 MEMO TO: Planning and Zoning Commission FROM: Julia W, Skare, P.E., Staff Engineer SUBJECT: PS97 -46; MORGAN MEADOWS ADDITION; Block 2, Lots 1 R & 2R; Replat We have reviewed the subject documents submitted to this office on September 19, 1997, The following items are for your consideration. Item #4, ROW Dedication will need to be addressed prior to the Plat being placed on the City Council Agenda. 1. FLOOD PLAIN A portion of the property is located in the 1 OO-year flood plain. It appears from the FIRM that the 1 OO-year flood plain is located in the drainage easement. 2. WATER AND SEWER Lot 2R has a house with water and sewer services, Lot 1 R will be provided with a water and sewer stub out when Hightower Drive is improved. The City will provide the water and sanitary sewer stub out for these services per the letter to the owner from Mark Bradley, dated August 19, 1997, The owner will be responsible for water and sewer connection, access and impact fees. 3. VISIBILITY EASEMENT The intersection of Hightower Drive and Meadow Creek Road will require visibility, sidewalk and utility easements as defined in the Design Manual. The easements will need to be clearly indicated. 4. ROW DEDICATION Meadow Creek Road is designated as a R2U on the Master Thoroughfare Plan. This designation requires a 50-foot ultimate right-of-way. The ultimate right-of-way requirement is a total of 25 feet west of the existing centerline, The ROW is inaccurately shown on the Plat. This needs to be corrected on the next submittal. The distance from the centerline of the existing roadway (Meadow Creek Road) to the proposed subdivision shall be shown to determine the adequacy of right-of-way along the route and to determine if additional right-of-way is necessary to accommodate the proposed street. Sufficient iron pins shall be found and shown on the drawing together with dimensions to adequately describe all perimeter streets. 5. STREET IMPROVEMENTS This plat fronts on Meadow Creek Road. Meadow Creek Road needs to be improved to provide curb and gutter along the west right-of-way as well as improve % of the street (15 feet) to the current City standards. The Subdivision Ordinance requires that the Developer provide his portion of these improvements. P.O. Box 820609 " North Richland Hills, Texas" 76182-0609 7301 Northeast Loop 820" 817-581-5521' FAX 817-656-7538 These improvements are required by ordinance. Public Works is not opposed to the funds being placed in escrow for these improvements, The escrow amount is $88.27/foot at 389 feet for a total of $34,337.03. 6. SIDEWALKS The Zoning Ordinance requires sidewalks adjacent to all public streets. Sidewalks for Meadow Creek Road are included in the escrow amount in item #5 above. 7. SCREENING WALL Section 355 of the Subdivision Regulations require the developer of a newly platted subdivision to construct a masonry screening wall along and adjacent to a thoroughfare C4U or larger. Hightower Drive is designated as a C4U. In the past, masonry screening walls have been addressed on a case by case basis. Public Works is not opposed to a waiver of this requirement if the home is fronting on Hightower Drive. 8, ZONING The current zoning needs to be clearly indicated on the face of the plat. This includes the proposed lots and the adjacent lots. 9. BUILDING SETBACK Building setback lines need to be added for Lot 3, Block 2 and for Lot 16R 1, Block 2. 1 O. SIGNATURES The appropriate signatures need to be added to the Owner's Acknowledgment and Dedication on the Final Plat. In addition, the surveyors seal and signature will need to be included on the mylar of the Final Plat. 11. STREET LIGHTING Street Lighting is required by Section 1-06 of the Design Manual. The locations of any existing street lights need to be shown on the topographical drawing to confirm compliance with current ordinances. Any additional street lights which may be required based on current ordinances, needs to be coordinated with Public Works and TU Electric. Cost for the installation of any additional street lights will be paid by the developer directly to TU Electric. This review was based on the plat submitted. The intention of this letter is to comment on items of significant importance to the general concept. The marked-up blue line will need to be returned with the next submittal. ~1 VL 0r. Jk~ Jul' W. Skare, P.E/ Staff Engineer JWS\pwm97160 cc: Kevin B. Miller, P.E., Assistant Public Works Director Barry LeBaron, Director of Planning & Inspection Services Eddie Dunn\7083 Baker Boulevard\Richland Hills, Texas 76118 EDDIE L. DUNN R.P.L.S. REGISTERED PROFESSIONAL LAND SURVEYOR 7083 BAKER BLVD. RICHLAND HILLS, TEXAS 76118 (817) 284-5539 October 14,1997 Jul ia W. Skare P. O. Box 820609 North Richland Hills, Tx 76182 Dear Jul ia: This letter is written to respond to your comments on Morgan Meadows Addition; Block 2 Lots 1R and 2R Subject PS97-46. 1. FLOOD PLAIN I acknowledge that the 100 year flood plain appears to be within the existing drainage easement. 2.WATER AND SEWER I acknowledge that the city will provide the water and sanitary sewer stub outs for lot 1R. 5. STREET IMPROVEMENTS The owner requests to sign a covenant with the City on this matter. 6. SIDEWALKS I acknowledge the zoning ordinance requires for sidewalks. 7. SCREENING WALLS The owner requests a waiver on this item. ¡rtI--- 11. STREET LIGHTING There is an existing street light at the sout~ corner of Hightower and Meadow Creek drive shown on the Plat. Sincerely, ~ ';(_Ju~ Eddie L. Dunn, R.P.L.S. No. 4580 ZONE ''-. µ m U1 A ì (; RANCH ! -----. :6 J>/6 b?.:) Y ) ... - " Œ .... rJ .... w ~ ~, o ~~ ~ (;) -,- f\) U1 A i ) 68/ ! ¿j'JS CREEK 6 1/-6 ~?.;) '/ 6Pð. ROAD 6 f'ðo ;: (,1 I T1 .-< .... w .... N -. , .__._~. --., ,--- . .._-- i -t--6.)- I. P' CJì A U1 '" ;to J. £?17 CJ-<.s Ç,.707 6/'0;; .69/ ¿ 61,19 , I I Î b'/r;, w I I I I :r: ~ :r: ....¡ ; o ::E 5j I I I I I Dt>ð ~I^ ~ L "I ?~~ ~ II I\) W-4 oIl þ I\) nLJ c;: ! c ¡. r: (;q¡7 09/£ ?œ, ~ -4 ......c: J1 ~ o .... .. ' .... b ..... \m', II j. -ru... b (II-< ....JJ ~ .... U1 b CD .... n ¿1& "t- m~ III! .... I ·t-·-- w I o ::0 H < -4 m! II I I i I I ¡ -< ~ ~ ,~~ tDc ~ 9/-6 < , .., 1\)-< II o A þ(II ntD 11m i 1\)-4 II CJì b þ(II n"-J w I\) I I C?/? 67¿r .... -< I! l:o o~ i . CITY OF NORTH RICHLAND HILLS Department: Economic Development Council Meeting Date: 10/27/97 Subject: Public Hearing for Consideration of Applic::Ition Agenda Number: for Tax Abatement by Columbia North Hills Hospital Ordinance No. 2246 Resolution No. 97-46 ~N Çj7-11R On August 5, 1997, Columbia North Hills Hospital submitted to the City an application for tax abatement of $16.5 million in expansion and improvements to its medical campus at 4401 and 4251 Booth Calloway Road. Staff has. since prepared a Feasibility Study (IR 97-122) as stipulated in the City's Guidelines and Criteria for Granting Tax Abatement. The Feasibility Study verifies substantial economic impact and recommends adoption of the abatement. Significant findings of the Study include: · Retaining 628 employees (the full-time equivalent of 515 jobs) and adding 120 new employees (the full-time equivalent of 93 jobs). The new positions will increase Columbia's payroll by $2.5 million--and will also provide the indirect benefit of an additional 67 jobs in other industries. · Increasing the City's personal property values by $3.46 million (with the addition of equipment which is ineligible for abatement), which will immediately provide $19,772 in new property tax revenues for the City. · Abating $16.5 million (of the total $20.8 million total) in building expansion and improvements at 100% per year for five years. RECOMMENDATION City staff recommends that Council hold the required Public Hearing and act on the following items: 1. Approval of Ordinance No. 2246 designating a reinvestment zone pursuant to Section 312.401 of the Texas Property and Redevelopment Act. 2. Approval of Resolution No. 97-46 approving the application of Columbia North Hills Hospital and authorizing the City Manager to execute the Abatement Contract in accordance with the Guidelines and Criteria For Granting Tax Abatement in Reinvestment Zones Created in the City of North Richland Hills. Finance Review Source of Funds: Bonds (GO/Rev.) OperatinF! Budget _ t er Acct. Number Sufficient Funds Available ead Signature CITY COUNCIL ACTION I FlnM" Dinlctor Page 1 of ORDINANCE NO. 2246 WHEREAS, the City of North Richland Hills City Council has determined that the economic well-being of the City of North Rich/and Hills is of primary concern, and; WHEREAS, Chapter 312, Texas Tax Code, known as the Texas Property Redevelopment and Tax Abatement Act, provides that the City of North Richland Hills has the authority to create reinvestment zones within the City for the purpose of economic development, and; WHEREAS, on March 24,1997 and September 22, 1997, the City of North Richland Hills City Council, by resolution, established certain guidelines and criteria governing tax abatement agreements and indicated the desire of the City of North Richland Hills to remain eligible to participate in tax abatement agreements, and; WHEREAS, Columbia North Hills Hospital has requested the designation of a reinvestment zone for the purpose of tax abatement of real property belonging to Columbia Healthcare Corporation for the purpose of economic development as defined under the Texas Property Redevelopment and Tax Abatement Act, and; WHEREAS, on the 20th day of October, 1997, notice was published in the Fort Worth Star-Telegram stating that a public hearing would be conducted by the City of North Richland Hills City Council on the 27th day of October 1997, to consider the request of Columbia North Hills Hospital to have the property herein described in Exhibit "A" as a reinvestment zone, and; WHEREAS, it is the finding of the City Council of the City of North Richland Hills that the terms of the agreement and the properties subject to the agreement as presented to the City of North Richland Hills by Columbia North Hills Hospital meet the applicable guidelines and criteria adopted by the City Council as of March 24, 1997 (and amended September 22, 1997), and; WHEREAS, it is the finding of the City Council of the City of North Rich/and Hills that the creation of a reinvestment zone for the above stated property would be a benefit to the said property and the development anticipated to occur in the proposed zone would contribute to the economic development of the City of North Richland Hills, and; WHEREAS, it is the finding of the City Council ofthe City of North Richland Hills that the designation of the reinvestment zone would contribute to the retention or expansion of primary employment within the City of North Richland Hills, Texas, and; WHEREAS, it is the finding of the City Council of the City of North Richland Hills that the designation of the reinvestment zone would attract major investment in the zone. BE IT THEREFORE ORDAINED that the City Council of the City of North Richland Hills hereby designates as a reinvestment zone the property herein described in Exhibit "A" pursuant to the authority contained in Section 312.401 of the Texas Property Redevelopment and Tax Abatement Act. Passed in open session of the City Council this 27th day of October, 1997. Tommy Brown, Mayor City of North Richland Hills, Texas ATTEST: Patricia Hutson, City Secretary Rex McEntire, City Attorney RESOLUTION NO. 97 - 46 WHEREAS, the economic viability of the City of North Richland Hills depends on the City's ability to attract new investment through the location of new industry and the expansion of existing industry, and; WHEREAS, the creation and retention of job opportunities that result from new economic development is the highest civic priority, and; WHEREAS, the Texas Property Redevelopment and Tax Abatement Act authorizes cities that have adopted "guidelines and criteria" for the designation of reinvestment zones for purposes of tax abatement to participate in such tax abatement, and; WHEREAS, the City of North Richland Hills City Council readopted such Guidelines and Criteria by resolution on March 24, 1997 and amended them on September 22, 1997, and; WHEREAS, the City of North Richland Hills City Council has designated Lots 1 R, 2 & 3, Block E of the Calloway Farm Addition on maps submitted to the City by Columbia North Hills Hospital as a reinvestment zone, and; WHEREAS, Columbia North Hills Hospital has requested tax abatements for improvements to be constructed in the reinvestment zone, and; WHEREAS, the planned property improvements will have an estimated total value of $20,800,000 and Columbia North Hills Hospital will retain the full-time equivalent of 515 employees and hire the full-time equivalent of a minimum of 93 additional employees at the facilities on which taxes will be abated, and; WHEREAS, the City Council finds that the request for tax abatement by Columbia North Hills Hospital meets the applicable City Guidelines and Criteria, adopted March 24, 1997 (and amended September 22, 1997), and requirements of the Texas Property Redevelopment and Tax Abatement Act, and; WHEREAS, the City Council finds that the approval of the proposed tax abatement will not have a substantially adverse effect on the provision of government services or tax base, that the applicant has sufficient financial capacity to carry out the project, that the planned use of the property does not constitute a hazard to public safety, health or morals, and that the planned use of the property does not violate other codes or laws, and; WHEREAS, the City Council has held a public hearing in compliance with the City Guidelines and Criteria to provide other affected jurisdictions with an opportunity to show cause to the City Council for denying the application for tax abatement by Columbia North Hills Hospital and that no such cause was demonstrated, and; WHEREAS, Columbia North Hills Hospital has agreed to meet certain additional requirements and provisions of abatement guidelines and criteria of Tarrant County and any other local taxing entity which chooses to grant such an abatement. NOW, THEREFORE BE IT RESOLVED that the City of North Richland Hills City Council does hereby approve the application by Columbia North Hills Hospital for tax abatement associated with the improvements described in its application for such abatement, dated August 5,1997, and; BE IT FURTHER RESOLVED that the City of North Richland Hills City Council does hereby authorize the City Manager to execute the contract and other documents, as necessary, to implement an agreement for the abatement of taxes on $16.5 million of Columbia's investment in accordance with the City Guidelines and Criteria. Passed by the City Council this 27th day of October, 1997. Tommy Brown, Mayor City of North Richland Hills, Texas ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for the City Application for Tax Abatement from City of North Richland Hills for capital investments relative to a Post-Consolidation Expansion of Columbia North Hills Hospital North Richland Hills, TX August 5, 1997 \\NORTH _ HILLS\ VOL 1 \USERSIADMIN\DOC\ Tax Abatement for E.pansion. doc TABLE OF CONTENTS Application Form Description of Project Attachment A Budgeted Use of Funds Investment Summary by Program Attachment B Map of Facility Location Attachment C Property Description Current Ownership Time Schedule for Completion of Improvements Attachment D Financial Reports for 1995 & 1996 Attachment E F:\USERSIADMIN\DOC\Tax Abatement for Expansion. doc CITY OF NORTH RICHLAND HILLS APPLICATION FOR TAX ABATEMENT Filing Instructions This application must be filed prior to the commencement of construction or the installation of equipment associated with the project for which the abatement is being sought. This filing acknowledges that the applicant has read and understands the "Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone in the City of North RicWand Hills," approved by the City Council on May 11, 1992, Furthermore, the applicant agrees to comply with all requirements stated in the Guidelines. This application will become a part of any tax abatement agreement or contract executed between the applicant and the City of North RicWand Hills, and knowingly false representations therein will be grounds for voiding such agreement or contract. An original and two copied of this application and attachments should be submitted to: Director of Economic Development City of North RicWand Hills P.O. Box 820609 North RicWand Hills, Texas 76182-0609 Applicant Information Company Name: Address: Columbia North Hills Hospital 4401 Booth Calloway Road North Richland Hills, Texas 76180 Phone Number: (817) Contact Person: Contact Person's Title: 590-1101 Brent Cope Chief .Operating Officer Type of Business: IX! Corporation o Partnership o Sole Proprietorship Primary Activity (Good/Service Produced): Healthcare Services Annual Sales at Time of Application: $ 61 .5 million Number of Permanent, Full-time Employees at Time of Application: 427 Number of Permanent, Part-time Employees at Time of Application: 213 Project Information o Manufacturing o Research o Regional Service* /XI Other Basic Industry o Agriculture/ Aquaculture * o Regional Distribution* o Regional EntertainmentIT ourism * (Healthcare) *Note: Applicant must provide evidence that a majority of the revenues generated by this facility are ITom sources outside of Tarrant County. Type of Improvements: o New Plant IXI Modernization IX] Expansion Project Location (Address and Legal Description: Estimated Total Value of Improvements: Anticipated Date Construction Will Begin: Anticipated Date Construction Will be Completed: Anticipated Peak Construction Work Force: Total New Permanent Employment: Total Jobs Retained (if modernization): $21,000,000 8/18/97 12/15/98 67 93 FTEs 515 FTEs * *Note: Applicant must provide evidence that the company would reduce or cease operations within City of North Richland Hills, if not for the proposed modernization, Public Service Requirements and School District Impacts Volume of Treated Water Required (Gallons Per Day): 68,900 Volume ofEffiuent to be Treated (Gallons Per Day): 55,000 Number of Families to be Transferred to New Facility: -0- Estimated Number of Children of School Age (K-12) in Transferred Families: -0- Other Abatement Agreement Applications Has the applicant made application for abatement of the value of real property improvements associated with this project to any other taxing jurisdiction or county? DYes [X] No If yes, please provide the following information on each pending application: Name of Jurisdiction Date of Application Date of Public Hearings (if required) Action Taken by Jurisdiction (if any) Variance Does approval of this application by the City Council of North Richland Hills require a variance from the Guidelines and Criteria, adopted by the City Council on May 11, 1992? DYes ŒI No If yes, applicant must provide a complete description of the circumstances explaining why the applicant should be granted a variance. Approval of a request for variance requires a three-fourths (3/4) vote of the governing body, Attachments All applications must contain the following attachments, The City Council may not review an application until the requested information has been provided. A. A written description of the proposed use and the general nature and extent of the modernization, expansion or new improvements to be undertaken, B. A description (including estimated value) of each improvement that will be part of the facility. C. A map of the facility location and property description (including current ownership). D. A time schedule for undertaking and completing the planned improvements. E. Financial information (annual reports or tax returns) for the most recent two years of operations for which such information is available. Assurances I do hereby certifY: (1) the information provided above is, to the best of my knowledge, complete and accurate, (2) that I have received and read a copy of the "Guidelines and Criteria for Granting Tax Abatement in Reinvestment Zones in City of North Richland Hills," dated May 11, 1992, and that I understand the conditions and terms under which a tax abatement agreement may be executed, (3) That employees and/or designated representatives of the City shall have access to the facility during the period of the abatement agreement to determine if the company is in compliance with the terms and conditions of the agreement, as provided in Section 7(b) of the "Guidelines and Criteria," referenced above. ( 4) I understand that failure to comply with the terms and conditions of the abatement agreement may result in the recapture by the City of any and all taxes previously abated by virtue of the agreement. (5) I understand that participation in an abatement agreement does not remove any obligation to satisfy all codes and ordinances issued by the City or any other affected taxing jurisdiction that may be in effect and applicable at the time this project is implemente August 5, 1997 Date Brent A. Cope Name of Officer (Type or Print) Chief Operating Officer Title (Type or Print) ATTACHMENT A Description of Proiect Columbia North Hills Hospital (CNHH) has received initial approval from Columbia/HCA to remodel CNHH accommodating growth in Women's Services, Outpatient Imaging, Surgical, Emergency Services and various support departments which will be displaced upon renovation. Support areas include: Medical Records, Respiratory Therapy, Laboratory, OP Physical Rehab services, Pharmacy, Administration, Admitting, Human Resources, QA/Resource Management, Education and Medical Staff Office. The Outpatient Services expansion will be added to the west side of the hospital and give what is now the obvious "back" of the hospital a "front" of the hospital look and feel. Outpatients and their visitors will enter the hospital on through a new west lobby designed specifically for outpatient services. The majority of the new square footage will be to house pre and post-operative patients. Also included in the new space will be three endoscopy suites and a new operating room and additional support space. The new space will be contiguous with renovation to the operating and recovery suites which will create convenience and efficiency for patients, physicians and hospital personnel. The Obstetrics and Nursery departments will be expanded and renovated significantly. Growing the number of Labor-Ðelivery-Recovery-Postpardum suits to 10 and the women's acute beds to 18. In addition to the hospital expansion, a Medical Office Building (MOB) focused on the needs of health care providers of women's and children's services will be constructed on the CNHH campus. The plan for will place the new MOB between the hospital and the existing MOB. (See proposed site plan). Bude:eted use of Funds The construction will include 64,700 square feet of renovated hospital space, 16,400 square feet of new construction and a 54,000 square foot medical office building. The cost of construction is estimated at $9 million for hospital related construction, $6.4 million for the medical office building (excluding tenant improvements), $4 million in equipment $6 hundred thousand in information and communication upgrades, and $9 hundred thousand in interest and overhead. (See the exhibit A for a summary listing of the scope of the expenditures. ) Completion of the project is vital for the hospital to retain the over 100 full-time equivalent positions. Additionally, the added capacity will result in 93 new full-time equivalent positions. F:\USERS\ADMIN\DOC\Tax Abatement for Expansion.doc -""^"---~_._'".~--'----'~-~'~"- ATTACHMENT B Columbia North Hills Expansion Project Investment Summary by Program Hospital MOB Total ¡Construction: I New Sq Ft - $151.06/sf SQ...ft. $'s x Sq Ft , ...' .. Pre-OplRecovery 9,282 1,402,139 Surgery 3,640 549,858 Diagnostic 1,000 151,060 Womens Services 1,125 169,943 Dietary Expansion 1,260 190,336 Central Plant uo.o 181.272 17,507 2.644,607 Renovated Sq Ft - $60.47/sf SQ...ft. $'s x Sq Ft Womens Services 20,691 1,251,185 Surgery 9,748 589.462 MedlSurg Beds 8,500 513,995 ER 8,451 511,032 RT,PT, Misc. 4,320 261,230 Lab 3,816 230,754 Lobby 2,965 179,294 Med Rec 2,520 152,384 Sterile 2,244 135,695 Rx M2i H.23Q 64,681 3,911 ,260 6,555,867 Contingency, AlE Fees, Building Fees, Tenant Buildout 2.432,591 Construction Subtotal ( 8.988.458 J "... Equipment: I $'s Equipment'" 3,305,092 Eng Systems 170,555 Inflation 5% 173,782 Tax 7.75% . 282,831 Freight 1% 3UI4 [ 3.968,754.1 Equipment Subtotal · Please refer to attached equipment list for Items greater than $10,000. ~Info Systems: $'s Cabling 90,000 Telecommunications 390,000 IS Eq - Construction 101.737 [ 581.7371 IS Subtotal hnterestlOverhead J 911.7841 Investment Total 114,450,713 , I 8.440,357] þO,891,070 I I ~ I th f II .1 I " ; I ; I I I I ì I I I J - - r! ñr m ..... o "'I ~¡ .-,..J _. I .... nl~"1 " .1 I o - C' ,.,~. i ., ~ r J~- I ~':L. J .;¡."'A . . ~¡!jr;¡ ~ ] ~r·-J 'f "~, :;?, dLC:;:¡¡: . H ~~' Æ=> ~ tc If ,,,_ttt~ . ! J!~? ~ . a CO LUll:) l_-"¡HCA m .. öl7"ö-l ' m ~-.. ì!l ;~If féi ¡tJ Gi 1'1 - -lö1 ì: # 1 -" ;'.~:: ;~.~!=:~ ~ ~~ ~ ~ ~ iC~ll· ' i~ ~. I~ "J'~ "'.. ~... -~ .- :::c PI' i-.!Ii~ / .~ . 'I"t 4 IJ ~ j'"' "I' "', I ~~"I V iù ~:. IS ~~; ~. :!î .¡; b lih ~I' tj~¡!~ - It. "tJ f ,. 1Ul' ~Z r .. ;1' 1'1' '-h !"..;.r-.i! 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'~ ,...)0 , ~') ~:.it' ...."" .~.". ~.... 0/ - . 1 :; , ., :~. ~.----¡-~ . u::::: '- : ~:==-~: c.t= . === ===.. ~: ===~--i- =:=-==> : ~ .':" <=:)::1 <:::) P, ~. o 0 ,I · . J¡ ~ . <=:)1- CE) m C::) :.. ~ . -¡-I' -,..-¡- t ..~..- -;- : ::::c:¡...~ ~." ~ ; _0. ~... ._In_ _. ¡ . - , =r::: ~ === -:- z ;:' "'-== -- ::.~... ,... I :::::=::::.>'"" Õ I '- -. C::) dD ! ~ ::!! ¡ ~ S t~OVI .01." ../ 1001)1 c.oL~CWA'" . .......1 ...". ,,"0 W.· COLUMëIA/HCA- / ~~.. ]I NC;A ~ UU"Y. we. ""'--"- ...: .".. ......¡.. ;;.~...~ ..~._-;.. ............ 0~."!"'1 II : I !"'I"<O . , III " . ~ , ROAD ¡ II I! III II - - .. "I , ,..,.... I '~4~" WI , -- 10.'- ........ t ...,,-. we ,........ ;>1 7:';;>·Hö1 7; # :!/ ., .¡, ~~'~ ( I ~ ':C ~ .' ... CJ ! .. l .. ~ C==== o .. [ ~! 1?r5"~~ nr.,? ~t0.3~. :tiJl.\í~ II :=::..- -==~..~..-. D -----"-- --~~-~~ ","~~ . . t . EXHIBIT "A": .. -.......: ... ~.':o;.:..: : PARCELl PROPERTY DESCRIPTION BEING a 33.190-acre trac:t or land situated In the W. W. Wallace survey, Abstract No. 1606, City or North Rlchland HUIs, Tarrant County, Texu and being all at Lot I, Block E, Calloway Farm Addition u recorded In Plat Volume 388/158, page 60, County Record" Tarrant County, Texu and a portion at that certaIn tract at land as described by"'" deed to HCA Health Services at Texas, Inc. Parcel No.2 and recorded In Deed Volume 7443, page 719, said County Records, saId 33.190-acre tract at land being more particularly described by metes and bounds as tallows: Beginning at a 1/2" Iron rod tound In the westerly Une at Booth Calloway Road, the northeast comer or Lot I, Block E, Calloway Farm Addition, as recorded In Plat Volume 388/158, page 60, said County Record,: Thence, South 00· 31' 00" East, ., 15.51 reet, along the westerly rIght-ot-way line ot said Booth CaIloway Road to a 5/8" Iron rod with cap stamped "Carter c!c Burgess" (round), the northeast corner at CaIloway Farm Addition as recorded In Plat VoIume 388/188, page 98, said County Records; Thence, South 89· 29' 00" West, along the northerly Une ot saId addition, 6.00 teet to a 5/8" Iron rod with cap stamped "Carter ðc Burgess" (tound), the northeast corner ot Lot I, Block F, said addl tlon¡ Thencè, South 00· 31' 00" East, along the easterly Une ot said Lot I, Block F, 407.63 teet to a 5/8" Iron rod wIth cap stamped "Carter ðc Burgess" (tound), the southeast corner ot said Lot 1, Block P; Thence, North 89° 29' 00" East, along the southerly Une at said CaUoway Farm AddItion, 8.00 teet to a 5/8" Iron rod with cap stamped "Carter ðc Burgess" (tound), and the westerly rirht-ot-way Une at the aCorementloned Booth CaUoway Road¡ Thence, South 00· 31' 00" East, 887.86 Feet along said westerly rlght-ot-way Une to a 1/8" Iron rod (round) In the northerly Une or a tract ot land as described by deed to Pederated Department Stores, Inc. and recorded In Deed Volume 6333, page 35, said County Records; Thence, South 89° 48' 17" West, 660.81 teet, along said northerly Une to a 112" Iron rod (tound), the northwest corne.. ot said Federated Department Stores, Inc. tract, also being In the easterly Une ot 3rd FlUng Calloway Farm Addition as recorded In Plat Volume 388/126, page 89, said County Records¡ . Thence, along the easterly Un. ot said 3rd FlUng'. calloway Farm Addition and the west Une ot the aCorementloned Parcel II, the tollowlng courses and distanceS! VOL. 8786 PG. 1429 -1- _._-_._.-_._--<-~~------~'-~'."~- o.___~__"'_·___··_·w_"__""_,.,·,·__·_·__'_____·___·_,-.._-~,...._._.- North 00· 18' 05" West. 884.09 teet to a 1/2" Iron rod (found); North 38· 0 l' -15" West, 590.45 teet to a 1/2'; Iron rod (tound). the beginning ot a ~urve to the right whose radius Is 571.00 teet and whose long ~hord bears North 17· 35' 45" West, 398.69 teet, Along saId ~urve to the right In a northwesterly dlre~tlon through a ~entral angle at -10· 52' 00", an arc length at 407.27 teet to a 1/2" Iron rod (tound), the end ot said ~urve; ¡.. I North 02· SO' 15" East, 29.98 teet to a 5/8" Iron rod (tound) with cap stamped "Carter &: BurgeS3", Thence, North 89· 29' SO" East, leaving the easterly Une at said Calloway Farm Addition and the westerly Une ot said Parcel D, 744.18 teet to a 1/2" Iron rod (tound), the lOutheast ~orner ola tract or land as described by deed to Integrity Bul~k, Inc. and recorded In Deed Volume 7300, page 1764, said County Re~ordr, Thence, North 00· 21' SO" West, 54.98 reet along the easterly Une ot saId Integrity Buick, Inc. tract to a 3/4" Iron rod (tound), the lOuthwest corner or the aforementioned Lot B, Calloway A~ltlon, ¡ '!'~ence. South 88· 5 l' 58" East, 388.00 reet along the lOutherly Une or said Lot B to the point 01 beginnIng and containIng 33.190 acres or .'. land, more or less. . . .. ,-- Included In but excluded rrom this desc:rlptlon Is a 3.830 acre tra~t or land described as Parcel 0, below. PARCEL D PROPERTY DESCRIP'I10N BEINa a 3.830-acre tract 01 land situated In the W. W. Wallace survey, Abstract No. 1806, City 01 North Rlchland HIlI.!, Tarrant County, Texas and being a part 01 Lot 1, Block F, Calloway Farm Addition as recorded In Plat Volume 388/188, pare 98, County Racords, Tarrant County, Texas and being more particularly described by metes and bounds as toUowss . .. Beginning at' a 5/8" Iron rod with cap stamped "Carter& -Burgess,ÍI (found) the northeast corner 01 said Lot 1, Block F, Calloway Farm Addition, said point being In the westerly right-of-way Une of Booth CaUoway Road (88' wide public right-of-way at this polnU, Thence, South 00· 31' 00" East, 407.83 feet, along the westerly rlght-ol-way line olsard Booth Calloway Road to a 5/8" Iron rod with . cap stamped "Carter &: Burress,~ (found); -2- VOL.8786 PG.1430 -----.------- ~ .~--_..._-~_._~---~~ Thence, South 89· 29' 00" West, 316.74 {eet~ . leavIng the westerly rlght-ot-way Une at saId Booth Calloway Road to a 5/8" Iron rod with cap stamped "Carter ðc Burgess," ({ound) Thence, North 30· 55' 12" West. 182.30 teet to a 5/8" (ran rod with cap stamped "Carter ðc Burgess," (/ound), the beginning o{ . curve to the left whose radius Is 1,506.00 teet and whose long .cord bears North 32· 07' 05" West, 62.98 leet Thence, along saId curve to the left at a northwesterly direction through a central angle 01 02· 23' <46", an uc length o{ 82.98 leet to a 5/8" Iron rod wIth cap stamped "Carter tc Burgess," (/ound), the end o{ saId curve; . . .' Thence, North 00· 31' 00" West,' 196.76 leet to a 5/8" Iron rod wIth .. cap stamped "Carter ðc Burgess," ((ound), and the southerly Une o{ the . aforementioned Lot I, Block E, Calloway Farms addItion ~Vo1ume 388/158, page 60); . Thence, North 89· 29' 00" East. 442.00 teet along the southerly Une o{ saId Lot 1, Block E to the point o{ beglMlng and containing 3.830 acres o{ land, more or less. :~~:..;':':~ to ':'.~ : ·0. ;!.,. i,·~· . _ { \ ~, ,... .' J .' . '\ '\, . . ..' -. ",' ~ .... - \~~:."".!'.: .~: '<':.'-" "I·i·.·_..~,. ;-......t':..J...,t.'.. '\, .' .. . ,0' .. .... . '..;.' . ,. . . r', ',' .,. '. '.' .; ,.\ " '. . .. '. 4 ...... 0' '-' I " '. ' . , . . . .. .... .. n-, ~ J~ l. J :..... ,'\~ ".:" u I' . . . . . .; -., :: :J VOL.8786 P6.1431 -3- :. . ~ .' .. . ;. " FILED"· ',.. '. " T ARR~~T,~Ol1I1TY TEX,~ ': 'B6 ,... '.. , ... ~.19 r3:~9 MADlmilli':r' ", COUNTY (' .1:'.: eY~_~ . . !. . . COUNTY OF T...RRNfC } STATE OF TEXAS ..~ I ~"Þy ClnlI11hot \hi. IC\MIII'" ... FIlm .. - .... """ .1 Ih. u_ .11.... lief ... .... IttcoaotO 11\ IIIe yol..... .... ,..."': I~ :..::' I~"" 01 "lion( c;ouaq. J _ .. ......... h...... ., - DEt ,q 1~^~ \ CCUICTY CUlt( -. VoIINIT ~ICIY. n:;tAS. . . '. . ....J'....: :.:. .,; ._!ï~::·::!···'] " .' . ' ':.. ;.""..( .... .' .- . ;.. .." ¡ :.' . .J ~:.., i:: ., ::;.' .-.' . ~ H PfM~· . ,.. .. ' . . ,. '.;.. .,::' ;.,..,;: ; 1IIi sf'ON$ CON . ,.. ....'. . . 7Hli?EI/(LE, nf,r~ rAINED I' ' ~ED('!AL f~~USf 1.. qn ú}·,111'f 00 .' ,-.:. . . . . . '-'11'/ A OJ H, ¡; OF r. CIJ.. - . . .' ' ANY P /fD A' . (;E 0 1 H~ I ¿..~fjr "7 . . " ...;. .:' i :: IIS:~~SION -"n-. ~'UN'N;ù~"..~O.¡ Á'vp.';~i~~'·~<S"'·~r:· :'. \.. , 1.4w.It4CE IS fJ/E Df:c~N IW/fCH · 'fA.,! ' 'N:,,;;/ ù~gc(¡"EO VALID A/{~EiJ RiAL RESTfl!CTS Eli fJllèIlFr\~RO. 'E.1'v ~/ë .t1Lr \/..C:A . (Ii. ... Rr'J '-'I..Lë fJ'tl'~ ;,~'E ·1;~r.1L. -E.? iE l" :0£0" , .¡;i7.I£ r¡ .... ,. :'~ . ; ·,,1 .., ... ~. ~:.:'.' ~ '~I'} f' .., ~ '. .--....- .- ..-....--.. , ,VO~. 8786 PG.1432 ... . . . '. ~ _ .. "- ..'~/--Irrt' '-þ-'~ ~_ y~;iA~ ,;....¡-~"P J OLß . u.~;J.C,y . I .J, >1 ir"J.. -:.:.;.:.;.;,¿¡ .... ;-.;:.v'v?-/ï . '0- ð i;JI. .,.'.: ...: .,.. (/ .. .' . ....::..:,; "'" . ..... . Jo '" . (j- fi - .-.-.- taoVISJONS CONTA;;Œ¡J 11/ ANY OOC:i.'''é.NT ,'!H!CH REST~~~JEO hIE. ;)Aw:., nfl; /1\L. vi{ u~c. Ur 11.~t 1,f¡;L PRO,~Eal(( LJE~ THtREiN BECAUSe OF RACE OR (;(jLO.-<. ARE ¡,'hAL/¡J úNùER FEJfiIAL'LAN AN:) ARE uNf'lfO\~¡:A¡jLf. ANY PROV:SION ';E .é.1I/ WfIICH RESfR ~TS THE S~l.E. RENTAL Oii 'USE OF T;1f ..E::;;RlliE:..: RLAL I RO. E.. fY BECAUSE OF COLOR OR RACE IS fNVALlD AND UrlENFO~CEAùLE UNDER FEDERAL LAW. STATE OF TEX.AS 1 I, SJZAJiHE HEllDERSON, County COúll:n: :.1" :l'Al"_\;'T. (.'~u¿·k in and ror said. County and S,:a .e. (0 h.,raby u~rt1ry that the a :,ove <I::d foro·; 0 .n:,; is a true .""d C orrec t COpy or the instrum.nt l'i~"d ror record On the_ /9.""'- day of . and duly recorded on the - a~", _day or· C; in Volume - ~ ~:~ -.PafJe _1 LJ;¡' <I or the JJ()~ M_rl>' ___ .:: ·;vl'~s .L nlr ¡'~:1 t .: 0''::1.':.1 t T~xas W.,TI1ESS my hU»d a"d Sa;,. or offioe at Fort Worth T&xaa this_.'1~"y Of~-1r;, 19_112. S' Z.APNE H;r;NDERSON, COUNTY CLERK TARRANT COUNTY, TEXAs By..o. J ('/Y~ ~De.!'ut;y , ( . .."'\. h . 'I / ,. . . " " ..". ,.'1 " " ., . ~ . ....... "' . (¡~:<~\;::}l:· .. I . '. . . . .. .. ~~.: . " :J..~..' " .....:.. , .. \, ... .....~ "~:'..: .~',. ...:..'.. ...'.....:."':... . Ý." . . . . . .. *. '. ."I.J" ~ \'." ",. ., ,- Department ot Health and Human S.rvlcea Health Care Financing Administration Form Approved OM8 No. 093&00ee DISCLOSURE OF OWNERSHIP AND CONTROL INTEREST STATEMENT I. Identifyina Information (a), Nar,e of çnt~ ill . tal Columbia ~~ Hills Provider No. Vendor No. t Tra'lJ1ne No. Co l.min.a rth H s Hosp1. Subsidiary, L.P. Hospital 45-0087 284-1431 Street Address ~~~unHiå\1~ Hills, Zip Code 4401 Booth Calloway Road Tarrant CO., Texas 76180 (b) (To be completed by HCFA Regional 0Iffce) Chain Affiliate No. 00000 L81 II. Answer the following questions by checking "Ves" or "No". If any of the questions are answered "Ves" , list names and addresses of individuals or corporations under Remarks on page 2. Identify each item number to be continued. A. Are there any individuals or organizations having a direct or indirect ownership or control interest of 5 percent or more in the institution, organizations, or agency that have been convicted of a criminal offense related to the involvement of such persons, or organizations in any of the programs established by Titles XVIII, XIX, or XX? Dves ~ No L82 8. Are there any directors, officers, agents, or managing employees of the institution, agency or organization who have ever been convicted of . criminal offense related to their involvement in such programs established by Titles XVIII, XIX, or XX? D Yes Œ1 No LB3 C. Are there any individuals currently employed by the institution, agency, or organization in a managerial, accounting, auditing, or similar capacity who were employed by the institution's, organization's, or agency's fiscal intermediary or carrier within the previous 12 months? (Title XVIII providers only) Dves ~ No L84 III. (a) List names, addresses for individuals, or the EIN for organizations having direct or indirect ownership or a controlling interest in the entity. (See instructions for definition of ownership and controlling interest.) Ust any additional names and addresses under "Remarks" on Page 2. It more than one individual is reported and any of these persons are related to each other, this must be reported under Remarks. Address EIN 4401 Booth Calloway Road North Rich1and Hills, TX 76180 Pending ~ One ar aza Nashville, TN 37203 62-1662145 See also Sections III (d) and VII (a) of this form (b) Type of Entity: D Sole Proprietorship KJ Partnership D Corporation L86 D Unincorporated Associations 0 Other (Specify) (c) If the disclosing entity is a corporation, list names, addresses of the Directors, and EINs for corporations under Remarks. Check appropriate box for each of the following questions (d) Are any owners of the disclosing entity also owners of other MedlcareJMedicaid facilities? (Example, sole proprietor, partnership or members of Board of Directors.) If yes, list names, addresses of Individuals and provider numbers. . ~ves D No L87 Name Address Provider Number Columbia North Texas Healthcare System, L.P. is a holding partnérship in the Columbia/HCA Healthcare Corporation hospital chain. Such chain includes in excess of one hundred (100) hospitals operating subsidiaries throughout the United States. _,__,.~__.____"N_______' Department of Health and Ilumen Service. Health Care Financing Administration IV. (a) Has there been a change in ownership or control within the last year? If yes. give date (b) Do you anticipate any change of owner:lhip or control within the year? If yes, when? (c) Do you anticipate filing for bankruptcy within the year? If yes. when? V. Is this facility operated by a management company. or leased in whole or part by another organization? If yes, give date of change in operations VI. Has there been a change in Administrator, Director of Nursing or Medical Director within the last year? -yo- Form Approved OMB No, 0938-0086 ~ No LB8 D~ No LB9 ~ No LB10 No LB11 ~ No LB12 Ii] Yes D No LB13 VII. (a) Is this facility chain affiliated? (If yes. list name. address of Corporation. and EIN) Name EIN 1# Columbia/HCA Healthcare Corporation 75-2497104 Address One Park Plaza Nashville, TN 37203 LB14 VII. (b) If the answer to Question VI!.a. is No. was the facility ever affiliated with a chain? (If YES. list Name, Address of Ccrooration and ErN) Name EIN 1# N/A Address DYes D No LB18 LB19 VIII. Have you increased your bed capacity by 10% or more or by 10 beds. whichever is greater. within the last 2 years? D Yes Ii] No If yes, give year of change LB1S Current beds LB 18 Prior beds LB 17 WHOEVER KNOWINGLY AND WILLFULLY MAKES OR CAUSES TO BE MADE A FALSE STATEMENT OR REPRESENTATION OF THIS STATEMENT, MAY BE PROSECUTED UNDER APPLICABLE FEDERAL OR STATE LAWS. IN ADDmON, KNOWINGLY AND WILLFULLY FAILING TO FULLY AND ACCURATELY DISCLOSE THE INFORMATION REQUESTED MAY RESULT IN DENIAL OF A REQUEST TO PARTICIPATE OR WHERE THE ENTITY ALREADY PARTICIPATES, A TERMINATION OF ITS AGREEMENT OR CONTRACT WITH THE STATE AGENCY OR THE SECRETARY, AS APPROPRIATE. Name of Authorized Representative (Typed) Randy l-Dresi Title Chief Executive Officer Signature Date ~, J>~¡/) · . . . . . . . Remarks G G.G G G G .. . G G G G G . . G G' G . . . . G . ~.............., .. . . . . · . . . . . · .. .... · . . ... . . . · . . . . . . . · . . . . . . . · . . G . . . . · . . ... G . . ....~ . ärj þ ~!" :~ ~·.l-l -f ~=' ;~ ~li :~;~ ,.. ~;; ~ ~Nl ¡¡'~"1!j¡¡: ;fJ~; ;:¡. ,è. ~ :!i± ;¡¡ .~¡, ¡¡'I f i.~..'; ~ ¡I.. :1 ~: '< .*tJ ~ ~ ~ ~;,~ !!. :~. a ~¡;t '< :5¡ ... C ;¡: i ~ i i i I~ fit en (It en tn m I'll I'll I'll I'll ~manEcø<~mdnKiø<~QmnEicn ~œnEi~~~mdomo~i~ø7Em~~0ø fÆ%~~~~~:i%¡~~~~~ti~~~i~~~!~~f~~i%i6!a.a~6m~~~il ;§~28~i~;~~28~·!~;;§28~·ig;j28gi~;~~;~2~~~i~8g~~~i O~Un~c~~o~an~ii n¡-n~~=zn~n~i=~n-~;on i~-~ 3 -. g ¡=~~~.g i=~<n83~ =~~nog~:~<nog i~~= -~~~m :~~ ~ ;g~~i;~ ~g~l~l3~: g~~i~~ig~~:~~ i~~g l¡å~~~i i!~ ~ ~~!.,,~m~ -~! ~~ff~ ~!2~·~~~~!"'~ ~ ~~~~ cõo~- a~.~· g. f~~i~ãg· ~c~ ~CÕ¡' c~~~fJlg· c~~~ g. ~Joc i.:t~z-ã 'OS'o. :t _3»_8<:1 -!»-2g:t i»-~~~ ~»_. :t _..23 -~tg~ft ~o~ ;~~ ~~ ¡:t~.o ~ :t<:m ~<: ;¡~~ ;!z~; n ~ -~ f~ g~ 1õz ; ;~ ~-~ ;~ i ~-; ~o »£ o:õ º ¡ º ~ & º g º i ~ ~1 º~ [~l ~ a ~ .g. ~ a,. ~ a ~ ~a~; ~~3 þ. ~ ~ ~ñ- ~ ~ Q. -¡ ~~ ~ g .¡¡ ò ~ ~ 3 ~ ¡s: .. ~ ... i: ¡. " ~ ~ s : ~ ." } ~ ! ! "," ., 0, ., .. ," ~:, '~h i· f,· f~: I~ I' ~ ;. " . ~.~ ~í(" 'Ì4Š ~.~ ~ ~, ~ .- c:\ ~: "~. ? ~;~ " .. ,-'¡;,t r .,. ,.- ~; II I ~ If I I I 15", i I I tli 16 Ii I I, Ii it I ~; I t' i. '"" . I I I ,¡ ¡~ . ." I - li!~ .... '. ... ...... S' ?? ¡¡; '-'- ::r c c ~ -<-< ..... ¡¡¡ ~ ~.... .. -.. .... ..... ... - ~ ~ 0 0 r- r- C C q 2 " z r- " 0 r- III 0 III III -< III -< .~ I'· , .- 1 I I " i 1 I - I I I ".' ... i s .. ~~ I I i i ; , '" C> ~ i ~JJ i I i; I , .... 1ft I ... S' ¡¡; ::r .. ¡;¡ 0 ¡¡¡ .. " I ... S' ¡¡; ::r ~ '" ¡¡¡ .. , . . ·t . . . - ~.. _ ~ 2 ,..~ :- :; ¡¡ -I; :- èir Z r.: ; ~ ,.. -~ - ~ ~ - ; g - (i P! ~ Ii - ¡;;- Ii ~5 - ~ ,.. - ~ - .. .. - .. .. " " - - - - _. : ~ i ~.. ,..;1 - :; ¡¡ - ~ § : ! I _ '" 1ft ~~ ; ~ ~ - - - - - n Ii! - ; ¡¡ - § ~ en '" c ], ¡ ,. o ... < ~ 2000'" ~ ~ ~ ~,<::) ~.. ~ zt"'o ~ ~ ~S èiJ nm ~ "~i ~b:ì ~õ ~~ ¡Q o " I ~~ ~~ ['''' .~ ~ 'b Q ,~ ~ .~ ~ Q ~ '.~ "'"i .~ ~ :::- !:i' S' Q ..;:s -..:. zz o 0 ~ª ~§ -.. !: ;¡: ~~ :g - 11: >:! to -a õi " 3' "!!. 3' to ~ õ· " > >-i >-i > ~ Z >-i t; ..J · ATTACHMENT E J EFT ÐA 1 E: 121'31/% fIHS: fl'iD~PT U044Q CO ~O BOO r.üú 0000 110444 caID 34329 l'IüHTHL'( UP£RATIHG REPURT COLUMBIA HORTH HIllS HOS~ITÅL AS or i1l31/16 · ACrUAl , 1,209,337 6,005,053 , 3,820,711 95,033 11 ,no ,1110 · 2,435,291 30,975- 17,616 J 1.1,418- 2,855,190 05,109 J 2<11,602 5,6t18,41S , 5,481,725 , 1,580,93'1 1t4,:l94 205,879 665 , 926. , 72,827 291,975 54,476 t 72 ,584 69,921.. I 176,270 , , 760 ,OS3 101,71'# · 129 ,408. . 4,232,3U · , t,249,362 no ,535 30 ,085 --- , ; ~, 183,839 .. . " 776,719 1,m,1?1J 71,816- i ~ . ' .' 55S j . 2,520 I.. ~ .,' 81 f . .~'::. .~{, 124 .~ ,;:~¡" ".~:.f.:'·~~: ~.~:;1;i{--:: ;:';::'.: PRIOR YERR 87tj,675 3,894,031 2,365,2M 59,885 7,193,8::ë5 1,576,497 96,550 45 ,958 448,0'1.4- 1,488,225 21,242 80,508 2 ,860 ,9:-j6 4,332,899 -.--- VARIANCE ----- tiEASUREnEHT CRITERIA $$$ YJ. REIJEHUE$ 334,662 38.26 RDUTIHE 2,111,022 54,21 IP hHCILlARY 1,455,453 61.53 DP ANCILLARY 35,148 58.69 OTHER OPERATING [HCDnE 3,936,285 54.72 TDTAL REVENUES DEDUCTIDHS 858,794 54.47 nEDlCARE CURRENT YEAR CDHTRAC 127,525- 132.08- "£OICAID CURRENT YEAR CDHTRAC 31,658 68.88 CHAnPUS CDHTRACTUAlS 426,606. 95. 2Ð-,.PRIDR YEAR CDHTRSlCTUALS 1,366,965 91.85 HnDIPPD DIstDUHTS 63,867 300.66 CHARITY 167,094 207.55 DTHER DEDUCTIONS 2,707,~59 97.43 TOTAl DEDUCTIDHS 1,148,826 26.51 . TOTAL NET REVENUE ~."~' .;. , ...'' DPÈÌMifJtG EXPENSES 1,066,064 " 514,867 48.30':i.SAl.flRIES 102,053:" 57,659'; 56.49~, CDHTRACT lABOR 66,076':,..' ' 139 ,803 211.58 ..; . 'OfPUME BENEFITS . t!52,6:U' . ~:. 213 ,290 .: 47.12" SUPPlIES 65',(M6".. ': 7,781 u. ,,!;' .PRDf'ESSIDHAl, fEES 299,723 . 2,252 ",78·' . CDHTRACT S£R~ICES 147,5(J3 93,027- 63:~:'r.R£PAIRS L MIHTEHAHCE 26,469 ' 46,U5 : 174. 22 .~..~ RENTS L UASES 54,065 15,856 29. 3~,,: UTILITIES 21,001- '. 197,271 939.33-.' DfSURAHCE . .,'f','-. 392,125.:. 367,928 93.83/.8111> D£DT . .,~~ DfTEREST IHCDtI£ H5,686 383, 7~,. HDH- IHCOJ1E TAXES .' 23,646-.100.00- OTHER OP£RA~ EXPEHSE 1,476,511 S3. 58:, TOTAL OPERATING EXPEHSES 37,967-..; 153,054 . . 2,755,846 ~ .~. 1,S77 ,~3 " 327,691- 20.17- EIcITÐR . - . '. I' CAPITAl, DHIER caSTS 142,132 . 88,403 36.51"" DEPRECIATIIJH 33,40011 '. ,;,' 3,399- 10.1S-:· AnDRTIZATIDH ....~.. '"¡'~".~-+""~; -.. 36."- OTHER HDH-DPERATIHG EXPEHSr . . --. .'~ ....:0,.....-,. --'~ 168,356 . 15,483 .:.: '~i:" ,INTEREST 1,356,2LS . 579 ,49~-:· 36: 99- MHAGErtEHT fEES .: .',: :;:.~...;. "IHDRITY INTEREST 4~ ,009- 26.6Ih:', TOTAl CAPITAl , OTHER . I..""., 151,318 61. ",;,1-,J'RETAX DlCDrIE/(LDSS) .- ~'~:~~t.~",:i$~.~, 4OÌ"~. ::f.:.":,· 1S3 38. 04 ~w..; ÀDtfISSIOHS , . ~-'..~ ....---~~!i.~. 1.971'\.c'i~c .. ~9, 27. 85,¡.~:;~ PATIÐfT DA'ft ,63' ;:t¡",~~:..,1?~' 27. 8S~'AÐe. ¿. '. .~ 95 :'Þ!!,"?-"t.;.:~; 29 .~. 30. 7!Y.;'" AOJu$TEJ) ÅÐC '.-";' :':':···'UL :~;;.:;'~.:~'. m~ 394 - ~ ..~v ,c-" :1f'~ II I-~, .-c>.~ ..a.;;,_ ¡__ '" , "::1~~:;·/1~1?~f,::~~~:~~t'·~~~t'~:~~ 1,800,131 223,134- .~ .1, PAGE PROfIT & LOSS IHCD"E SïATEN£HT - PRIDR YEAR PRIHTtD 01/12/97 06:25: Full Fiscal Year 1996 1995 ACTUAL PRIDR ---- VÄRIAHCE --- ÿjb ÿTj) . ~$$ l.7. 11,552,561 9,558,701 i,993,060 20.& 58,897,231 44,126,8<16 14,770,385 33.4 42,063,724 28,001,811 14,061,913 SO. 2' 821,826 658,669 163,157 24.7; 113 ,3~ ,342 82,346,027 30,989,315 37.6 25,145,817 20,195,121 4,950,696 24.5 2 ,8~ ,025 . 1,460,108 1,379,717 94.4' 934,952 160,521 774,431 482. 4~ 147 ,644- 855,710- 708,066 82.7 27,299,101 16,954,207 10,344,894 61.0', 595,183 605,881 10,698- 1.7( 1,7"'A , 295 754,001 1,000,294 132. 6t 58,421,529 ~ ,274,129 19,147,400 4S.~ 54,913,813 43,071,898 11,841,915 27.4r 15,927,386 12 ,695 ,468 3,231,918 25.46 698,759 744,549 45,790- 6.1~ 2,725,482 2,529,515 195,967 7.~ 7,583,685 6,122,935 1,460,750 23.8t 964,175 797,255 166,920 20.94 3,368,031 2,976,494 391,537 13.15 1,285,567 1,078,837 206,730 19.16 739 ,342 902,683 163,341- 18.09 760 ,073 681,823 78,250 11. 48 845,664 611,295 234,369 38.34 5,019,948 3,507,641 1,512,307 43.11 753,303 567,376 185,9'27 32.77 1,166 ,099 1,014,825 151,274 14.91 41,837,514 34,230,696 7,606,818 22.22 13,076,299 8,841,202 4,235 ,097 47.90 3,891,373 2,836,814 1,054,559 37.17 367,817 401,802 33 , 985- 8.45- 22.67 2,258,534 2,064,987 193,547 3,394,090 2,542,998 851,092 22.67 9,911,814 7,846,601 2,065,2H 26. ~l 3,164,485 994,601 2,169,984 218.17 5,~3 4,476 967 21.60 25 , 385 21,522 3,863 17.95 69 58 10 11.63 110 89 21' 23.46 <164 38$ 81 r '.\i kl1l1\ R SlI1ith. III W~I' hnnl tn D~II'IIIIl' SllIllh ill I )en'llIh.'! I Ie- i, nl\(' "lllIn\<' Ihall 2··I()J~X) hahi,', dL'iivl'Il'LI ill ('o!tllllhia IHhpitals in I <¡l)C,. I q q h !\ N N ( ¡ i\! R I ( ) 1< . '\ ( ) I () ( K II () L !) I; R S U I R () t I ! ¡ I' í ,. I 1 i' '\, ( ¡ J}! I '" tv! I !\ SIR I \ !' \1 ¡' () \ ¡ i II \1 PI. I( Ui\11 S tv! 1\ ,; I ' I,~ I \ I ) j' ( ) \ i' \ I I I II S I !\ ( , T I () N . \11 ~~ ¡ ¡ ": ¡ i\II'!,c () \ I ¡, \ 'j P R I) \ I) I ". I i< \ II I I! II ( t)\11\SSI()~; C> COLUMBIA ". "_____,..,.,,,_, ''''._·,·,··.·''····_·o···_...'··..n.___. ColuÌnbialHCA Healthc~re Corporation is o"ne of the largest health carè setvices companies in the United States. As of Decembèr 31, '1996, the Company operated 343 hospitals, 136 outpl;l.tièb.t surgery centers, approximately 550 home health .locàtions andprovidèd extensive outpatient and ancillary services in .37 states, the. United King- . dom and Switzerland. The terms "Columbia" and the "Company" as used in tbi¡¡; Annual Report re~ .. fer to Columbia/HCA HealthcareCorporation and its direct and indirect subsidiaries and afflIiatêd partner~hips, unless ~therwise stated or indicated by context. Columbia/RCA Realthcare Corpora~ tion is a holding company which.has no employ- , . èes. References herein to "Columbia'. employees.'; òr to "our employees" refer to employees ofthe . subsidiaries and affiliates of Columbia/HCA Healthcare CorporatÍon, ' Cólumbia'sIVIÌssion '., The mission of Columbia is to wo:r;k with our employees, affiliated physicians and volun~eers to , . provide a continuum of quality healthcarè; cost- ' effectively for the people in the communities we serve. Columbia's Vision Our vision is for Columbia to work with. employ-. ees and physicians to build a company that is fo- . cused on the well-being of people, that is patient- oriented, that offers the most advanced technology and information systems, that is finapcially sound, and that is synonymous with quality, cost-effective healthcare. . . Stock Information and Dividends The Company's Common Stock is traded on the New York Stock Exchange (the "NYSE") (symbol "COL"). All stock information in this document has been adjusted to reflect a 3-for-2 stock split, i~ the form of a stock dividend, effective' October 15, 1996. The table below sets forth, for the calendar quarters indicated, th,e high and low sales prices per share reported on the NYSE Composite Tape for the, Cómpany's Common Stock.· . . High Low - 1995 First Quarter Second Quarter Third Quarter . Fourth Quarter $29.50 30.67 33.25 36.00 $23.58 25.75 28.33 31:08 1996 First Quarter Second Quarter Third Quarter Fourth Quarter $39,08 38.17 39.25 41.88 $33,42 32,92 31.67 34.50 .....,. ,At the ,close óf1:msiness onMarch'24, 1997" tJ-¡.ere were approximately 18,400 holders ór record·, of the Company's ComÌnon S-wck and one holder 0(. reco"rdofthe Company's Nonvoting Common .. . Stock. . . . . The· Company currently pays a regular' quarterly . dividend of $.02 per share of Company common . stock and Company nonvótin~t common stock. , While .itis the present intention of the Company's .' Board ,of Directors to Gontinuepaying a quarterly diyidend of $,02 per share, the ,declaration and pay- ment of future dividends by the Company will de" pend upon manY factors, including the Company's : earnings,financiál conditiop" business needs, èapi- t.aland surplus 'and règul~tory considerations. . '- -------- COLUMBIAlHCA HEAL THCARE CORPORATION FINANCIAL HIGHLIGHTS FOR THE YEARS ENDED DECEMBER 31 (Dollars in millions, except per share amounts) % 1996 1995 Change Results of Operations Revenues................................. ............ ...., $ 19,909 $ 17,695 +12.5 EBDITA (a) . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,309 $ 3,720 +15.8 Net Income: Excluding merger and facility consolidation costs and extraordinary charges................................ $ 1,505 $ 1,299 +15.9 Merger and facility consolidation costs. . . . . . . . . . . . . . . . . . (235) Extraordinary charges on extinguishments of debt . . . . . . (103) Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,505 $ 961 +56.7 Earnings per share: Excluding merger and facility consolidation costs and extraordinary charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.22 $ 1.93 +15.0 Merger and facility consolidation costs. . . . . . . . . . . . . . . . . . (.35) Extraordinary charges on extinguishments of debt. . . . . . (.15 ) Net income............,................ ........... $ 2.22 $ 1.43 +55,2 Financial Position Assets . . . . . . . . . . . . . . . . . . . . . . . . . , . , , , . . . . . . . . . . . . . . . . . . . . . . . Working capital. . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . Long-term debt, including amounts due within one year. , . . . Minority interests in equity of consolidated entities ......... Stockholders' equity. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . Ratio of debt to debt plus common and minority equity. . . . . . Other Data (b) Number of hospitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , Licensed beds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average daily census. . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . Number of admissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Same-hospital admissions. ... . . . . . . . . . . .. . . . . . . . .... . . ..... Outpatient revenues as a percentage of total patient revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of employees (c) ................................... Shares used in computing earnings per share (in thousands) ........................................... $ 21,272 $ 19,892 +6,9 $ 1,467 $ 1,462 +0.3 $ 6,982 $ 7,380 -5.4 $ 836 $ 722 +15.8 $ 8,609 $ 7,129 +20,8 42.5% 48.5% 319 319 61,931 61,347 + 1.0 26,538 25,917 +2.4 1,895,400 1,774,800 +6.8 1,608,300 1,549,000 +3.8 38.2% 36,0% 285,000 240,000 +18.8 677,886 673,071 +0.7 (a) Income from operations before merger and facility consolidation costs, depreciation, interest, minority interests, income taxes and amortization. (b) Excludes data for 24 hospitals at December 31, 1996 and 19 hospitals at December 31, 1995 which are accounted for using the equity method. Columbia is generally a 50% owner in the entities which own and operate these hospitals. (c) Includes both full-time and part-time employees. 1 Margaret Johnson, 68, Patient, Columbia Michael Reese Hospital and Medical Center. Once every two weeks / come to receive an inotropic transfusion at the Heart Fail- ure Unit at Columbia Michael Reese Hospital in Chicago. Over the past several years / have reduced my visits from twice a week, to once a week, to my current level. Because of my end stage heart failure, / could not walk, go shopping, or go to the store, Thanks to my infusions, / feel like I'm in control now. / have faith in myself. / can do my regular household chores, li/œ cook- ing, sweeping, and cleaning. / am less of a burden on my family. Linda St. Julien, Director of Nursing for Medical/Surgical, Critical Care, and Emergency Nursing, Columbia Michael Reese Hospital and Medical Center. / have worked at Colum- bia Michael Reese Hospital and Medical Center for /6 years. As a nurse, my top pri- orities are patient care and the comfort of the patient. Michael Reese has always cared about its patients and community. Before our affilia- tion with Columbia, we had to provide the best care with old equipment and snwll capital budgets. When Columbia pur- chased the hospital and began operating it, that changed for the better. Columbia under- stands that quality patient care comes from a combina- tion of excellent staff and state of the art equipment. To Our Stockholders, Employees and Friends: A recent Saturday morning found me roaming the aisles of my neighborhood hardware store. While I marveled at the hundreds of choices of nails that I needed for a simple home repair project, a woman approached me and asked if I worked for Columbia. She didn't know me, but she saw the Columbia logo on my shirt. As soon as she learned that I worked for Columbia, she began sharing the story of her mother's stay at one of our community hospitals. It seems that her mother unexpect- edly became ill and they rushed her to a Columbia hospital. The woman's case proved difficult to diagnose and she spent about a week in the hospital, moving through different units and levels of care as her condition stabilized. The daughter told me that the family had received first class treat- ment. One night she had fallen asleep while staying with her mother and awakened as one of the nurses placed a blanket over her to keep her wann, Nurses who had treated her mother came to visit her on different floors as her mother's condition improved. The woman told me that she planned to write a letter to the hospital, thanking them for their personal attention, I hope she does write a note, because those nurses, even though they provided quality service with the same care and compassion as they do every day, deserve special recognition. The chance meeting that Saturday morning was an unexpected reminder of the ways that our employees have a positive impact on the lives of people. More important, it stripped away the trappings of high technology and breakthrough treatments and reached to the core of our mission. Each day, our mission is to take care of patients, Caring begins with compassion and a human touch. The value of compassion cannot be overemphasized. No greater burden can be borne by a patient than to think that no one cares or understands. A visit to a hospital can be frightening and intimidating. But to this woman the fear had been lessened by the personal, caring attention she and her mother had experienced. It is a simple and moving lesson, and a lesson that we need to take with us into our work every day, because each day we touch the lives of 150,000 patients and their families. In a part of the American fabric facing so much change, it is difficult-yet valuable-to reflect on what we achieved in 1996. It remains more important, however, to rededicate ourselves to the basic values that shape our lives and the lives of our patients. · Recently, two girls from El Paso received a rare stem cell blood transplant at Columbia Medi- cal City Dallas in order to cure their childhood leukemia. The girls had been diagnosed at one of our facilities in El Paso, but could not find a match for a traditional transfusion. Fortunately, a team of physicians at Columbia Medical City Dallas had been working on innovative re- search that led to the conclusion that they could substitute stem cells from umbilical cords. The girls received a match from a donor bank in New York and the doctors infused each girl's bone marrow with umbilical cord stem cells, Now, nearly a year later, they both have recovered. · In December, a 22 year old Olympic runner from Rwanda received free surgery at Columbia Raleigh Community Hospital in North Carolina to repair his injured eardrums. The surgery should restore the 40% hearing loss that Gabriel Mazimpaka suffered several years ago during a political demonstration in his home country. "When I get my hearing back," Mazimpaka said, "I'll feel like I won the gold, silver and bronze medals." · Lori Mabry survived because of innovative practices at the bum unit at Columbia Augusta Medical Center in Georgia. In the fall, Lori came to the facility with severe bums following a tenible car accident. Her survival depended on the ability of the physicians to reconstruct her abdominal wall cavity. · Genoveva Alva, 83, suffered from compression fractures in her back because of the weakness of her bones. A homecare nurse, Dee Ramos, has assisted her recovery after she visited an orthopedic specialist. As Mrs. Alva says of Dee, "she's not my nurse, she's my friend, a real member of the family." 2 r-- ~--- · In December, the Naughtons, who had returned from a trip to Honduras, e-mailed the Colum- bia World Wide Web health team because they felt ill. Based on the infonnation they received from our Web health coordinator about tropical diseases, they sought medical help at a hospital and a physician diagnosed them with malaria, Each week I hear dozens of anecdotes like the ones above. Each story contains common elements-the caring and compassion that Columbia's employees and associated physicians bring to their patients. Healthcare is about meeting the needs of people. While these stories also show that we can bring new technology, creative thinking and the latest treatment to our patients, our most valuable assets are our people and their compassion, COLUMBIA'S QUALITY OPERATING PRINCIPLES In a competitive environment we know that we must continue to find ways to deliver better patient care. Every day, we must be willing to ask ourselves what it takes to succeed and to improve on our past accomplishments. As a result, we have dedicated ourselves to leaming and measuring in order to better ourselves and our service. As one team, we strive to meet Columbia's four quality principles. Each day we all work to measure and improve patient outcomes, to measure and im- prove patient satisfaction, to measure and improve costs, and to provide care and compassion. Columbia's employees believe that by taking small steps to better perfonn each of our responsi- bilities, we can make dramatic improvements in quality patient care. Robert F. Kennedy once wrote that "few will have the greatness to bend history itself, But each of us can work to change a small portion of events, and the total of all of these acts will write the history of our generation." Our goal at Columbia is to take the small steps made in one facility and transfer them across our entire network of hospitals, surgery centers and home health agencies. Our quality operating principles create a common vision, and they work because they can be put into action and shared across our networks. Through our measurement programs, what we do well at a hospital in Kentucky can help improve the services we provide in California. As a case in point, we recently created a team made up of emergency room personnel to study the processes of our hospitals with the fastest and best emergency services as well as those emergency departments that did not perfonn as well, The purpose was to discover meaningful differences that can be shared across the entire system, We encouraged peers to talk with peers to identify procedures and processes that worked more effec- tively to meet the immediate needs of emergency patients. A member of the emergency room "best demonstrated practices" team, Kathy Barry, a nurse at Columbia Huntington Beach Hospital and Medical Center in California, borrowed an idea from Columbia PineLake Regional Hospital in Kentucky. PineLake had established a central transport pool and message center in its emergency room to facilitate admissions, take samples or tests to labs, and transport patients. After visiting the hospital, Kathy Barry worked to implement changes to make her emergency room more aware of the importance of getting people through the ER in a timely manner. In Huntington Beach the staff is now more aware of the timely and accurate flow of charts; they're "handing them off" instead of "dumping" them into a bin and hoping someone else picks them up. The lesson is that improved quality does not result from a top-down mandate, but it must pervade an organization and flow among peers, COLUMBIA'S STRATEGY WORKS More than ever, in 1996 we began to act as one company dedicated to a common purpose, These efforts have attracted the attention of others. Fortune's annual ranking of the nation's most admired companies included Columbia as the highest rated healthcare company. In addition, a re- port from the Advisory Board, a healthcare research organization, cited Columbia as the new com- petitive standard for American healthcare providers. The report cites our impressive quality record, our growing admissions, and our willingness to invest in the future. 3 Dennis N. Longstreet, Chairman, Johnson & Johnson Health Care Systems Inc. Together with Columbia we are developing better healthcare for patients while reducing costs. Our partner- ship has provided quality products, worked to establish optimal clinical care pro- grams, and begun to standard- ize these benefits across Columbia's healthcare net- works. Eileen Foley, Mayor of Portsmouth, New Hampshire. When trouble strikes, the hospital is there. I remember thinking that I was lucky to have familiar faces in the am- bulance and familiar faces at Columbia Portsmouth Re- gional Hospital. When it is needed, that is the place to be. Within a day, everyone was a new friend and confidante. I realize how lucky we are to have a hospital wilh a great capacity for healing. I am still an "outpatient" at their new Wound Care Center. Dr. Anthony Greco, Medical Director, Sarah Cannon Cancer Center. Columbia established and provides major support for the clinical research pro- gram of the Sarah Cannon Cancer Center at Columbia Centennial Medical Center in Nashville, This commitment to clinical research within our center began four years ago and has grown into an impor- tant program serving the Mid- dle Tennessee community and beyond. The substantial finan- cial commitment has helped supply computer facilities, a data manager, clinical re- search nurses, administrative facilities, and physician direc, tors of the center. Sarah Can- non functions as a "center without walls" by also incor- porating Columbia Southern Hills Medical Center, Colum- bia Nashville Memorial Hospi- tal, and Columbia Summit Medical Center into a coordi- nated clinical research pro- gram, which increases the number of patients participat- ing, Patients are accepted re, gardless of their ability to pay. An effort is underway to form a working cooperative venture among all the Columbia hospi- tals with active cancer pro- grams. The Sarah Cannon Cancer Center is a model that illustrates how a large corpo- ration can provide the essen- tial support that benefits pa- tients and their families, and provides a forum to develop, test and communicate im- proved therapies for patients with cancer. In a similar vein, objective third-party sources continue to give Columbia high marks for quali- ty. Currently, 37% Columbia hospitals have accreditation with commendation from the Joint Com- mission on Accreditation of Healthcare Organizations, an independent accreditation agency. This compares to a national average of approximately 10%. Furthermore, a Mercer/HCIA study placed 17 Columbia hospitals in its list of the nation's top 100 hospitals. It's encouraging when outsiders give us high marks, but it's even more exciting when our patients tell us that we've done a good job. Each quarter The Gallup Organization asks more than 125,000 Columbia patients about the quality of their care. According to 1996 survey results, 94% of our patients were either "satisfied" or "very satisfied" with their stay, Again, we outpace the industry average of 88%. COLUMBIA'S CONTINUUM OF CARE Weare one of the nation's largest providers of inpatient hospital care as well as homecare services and outpatient surgery. Our networks include more than 340 hospitals, 135 surgery centers and 550 homecare locations. We are also leaders in cardiology, cancer and orthopedic services. More than 240,000 babies were delivered in Columbia facilities last year. Of course our goal is not just to be known as a national healthcare provider, it's to be ONE company, acting in concert to take care of patients. In healthcare, bigger means better technology, better services, a better knowl- edge base and better prices, Moreover, as a friend recently reminded me, we acquire knowledge and experience in order to share them with others, not keep them to ourselves. As one company, we strive to contain costs, and share "best demonstrated processes" that will help improve the quality of care. We have continued to move forward in broadening our services in order to achieve our goal of creating a continuum of care in each of the communities we serve. We moved closer toward this objective in 1996 through acquisitions, construction, or joint ventures with 28 additional hospitals. For example, we strengthened our services in West Virginia when we completed a joint venture with the Sisters of St. Joseph of Wheeling. St. Joseph's Hospital in Parkersburg is a 375-bed hospi- tal that serves an II-county region in West Virginia and Ohio and has a strong history of commu- nity outreach. In addition, we improved the services that we can offer people in the northern Vir- ginia area by completing a partnership with the Arlington Hospital Association. The venture, named The Columbia Arlington Healthcare System, adds Columbia Arlington Hospital, a 350-bed tertiary care hospital with a teaching affiliation with The Georgetown University School of Medicine, to three existing Columbia facilities in the area. In the past year, Columbia announced plans to build 12 hospitals in communities that we already serve. We also added 200 homecare locations, 30 skilled nursing units, 14 psychiatric units, 9 rehabilitation units, 15 comprehensive outpatient rehabil- itation units, and 7 ambulatory surgery centers, In the past year, we invested $2,3 billion in our communities on capital improvements and acquisitions. Patients and consumers have begun to recognize our commitment to quality, measure- ment, and improvement. Patients benefit from the more than $200 million we invested in informa- tion systems, including the Columbia Patient Information System, an electronic patient record sys- tem that gives a Columbia hospital's medical staff real-time access to the complete records from a patient's visit to other Columbia facilities. Moreover, we have fostered a leaming culture and each of us understands that someone else may have a better idea than ours so that we must be able and willing to incorporate new processes. For instance, we have established a series of panels and advisory boards that will allow our associated physicians and medical staffs to leam from each other, Our new Columbia Cancer Network, like the existing Columbia Cardiovascular Management Network and the Orthopedic Excellence Panel, will give physicians a forum to meet and share ideas. In the past year, the Cardiovascular Network initiated a pilot supply cost study. The purpose of the study is to fmd the most efficient way to use supplies in order to improve the quality of patient care and to find ways to keep from wasting resources, In addition, we recently began train- ing programs in our facilities in Dallas and Nashville in which physicians practice techniques to better perform a minimally invasive heart procedure. 4 Thanks to these and other improvements, patients increasingly choose Columbia facilities. In 1996 our same-facility adjusted admissions (adjusted to reflect outpatient activity) increased 7%, inpatient admissions increased 4%-while nationwide hospital admissions declined-and our sur- gery cases increased 7%. Factoring in our growth through acquisitions, our adjusted admissions increased 11 % last year. COLUMBIA'S MARKETING SOLUTIONS In working to offer patients quality, cost-effective healthcare, Columbia will not be boxed in by conventions. In healthcare, like other fields where change is rapid and constant, we must be innova- tive. If we continue to think in the same ways, we can never solve the challenges that confront us. One aspect of our new thinking in 1996 was a greater focus on marketing. In August we aired seven television spots and seven print advertisements, educating people about Columbia and our network of facilities and services. We will continue this campaign in 1997 with new advertisements focused on informing people about the various services offered at our facilities, such as oncology, diabetes, cardiology and women's services, "Healthcare has never worked like this before," we say in our tagline. And it hasn't. We are bringing together physicians, hospitals, outpatient centers, home health, rehabilitation care, and con- sumer services into a single community system and we are working as partners with physicians, managed care organizations and suppliers in order to raise quality, improve patient satisfaction, and contain costs, Our commercials have communicated these ideas in memorable ways, By all accounts, our marketing efforts have had excellent results. Some of the proof is anecdo- tal, On numerous occasions, people have come up to Columbia employees and said, "What do you do if you're pregnant and in Denver?" (from one of our TV ads). Moreover, we have other evi- dence as well, Our name recognition has increased in many markets where we have either a new or established presence. Finally, some of the proof is in our increased number of patients. Our marketing extends far beyond advertising, There are many ways to differentiate Columbia from other healthcare providers. One approach has been to create a range of services centered around particular diseases or patient needs. The focus of the initiative is to create health manage- ment and population-based products that give patients access to Columbia's comprehensive net- works and allow patients to focus on the complete range of care, including wellness, prevention, diagnosis, and treatment. Initiatives are being developed in the following areas - women's health, senior care, oncology, cardiovascular, diabetes, emergency care, workers' compensation, and behav- ioral health. At the same time, we want to develop a sales culture. At Columbia, we believe that our best salespeople are our employees-all 285,000. Hand in hand with our commitment to sales is the idea that we must put our patients' needs fIrst. One part of this strategy is our effort to become the world's premier health information re- source on-line. It is our conviction that increasing consumer knowledge will lead to more informed healthcare decisions, which will both raise quality and contain costs. The Internet has emerged as the centerpiece of our information strategy, Growth on the Internet has been exponential and our home page (http://www.columbia.net) has won numerous awards, A recent USA Today/IntelliQuest survey honored our home page as the best source for healthcare information on the Internet. We've gained numerous other honors as well, including recognition as a "Top Internet Site" by U.S. News & World Report. Weekly we have more than 500,000 hits to our home page on the World Wide Web. Visitors can learn about diseases, wellness, and healthy habits. They might have a look at our Columbia virtual heart or tour the Columbia virtual hospital. The growth in interest on our Website reflects its usefulness. During 1996, about 2.5 million people visited our Website's home page. But that num- ber is just a fraction of the activity that we expect in 1997. In January we've already had more than 1 million people visit our Web site. The Internet also gives consumers access to leading medical specialists during physician chats sponsored by Columbia on both America Online and CompuServe. Here again, we continue to break down traditional barriers and expand the defInition of patient care. 5 About Michelle Griewe, Columbia Call Center employee. I called i-BOO-COLUM- BIA because I had been in- jured in a fire and needed a plastic surgeon who could per- fonn certain procedures. i spoke with Michelle Griewe, who went to great lengths to find a doctor for me-searching the physician referral data- base and calling a hospital for medical staffing assistance. I was frantic but Michelle was very nice and patient with me, and she was concerned that I get the right help. I wouldn't have known what to do if I didn't have the resources of the physician referral line. Al- so, I was very impressed with the level of customer service I received. Francene Wehrer, Coordinator for Health Services, Aurora (Colorado) Schools. One of our nurses had a dream. She saw a need to im- prove healthcare for our stu- dents. I said, how are we go- ing to do it? She said, "we need a mobile van. " Now the dream has come true. Five days a week, year round, a Co- lumbia van heads out in one of Aurora's under-served neighborhoods. On board are a Columbia physician and nurse practitioner-along with state of the art equipment, two exam rooms, and a mobile lab. We're serving kids we've never served before-and their families. Todny, St, Joseph's Hos- pital is breaking new ground in more ways than one. The hospital is initiating several new projects, enhancing exist- ing programs, and implement- ing aggressive community out- reach programs. St. Joseph's is working closely with mem- bers of its statewide network to strengthen its behavioral health program, as well as other services. Columbia is a partner that respects the mis- sion, vision, and values of St, Joseph's Hospital. Evidence of this is Columbia's willingness to continue our tradition of providing spiritual care, an es- senlial element of holistic care. Hospital employees are using the vast resources and expertise of other Columbia hospitals to initiate m£lny posi- tive changes al St. Joseph's. At lhe same time, they find comfort in knowing the hospi- tal, in partnership with Colum- bia, rem£lins focused on pro- viding the compassionate care patients have come to expect over the years. Sister Christine Riley, President of the Sisters of St. Joseph of Wheeling, West Virginia. Visitors to our Website and consumers can also make a direct connection to our toll-free physician referral number, l-800-COLUMBIA. To handle the volume of calls, we opened a state- of-the-art call center in Bedford, Texas. The Columbia Call Center, which opened in July, now averages about 30,000 calls per month. Available 24 hours a day, seven days a week, the service allows callers to find a physician who meets their specific healthcare needs in the most convenient location. COLUMBIA'S COMMITMENT TO COMMUNITIES, FAMILIES, AND CHILDREN Our mission is to take care of patients, By providing quality, cost-effective healthcare services we can have an impact on the communities that we serve. Our community involvement extends beyond our commitment to helping patients. Local communities benefit through the taxes that we pay, In 1996, Columbia incurred almost $2 billion in federal, state and local taxes. This money supports local needs and infra- structure, such as roads and schools. We also take care of patients who cannot afford to pay their bills. Last year we provided more than $1.4 billion in uncompensated care, In many ways our investor-ownership strengthens our relationships with communities. In es- sence, we are publicly owned and publicly accountable, In addition, Columbia encourages its em- ployees to be socially responsible in their community by contributing to United Way and other local charities. In September, when we sponsored Columbia Community Day, some 18,000 Columbia employees across the nation repaired homes for the poor and elderly, built playgrounds for children, collected food and clothing, sponsored and participated in fund-raisers and took part in dozens of other community enhancing activities. On January 24, 1997, President Bill Clinton, fonner President George Bush and Colin Powell announced Columbia's commitment to immunize one million children by the year 2000 in conjunc- tion with "The President's Summit for America's Future," a program aimed at bringing America to a new level of volunteer service. At the end of each day, everyone in healthcare should ask themselves these questions: Have we been fair? Have we treated people right? Have we improved our communities? Columbia em- ployees can answer yes to each of these questions. COLUMBIA'S FUTURE Already in 1997, we have begun to look for new ways to increase the quality of the services that we offer. In January, for example, we announced plans to acquire Value Health, Inc" a spe- cialty healthcare services company that generated approximately $2.0 billion in revenues in 1996. With its more than 50 million members in its general medical, mental health, prescription drug, and workers' compensation networks, Value Health will provide an important component of Columbia's comprehensive healthcare solution. We're moving in new directions that empower consumers in areas that just a generation ago would have seemed like fantasy. We are on the cutting edge of laser surgery, which can reduce costs, decrease the time a patient must spend in the hospital and speed the patient's recovery. New fonns of communication, like the Internet, allow scores of consumers to interact in real-time with healthcare experts who may be hundreds of miles away. Better technology results in more infonned consumers better able to participate in their own health and wellness decisions. In order to ensure that healthcare works best for patients and consumers, we have to create a fairer system. While healthcare spending in 1996 increased at its lowest rate in 30 years and medical inflation is . lower than general inflation, Medicare stands five years from insolvency and the number of uninsured has increased. Americans and their elected representatives need to consider fundamen- tal and systemic improvements to healthcare, not short-tenn patches that do not improve incentives or address fundamental problems. While Congress and the President debate the issues, private indus- try has implemented changes that have begun to control costs. This is a good beginning, but it is only a beginning. We need to find new and creative ways for available funds to be spent more fairly to ensure that all Americans have access to quality care. 6 We need to allow markets to work, because markets improve services and empower consumers. We need to remove burdensome regulations, like certificate-of-need laws, that restrict competition and choice. Competition and choice will lower cost, improve quality, and allow the market to match services to the demands of local communities. Competitive markets have been the driving force in providing quality products and services throughout our history. Healthcare should be no exception. Healthcare will continue to change, but there will remain one constant--our mission to provide better patient care. Healthcare means people treating people with compassion, dignity and respect. Columbia will continue to meet this fundamental mission, and with the commitment of our dedi- cated employees and associated physicians, we will be a leader in the new millennium of quality care. Sincerely, ~Lfl- t ~/ Richard L. Scott Chainnan and Chief Executive Officer r f COLUMBIAlHCA HEALTHCARE CORPORATION SELECTED FINANCIAL DATA AS OF AND FOR THE YEARS ENDED DECEMBER 31 (Dollars in millions, except per share amounts) Summary of Operations Revenues .....,.................,......."......",......,.,. . Salaries and benefits . . . . . . . . . . . . , . , . . . . . . , . . . . . . . . . . . . . . . . . . , , Supplies ..,........,................,.......".............., , Other operating expenses. . . . . . . , . . . . . . , , , . . . . . . . , . . . . . . . . , . . . . Provision for doubtful accounts ....,..................,........ Depreciation and amortization. . . . . . , , . . . . . . , . , . . . . . . . . , . . . . . . , Interest expense ,................,.......,........,.......,.,. Equity in earnings of affiliates. . . . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . Merger, facility consolidation and other costs ....."".....,.., Income from continuing operations before minority interests and income taxes .....,.........,......,........,.,......." Minority interests in earnings of consolidated entities. . . . , . . . , . Income from continuing operations before income taxes Provision for income taxes. . . . . . . , . . . . . . . . , . . . . . . . . , , . . . . . . , . . , Income from continuing operations .........,......""....",. Income (loss) from discontinued health plan segment, net of income tax (benefit) , , . . . . . . . , . . . . . . . , , . . . . . . . . . . , . . , . . . . . , . . Extraordinary charges on extinguishments of debt, net of income tax benefits. . . . . . . . . . . . . . . . . , , . . . . . . . , . . . . . . . . . , , . . . . Cumulative effect on prior years of a change in accounting for income taxes. . . . . . . , . . . . . . . , . . . . . . . . . . . . . . . . . , , . . . . . . , . . . , . , Net income,... ......,.................,......,..,.....,.. $ 1996 $ 19,909 $ 7,842 2,694 4,025 1,212 1,155 498 (173) 17,253 2,656 141 2,515 1,010 1,505 1,505 $ Earnings per share: Income from continuing operations ......",.....".......,.. $ 2.22 $ Income (loss) from discontinued health plan segment. . . . , . . . . Extraordinary charges on extinguishments of debt , . . . . . . . . . . Cumulative effect on prior years of a change in accounting for income taxes. . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . , . . . . Net income........... ..........,.,... ....,........"..... $ Shares used in computing earnings per share (in thousands) Cash dividends per common share. . . . . . , , . . . . . . . , , . . . . . . . . . . . . Financial Position Assets .........................." , . . . . . . . . . . . . . . . . . , . . . . . . , . . Working capital.. . .... . . . . .. . . ... . . . . , . . . . ...." . . ..., ,. , ... . . Net assets of discontinued operations. . . . . . . , , . . . . . . . , . , . . . . . . . Long-term debt, including amounts due within one year, , . . . . . . Minority interests in equity of consolidated entities ..,......... Stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . . , . , . . . . . . Cash Flow Data Cash provided by operating activities . . . . . , , . . . . . . . , . . . . . . . . , ,. $ Cash used in investing activities. . . . . . . , . . . . . . . . , . . . . . . . . , . . . . . Cash provided by (used in) financing activities. . . . . , . . . . . . . . , , . 2.22 $ 677,886 $ .08 1995 17,695 $ 7,101 2,558 3,346 998 981 460 ( 28) 387 15,803 1,892 113 1,779 715 1,064 (103) 961 $ 1.58 $ (.15) 1994 14,543 5,963 2,144 2,661 853 804 387 (8) 159 12,963 1,580 40 1,540 611 929 (115) 814 $ 1.44 $ (.18) 1993 $ 12,678 5,202 2,015 2,286 699 689 415 (9) 151 11,448 1,230 18 1,212 492 720 16 (97) 639 $ 1.16 $ ,03 (.16) 1.43 $ 673,071 $ .08 1.26 $ 1.03 $ 643,943 619,554 $ .08 $ .04 $ 21,272 $ 19,892 $ 16,278 $ 12,685 $ 1,467 1,462 1,092 835 6,982 836 8,609 2,621 $ (2,251) (489) 7,380 722 7,129 2,254 $ (3,600) 1,510 5,672 278 6,090 1,747 $ (1,946) (81) 4,682 67 4,158 1,585 $ (967) (684) '1 i 1992 $ 12,226 5,062 1,948 2,205 652 670 506 (1) 532 11,574 652 25 627 334 293 (125) (23) 51 196 ,50 (.21) (.04) ,08 .33 591,567 12,773 899 376 4,735 51 4,241 1,776 (904) (1,212) Operating Data Number of hospitals at end of period.......".......",..... .., 319 319 311 274 281 Number oflicensed beds at end of period ,.........,......,.." 61,931 61,347 59,595 53,245 53,457 Weighted average licensed beds (a) .,........".......",...... 62,708 61,617 57,517 53,247 51,955 Average daily census (b) . . . . . . . , . . . . . . . . . , . . . . . . . . . , , . . . . . . . .. , 26,538 25,917 23,841 22,973 23,569 Occupancy (c) ..... ........ ..................,.......,......... 42% 42% 41% 43% 45% Admissions (d) .... ..,..... ....,................,..,......,.." 1,895,400 1,774,800 1,565,500 1,451,000 1,448,000 Average length of stay (days) (e) . . , . . . . . . . . . , . . . . . . . . , . . . . . . . . , 5.1 5.3 5.6 5.8 6,0 (a) Represents the average number of licensed beds weighted based on periods owned, Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency. (b) Represents the average number of patients in hospital beds each day. (c) Represents the percentage of hospital licensed beds occupied by patients. (d) Represents the total number of patients admitted (in the facility for a period in excess of 23 hours) to the Company's hospitals. (e) Represents the average number of days admitted patients stay in the Company's hospitals. 8 COLUMBIAlHCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Selected Financial Data and the accompanying consolidated financial statements set forth certain information with respect to the financial position, results of operations and cash flows of Columbia/HCA Healthcare Corporation ("Columbia" or the "Company") which should be read in conjunction with the following discussion and analysis. Background Information and Business Strategy Healthtrust Merger In April 1995, Columbia completed a merger transaction with Healthtrust, Inc.-The Hospital Company ("Healthtrust") (the "Healthtrust Merger"), At the time of the Healthtrust Merger, Healthtrust operated 117 hospitals (excluding 2 hospitals which are accounted for using the equity method) and certain other ancillary healthcare facilities located in twenty-two states with annual revenues of approximately $3.4 billion. For accounting purposes, the Healthtrust Merger was treated as a pooling of interests, Accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis give retroactive effect to the Healthtrust Merger and include the combined operations of Columbia and Healthtrust for all periods presented. MCA Merger In September 1994, Columbia completed a merger transaction with Medical Care America, Inc. ("MCA") (the "MCA Merger"). MCA was a national provider of alternative-site healthcare services through the operation of free-standing surgical centers and certain other outpatient, ancillary facilities located in twenty-six states with annual revenues in excess of $400 million. The MCA Merger was accounted for under the purchase method, and accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis include the operations of MCA since September 1994, EPIC Merger Prior to the merger with Columbia, Healthtrust completed a merger transaction with EPIC Holdings, Inc. ("EPIC") (the "EPIC Merger") in May 1994. EPIC was a healthcare services provider that owned and operated 32 general acute care hospitals with annual revenues in excess of $1 billion. The EPIC Merger was accounted for under the purchase method, and accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis include the operations of EPIC since May 1994, HCA Merger Columbia Healthcare Corporation ("CHC") completed a merger transaction with HCA- Hospital Corporation of America ("HCA") (the "HCA Merger") in February 1994. In connection with the transaction, CHC changed its name to Columbia/HCA Healthcare Corporation. At the time of the HCA Merger, HCA operated 97 hospitals located in twenty-one states with annual revenues in excess of $5 billion. For accounting purposes, the HCA Merger was treated as a pooling of interests. Accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis give retroactive effect to the HCA Merger and include the combined operations of CHC and HCA for all periods presented. 9 COLUMBIAlHCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Background Information and Business Strategy (Continued) Business Strategy Columbia's business strategy centers on working with physicians and other healthcare providers to develop comprehensive, integrated healthcare delivery networks in targeted markets, This strategy typically involves significant healthcare facility acquisition and consolidation activities. During the past several years, hospital industry inpatient admission trends have been adversely impacted by cost containment efforts initiated by federal and state governments and various third-party payers, including health mai:µtenance organizations, preferred provider organizations, commercial insurance companies and employer-sponsored networks. In addition, a significant number of medical procedures have shifted from inpatient to less expensive outpatient settings as a result of both cost containment pressures and advances in medical technology. In response to changes in the healthcare industry, Columbia has developed the following strategy to provide the highest quality healthcare services at the lowest possible cost: Deliver high quality services-Through the use of clinical information systems and continuous quality enhancement programs, Columbia focuses on patient outcomes and strives to continuously improve the quality of care and service provided to patients. Become a significant provider of services-Columbia attempts to (i) consolidate services to reduce costs and (ii) develop the geographic coverage necessary for inclusion in managed care and employer-sponsored networks in each market. Provide a comprehensive range of services-In addition to the operation of general, acute care hospitals, Columbia also operates psychiatric and rehabilitation facilities, outpatient surgery and diagnostic centers, home health agencies and facilities providing other healthcare related services. This strategy enables Columbia to attract business from managed care plans and major employers seeking efficient access to a wide array of healthcare services. 10 COLUMBIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Results of Operations The following is a summary of results of operations before extraordinary charges (dollars in millions, except per share amounts): Revenues. . . . . . . , . . . . . , . , . . . . , . . . . . . . , . . . . . . . , . . . . . . , . . . . . . , . . Salaries and benefits .,.........................,......"..... Supplies, . . . . . . , . . . . . . . . . . . . . , . . . . . . , . . . . . . . , . . . . . . . , . . . . , . . . . Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . Provision for doubtful accounts. . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity in earnings of affiliates . . . . . . . . . . . . . . , . . . . . . , . . . . . . , . . . Depreciation and amortization . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense. . . . . , . . . . . . . . . . . . . , . . . . . . . , . . . . . . , . . . . . . . . . . . Merger and facility consolidation costs ..,..................." Income before minority interests and income taxes ...,.....". Minority interests in earnings of consolidated entities ......... Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for income taxes ........................ . . . . . . . . . . . . Income before extraordinary charges . . . . . . . . . . . . , . . . . . . , , . . . . . Earnings per share: Excluding merger and facility consolidation costs. . . . . . . . . Merger and facility consolidation costs ..,......,......,.. Income before extraordinary charges . . , . . . . . . , , . . . . . . . . . . % changes from prior year: Revenues ..........................................,.... Income before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income before extraordinary charges , . . . . . . . , . . . . . , . . . . . . Earnings per share. . . , . . . . . . . , . . . . . . . . . . . . . , , . . . . . . . . . . . Other information excluding the effect of merger and facility consolidation costs (a): Income before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income before extraordinary charges . . , . . . . . . , . . . . . . . . . . . % changes from prior year: Income before income taxes. . . . . . . , . . . . . . . . . . . . . . . . . Income before extraordinary charges. . . . . . . . . . . . . . . . Earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Same-hospital % changes from prior year (b): Revenues ..........................,.................... Admissions. . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjusted admissions (c). . . . . . . . . . . . , . . . . . . , . . . . . . . . . . . . . . 1996 1995 1994 Amount Ratio Amount Ratio Amount Ratio $19,909 100.0 $17,695 100.0 $14,543 100.0 7,842 39.4 7,101 40,1 5,963 41.0 2,694 13.5 2,558 14.5 2,144 14.7 4,025 20.3 3,346 19.0 2,661 18.4 1,212 6.1 998 5.6 853 5,9 (173) (0.9) (28) (0,2) (8) (0.1) - - - - 15,600 78.4 13,975 79.0 11,613 79.9 1,155 5.8 981 5.5 804 5.4 498 2.5 460 2,6 387 2.7 387 2.2 159 1.1 - - - - 2,656 13.3 1,892 10,7 1,580 10,9 141 0.7 113 0.6 40 0.3 - - - - 2,515 12.6 1,779 10.1 1,540 10,6 1,010 5.0 715 4,1 611 4.2 - - - - - $ 1,505 7.6 $ 1,064 6,0 $ 929 6,4 - - - - - - $ 2.22 $ 1.93 $ 1.60 (.35) (.16) - - $ 2.22 $ 1.58 $ 1.44 - - - 12.5 21.7 14.7 41.3 15.5 27,1 41.5 14.6 28.9 40.5 9.7 23.4 $ 2,515 12.6 $ 2,166 12.3 $ 1,699 11.7 1,505 7.6 1,299 7.3 1,031 7.1 16,1 27.4 24.7 15.9 26,0 25.8 15.0 20.6 21.2 9.6 10,2 3.8 4.6 7.4 8,6 (a) Amounts exclude merger and facility consolidation costs incurred in 1995 and 1994, Excluding these amounts from results of operations is not a measure of operating performance calculated in accordance with generally accepted accounting principles ("GAAP"). The Company believes these costs (in 1995 and 1994) are of a magnitude not expected to be incurred in future periods and excluding such amounts will allow users to better identifY operating trends for comparison with other companies. The costs excluded are significant and have a material effect on operations and liquidity. Excluding the effect of these costs should not be considered when measuring profitability or liquidity or as an alternative to operating income or cash flows as determined in accordance with GAAP. (b) Excludes the operations of hospitals and their related facilities which were either acquired or divested during the current and prior year. (c) Adjusted to reflect outpatient activity by multiplying actual admissions by the sum of gross inpatient revenue and gross outpatient revenue and dividing the result by gross inpatient revenue. 11 COLUMBIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERA TIONS-(Continued) Results of Operations (Continued) General The Company continues to experience revenue increases and results of operations continue to be affected by the trend toward certain services being performed more frequently on an outpatient basis and in patients' homes. The Company has been able to achieve increases in revenues due to acquisitions, higher utilization of home health, outpatient and ancillary services, and the increased severity of illness of patients admitted. Although the Company's revenues have grown in each period, the impact of volume increases and increases in patient acuity have been partially offset by the increasing proportion of revenue derived from fixed payment sources, including Medicare, Medicaid and managed care plans (86% of admissions in 1996 and 82% in 1995 relate to Medicare, Medicaid and managed care plan patients). Insurance companies, government programs (other than Medicare) and employers purchasing healthcare services for their employees are negotiating the amounts they will pay the healthcare providers rather than paying standard prices. This leads to these purchasers of healthcare services becoming managed care payors, similar to HMO's and PPO's, in virtually all markets and making it increasingly difficult for providers to maintain their historical revenue growth trends. The growth in outpatient services (including home health) is expected to continue as procedures currently performed on an inpatient basis are converted to outpatient procedures through continuing advances in pharmaceutical and medical technologies. The redirection of certain procedures to an outpatient basis is also influenced by pressures from payors to direct certain procedures from inpatient care to outpatient care. The Company expects the growth in home health and outpatient services to continue. The Company expects patient volumes (admissions and outpatients visits) from Medicare and Medicaid to continue to increase due to the general aging of the population and the expansion of state Medicaid programs, The Medicare program reimburses the Company's hospitals primarily based on established rates that are dependent on each patient's diagnosis, regardless of the provider's cost to treat the patient or the length of time the patient stays in the hospital. The Medicare program's established rates are indexed for inflation annually, but these increases have historically been less than both the actual inflation rate and the Company's increases to its standard charges. Years ended 1996 and 1995 Revenues increased 12.5% to $19,9 billion in 1996 compared to 1995, primarily as a result of acquisitions and growth in inpatient and outpatient volumes. On a same-hospital basis, revenues increased 9.6%, admissions increased 3.8% and adjusted admissions (adjusted to reflect outpatient activity) increased 7.4% from a year ago. The increase in outpatient activity is primarily a result of the continuing expansion of home health and other ancillary services, Income before income taxes increased 41.3% to $2.5 billion in 1996 from $1.8 billion in 1995 and pretax margins increased to 12.6% in 1996 from 10.1% in 1995. Excluding the effect of the merger and facility consolidation costs charged in 1995, income before income taxes increased 16.1 % to $2.5 billion from $2.2 billion in 1995 and pretax margins increased to 12.6% in 1996 from 12 I J~"z. COLUMBIA/HCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Results of Operations (Continued) 12.3% in 1995. The increase in pretax income was attributable to the combination of growth in revenues and improvements in the margin. Pretax margins increased due to enhanced levels of participation in the Company's standard purchasing contracts for medical supplies (which provide for progressive discounts based upon the volume of purchases made by Columbia), improvements in labor productivity (due to several work redesign programs initiated and the benefits attained from being able to share "best demonstrated practices" among our facilities) and an increase in equity in earnings of affiliates (primarily due to more of the Company's development activities being structured as non-consolidated joint ventures), Supply costs declined as a percentage of revenues to 13,5% in 1996 from 14.5% in 1995, salaries and benefits declined as a percentage of revenues to 39.4% in 1996 from 40.1% in 1995 and equity in earnings of affiliates increased to 0.9% in 1996 from 0.2% in 1995, The improvement in pretax margins was partially offset by an increase in other operating expenses and provisions for doubtful accounts, Other operating expenses, as a percentage of revenues, increased to 20.3% in 1996 from 19.0% in 1995 due, in part, to the outsourcing of certain services. The outsourcing of services contributed to the improvement in salaries and benefits as a percentage of revenues as more of the services previously performed by employees were performed by outside contractors. Provisions for doubtful accounts, as a percentage of revenues, increased to 6,1% in 1996 from 5.6% in 1995 due, in part, to computer information systems (including patient accounting) conversions at various facilities which hampered the business office functions and collection efforts in those facilities. Income before extraordinary charges increased 41.5% to $1.5 billion ($2.22 per share) during 1996 compared to $1.1 billion ($1.58 per share) in 1995, Excluding the effects of the merger and facility consolidation costs charged in 1995, income before extraordinary charges increased 15,9% to $1.5 billion ($2.22 per share) in 1996 compared to $1.3 billion ($1.93 per share) in 1995. During 1995, Columbia recorded $387 million (before income taxes) of merger and facility consolidation costs in connection with the Healthtrust Merger. In connection with the Healthtrust Merger in 1995, Columbia refinanced approximately $1.8 billion of Healthtrust's debt resulting in an after-tax charge of $103 million ($.15 per share). The Company did not incur any extraordinary charges during 1996. Years ended 1995 and 1994 Revenues increased 21.7% to $17.7 billion in 1995 compared to 1994, primarily as a result of acquisitions (including the EPIC Merger in May 1994 and the MCA Merger in September 1994) and growth in inpatient and outpatient volumes. On a same-hospital basis, revenues increased 10.2%, admissions increased 4.6% and adjusted admissions increased 8,6% from a year ago. The increase in outpatient activity is primarily a result of expanding home health and other outpatient ancillary services. Income before income taxes increased to $1.8 billion in 1995 from $1.5 billion in 1994 and pretax margins decreased to 10.1% in 1995 from 10.6% in 1994. Excluding the effect of the merger and facility consolidation costs charged in 1995 and 1994, income before taxes increased 27.4% to $2.2 billion in 1995 from $1.7 billion in 1994 and pretax margins increased to 12.3% in 1995 from 11.7% in 1994. The improvement in pretax income was attributable to the combination of growth 13 COLUMBIAlHCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Results of Operations (Continued) in revenues and improvements in the margin. Pretax margins increased due to improvements in productivity and increased discounts on medical supplies. Salaries and benefits declined as a percentage of revenues to 40.1% in 1995 from 41.0% in 1994, and supply costs declined as a percentage of revenues to 14.5% in 1995 compared to 14,7% in 1994. The improvement in pretax margins was partially offset by an increase in other operating expenses as a percentage of revenues to 19.0% in 1995 from 18.4% in 1994. This was due, in part, to the outsourcing of certain services. The outsourcing of services contributed to the improvement in salaries and benefits as a percentage of revenues as more of the services previously performed by employees were performed by outside contractors. Income before extraordinary charges increased 14.6% to $1.1 billion ($1.58 per share) during 1995 compared to $929 million ($1.44 per share) in 1994. Excluding the effects of the merger and facility consolidation costs charged in 1995 and 1994, income before extraordinary charges increased 26.0% to $1.3 billion ($1.93 per share) in 1995 compared to $1.0 billion ($1.60 per share) in 1994. During 1995, Columbia recorded $105 million of pretax charges incurred in connection with the Healthtrust Merger. These costs included severance costs, investment advisory fees, and certain charges based upon management's implementation of actions to reduce corporate overhead costs and consolidate management information systems. In addition, pretax charges of $282 million were recorded to write down assets to estimated net realiza.ble value in connection with management's plans to consolidate duplicative facilities and replace facilities in certain markets. Such charges have not had any material adverse effect on net revenues. Also in connection with the Healthtrust Merger, approximately $1.8 billion of Realthtrust's debt was refinanced to reduce future interest expense and eliminate certain restrictive covenants, resulting in an after-tax charge of $103 million ($.15 per share). During 1994, Columbia recorded $159 million (before income taxes) of merger and facility consolidation costs in connection with the RCA Merger. Also in connection with the HCA Merger, Columbia refinanced approximately $2.2 billion of long-term debt resulting in an after-tax charge of $115 million ($,18 per share). Liquidity Cash provided by operating activities totaled $2.6 billion in 1996 compared to $2.3 billion in 1995 and $1.7 billion in 1994. The increase in 1996 over 1995 is primarily due to the cash generated from the hospitals and healthcare facilities acquired during 1996 and 1995. During 1996, cash flows from operating activities exceeded the funds utilized for Columbia's capital expenditure program and acquisitions. Capital expenditures and acquisitions, including investments in and advances to affiliates in 1995, exceeded cash provided by operating activities by approximately $1.4 billion and were funded by the issuance of long-term debt and commercial paper borrowings, Working capital totaled $1.5 billion at December 31, 1996 and 1995. Management believes that cash flows from operations and amounts available under Columbia's revolving credit facilities and related commercial paper programs are sufficient to meet expected future liquidity needs. 14 COLUMBIAlHCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Liquidity (Continued) A substantial portion of the merger and facility consolidation costs recorded during 1995 and 1994 relate to the writedown of recorded assets and, accordingly, did not have a material adverse effect on cash flows from operating activities. Investments of Columbia's professional liability insurance subsidiary to maintain statutory equity and pay claims totaled $1.3 billion and $1.2 billion at December 31, 1996 and 1995, respectively, The Company has entered into various agreements with joint venture partners whereby the partners have an option to sell or "put" their interest in the joint venture back to the Company within specified periods at fixed prices or prices based on certain formulas. The combined put price under all such agreements was approximately $1.0 billion at December 31, 1996. While the Company cannot predict if, or when, their joint venture partners will exercise such options (no put options have been exercised through December 31, 1996), it is not expected that the majority of the puts would be exercised in anyone period. Capital Resources Excluding acquisitions, capital expenditures totaled $1.4 billion in 1996 compared to $1.5 billion in 1995 and $1.2 billion in 1994. Planned capital expenditures in 1997 are expected to approximate $1. 7 billion. Management believes that its capital expenditure program is adequate to expand, improve and equip its existing healthcare facilities. Columbia also expended $816 million, $1.6 billion and $486 million for acquisitions (excluding the MCA and EPIC Mergers) during 1996, 1995 and 1994, respectively. See Note 4 of the Notes to Consolidated Financial Statements for a description of these activities. In addition, Columbia made investments in and advances to affiliates (generally 50% interests in joint ventures that are accounted for using the equity method) of $61 million in 1996 compared to $609 million in 1995 and $6 million in 1994. In connection with the MCA Merger consummated in September 1994 (accounted for under the purchase method), Columbia issued approximately 31.6 million shares of common stock (market value of $912 million) in exchange for all outstanding shares of MCA common stock. In connection with the EPIC Merger consummated in May 1994 (accounted for under the purchase method), Healthtrust paid approximately $249 million in cash in exchange for all outstanding shares of EPIC common stock. Columbia expects to finance all capital expenditures with internally generated and borrowed funds, Available sources of capital include public or private debt, commercial paper, unused bank revolving credit facilities and equity. At December 31, 1996, there were projects under construction which had an estimated additional cost to complete and equip of approximately $1.2 billion. Subsequent to December 31, 1996, Columbia amended its revolving credit agreements (the "Credit Facilities") from a $2.5 billion five-year revolving credit facility and a $1.5 billion 364-day revolving credit facility to a $2.0 billion five-year revolving credit facility and a $2.0 billion 364- day revolving credit facility, respectively. Borrowings under the 364-day revolving credit facility do not mature until one year subsequent to the end of the 364-day period. The Credit Facilities 15 COLUMBIA/HCA HEALTH CARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-(Continued) Capital Resources (Continued) support Columbia's commercial paper programs. As of February 28, 1997, Columbia had approximately $1.8 billion of credit available (net of outstanding commercial paper) under the Credit Facilities, The Credit Facilities contain customary covenants which include (i) limitations on additional debt, (ii) limitations on sales of assets, mergers and changes of ownership and (iii) maintenance of certain interest coverage ratios. Columbia was in compliance with all such covenants at December 31, 1996. Effects of Inflation and Changing Prices Various federal, state and local laws have been enacted that, in certain cases, limit Columbia's ability to increase prices. Revenues for acute care hospital services rendered to Medicare patients are established under the federal government's prospective payment system. Total Medicare revenues approximated 35% of total revenues in 1996, 36% in 1995 and 35% in 1994. Management believes that hospital industry operating margins have been, and may continue to be, under significant pressure because of deterioration in inpatient volumes, changes in payer mix, and growth in operating expenses in excess of the increase in prospective payments under the Medicare program. Management expects that the average rate of increase in Medicare prospective payments will range from 1.0% to 1.5% in 1997. In addition, as a result of increasing regulatory and competitive pressures, Columbia's ability to maintain operating margins through price increases to non-Medicare patients is limited, Health Care Reform In recent years, an increasing number of legislative proposals have been introduced or proposed to Congress and in some state legislatures that would significantly affect healthcare systems in Columbia's markets. The cost of certain proposals would be funded in significant part by reductions in payments by government programs, including Medicare and Medicaid, to healthcare providers such as hospitals. While the Company is unable to predict which, if any, proposals for healthcare reform will be adopted, there can be no assurance that proposals adverse to the business of Columbia will not be adopted. Proposed Merger Transaction On January 15, 1997, Columbia entered into a definitive agreement to merge with Value Health, Inc. in a tax-free stock-for-stock transaction. See Note 13 of the Notes to Consolidated Financial Statements for a description of the proposed merger transaction. Other Information Columbia is currently contesting income taxes and related interest aggregating approximately $338 million proposed by the IRS for prior years. Management believes that final resolution of these disputes will not have a material adverse effect on the financial position, results of operations or liquidity of Columbia. Resolution of various other loss contingencies, including litigation pending against Columbia in the ordinary course of business, is not expected to have a material adverse effect on its financial position or results of operations. 16 COLUMBIAlHCA HEALTH CARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in millions, except per share amounts) Revenues ......................................................... Salaries and benefits . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . Supplies ......................,................................... Other operating expenses. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for doubtful accounts.... . . . . . . . . . . . . . ...... . . ,.. . .., . . . . Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense. . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity in earnings of affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . Merger and facility consolidation costs . . . . . . . . . . . . . . . . . . . . , . . . . . . . . Income before minority interests, income taxes and extraordinary charges ......................................................... Minority interests in earnings of consolidated entities. . ..... .. , .... Income before income taxes and extraordinary charges .........,... Provision for income taxes . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . Income before extraordinary charges . . . . . . . . . . , . . . . , , . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt, net of income tax benefits of $67 in 1995 and $72 in 1994 . . . . . . . . . . . . . . . . . . . . . . Net income .........................................,..... Earnings per share: Income before extraordinary charges. . . . . . . . . . , . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt ............. Net income...................,........................... Shares used in computing earnings per share (in thousands) ....... The accompanying notes are an integral part of the consolidated financial statements 1996 1995 1994 $19,909 $17,695 $14,543 7,842 7,101 5,963 2,694 2,558 2,144 4,025 3,346 2,661 1,212 998 853 1,155 981 804 498 460 387 (173) ( 28) (8) 387 159 17,253 15,803 12,963 2,656 1,892 1,580 141 113 40 2,515 1,779 1,540 1,010 715 611 1,505 1,064 929 (103) (115) $ 1,505 $ 961 $ 814 $ 2.22 $ 1.58 $ 1.44 (.15) (.18) $ 2.22 $ 1.43 $ 1.26 677,886 673,071 643,943 COLUMBIAlHCA HEAL THCARE CORPORATION CONSOLIDA TED BALANCE SHEETS DECEMBER 31, 1996 AND 1995 (Dollars in millions, except per share amounts) ASSETS Current assets: Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts receivable, less allowances for doubtful accounts of $1,396-1996 and $1,171-1995 . , . . , . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other .................................................................. Property and equipment, at cost: Land ......................................................... .......... Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equipment ............................................................. Construction in progress (estimated cost to complete and equip after December 31, 1996-$1,158) ........................................,. Accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments of insurance subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments in and advances to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intangible assets net of accumulated amortization of $527-1996 and $426-1995 . . . . . . . . . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable . . . . . . . . . . . . . , , . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued salaries .. . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other accrued expenses . . . . . . . . . . . . , . , . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . Income taxes ....................."..,.....,........................... Long-term debt due within one year..................................... Long-term debt ............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred taxes and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , Minority interests in equity of consolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . Stockholders' equity: Common stock $.01 par; authorized 800,000,000 voting shares and 25,000,000 nonvoting shares; issued and outstanding 650,499,400 voting shares and 21,000,000 nonvoting shares-1996 and 647,549,600 voting shares and 21,178,500 nonvoting shares-1995 .. . . . . . . . . . . . . ... . . . . . . . Capital in excess of par value ........................................... Other ................................................................,. Retained earnings ...................................................... The accompanying notes are an integral part of the consolidated financial statements. 18 1996 1995 $ 113 $ 232 3,023 2,665 441 406 836 897 4,413 4,200 978 926 7,395 6,649 6,746 5,826 602 914 15,721 14,315 (5,322) ( 4,564) 10,399 9,751 1,119 1,071 1,293 1,021 3,709 3,497 339 352 $21,272 $19,892 $ 845 $ 829 453 520 1,320 1,146 127 201 243 2,946 2,738 6,781 7,137 2,100 2,166 836 722 7 4,519 66 4,017 8,609 $21,272 7 4,496 60 2,566 7,129 $19,892 ............h......'M."\'I!"..~~I._, . -","'.«",w'", ',"'¡;¡", ~ .."".L\.·< '+">\if0:~,ts:i,'?,;";£iQ:~dtitÊ~ ' "",-.,,'9t.B0~!;, , t COLUMBIAlHCA HEAL THCARE CORPORA nON CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in millions) Common Stock Capital in Shares Par Excess of Retained (000) Value Par Value Other Earnings Total - Balances, December 31, 1993, as previously reported. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . 408,103 $4 $3,210 $58 $ 886 $4,158 Adjustment to give retroactive affect to the 3-for-2 stock split. . . . . . . . . . . . . . . . . . . . . . . 204,052 2 (2) - - Balances, December 31, 1993, adjusted. . . . , . . . 612,155 6 3,208 58 886 4,158 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814 814 Cash dividends . . . . . . . . . . . . , . . . . . . . , . . . . . . (42) (42) Issuance of common stock. , . . . . . . . . . . . . . . . 39,534 1 1,065 1,066 Stock options exercised, net . . . . . . . . . . . . . . . 2,847 46 (16) 30 Net unrealized losses on investment securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (30) Other .................................... 8,398 83 11 94 - - - Balances, December 31, 1994. . . . . . . . . . . . . .. . .. 662,934 7 4,402 23 1,658 6,090 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961 961 Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . (53) (53) Stock options exercised, net . . . . . . . . . . . . . . . 5,187 100 (7) 93 Net unrealized gains on investment securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 31 Other .................................... 607 (6) 13 7 - - - - Balances, December 31, 1995....... ..,........ 668,728 7 4,496 60 2,566 7,129 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,505 1,505 Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . (54) (54) Stock options exercised, net . . . . . . . . . . . . . . . 3,859 81 (5) 76 Net unrealized gains on investment securities. . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . 24 24 Other .................................... (1,088) (58) (13) (71) - - - - Balances, December 31, 1996. . . . . . . . . . . . . . . . . . 671,499 $7 $4,519 $66 $4,017 $8,609 - - - - - The accompanying notes are an integral part of the consolidated financial statements. 19 COLUMBIA/HCA HEAL THCARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in millions) Cash flows from operating activities: Net income........ .......,..................................... Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization. . . . . . . , . , , . . . . . . . . . . . . . . . . . . . Merger and facility consolidation costs. . , . . . . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt .. . . . . . . . . Increase (decrease) in cash from operating assets and liabilities: Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories and other assets .,......................... Income taxes ...,................,..................... Accounts payable and accrued expenses ................ Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . Net cash provided by operating activities. . . . ... . . . . . . . . Cash flows from investing activities: Purchase of property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of hospitals and health care entities. . . . . . . . . . . . . . . . . Investments in and advances to affiliates ,...................... Sale of assets ........."....................................... Purchase of investments. . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash acquired in Medical Care America, Inc. acquisitions ....... Acquisition of EPIC Holdings, Inc. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . Cash flows from financing activities: Issuance of long-term debt. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . Net change in commercial paper borrowings and lines of credit. . Repayment of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of cash dividends ..................................... Other . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash provided by (used in) financing activities. . . . .. Change in cash and cash equivalents. . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents at beginning of period ................... Cash and cash equivalents at end of period. . . . . . . . . , . . . . . . . . . . . . . . . . Interest payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax payments, net of refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The accompanying notes are an integral part of the consolidated financial statements 20 I , 1996 1995 1994 $ 1,505 $ 961 $ 814 1,155 981 804 (66) 302 95 170 187 (221) (198) (99) (29) (174) (80) 240 (121) 1 (100) 218 (67) 137 115 92 2,621 2,254 1,747 (1,400) (1,527) (1,206) (816) (1,556) ( 486) (61) (609) (6) 166 334 88 (159) (283) (226) 106 (221) 19 41 5 (2,251) (3,600) (1,946) 459 2,257 2,361 (579) 1,230 1,148 (303) (1,969) (3,724) (54) (50) (36) (12) 42 170 (489) 1,510 (81) (119) 164 (280) 232 68 348 $ 113 $ 232 $ 68 $ 499 $ 479 $ 404 709 748 508 I COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE I-ACCOUNTING POLICIES Reporting Entity Columbia/HCA Healthcare Corporation ("Columbia") (the "Company") is a Delaware corporation that operates hospitals and related healthcare entities through (i) wholly owned subsidiaries, (ii) joint ventures or (iii) ownership of interests in various partnerships in which subsidiaries of Columbia serve as the managing general partner. At December 31, 1996, Columbia owned and operated 319 hospitals, 132 free-standing surgery centers, more than 550 home health locations and numerous other facilities providing a variety of healthcare services. Columbia is also a partner in several 50/50 joint ventures that own and operate 24 hospitals and 4 free-standing surgery centers which are accounted for using the equity method. Columbia's facilities are located in 37 states, England and Switzerland. During April 1995, Columbia completed a merger transaction with Healthtrust, Inc.-The Hospital Company ("Healthtrust") (the "Healthtrust Merger"), See Note 2 for a description of the specific terms of the Healthtrust Merger. During September 1994, Columbia completed a merger transaction with Medical Care America, Inc. ("MCA") (the "MCA Merger"). See Note 2 for a description of the specific terms of the MCA Merger. During May 1994, Healthtrust completed a merger transaction with EPIC Holdings, Inc. ("EPIC") (the "EPIC Merger"). See Note 2 for a description of the specific terms of the EPIC Merger. During February 1994, Columbia Healthcare Corporation ("CHC") completed a merger transaction with HCA-Hospital Corporation of America ("HCA") (the "HCA Merger"), In connection with the transaction, CHC changed its name to Columbia/HCA Healthcare Corporation. See Note 2 for a description of the specific terms of the HCA Merger. Basis of Presentation The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include all subsidiaries and entities controlled by Columbia. Significant intercompany transactions have been eliminated. Investments in entities which Columbia does not control, but in which it has a substantial ownership interest and can exercise significant influence, are accounted for using the equity method. The MCA and EPIC Mergers and various other acquisitions and joint venture transactions have been accounted for under the purchase method. Accordingly, the accounts of these entities have been consolidated with those of Columbia for periods subsequent to the acquisition of controlling interest. The Healthtrust and HCA Mergers have been accounted for by the pooling-of-interests method. Accordingly, the consolidated financial statements give retroactive effect to these transactions and include the combined operations of Healthtrust, HCA and CHC for all periods presented. 21 - COLUMBIAlHCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE I-ACCOUNTING POLICIES (Continued) Revenues Columbia's healthcare facilities have entered into agreements with third-party payers, including government programs and managed care health plans, under which the facilities are paid based upon established charges, the cost of providing services, predetermined rates per diagnosis, fixed per diem rates or discounts from established charges. Revenues are recorded at estimated amounts due from patients and third-party payers for the healthcare services provided. Settlements under reimbursement agreements with third-party payers are estimated and recorded in the period the related services are rendered and are adjusted in future periods as final settlements are determined. The adjustments to estimated settlements for prior years are not considered material. The Company provides care without charge to patients who are financially unable to pay for hospital care. Because the Company does not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues or operating expenses. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with a maturity of three months or less when purchased. Carrying values of cash and cash equivalents approximate fair value due to the short-term nature of these instruments. Accounts Receivable Columbia receives payment for services rendered from federal and state agencies (under the Medicare, Medicaid and Champus programs), managed care health plans, commercial insurance companies, employers and patients. During the years ended December 31, 1996 and 1995, approximately 35% and 36%, respectively, of the Company's revenues related to patients participating in the Medicare programs. Columbia recognizes that revenues and receivables from government agencies are significant to the Company's operations, but Columbia does not believe that there are any significant credit risks associated with these government agencies. Columbia does not believe that there are any other significant concentrations of revenues from any particular payor that would subject the Company to any significant credit risks in the collection of its accounts receivable. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market. Long-lived Assets Property and Equipment Depreciation expense, computed by the straight-line method, was $989 million in 1996, $859 million in 1995 and $722 million in 1994. Buildings and improvements are depreciated over estimated useful lives ranging generally from 10 to 40 years. Estimated useful lives of equipment vary generally from 3 to 10 years, . 22 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE I-ACCOUNTING POLICIES (Continued) Intangible Assets Intangible assets consist primarily of costs in excess of the fair value of identifiable net assets of acquired entities and are amortized using the straight-line method generally over periods ranging from 30 to 40 years for hospital acquisitions and periods ranging from 5 to 20 years for physician practice, home health and clinic acquisitions. Noncompete agreements and debt issuance costs are amortized based upon the lives of the respective contracts or loans, When events, circumstances and operating results indicate that the carrying values of certain long-lived assets and the related identifiable intangible assets might be impaired, Columbia prepares projections of the undiscounted cash flows from operations expected to be generated by the identified assets. If the projections indicate that the recorded amounts are not expected to be recoverable, such amounts are reduced to estimated fair value, Professional Liability Insurance Claims Provisions for loss for professional liability risks are based upon actuarially determined estimates. To the extent that subsequent claims information varies from management's estimates, earnings are charged or credited. Minority Interests in Consolidated Entities The consolidated financial statements include all assets, liabilities, revenues and expenses of less than 100% owned entities controlled by Columbia. Accordingly, management has recorded minority interests in the earnings and equity of such entities, Columbia is a party to several partnership agreements which generally include provisions for the redemption of minority interests using specified valuation techniques. Earnings per Share Earnings per share is based upon the weighted average number of common shares outstanding adjusted for the dilutive effect of common stock equivalents, consisting primarily of stock options. Fully diluted earnings per share is not presented because such amounts approximate earnings per share, Stock Split A 3-for-2 stock split in the form of a stock dividend was distributed on October 15, 1996, to shareholders of record as of October 1, 1996, Retroactive recognition has been given to the stock split in the accompanying financial statements and notes, Reclassifications Certain prior year amounts have been reclassified to conform to the 1996 presentation. 23 ..- COLUMBIA/HCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 2-MERGERS Healthtrust Merger The Healthtrust Merger was consummated during April 1995. Healthtrust was one of the largest providers of healthcare services in the United States that owned and operated 117 acute care hospitals. In connection with the Healthtrust merger, all the outstanding shares of Healthtrust common stock were converted on a tax-free basis into approximately 120,617,700 shares of Columbia voting common stock. The Healthtrust Merger has been accounted for as a pooling of interests, and accordingly, the consolidated financial statements give retroactive effect to the Realthtrust Merger and include the combined operations of Columbia and Healthtrust for all periods presented. MCA Merger The MCA Merger was consummated during September 1994. MCA was a national provider of healthcare services through the operations of free-standing surgical facilities, In connection with the MCA Merger, all outstanding shares of MCA common stock were converted on a tax-free basis into approximately 31,640,400 shares of Columbia voting common stock. The aggregate purchase price was approximately $912 million, including transaction costs. The MCA Merger has been accounted for by the purchase method, and accordingly, the accounts of MCA have been consolidated with those of Columbia since September 1994. The excess of the aggregate purchase price over the estimated fair value of net assets acquired (including property and equipment of $217 million) approximated $903 million, EPIC Merger The EPIC Merger was completed during May 1994, EPIC was a health care services provider that owned and operated 32 general acute care hospitals. In connection with the EPIC Merger, Healthtrust paid approximately $266 million in cash, including transaction costs. In addition, Healthtrust assumed approximately $713 million of EPIC long-term debt, of which approximately $681 million was refinanced. The EPIC Merger has been accounted for under the purchase method, and accordingly, the accounts of EPIC have been consolidated with those of Columbia since May 1994. The excess of the aggregate purchase price over the estimated fair value of net assets acquired (including property and equipment of $516 million) approximated $577 million. HCA Merger The HCA Merger was completed during February 1994. In connection with the RCA Merger, CHC stockholders approved an amendment to CRC's Certificate of Incorporation changing the name of the corporation to "ColumbiaIHCA Healthcare Corporation". HCA was then merged into a wholly owned subsidiary of Columbia. Shares of HCA Class A voting common stock and Class B nonvoting common stock were converted on a tax-free basis into approximately 250,269,000 shares of Columbia voting common stock and approximately 28,485,000 shares of Columbia nonvoting common stock, respectively. The HCA Merger has been accounted for as a pooling of interests, and accordingly, the consolidated financial statements give retroactive effect to the HCA Merger and include the combined operations of CRC and RCA for all periods presented. 24 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 3-MERGER AND FACILITY CONSOLIDATION COSTS Columbia incurred merger and facility consolidation costs during 1995 and 1994. A description of these charges follows: 1995 In the second quarter of 1995, Columbia recorded the following pretax charges in connection with the Realthtrust Merger and certain facility consolidation costs (dollars in millions): Employee benefit and certain severance actions. . . . . . . . . . . . . . . . . . . . .. $ 46 Investment advisory and professional fees. . . .. . . ... ..... . .... . . . . . .. 14 Costs of information systems consolidations, primarily related to the write down of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . , , . . . 19 Other ................................................,............. 26 105 Writedown of assets in connection with consolidation of duplicative facilities and facility replacements ................................ 282 $387 1994 In the first quarter of 1994, the following pretax charges were recorded in connection with the RCA Merger (dollars in millions): Employee benefit and certain severance actions. . . . . . . . . . . . . . . . . . . . .. $ 40 Investment advisory and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Writedown of assets in connection with consolidation of duplicative facilities, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Costs of information systems consolidations, primarily related to the write down of assets. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . 42 Other .......................,...................................... 12 $159 NOTE 4-0THER BUSINESS COMBINATIONS During the past three years, Columbia has acquired various hospitals and related ancillary health care entities (or controlling interests in such entities), all of which have been accounted for by the purchase method. Accordingly, the aggregate price of these transactions has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed based upon their respective fair values. The consolidated financial statements include the accounts of acquired entities for periods subsequent to the respective acquisition dates, 25 ..... COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 4-0THER BUSINESS COMBINATIONS (Continued) The following is a summary of hospital and other healthcare entity acquisitions consummated during the last three years under the purchase method of accounting (excluding the MCA and EPIC Mergers) (dollars in millions): Number of hospitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of licensed beds. . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase price information: Hospitals: Fair value of assets acquired . . . . . . . . . , . . . . . Liabilities assumed ........................ Net assets acquired. . . . . . . . . , . . . . . . . . . . Net assets sold in exchange for acquired properties ............................... Contributions from minority partners. . . . , , . Other healthcare entities. , . . . . . . . . . . . . . . . . . . . . . Net cash paid..........,......... . 1996 1995 1994 - 14 2,652 29 12 5,647 3,065 $ 737 $1,812 $ 602 (103) (148) (63) --- 634 1,664 539 (133) 501 315 $ 816 (45) (124) 370 116 $ 486 (331) 1,333 223 - $1,556 - - - The purchase price paid in excess of the fair value of identifiable net assets of acquired entities aggregated $351 million in 1996, $641 million in 1995, and $234 million in 1994. The pro forma effect of these acquisitions on Columbia's results of operations for the periods prior to the respective consummation dates was not significant, NOTE 5-INCOME TAXES Provision for income taxes consists of the following (dollars in millions): Current: Federal ........................................ State. . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred: Federal ........................................ State, , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 1996 1995 1994 $ 829 $594 $447 149 106 83 - - 978 700 530 27 12 70 5 3 11 - - 32 15 81 - - $ 1,010 $715 $611 COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 5-INCOME TAXES (Continued) A reconciliation of the federal statutory rate to the effective income tax rate follows: 'I" Federal statutory rate . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . State income taxes, net of federal income tax benefit .. Non-deductible amortization of intangible assets. . . ... Other items, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effective income tax rate .........".................. 1996 1995 1994 35.0% 35.0% 35.0% 4,0 4.0 4.0 1.3 1.6 1.3 (0.2) (0.4) (0.6) - - - 40.1% 40.2% 39.7% A summary of the items comprising the deferred tax assets and liabilities at December 31 follows (dollars in millions): 1996 1995 Assets Liabilities Assets Liabilities Depreciation and fixed asset basis differences ............................. Professional liability risks. . . . . , . . . . . . . . . . . Doubtful accounts ........................ Compensation ... . . . . . . . . . . , . . . . . . . . . . . . . . Other .................................... $ 369 162 101 195 $ 827 $ 799 $ 794 $ 409 216 56 256 $937 329 - $1,128 261 $1,055 - -- Deferred income taxes of $415 million and $379 million at December 31, 1996 and 1995, respectively, are included in other current assets, Noncurrent deferred income taxes, included in deferred taxes and other liabilities, totaled $643 million and $570 million at December 31, 1996, and 1995, respectively. At December 31, 1996, federal and state net operating loss carryforwards (expiring in years 1997 through 2012) available to offset future taxable income approximated $92 million and $682 million, respectively. Utilization of net operating loss carryforwards in anyone year may be limited and, in certain cases, result in a reduction of intangible assets. Net deferred tax assets related to such carryforwards are not significant. Í" IRS Disputes Resolved During 1996 In February 1996, HCA and the Appeals Division of the Internal Revenue Service (the "IRS") filed a stipulation of settled issues with the United States Tax Court (the "Tax Court") which resolved the following disputed issues: the allocation of costs to identifiable intangibles with ascertainable useful lives and to goodwill in connection with hospitals acquired by HCA in 1981 and 1985, HCA's use of straight-line rather than accelerated depreciation to calculate its basis in the stock of certain subsidiaries sold to Healthtrust in 1987 and certain investment tax and foreign tax credits which the IRS had previously disallowed. In March 1996, the Tax Court ruled in Columbia's favor that the use of a method of accounting, based primarily on the cash method, by certain of HCA's subsidiaries for the years 1981-1986 clearly reflected income. The Small Business Job Protection Act of 1996, signed in August 1996, included a provision which upheld HCA's position with respect to certain expenses incurred in connection with HCA's 1989 leveraged buyout transaction which were deducted in the years 1989-1992 which the IRS had proposed to 27 1111""""'" COLUMBIAIHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 5-INCOME TAXES (Continued) capitalize. In September 1996, the Tax Court ruled in the IRS' favor with respect to the formula for calculating the tax reserve for doubtful accounts and in Columbia's favor with respect to the eligibility of certain receivables for the reserve method. In September 1996, the Tax Court also ruled in the IRS' favor with respect to the timing of the recognition of deferred income in connection with HCA's sale of certain subsidiaries to Healthtrust, In December 1996, the Tax Court ruled in HCA's favor with respect to the valuation of Healthtrust preferred stock and stock purchase warrants HCA received in connection with the sale of certain subsidiaries to Healthtrust in 1987, The Tax Court decisions may be appealed by the IRS or by Columbia once the disputes involving depreciable lives and deductibility of insurance premiums (as noted below) are resolved. As a result of these decisions, Columbia owed additional tax and interest of $249 million of which $87 million had been paid in prior years, Had the IRS prevailed on all these issues, Columbia/HCA would have owed additional income taxes and interest of approximately $1.6 billion. Pending IRS Disputes Columbia is currently contesting, before the Tax Court, the United States Court of Federal Claims and the IRS, certain claimed deficiencies and adjustments proposed by the IRS in connection with its examination of HCA's federal income tax returns for 1981 through 1992 and of Healthtrust's 1990 and 1991 federal income tax returns. The disputed items include the depreciable lives utilized by HCA for constructed hospital facilities, the disallowance of certain executive compensation which Healthtrust deducted in calculating taxable income for 1991, and the disallowance of certain stock option compensation which HCA deducted in calculating taxable income for 1992. If the IRS prevails on these issues, Columbia would owe additional income taxes and interest of $338 million through December 31, 1996. A Tax Court decision is expected in 1997 regarding HCA's claim that insurance premiums paid to its wholly-owned insurance subsidiary are deductible. Through December 31, 1996, Columbia is seeking a refund totaling $212 million. Management believes that HCA and Healthtrust properly reported income and paid taxes in accordance with applicable laws and agreements established with the IRS during previous examinations, and that final resolution of these disputes will not have a material adverse effect on the results of operations or financial position of Columbia. NOTE 6-PROFESSIONAL LIABILITY RISKS Provisions for professional liability risks, including expenses incident to claim settlements, were $233 million for 1996, $177 million for 1995 and $134 million for 1994. A substantial portion of professional liability risks is insured through a wholly owned insurance subsidiary of Columbia. Columbia paid premiums to the insurance subsidiary of $224 million in 1996, $270 million in 1995 (including $83 million related to prior years), and $253 million in 1994 (including $146 million related to prior years). Allowances for professional liability risks, included principally in deferred credits and other liabilities, were $1.2 billion at both December 31, 1996 and 1995. 28 COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 6-PROFESSIONAL LIABILITY RISKS (Continued) Investments of the insurance subsidiary are classified as available for sale per the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", Accordingly, stockholders' equity was increased by $24 million and $31 million in 1996 and 1995, respectively, and decreased by $30 million in 1994 to reflect the change in net unrealized holding gains and losses on securities classified as available for sale. A summary of the insurance subsidiary's investments at December 31 follows (dollars in millions): Available for sale: Fixed maturities: United States Government.......... ...... ............. States and municipalities .............................. Mortgage-backed securities. . . . . . . . . . . . . . , . . . . . . . . . . . . . . Corporate and other .......... "....................... Money market funds. . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redeemable preferred stocks .. . . . . . . . . , , . . . . . . . . . . . . . . . Equity securities: Perpetual rate preferred stocks. . . . . . . . . . . . . . . . . . . . . . . . . Common stocks . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts classified as current assets . . . . . . . . . . . . . . . . , , . . . . . . . . . . Investment carrying value... . . . . . . . .. . . . ,. . . .. . ... . . . . . .. . . ... . Available for sale: Fixed maturities: United States Government......".. ................... States and municipalities ................,............. Mortgage-backed securities. . . . . . . . , . . . . . . . . . . . . . . . . . . . . Corporate and other ................................... Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commercial paper .........................,........... Redeemable preferred stocks .............. . . . . . . . . . . . . . Equity securities: Perpetual rate preferred stocks. . . , . . . . . . . . . . . . . . . . . . . . . Common stocks . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . Amounts classified as current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment carrying value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Amortized Cost $ 28 462 131 126 86 24 - 857 10 308 - 318 - $1,175 - - Amortized Cost $ 23 434 103 62 195 81 35 933 - 8 185 - 193 $1,126 1996 Unrealized Amounts Gains Losses Fair Value $ - $ $ 28 11 (1) 472 1 (1) 131 2 128 86 24 14 (2) 869 83 83 $97 (11) (11) $(13) 10 380 - 390 - 1,259 (140) - $1,119 - Fair Value $ 1 $ - $ 24 16 450 2 (1) 104 2 64 195 81 35 21 (1) 953 9 209 - 218 - 1,171 (100) - $1,071 1995 Unrealized Amounts Gains Losses 1 30 31 $52 (6) (6) $ (7) ..... COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 6-PROFESSIONAL LIABILITY RISKS (Continued) The cost and estimated fair value of debt and equity securities at December 31, 1996 by contractual maturity are shown below (dollars in millions). Expected and contractual maturities may differ because the issuers of certain securities may have the right to prepay or otherwise redeem such obligations without penalty, Available for sale: Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Due after one year through five years. . . . . . . . . . . . . . . . Due after five years through ten years. . . , . . . . . . . . . . . Due after ten years ................................. Equity securities. . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . Amortized Fair Cost Value - $ 156 237 298 166 857 318 - $1,175 $ 157 239 304 169 - 869 390 - $1,259 -- -- The fair value of the subsidiary's investments is based generally on quoted market prices. The average maturity of the above investments (excluding common stocks) approximated 5 years at December 31, 1996 and the tax equivalent yield on such investments averaged 7% for 1996, 9% for 1995 and 8% for 1994. Tax equivalent yield is the rate earned on invested assets, excluding unrealized gains and losses, adjusted for the benefit of such investment income not being subject to taxation. Sales of securities for the years ended December 31 are summarized below (dollars in millions), The cost of securities sold is based on the specific identification method. Fixed maturities: Cash proceeds .................................... Gross realized gains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity securities: Cash proceeds .................................... Gross realized gains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross realized losses . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . 30 1996 1995 1994 $287 $427 $134 3 3 1 3 1 2 $135 $149 $ 98 27 33 16 13 8 5 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 7-LONG- TERM DEBT Capitalization A summary of long-term debt at December 31 follows (including related interest rates for 1996) (dollars in millions): Senior collateralized debt, 3.5% to 18% (rates generally fixed) payable in periodic installments through 2034 ......................................... Senior debt, 6.3% to 13,3% (rates generally fixed) payable in periodic installments through 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Senior debt (floating rates averaging 5.7%) payable in periodic installments through 1997 . , . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commercial paper (floating rates averaging 5.7%) ................,............ Commercial paper (rates generally fixed averaging 5.9%) ...................... Bank credit agreements................. .,................................... Bank line of credit (floating rates averaging 6.1%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Subordinated debt, 6.8% to 11.5% (rates generally fixed) payable in periodic installments through 2015 '" . .. . . . ... . . . . . . . . . . . . . ..,. . . . . . . . .. . . ..... . .... Total debt, average life of eleven years (rates averaging 7.1%) ................. Amounts due within one year. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1996 1995 - - $ 207 $ 203 4,104 3,774 115 270 2,102 2,607 200 300 56 130 49 124 121 - - 6,982 7,380 201 243 - - $6,781 $7,137 - - Credit Facilities Subsequent to December 31, 1996, Columbia amended its revolving credit agreements (the "Credit Facilities") from a $2.5 billion five-year revolving credit agreement and a $1.5 billion 364- day revolving credit agreement to a $2,0 billion five-year revolving credit agreement and a $2.0 billion 364-day revolving credit agreement, respectively. Borrowings under the 364-day revolving credit agreement do not mature until one year subsequent to the end of the 364-day period. The Credit Facilities support Columbia's commercial paper programs. As of December 31, 1996, Columbia had approximately $1.7 billion of credit available under the revolving credit agreements. Interest is payable generally at either LIBOR plus .115% to .35% (depending on Columbia's credit rating), the prime lending rate or a competitive bid rate. The Credit Facilities contain customary covenants which include (i) limitations on additional debt, (ii) limitations on sales of assets, mergers and changes of ownership and (iii) maintenance of certain interest coverage ratios. Significant Financing Activities 1996 During 1996, Columbia issued $100 million of 6.875% notes due 2001; $200 million of 7.25% notes due 2008 and $100 million of 7,75% debentures due 2036. 1995 In connection with the Healthtrust Merger, Columbia completed exchange offers for substantially all of Healthtrust's $1.0 billion subordinated notes and debentures. Columbia defeased the remaining $44 million of unexchanged subordinated notes and debentures, 31 ~ COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 7-LONG- TERM DEBT (Continued) Also during 1995, Columbia issued $150 million of 6,63% notes due 2002; $100 million of 6.73% notes due 2003; $125 million of 6.87% notes due 2003; $150 million of 8.7% notes due 2010; $150 million of 9.0% notes due 2014; $150 million of 7.19% debentures due 2015; $125 million of 7.58% debentures due 2025; $150 million of 7.05% debentures due 2027 and $200 million of 7.5% debentures due 2095. General Information Borrowings under the commercial paper programs are classified as long-term debt due to the credit available under the revolving credit agreements discussed above and management's intention to refinance these borrowings on a long-term basis. Maturities of long-term debt in years 1998 through 2001 are $126 million, $224 million, $417 million and $226 million, respectively. Such amounts do not include borrowings under the commercial paper program, all of which are classified as long-term based upon the maturities of the supporting revolving credit agreements. During 1995 and 1994, Columbia reduced interest costs and eliminated certain restrictive covenants by refinancing or prepaying high interest rate debt, primarily through the use of existing cash and cash equivalents and issuance of long-term debt, commercial paper and equity, Amounts refinanced or prepaid totaled $1.8 billion in 1995 and $2.2 billion in 1994. Mter tax losses from refinancing activities aggregated $103 million ($.15 per share) in 1995 and $115 million ($.18 per share) in 1994. The estimated fair value of Columbia's long-term debt was $7.3 billion and $7.7 billion at December 31, 1996 and 1995, respectively, compared to carrying amounts aggregating $7.0 billion and $7.4 billion, respectively. The estimate of fair value is based upon the quoted market prices for the same or similar issues of long-term debt with the same maturities. NOTE 8-CONTINGENCIES Management continually evaluates contingencies based upon the available information. Columbia and its subsidiaries are currently, and from time to time are expected to be, subject to claims and suits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of such pending legal proceedings will not have a material effect on Columbia's financial position or results of operations. Final determination of amounts earned under prospective payment and cost reimbursement activities is subject to review by the appropriate governmental authorities or their agents. In the opinion of management, adequate provisions have been made for any adjustments that could result from such reviews. 32 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 9-CAPITAL STOCK The terms and conditions associated with each class of Columbia common stock are substantially identical except for voting rights. All nonvoting common stockholders may convert their shares on a one-for-one basis into voting common stock, subject to certain limitations. In addition, certain voting common stockholders may convert their shares on a one-for-one basis into nonvoting common stock. Columbia has adopted a shareholder rights plan under which common stockholders have the right to purchase Series A Preferred Stock in the event of the accumulation of, or the receipt of tender offers for, certain designated percentages of Columbia's common stock. The rights will expire in 2003 unless redeemed earlier by Columbia. Columbia has authorized 25 million shares of preferred stock. No preferred shares have been issued. NOTE lO-STOCK BENEFIT PLANS The Company applies APB Opinion 25 and related interpretations in accounting for its stock benefit plans. In 1995, Statement of Financial Accounting Standards No. 123 "Accounting for Stock Based Compensation" ("SF AS 123") was issued and, if fully adopted, changes the method for recognition of costs on plans similar to those of Columbia. Columbia has adopted the disclosure-only provisions of SF AS 123. Accordingly, no compensation cost has been recognized for the Company's stock option plans. Had compensation cost for the stock option plans been determined based on the fair value at the grant date for awards in 1995 and 1996 consistent with the provisions of SF AS 123, the effect on net income and earnings per share would have been immaterial, and the effect is not expected to be material in future years. The Columbia/HCA Healthcare Corporation 1992 Stock and Incentive Plan is the primary plan under which options to purchase common stock may be granted to officers, employees, and directors. In May 1996, the stockholders approved an amendment to this plan which increased the number of options authorized to 60,000,000 of which 35,613,000 are available for grant at December 31, 1996. Under this plan, options are generally granted at no less than market price on the date of grant. Options are excercisable in whole or in part beginning two to five years after the grant and ending ten years after the grant. In the past, Columbia has had various plans under which options to purchase common stock may be granted to officers, employees, and directors, Generally, options have been granted at no less than the market price on the date of grant, Exercise provisions vary, but most options are exercisable in whole or in part beginning two to four years after the grant and ending four to fifteen years after grant. 33 COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) -- NOTE lO-STOCK BENEFIT PLANS (Continued) Information regarding these option plans for 1996, 1995, and 1994 are summarized below (share amounts in thousands): Balances, December 31, 1993 ......................... Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . Conversion ofMCA stock options...............,. Exercised .....................................,.. Cancelled ........................................ Balances, December 31, 1994 ......................... Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exercised ............................,.........., Cancelled ........................................ Balances, December 31, 1995 ..,...................... Granted. . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . , . . . . . . Exercised ........................................ Cancelled ........................................ Balances, December 31, 1996 ................",...... Stock Options 20,777 7,907 1,407 (2,882) (2,361) - 24,848 9,401 (5,484) (2,381) 26,384 10,446 (4,329) (3,034) - 29,467 - - Option Price per share $0.01 to $22.25 22.83 to 28.92 3.76 to 38.11 0.14 to 25,09 0.14 to 38,11 0.01 to 38.11 26.51 to 32.50 0.01 to 31.36 0.14 to 38.11 0.14 to 38.11 26.58 to 38.92 0.14 to 35.25 0.40 to 38.11 0.14 to 38.92 Weighted average fair value for options granted during the year... . . , .. . ... . . . Options exercisable . . . . . . . . . . . . . , . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Options available for grant ................................................... Weighted Average Exercise Price $15.29 27,39 10.81 22.86 19.87 37.13 13.27 26.87 26.23 1996 1995 - $13.47 $ 9.91 7,552 8,280 35,613 13,413 The following table summarizes information regarding the options outstanding at December 31, 1996: Options Outstanding Options Exercisable Weighted Average Weighted Weighted Number Remaining Average Number Average Range of Outstanding Contractual Exercise Exercisable Exercise Exercise Prices at 12/31/96 Life Price at 12/31/96 Price $ 4.89 to $22.60 ................ . 952 1 year $12.40 952 $12.40 3,26 to 20.12 .,........,...... 130 2 years 14.10 99 13.66 2.43 to 38,11 ................. 376 3 years 15.51 375 15.50 2.12 to 34.08 .............,... 253 4 years 16.28 236 16.08 4.02 to 35.25 ................ . 112 5 years 11.14 106 11.06 7.73 to 25.09 ................. 2,972 6 years 12.34 2,264 12.37 0.14 to 28.92 ................, 7,023 7 years 19.73 3,176 12,58 26.52 to 34,67 ................. 7,443 8 years 27.44 45 26.54 33.67 to 38.92 ................ . 9,862 9 years 37.15 0.14 to 12.86 ...,............. 344 14 years 6.87 299 5.96 - - 29,467 7,552 - Shares of common stock reserved for the Company's employee stock purchase plan were 10,773,000 at December 31, 1996. 34 .........., ¡ ~ COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE ll-EMPLOYEE BENEFIT PLANS Columbia maintains noncontributory defined contribution retirement plans covering substantially all employees. Benefits are determined as a percentage of a participant's earned income and are vested over specified periods of employee service. Retirement plan expense was $173 million for 1996, $110 million for 1995 and $107 million for 1994. Amounts approximately equal to retirement plan expense are funded annually. Columbia maintains various contributory benefit plans which are available to employees who meet certain minimum requirements. Certain of the plans require that Columbia match an amount ranging from 25% to 100% of a participant's contribution up to certain maximum levels. The cost of these plans totaled $20 million for 1996, $24 million for 1995 and $39 million for 1994. Columbia contributions are funded periodically during the year. NOTE 12-ACCRUED EXPENSES AND ALLOWANCES FOR DOUBTFUL ACCOUNTS A summary of other accrued expenses at December 31 follows (in millions): 1996 1995 - Worker's compensation......... .......................... Taxes other than income. . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . Professional liability risks ................................ Employee benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . Interest . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 114 193 240 206 213 354 $1,320 $ 130 226 115 185 199 291 $1,146 - - A summary of activity in the Company's allowances for doubtful accounts follows (in millions): Balances at Beginning of Period Additions Charged to Costs and Deductions Expenses or Payments Balance at End of Period Allowances for doubtful accounts: Year-ended December 31, 1994............ Year-ended December 31, 1995............ Year-ended December 31, 1996............ $ 907 1,054 1,171 $ 853 998 1,212 $(706) (881) (987) $1,054 1,171 1,396 35 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) NOTE 13-SUBSEQUENT EVENT Proposed Merger Transaction On January 15, 1997, Columbia entered into a definitive agreement to merge with Value Health, Inc, ("Value Health") in a tax-free stock-for-stock transaction. - Under the terms of the merger agreement, which was approved by the boards of both companies, Value Health stockholders would receive .58 of a share of Columbia common stock in exchange for each Value Health common share held. Columbia expects that the merger will be tax-free to Value Health stockholders and accounted for as a pooling of interests. It is also anticipated that the combined entity will continue Columbia's existing dividend policy of $.02 per common share. The proposed merger is subject to various conditions, including confirmation that the proposed merger qualifies as a pooling of interests for accounting purposes, expiration or termination of the waiting period applicable to the consummation of the merger under the Hart- Scott-Rodino Antitrust Improvements Act of 1976, and approval of the proposed transaction by the stockholders of Value Health. The combined entity will have annual revenues in excess of $21 billion. A proxy statement detailing the proposed merger will be distributed to the stockholders of Value Health, with the stockholder meeting to vote on the proposed merger expected to occur during the second quarter of 1997. If approved, the transaction should be completed shortly thereafter, 36 COLUMBIAlHCA HEAL THCARE CORPORATION QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) (Dollars in millions, except per share amounts) Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market prices (a): High .................................................... Low..................................................... Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income (loss): Before extraordinary charges (b) . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt ....... Net income (loss).. . , . . . . . .. . . . . ... . . . . . . . . . . . . . .... . Earnings (loss) per share: Before extraordinary charges (b) . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt ....... Net income (loss).... . .. . . . . . . . . ... . . . . . . .. . . . . . ... . . Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . Market prices (a): High..... ......... ................................. ..... Low.......................,............................. 1996 First Second Third Fourth - - - $4,951 $4,933 $4,887 $5,138 $ 416 $ 364 $ 311 $ 414 $ .61 $ ,54 $ .46 $ .61 $ .02 $ .02 $ .02 $ .02 $39.08 $38.17 $39.25 $41.88 33.42 32,92 31.67 34.50 1995 First Second Third Fourth - - - - $4,380 $4,361 $4,371 $4,583 $ 358 $ 78 $ 274 $ 354 (96) (7) - - - $ 358 $ (18) $ 267 $ 354 - - - - - - $ .53 $ .12 $ .40 $ ,53 (.14) (.01) - - - - $ .53 $ (.02) $ .39 $ .53 - - - - - $ ,02 $ .02 $ .02 $ .02 $29.50 $30.67 $33.25 $36,00 23.58 25.75 28.33 31.08 (a) Represents high and low sales prices of Columbia. Columbia common stock is traded on the New York Stock Exchange (ticker symbol COL). (b) Second quarter results include $235 million ($.35 per share) of costs related to the Healthtrust Merger and the consolidation of certain facilities, See Note 3 of the Notes to Consolidated Financial Statements. 37 It REPORT OF MANAGEMENT To Our Stockholders Management is responsible for the preparation, integrity and objectivity of the consolidated financial statements and related notes, To meet these responsibilities, management maintains a system of internal controls intended to insure that key employees adhere to the highest standards of personal and professional integrity. Although no cost effective internal control system will preclude all errors and irregularities, we believe the established system of internal controls provides reasonable assurance that the assets are safeguarded, transactions are recorded in accordance with management's policies and the financial information is reliable. The consolidated financial statements of Columbia/HCA Healthcare Corporation have been prepared in conformity with generally accepted accounting principles and include amounts based upon our best estimates and judgments. These financial statements have been audited and reported on by our independent auditors, Ernst & Young LLP, in accordance with generally accepted auditing standards. The Audit Committee of the Board of Directors, consisting entirely of outside directors, meets regularly with management, internal auditors and Ernst & Young LLP and reviews audit plans and results as well as management's actions taken in discharging responsibilities for accounting, financial reporting and internal control. Ernst & Young LLP and the internal auditors have direct and confidential access to the Audit Committee at all times to discuss the results of their examinations, ,ý ,~ c..~.~~ Kenneth C. Donahey -. Senior Vice President and Controller 38 Senior Officers Richard L, Scott Chairman of the Board and Chief Executive Officer David T. Vandewater President and Chief Operating Officer Stephen T, Braun Senior Vice President and General Counsel Victor L. Campbell Senior Vice President Richard E. Chapman Senior Vice President-Information Systems Kenneth C. Donahey Senior Vice President and Controller W. Leon Drennan Senior Vice President James M. Fleetwood, Jr, President-Florida Group Samuel A. Greco Senior Vice President-Financial Operations Jay Grinney President-Eastern Group Neil D. Hemphill Senior Vice President-Human Resources / Administration Jamie E. Hopping President-Western Group Frank M, Houser, M.D. President-Physician Management Services Daniel J. Moen President-Columbia Sponsored Networks Lindy B, Richardson Senior Vice President-Marketing / Public Affairs Richard A. Schweinhart Senior Vice President-Columbia Sponsored Networks James D. Shelton President-Central Group Donald E. Steen President-l nternational Group David R. White President-Mid-America Group Herbert Y. Wong Senior Vice President-Strategic Development Board of Directors Richard L. Scott Chairman of the Board and Chief Executive Officer, Columbia/HCA Healthcare Corporation Thomas F. Frist, Jr., M,D, Vice Chairman of the Board, Columbia/HCA Healthcare Corporation Magdalena Averhoff, M.D. Practicing Physician Sister Judith Ann Karam, CSA, R.Ph. Major Superior of the Sisters of Charity of St. Augustine T, Michael Long Partner, Brown Brothers Harriman & Co. (private banking firm) Donald S. MacNaughton Retired Chairman and Chief Executive Officer, Hospital Corporation of America, former Chairman and Chief Executive Officer, The Prudential Insurance Company of America R. Clayton McWhorter Chairman and Chief Executive Officer, Clayton Associates, L,L.C. Carl E. Reichardt Retired Chairman of the Board and Chief Executive Officer, Wells Fargo and Company Frank S. Royal, M.D. Practicing Physician William T. Young Chairman of the Board, W.T. Young, Inc. (warehouse company and horse farm) 39 REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders Columbia/HCA Healthcare Corporation We have audited the accompanying consolidated balance sheets of Columbia/HCA Healthcare Corporation as of December 31,1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion, In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Columbia/HCA Healthcare Corporation at December 31, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. ~.¡ hLLl' ERNST & YOUNG LLP Nashville, Tennessee February 7, 1997 40 Stockholder Information Corporate OffiCe: . Columbia I IiCA H.eálthcare Corporation One Park Plaza Nashville, Tennessee 37203 (615) 344-9551" . Annual MeetÎJ;tg: The Annual Meeting of Stockholders of Columbia/HCA Healthcare Corporation will be held May 15; 1997 at 1:30 p.m" Central Daylight,Time, at the' Opryland Hotel, 2800 Opryland'Drive, Nashville, Tennessee. Stock Listing: New York Stock Exchange Ticker symbol: COL' Stock Certificates aitd Dividends: . Questions concerning stock .certificåtes and . dividends should bè addressed to Columbia's transfer ~gent, National· City· Bank. Transfer Agent: National City Bank Shareholder .Services . Group P.,O. Box 92301 Cleveland, OH 44193-0900 (216) 476-8663 (800) 622-6757 . Additional Investor Information: Questions and requests for additional infor- mation from stockholders, security analysts, brokers and other investors should be ad- dressed to the Investor Relations Department at the Corporate Office. Investor Contact: Victor L, Campbell Senior VicePresideÍ1t (615) 344-1199 (615) 344-2266 (FAX) Form lOoK: A copy of Cölumbia's Annual Report on Form 10-K fUed with the SecQ,rities and Exchange Commissiòn can be obtained Jreeof charge from the Investor Relations Department at the Corporate Offi.ce. . - One day. 260 projects. 18,000 volunteers, 750,000 lives made brighter. With numbers like that, how could we consider last year's Columbia Community Day anything less than a: success? And hów could we not move forward with .,t··OMkÐC... · ..... .IO~ P¥. On October 18, 1997, . Columbia volunteers will once again repair homes for the disadvantaged and elderly, build playgrounds for kids, paint and refurbish community centers, stock food pantries and spend CCOWMBIAM . . this project, expanding on . Healthcare has never worked it, making it even better? like this before. http://www.columbia.net· the day working to make the communities we serve better places to live. What's our expected return on . investment. for this project?' Thousands of smiles that . will last 365 days. For móre òn Columbia in your community, look us up on the Internet or call1-800-COLUMBIA. " s E co e- o <0 8 -5 ~ ::r:: (5 ~ ",E E '" ð ""- 0\ ~ QJ __.",,,,,,,,,c_·', ,- ." -,- .,........, ·-···,~""·,·",,,·,,,.;,,,_·,,,,,;",,"·'_""'<I-_,,,,_,,,et""'_,,,,j'_·""''''i!<~,_t;.. 'f.. .~ I OCOWMBIA 1995 ANNUAL REPORT ColumbialHCA Healthcare Corporation is one of the largest health care services companies in the United States. As of February 29, 1996, the Company operated 343 hospitaJs, 135 outpatient surgery centers, 200 home health agencies and extensive outpatient and anciUary services in 38 states, the United Kingdom and Switzer- land. The terms "CoJumbialHCA" "CoJumbia" and the "Company" as used in this AnnuaJ Report refer to CoJumbialHCA HeaJthcare Corporation and its direct and indirect subsidiaries and affiliated partnerships, unless otherwise stated or indicated by context. A copy of Columbia's Annual Report on Form lO-K filed with the Securities and Exchange Commission can be obtained free of charge from the Investor Relations Department. Columbia's Mission The mission of Columbia is to work with our employ- ees, physicians and volunteers to provide a continuum of quality healthcare, cost-effectively for the peopJe in the communities we serve. Columbia's Vision Our vision is for Columbia to work with empJoyees and physicians to build a company that is focused on the weJl-being of people, that is patient'oriented, that offers the most advanced technology and information systems, that is financiaJly sound, and that is synonymous with quaJity, cost, effective health care. Stock Information and Dividends The Company's Common Stock is traded on the New York Stock Exchange (the "NYSE") (symbol "COL"). The table below sets forth, for the calendar quarters indicated, the high and low sales prices per share reported on the NYSE Composite Tape for the Company's Common Stock. High - Low - 1994: First Quarter. . . . . . . . . . . Second Quarter. . . . . . . . . Third Quarter .... Fourth Quarter. . . . . . . . . $45.25 43.00 44.00 43.75 $33.25 36.50 38.25 33.50 1995: First Quarter. . . . . . . . . . . Second Quarter. . . . . . . . . Third Quarter .......... Fourth Quarter . . , , . . , , . 44.25 46,00 49,88 54.00 35.38 38.63 42.50 46.63 At the close of business on March 15, 1996, there were approximately 18,900 holders of record of the Company's Common Stock and one holder of record of the Company's Nonvoting Common Stock. The Company currentJy pays a regular quarterJy div- idend of $.03 per share. While it is the present intention of the Company's Board of Directors to continue paying a quarterly dividend of $,03 per share, the declaration and payment of future dividends by the Company will depend upon many factors, including the Company's earnings, fi, nancial condition, business needs, capital and surplus and regulatory considerations. --- About this Annual Report In 1995, we reinvested $1.5 billion in our facilities to enable employees and physicians to provide the quality patient care that individuals in our communities need and should receive, We incorporate this operating philosophy into all facets of our workplace. As a result, our annual report has been scaled back tremendously so that we can direct even more funds into patient care, reinforcing our ability to provide quality patient care. FINANCIAL HIGHLIGHTS FOR THE YEARS ENDED DECEMBER 31 (Dollars in millions, except per share amounts) 1995 Results of Operations Revenues . . . . , , , , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . , . " $ EBDITA (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ Net income: Excluding merger and facility consolidation costs and extraordinary charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ Merger and facility consolidation costs ................ Extraordinary charges on extinguishments of debt. . . . . Net income............................. . . . ... . . ,. $ Earnings per common and common equivalent share: Excluding merger and facility consolidation costs and extraordinary charges . . . . . . . . . , . . . . . . . . , . . , . . . . . . . . . . Merger and facility consolidation costs .......",...". Extraordinary charges on extinguishments of debt. . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Position Working capital. . . . . . , . , , . . , , . . , , . , . , . , . . . , , . , . , . , . , , , . . . , Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . , , . . . . . . . . , , , . . . . . . . Long-term debt . . . . . , , , . . . , . , , . . . . , . , , , , , . . . . . . . , . , , . . , , . , Minority interests in equity of consolidated entities . . . . . . . . Stockholders' equity. . . . . . . . . . , , . . . . . , . , . , . , . , . , . . . . . . . . . . . Ratio of debt to debt plus common and minority equity. . . . . 1994 Change 17,695 $ 3,720 $ 14,543 2,930 +21. 7% +27.0% 1,299 $ (235) (103) 961 $ 1,031 (102) (115) 814 +26.0% +17.9% $ 2.90 $ 2.40 +20.8% (0.53) (0.24) (0.23) (0.27) $ 2.14 $ 1.89 +13.2% -- $ 1,462 $ 1,092 +33.9% $ 19,892 $ 16,278 +22.2% $ 7,137 $ 5,548 +28.6% $ 722 $ 278 +159.4% $ 7,129 $ 6,090 +17.1% 48.5% 47.1% 319 311 +2.6% 61,347 59,595 +2.9% 61,617 57,517 +7.1% 25,917 23,841 +8.7% 1,774,800 1,565,500 + 13.4% 36.0% 31.9% 240,000 213,000 + 12. 7% 445,818,700 441,956,300 +0.9% Other Data (b) Number of hospitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . , . . . . Licensed beds. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average licensed beds. . . . . . . . . . . . . . . . . . . . . , . . . . . Average daily census. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of admissions ........,.................,."..".. Outpatient revenues as a percentage of total patient revenues ......................................,..,..." Number of employees (c) . . . . . . , , , , . , . , . . . . , , , , , . , . , , , . . . . , Common shares outstanding ....."...,....".".......... (a) Income from continuing operations before merger and facility consolidation costs, depreciation, interest, minority interests, income taxes and amortization. (b) Excludes 19 hospitals at December 31, 1995 and 2 hospitals at December 31, 1994 which are accounted for using the equity method. Columbia is generally a 50% owner in the entities which own and operate these hospitals. (c) Includes both full-time and part-time employees. 1 To Columbia Stockholders and Employees: When we started Columbia in 1987, the most frequently asked question was why were we entering the healthcare field. In 1987, hospitals were struggling and many experts predicted a future of limited growth and profitability. Our vision of the future, however, was quite different. We saw the opportunity for improving the quality of patient care, while controlling spiraling healthcare costs. To seize this opportunity, we dedicated our efforts to building an organization that would apply time-tested business principles to the delivery of healthcare services. Eight years later, Columbia's assets have grown to nearly $20 billion. Our 240,000 employees work closely with approximately 75,000 physicians to meet the healthcare needs of 90,000 patients every day, The point is not that the experts were wrong-actually, had the healthcare delivery system remained unchanged, their gloomy predictions may have been accurate. Columbia's vision and the effort to make that vision a reality have contributed to a vastly different future than the one predicted in 1987. In 1995, we believe that no other organization made more positive contributions to healthcare delivery than Columbia, We are focused on establishing new and higher standards for patient satisfaction, patient outcomes, and the efficiency of healthcare delivery. This approach and these principles will be the fuel for Columbia's future success. Columbia's innovations are led by its employees who own more than 15% of Columbia's out- standing common shares and who purchased more than $45 million of Columbia stock in 1995. As a result of their efforts, our Company's accomplishments were significant in 1995. By all mea- sures, 1995 proved to be a watershed year for Columbia's patients, employees and stockholders - a year of transition and a year for building a foundation to accommodate our significant growth. Patients, employers and other payors will select physicians, hospitals, psychiatric centers, outpatient centers and home health programs that they know consistently deliver cost-effective, quality services. We are determined to more effectively measure the quality of our services, to develop new methods of increasing our efficiency, and to communicate our progress to the people who select, buy and use healthcare. Further, we will market health services under the Columbia brand. We will eagerly strive to build a household name to be synonymous with quality patient care, both nationally and locally. We will streamline our operations to sell and deliver emergency, home health, surgery, cardiology, maternity and other services with a high degree of consistency and quality. These changes keep us on the leading edge of healthcare, and because we involve employees, physicians, patients and payors in our decisions, we believe we will stay on course. Our success will translate into better patient outcomes, greater patient satisfaction and a more efficient health care system for everyone. Through change, we are helping to create a new future-not just for our Company-but for everyone who uses the healthcare system. Accomplishments of 1995 Columbia's 1995 financial results speak for themselves - we had a tremendous year. Excluding merger and facility consolidation costs and extraordinary charges: · Earnings per share - $2.90, up 21% · Net revenues - $17.7 billion, up 22% · Earnings before depreciation, interest, minority interests, income taxes and amortization - $3.7 billion, up 27% · Net income - $1.3 billion, up 26% Columbia's performance was recognized by the stock market, which rewarded our stockholders in 1995 with a 39% increase in the stock price, Business Week magazine ranked Columbia as the 44th largest company as measured by market capitalization -up from number 53 in 1994 - in the magazine's annual review of United States corporations. The bond market recognized the Company's strong performance as Columbia was the fourth United States company in 40 years to issue 100-year debentures. 2 - Healthtrust Merger Adds 119 Hospitals In April 1995, Columbia completed the acquisition of Healthtrust, Inc. - The Hospital Company, adding 119 hospitals to the Columbia system and widening the range of our urban/suburban healthcare networks with its mostly rural hospitals. Clayton McWhorter, Healthtrust's President and Chief Executive Officer, became Chairman of Columbia's Board of Directors. Mter serving for nearly a year, Clayton announced his retirement as Chairman effective May 9, 1996, having guided us through a year of transition and success. We are pleased that Clayton will remain on our Board of Directors. Comprehensive Services Broadened Significantly Columbia's networks were expanded significantly in 1995, particularly among non-hospital sectors of the healthcare continuum. The additions include home health agencies and units previously operated by Healthtrust. Home Health Agencies . . . . . . . . . , . . . . . . . . , , . . . . . , , . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . Skilled Nursing Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . , . . . , , . . . , . , , . , . . , . . , . , . . , Ambulatory Surgery Centers ,.".,.....,...........................,..,........... Psychiatric Units ...........................,....,.,..,..,...,."....,..,...,...., Rehabilitation Units .,..",...",............................,.,.,................ Comprehensive Outpatient Rehabilitation Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Added '95 Total 139 200 102 156 14 135 36 117 20 60 13 17 lJnitedKingdnrn o Ho,\]Jitals total 343 · Ambulatory Surgery Centers total 135 · Home Health Agencies total 200 As (~lf'ebnl(/ry /9% , "":'> . 3 Inpatient and Outpatient Volumes Increase While admissions to many hospitals in the United States declined in 1995, admissions to Columbia hospitals grew by 5% and hospital net revenues grew by 10%, excluding new acquisi- tions. While this growth in admissions is an indicator of Columbia's good health, we are proud of other trends as well. One particular achievement was the increase in outpatient revenues from 32% of our total revenues in 1994, to 36% in 1995. When Columbia acquired Medical Care America, Inc. in 1994, we became the nation's largest provider of outpatient services. Columbia also expanded its presence in home health in 1995. The Columbia Homecare Group is one of the fastest growing sectors in our Company. Columbia is already the largest provider of in-home healthcare services in the nation, a complement to our strategy of operating fully-integrated healthcare delivery systems. Nationwide, Columbia is estab- lishing local networks of physicians, hospitals, psychiatric centers, outpatient centers and home health programs. These networks have become new comprehensive healthcare product lines to offer to insurers, employers, Medicare, Medicaid and other purchasers of health care services, They simplify the healthcare delivery process for patients. Our networks are setting the quality and cost-effective standard that other health care systems must follow in order to compete. Vision and Humanity In An Age of Change Most of the successes Columbia employees recorded in 1995 can be found in personal, indi- vidual stories that most of us will never hear. In Oklahoma City, for instance, after the bombing of the federal building in April 1995, nurses, physicians and technicians at our Presbyterian Hos- pital worked around the clock to offer medical and human support to victims and their families. Nurses, physicians and employees from other Columbia hospitals travelled to Oklahoma City to help meet the overwhelming needs of the community, Our employees are the best in the world, committing themselves around the clock to the care of patients in each of our facilities and in the patient's home. Healthcare will never move away from the skillful, heroic people who deliver care. Everything else in healthcare is changing. New technology allows more surgery to take place outside the traditional hospital setting; employers are increasing their pressure to reduce healthcare costs; many hospitals are in financial trouble due to declining occupancy rates; and the government is redesigning Medicare and Medicaid to reflect proven methods for reducing costs in the private sector. Many providers have not adjusted to the turmoil caused by the evolution of the healthcare system, By contrast, we view change as a facilitator. It allows an organization like Columbia to introduce new ideas rapidly and with success, We have discovered that the best way to prosper in a fluid market is to implement change quickly within the framework of a central vision. As a result, we are finding new ways of providing cost-effective, quality patient care to individuals in our communities. As with the efforts of our employees in Oklahoma City and throughout the Columbia system, many of our accomplishments are not apparent in the accompanying financial statements. In- stead, they are the reasons for our financial performance in 1995 and the roots for successes to come. Focus on Excellence Columbia is focused on quality and excellence. Thirty Columbia hospitals were listed among the nation's top 100 hospitals in a study published by HCIA, Inc. and Mercer Healthcare, The Gallup Organization, which performs patient satisfaction surveys nationwide, found that our hos- pitals have a 94% patient satisfaction rate. The Joint Commission for the Accreditation of Healthcare Organizations recognized our hospitals for their emphasis on delivering quality patient care. Of the Columbia hospitals surveyed by the JCAHO in 1995, 43 percent received 4 ~ "accreditation with commendation"-the organization's recognition for high levels of achievement in quality. Only 12 percent of all hospitals surveyed in 1995 received this recognition, The Colum- bia Surgery Group was recognized as one of only two healthcare organizations awarded a site visit by the Malcolm Baldrige Awards Committee. What makes Columbia different? We have created a framework and atmosphere in which our employees and associated physicians can work together to improve the quality of care. Columbia's strategy is to create networks of physicians, hospitals, outpatient centers, rehabilitation centers, psychiatric centers, home health and other providers, working together as a single, local team. We are removing much of the waste and overlap in healthcare and have created a community of physicians and healthcare employees who can share real-time medical information about a patient throughout the local healthcare system. In addition, we have initiated efforts for determining best practices for specific types of pro- grams and clinical procedures - information that again can be shared among the Columbia sys- tem providers. For instance, in our Cardiology and Orthopedic Excellence programs, cardiologists and orthopedic surgeons are working directly with Columbia purchasing and clinical information personnel, along with manufacturers of surgical tools, implants and other supplies, The teams are establishing clinical pathways for specific procedures which may lead to new designs for surgical supplies and methods for improving patient outcomes and reducing the overall cost of a given procedure. The results of these programs will be shared among Columbia physicians and employ- ees. Our resources for research and sharing are immense. Not only do we have one of the nation's largest databases of inpatient and outpatient medical information, but many well-known and highly respected hospitals, along with their employees and associated physicians, are members of the Columbia system. Our resources now include: Tulane University Hospital's teaching and re- search program; nationally renowned heart programs at St. Vincent's Charity Hospital in Cleve- land, OH, Providence Hospital in Columbia, SC, Columbia Audubon Regional Medical Center in Louisville, KY, Columbia Miami Heart Institute in Miami Beach, FL and Columbia JFK Medical Center in Atlantis, FL; the cancer program at Centennial Medical Center in Nashville, TN; and the nationally respected orthopedic program at Columbia Hughston Sports Medicine Clinic in Columbus, GA. Through the sharing of information among our more than 340 hospitals, a hospital in California can benefit from "best practices" demonstrated at The Wellington Hospital in Lon- don. We are measuring patient outcomes and using this information to find cost-effective ways to improve the lives of patients after they leave the hospital or the care of their physician. Costs for employers, insurers, governments and individuals will continue to fall. Universities will use the best practices information in the classroom to teach new physicians and nurses the most effective procedures and cures. We are building bridges, connecting the expanse of healthcare providers across the nation so that the best will make all others better. Community Contributions In 1995, Columbia acquired or joint-ventured with 32 tax-exempt hospitals, Many new mem- bers to the Columbia family have a rich history in the markets they serve, such as Methodist Hospital in San Antonio, Tulane University Hospital in New Orleans, HealthOne in Denver and Sisters of Charity of St. Augustine in Ohio and South Carolina. Such additions expand our ability to serve a geographic region, help us connect local or state-wide healthcare networks and often provide us with instant goodwill and marketshare. Generally, when we purchase the hospital assets of a tax-exempt organization, the funds from the transaction retire the hospital's debt and the remainder is directed into a community founda- 5 tion. The joint venture with Sisters of Charity of St. Augustine, for instance, has added more than $130 million to several new and existing Catholic foundations. In recent years, funds generated from transactions with Columbia have helped create $1.5 billion in private community founda- tions. Meanwhile, the hospitals under Columbia's management continue to provide vital, quality and life giving services to their communities, meeting an individual's needs regardless of his or her ability to pay. Columbia provided more than $1.2 billion in charity and uncompensated care in 1995, and paid more than $1.6 billion in local, state and federal taxes. The foundations created through the purchase of, or joint-venture with, tax-exempt facilities are contributing a wealth of new benefits to the communities Columbia now serves. The Rapides Foundation in Alexandria, LA has funded a medical education program that will help locate more primary care physicians to medically under-served areas of the state. The Seacoast Health Foun- dation in Portsmouth, New Hampshire has established a youth foundation, assisted a program for patients with Alzheimer's Disease, and funded dental, medical and mental health services for local AIDS patients. The Kansas Health Foundation in Wichita, KS has helped fund school health programs for children, underwrite medical education and research programs at local universities and bolster the local health department in periods of shortfall. Columbia Enters the Information Superhighway Columbia has made significant progress toward our goal of becoming the most complete and useful source of health care information in the world. We launched Columbia One Source magazine in 1995. Reaching more than 4 million homes every quarter, One Source is the most widely circu- lated health magazine in the country. In 1995, we also created an Internet home page for Colum- bia, and by the second quarter of 1996, each of our hospitals will have their own home page. The on-line, interactive physician chats we host are well attended, as are our KidsChats with pedia- tricians. Soon, through the Internet, consumers will be able to reach Columbia's national referral center to select a physician. While we are providing useful information about prevention and medical care on the Internet, we see this as just the beginning. We believe that physicians, nurses and patients will all commu- nicate more effectively and immediately through the use of computers. In the not too distant future, home and office computers will monitor a person's blood pressure and pulse rate, and if there is any reason for concern, a healthcare professional will be notified. Physicians will be able to monitor the progress of in-home patients on a daily, real-time basis. Family members will be able to talk directly with a physician or set up an appointment through a television that has a built-in computer and video camera. Individuals will carry their medical records stored in a card they can swipe down the side of their TV/computer, enabling physicians and nurses to provide at- home diagnoses for patients. These advancements are not idle dreams-Columbia is actively en- gaged in programs that will make these conveniences, quality enhancements and cost-reduction efforts a reality. Challenges for the Future Healthcare will continue to evolve rapidly. Columbia will continue to be at the forefront of change because we have built a foundation upon which we can direct the changes needed to con- tinually improve the way in which healthcare is delivered. Columbia employees share this vision and have embraced a flexible approach to our changing environment. We understand what must be done in healthcare and are committed to making the vision a reality. Columbia's name is associated with quality and efficiency, and this association will continue to grow. In 1996, we will again expand through acquisitions and joint ventures in order to more effectively meet the needs of communities we serve and to enter new communities. We will con- 6 I I I ¡ L I tinue to take advantage of economies of scale to reduce costs. We will actively seek new and different opportunities to improve the quality of the services we provide and to reduce costs. In 1996, you will also see the Columbia name prominently associated with each of our facilities. We will strive to increase our recognition and gain from the goodwill associated with our solid repu- tation for quality and efficiency. We will not rely upon our reputation alone. We will do even more to inform patients, physicians, insurers and the public about our capabilities and our progress. We will continue improving the quality and scope of information available over the Internet. We will open our new national physician referral center to help patients contact a local physician to fit their needs just by dialing I-800-Columbia, We will continue working closely with physicians to provide the highest quality, most cost-efficient care in the communities we serve. Over the last eight years, Columbia has made many positive changes in the delivery of healthcare. With the consistent focus and dedication of employees, associated physicians and friends-such as volunteers and members of the National Association of Senior Friends affiliated with Columbia-we are positioned to continue leading the charge for quality care and reduced healthcare costs. In this way, we will contribute to better lives for patients, greater personal satisfaction for employees and physicians, and improved healthcare for all the communities we serve. ~~LO l (~ Richard L. Scott President and Chief Executive Officer 7 COLUMBIA/HCA HEALTHCARE CORPORATION SELECTED FINANCIAL DATA AS OF AND FOR THE YEARS ENDED DECEMBER 31 (Dollars in millions, except per share amounts) Summary of Operations: Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salaries and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization ................................ Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment income............................................ Merger, facility consolidation and other costs. . . . . . . . . . . . . . . . . . Income from continuing operations before minority interests and income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests in earnings of consolidated entities....,..". Income from continuing operations before income taxes . . . . . . . , Provision for income taxes .................................... Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations: Income (loss) from operations of discontinued health plan segment, net of income tax (benefit) . . . . . . . . . . . . . . . . . . Costs associated with discontinuance of health plan segment, net of income tax benefit ....................... . Extraordinary charges on extinguishments of debt, net of income tax benefits ................ . . . . . . . . . . . . . . . . . . . . . . . . . Cumulative effect on prior years of a change in accounting for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income............................................. $ Earnings per common and common equivalent share(a): Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . .. $ Discontinued operations: Income (loss) from operations of discontinued health plan segment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs associated with discontinuance of health plan segment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt. . . . . . . . . . . Cumulative effect on prior years of a change in accounting for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income............................................. $ 1995 $ 17,695 7,101 2,558 3,418 998 981 460 (100) 387 15,803 1,892 113 1,779 715 1,064 (103) 961 $ 2.37 $ (.23) 2.14 $ 1994 $ 14,543 5,963 2,144 2,722 853 804 387 (69) 159 12,963 1,580 40 1,540 611 929 (115) 814 $ 2.16 $ (.27) 1.89 $ 1993 $ 12,678 5,202 2,015 2,351 699 689 415 (74) 151 11,448 1,230 18 1,212 492 720 (97) 639 $ 1.75 $ .04 (.24) 1.55 $ 1992 $ 12,226 $ 5,062 1,948 2,292 652 670 506 (88) 532 11,574 652 25 627 334 293 16 (108) (17) (23) 51 196 $ 1991 11,722 4,924 1,774 2,153 638 647 748 (83) 521 11,322 400 24 376 158 218 16 (114) 120 .59 .05 (.34) .30 Shares used in computing earnings per common and common equivalent share (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash provided by continuing operations. . . . . . . . . . . . . . . . . . . . Financial Position: Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Working capital .............................................. Net assets of discontinued operations. . . . . . . . . . . , . . . . . . . . . . . . . . Long,term debt, including amounts due within one year ....... Minority interests in equity of consolidated entities. . . . . . . . . . . . Stockholders' equity ...................,...................... Operating Data: .Numberofhospitalsatendofperiod......................... 319 311 274 281 301 Number of licensed beds at end of period ...................... 61,347 59,595 53,245 53,457 54,616 Weighted average licensed beds............................... 61,617 57,517 53,247 51,955 54,072 Average daily census. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . 25,917 23,841 22,973 23,569 25,819 Occupancy.................................................... 42% 41% 43% 45% 48% Admissions. . .. . . . . . . ... . . . . . ........ .. . . . . . . ........ .. . ...... 1,774,800 1,565,500 1,451,000 1,448,000 1,486,200 Average length of stay (days). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 5.3 5.6 5.8 6.0 6.3 (a) Earnings per common and common equivalent share include the effect of preferred stock dividend requirements totaling $18 million in 1991. 448,714 429,295 $ 2,254 $ 1,747 $ 19,892 $ 16,278 1,462 1,092 8 7,380 722 7,129 5,672 278 6,090 413,036 $ 1,585 $ 12,685 835 4,682 67 4,158 .75 $ (.27) (.05) (.06) .13 .50 $ 394,378 $ 1,776 $ 12,773 899 376 4,735 51 4,241 334,676 $ 1,607 $ 13,081 917 411 6,380 44 3,219 COLUMBIA/HCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Selected Financial Data and the accompanying consolidated financial statements set forth certain information with respect to the financial position, results of operations and cash flows of Columbia/HCA Healthcare Corporation ("Columbia/HCA") which should be read in con- junction with the following discussion and analysis. Background Information and Business Strategy Healthtrust Merger In April 1995, Columbia/HCA completed a merger transaction with Healthtrust, Inc. - The Hospital Company ("Healthtrust") (the "HeaIthtrust Merger"), At the time of the Healthtrust Merger, Healthtrust operated 117 hospitals (excluding 2 hospitals which are accounted for using the equity method) and certain other ancillary health care facilities located in twenty-two states with annual revenues approximating $3.4 billion. For accounting purposes, the HeaIthtrust Merger was treated as a pooling of interests. Accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis give retroactive effect to the HeaIthtrust Merger and include the combined operations of Columbia/HCA and HeaIthtrust for all periods presented. MCA Merger In September 1994, Columbia/HCA completed a merger transaction with Medical Care Amer- ica, Inc. ("MCA") (the "MCA Merger"). MCA was a national provider of alternative-site health care services through the operation of free-standing surgical centers and certain other outpatient an- cillary facilities located in twenty-six states with annual revenues in excess of $400 million, The MCA Merger was accounted for under the purchase method, and accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this dis- cussion and analysis include the operations of MCA since September 1, 1994. EPIC Merger Prior to the merger with Columbia/HCA, Healthtrust completed a merger transaction with EPIC Holdings, Inc. ("EPIC") (the "EPIC Merger") in May 1994. EPIC was a health care services provider that owned and operated 32 general acute care hospitals with annual revenues in excess of $1 billion. The EPIC Merger was accounted for under the purchase method, and accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis include the operations of EPIC since May 1, 1994, HCA Merger Columbia HeaIthcare Corporation ("Columbia") completed a merger transaction with HCA- Hospital Corporation of America ("HCA") (the "HCA Merger") in February 1994. At the time of the HCA Merger, HCA operated 97 hospitals located in twenty-one states with annual revenues in excess of $5 billion. For accounting purposes, the HCA Merger was treated as a pooling of interests. Accordingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis give retroactive effect to the HCA Merger and include the combined operations of Columbia and HCA for all periods presented. Galen Merger In September 1993, Columbia Hospital Corporation ("CHC") completed a merger transaction with Galen Health Care, Inc. ("Galen") (the "Galen Merger") to form Columbia. At the time of the 9 ... COLUMBIAIHCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Background Information and Business Strategy (Continued) Galen Merger, CHC operated 22 hospitals and certain ancillary health care facilities in five major markets located in Florida and Texas. Annual revenues of CHC were in excess of $1 billion. Galen operated 71 hospitals located in eighteen states and two foreign countries with annual revenues of approximately $4 billion. The Galen Merger was accounted for as a pooling of interests. Accord- ingly, the accompanying consolidated financial statements and selected financial and operating data included in this discussion and analysis give retroactive effect to the Galen Merger and include the combined operations of CHC and Galen for all periods presented. Spinoff Transaction Prior to the merger with CHC, Galen became a publicly held corporation on March 1, 1993 as a result of a tax-free spinoff transaction (the "Spinoff') by Humana Inc. ("Humana"). The Spinoff separated Humana's previously integrated hospital and managed care health plan businesses and was effected through the distribution of Galen common stock to then current Humana common stockholders on a one-for-one basis. For accounting purposes, because of the relative significance of the hospital business, the pre-Spinoff financial statements of Galen (and now those of ColumbiaIHCA) include the separate results of Humana's hospital business, while the operating results and net assets of Humana's managed care health plans have been classified as discontin- ued operations. Business Strategy ColumbiaIHCA's business strategy centers on working with physicians and other health care providers to develop comprehensive, integrated health care delivery networks in targeted markets. This strategy typically involves significant health care facility acquisition and consolidation activities. During the past several years, hospital industry inpatient admission trends have been adversely impacted by cost containment efforts initiated by federal and state governments and various third-party payers, including health maintenance organizations, preferred provider orga- nizations, commercial insurance companies and employer-sponsored networks. In addition, a sig- nificant number of medical procedures have shifted from inpatient to less expensive outpatient settings as a result of both cost containment pressures and advances in medical technology. In response to changes in the health care industry, ColumbiaIHCA has developed the follow- ing strategy to provide the highest quality health care services at the lowest possible cost: Deliver high quality services - Through the use of clinical information systems and continu- ous quality enhancement programs, ColumbiaIHCA focuses on patient outcomes and strives to continuously improve the quality of care and service provided to patients. Become a significant provider of services - ColumbiaIHCA attempts to (i) consolidate services to reduce costs and (ii) develop the geographic coverage necessary for inclusion in managed care and employer-sponsored networks in each market. Provide a comprehensive range of services - In addition to the operation of general, acute care hospitals, ColumbiaIHCA also operates psychiatric and rehabilitation facilities, outpatient sur- gery and diagnostic centers, home health agencies and other services. This strategy enables ColumbiaIHCA to attract business from managed care plans and major employers seeking effi- cient access to a wide array of health care services. 10 COLUMBIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Results of Operations The following is a summary of continuing operations (dol1ars III millions, except per share amounts). 1995 1994 1993 Amount Ratio Amount Ratio Amount Ratio Revenues. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . $17,695 100,0 $14,543 100.0 $12,678 100,0 - - - Salaries and benefits ............................... . 7,101 40,1 5,963 41.0 5,202 41.0 Supplies. . . . . , , . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . 2,558 14.5 2,144 14,7 2,015 15.9 Other operating expenses . . . . , . . . . . . . . . . . . . . . . . . . . . . . 3,418 19.4 2,722 18.8 2,351 18.6 Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . 998 5,6 853 5,9 699 5,5 Investment income ................................. . (100) (0.6) (69) (0.5) (74) (0.6) 13,975 79.0 11,613 79.9 10,193 80.4 - EBDlTA (a) ......................................... 3,720 21.0 2,930 20.1 2,485 19.6 Depreciation and amortization . . . . . . , . . . . . . . . . . . . . . . . 981 5.5 804 5.4 689 5.4 Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 2.6 387 2.7 415 3.3 Merger and facility consolidation costs .............. . 387 2.2 159 1.1 151 1.2 Income from continuing operations before minority interests and income taxes ....................... . 1,892 10.7 1,580 10,9 1,230 9.7 Minority interests in earnings of consolidated entities .......................................... . 113 0.6 40 0.3 18 0.1 Income from continuing operations before income taxes. . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,779 10.1 1,540 10,6 1,212 9.6 Provision for income taxes .......................... . 715 4.1 611 4.2 492 3.9 - -- - Income from continuing operations. . . . . . . . . . . . . . . . . . . $ 1,064 6.0 $ 929 6.4 $ 720 5.7 Earnings per common and common equivalent share: Excluding merger and facility consolidation costs ........................................ . $ 2,90 $ 2.40 $ 1.99 Merger and facility consolidation costs. . . . . . . . . . . (.53) (.24) (.24) Income from continuing operations ............. . $ 2.37 $ 2.16 $ 1.75 % changes from prior year: Revenues ....................................... EBDlTA ........................................ Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations. . . . . . . . . . . . . . . Earnings per common and common equivalent share ...............................,......... Other information excluding the effect of merger and facility consolidation costs: Income from continuing operations before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,166 Income from continuing operations. . . . . . . . . . . . . . 1,299 % changes from prior year: Income from continuing operations before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations. . . . . . . . . . Earnings per common and common equivalent share . . . . . . . . . . . . . . . . . . . . . . . . . 20,8 20.6 10.6 (a) Income from continuing operations before merger and facility consolidation costs, depreciation, interest, minority in- terests, income taxes and amortization. Although EBDITA is not a measure of operating performance calculated in accordance with generally accepted accounting principles, it is commonly used as an analytical indicator within the health care provider industry. In addition, EBDITA also serves as a measurement of leverage capacity and debt service ability, EBDITA should not be considered as a measure of profitability or liquidity or as an alternative to net income, cash flows generated by operating, investing or financing activities or other financial statement data pre- sented in the consolidated financial statements as an indicator of financial performance. 21.7 27,0 14.7 17.9 3.7 5.3 15.5 14.6 27.1 28.9 93.2 146.5 9.7 23.4 133.3 12.3 7.3 $ 1,699 1,031 10.8 6.5 $ 1,363 818 11.7 7.1 27.4 26.0 24.7 25,8 17.6 15,7 11 .....,_c_ COLUMBIA/HCA HEALTHCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Results of Operations (Continued) Years ended 1995 and 1994 Revenues increased 21.7% to $17.7 billion in 1995 compared to the same period last year, primarily as a result of acquisitions (including the EPIC Merger in May 1994 and the MCA Merger in September 1994) and growth in inpatient and outpatient volumes. On a same-hospital basis, revenues increased 10.2%, admissions increased 4.6% and adjusted admissions (adjusted to reflect outpatient activity) increased 8.6% from a year ago. The increase in outpatient activity is primarily a result of expanding home health and other outpatient ancillary services. Income before income taxes increased to $1.8 billion in 1995 from $1.5 billion in 1994 and pretax margins decreased to 10.1% in 1995 from 10.6% in 1994. Excluding the effect of the merger and facility consolidation costs charged in 1995 and 1994, income before taxes increased 27.4% to $2.2 billion in 1995 from $1.7 billion in 1994 and pretax margins increased to 12.3% in 1995 from 11.7% in 1994. The improvement in pretax income was attributable to the combination of growth in revenues and improvements in the margin, Pretax margins increased due to improvements in productivity and increased discounts on medical supplies. Salaries and benefits declined as a percentage of revenues to 40.1% in 1995 from 41.0% in 1994, and supply costs declined as a percentage of revenues to 14.5% in 1995 compared to 14.7% in 1994. The improvement in pretax margins was partially offset by an increase in other operating expenses as a percentage of revenues to 19.4% in 1995 from 18.8% in 1994. This was due, in part, to the outsourcing of certain serVIces. Income before extraordinary charges increased 14.6% to $1.1 billion ($2.37 per share) during 1995 compared to $929 million ($2.16 per share) in 1994, Excluding the effects of the merger and facility consolidation costs charged in 1995 and 1994, income before extraordinary charges in- creased 26.0% to $1.3 billion ($2.90 per share) in 1995 compared to $1.0 billion ($2.40 per share) in 1994. During 1995, ColumbiaIHCA recorded $105 million of pretax charges incurred in connection with the Healthtrust Merger. These costs included severance costs, investment advisory fees, and certain charges based upon management's implementation of actions to reduce corporate overhead costs and consolidate management information systems. In addition, pretax charges of $282 mil- lion were recorded to write down assets to estimated net realizable value in connection with man- agement's plans to consolidate duplicative facilities and replace facilities in certain markets. During 1994, ColumbiaIHCA recorded $159 million (before income taxes) of merger and facil- ity consolidation costs in connection with the HCA Merger. In connection with the Healthtrust Merger, approximately $1.8 billion of Healthtrust's debt was refinanced to reduce future interest expense and eliminate certain restrictive covenants, re- sulting in an after-tax charge of $103 million ($.23 per share). In connection with the HCA Merger, ColumbiaIHCA refinanced approximately $2.2 billion of long-term debt resulting in an after-tax charge of $115 million ($,27 per share). Years ended 1994 and 1993 Revenues increased 14,7% to $14.5 billion in 1994 compared to the same period in 1993, primarily as a result of acquisitions (including the MCA and EPIC Mergers in 1994) and growth in inpatient and outpatient volumes. On a same-hospital basis, admissions increased 1.9% and outpatient visits increased 34.5% compared to the previous year, The increase in outpatient activ- ity is primarily a result of expanding home health and other outpatient ancillary services, 12 I - COLUMßIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Results of Operations (Continued) Income before income taxes increased to $1.5 billion in 1994 from $1.2 billion in 1993 and pretax margins increased to 10.6% in 1994 from 9.6% in 1993. Excluding the effect of the merger and facility consolidation costs charged in 1994 and 1993, income before taxes increased 24.7% to $1.7 billion in 1994 from $1.4 billion in 1993 and pretax margins increased to 11.7% in 1994 from 10.8% in 1993. The improvement in pretax income was attributable to the combination of growth in revenues and reductions in interest expense resulting from financing activities in 1994. In addition, pretax margins also increased due to increased discounts on medical supplies. Supply costs declined as a percentage of revenues to 14.7% in 1994 compared to 15.9% in 1993. Income before extraordinary charges increased 28.9% to $929 minion ($2.16 per share) during 1994 compared to $720 million ($1. 75 per share) in 1993. Excluding the effects of the merger and facility consolidation costs charged in 1994 and 1993, income before extraordinary charges in- creased 25.8% to $1.0 billion ($2.40 per share) in 1994 compared to $818 million ($1.99 per share) in 1993. During 1994, Columbia/RCA recorded $159 million (before income taxes) of merger and facil- ity consolidation costs in connection with the RCA Merger. In connection with the Galen Merger, ColumbiaIHCA recorded charges in 1993 totaling $151 million (before income taxes). ColumbiaIHCA incurred extraordinary charges (net of tax benefits) on early extinguishments of debt of $115 million in 1994 and $97 million in 1993. Liquidity Cash provided by continuing operations totaled $2.3 billion in 1995 compared to $1.7 billion in 1994 and $1.6 billion in 1993. The increase in 1995 over 1994 is primarily due to the cash generated from the hospitals and health care facilities acquired during 1995. During 1995, capital expenditures (including acquisitions and investments in and advances to affiliates) exceeded cash provided by continuing operations by approximately $1.2 billion. Addi- tional sources of cash used to fund the capital expenditures include the issuance of long-term debt and commercial paper borrowings. Cash flows were also used in 1995 and 1994 to fund $83 million and $146 million, respectively, of self-insured professional liability risks related to prior years and, in 1993, to finance a payment of $135 million to Rumana in connection with the Spinoff. Working capital totaled $1.5 billion at December 31, 1995 compared to $1.1 billion at December 31, 1994, Management believes that cash flows from operations and amounts available under Columbia/RCA's revolving credit facilities and related commercial paper programs are suf- ficient to meet expected future liquidity needs, A substantial portion of the merger and facility consolidation costs recorded during the past three years relate to the write down of recorded assets and, accordingly, did not have a material adverse effect on cash flows from continuing operations. Investments of ColumbiaIHCA's professional liability insurance subsidiary to maintain statu- tory equity and pay claims totaled $1.2 billion and $973 million at December 31, 1995 and 1994, respectively. The Company has entered into various joint venture agreements whereby the partners have an option to sen or "put" their interest in the joint ventures back to the Company at prices based on fair value. The combined put price of all negotiated joint ventures is material and could have a significant affect on the Company's liquidity in the event all put options were exercised at the same time. 13 .. COLUMBIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Liquidity (Continued) In September 1993, the Board of Directors initiated the payment of a regular quarterly cash dividend of $.03 per common share. Capital Resources Excluding acquisitions, capital expenditures totaled $1.5 billion in 1995 compared to $1.2 billion in 1994 and $1.1 billion in 1993. Planned capital expenditures in 1996 are expected to approximate $1.7 billion. Management believes that its capital expenditure program is adequate to expand, improve and equip existing health care facilities. Columbia/HCA also expended $1.3 billion, $370 million and $167 million for acquisitions (ex- cluding the MCA, EPIC, Healthtrust, HCA and Galen Mergers) during 1995, 1994 and 1993, respectively. In addition, Columbia/HCA acquired investments in and made advances to affiliates for aggregate cash payments of $609 million in 1995 compared to $6 million in 1994 and $12 million in 1993. See Note 9 of the Notes to Consolidated Financial Statements for a description of these activities. In connection with the MCA Merger consummated in September 1994 (accounted for under the purchase method), Columbia/HCA issued approximately 21.1 million shares of common stock in exchange for all outstanding shares of MCA common stock at an aggregate cost of $912 million. In connection with the EPIC Merger consummated in May 1994 (accounted for under the purchase method), Healthtrust paid cash in exchange for all outstanding shares of EPIC common stock at an aggregate cost of $266 million. The EPIC Merger was financed through the public offering of 5,262,400 shares of Healthtrust common stock (effected for the Healthtrust Merger exchange ratio), borrowings under bank credit agreements and internally generated funds. As part of its business strategy, Columbia/HCA intends to acquire additional health care facilities in the future. Since December 31, 1995 (through February 29, 1996), Columbia/HCA has expended $214 million toward the purchase of five hospitals (or a controlling interest therein), These transactions, which will be accounted for under the purchase method, were financed through the use of internally generated funds and issuance of long-term debt. Columbia/HCA expects to finance all capital expenditures with internally generated and bor- rowed funds. Available sources of capital include public or private debt, commercial paper, unused bank revolving credits and equity. At December 31, 1995, there were projects under construction which had an estimated additional cost to complete of approximately $923 million. In connection with the Spinoff, stockholder's equity was reduced by $802 million in 1993 as a result of the following transactions with Humana: (i) distribution of the net assets of the health plan business ($392 million) and the net assets of a hospital facility ($25 million), (ii) payment of cash ($135 million) and (iii) issuance of notes ($250 million). The notes were refinanced in Sep- tember 1993. Subsequent to December 31, 1995, Columbia/HCA amended its revolving credit agreements from an aggregate amount of $3.75 billion to $4.0 billion. The Credit Facilities comprise a $2.5 billion five-year revolving credit agreement and a $1.5 billion 364-day revolving credit agreement. The Credit Facilities were established to support Columbia/HCA's commercial paper programs and replace prior revolving credit agreements. As of February 29, 1996, Columbia/HCA had ap- proximately $1.0 billion of credit available under the revolving credit agreements. 14 COLUMBIA/HCA HEAL THCARE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Capital Resources (Continued) ColumbiaJHCA's credit facilities contain customary covenants which include (i) limitations on additional debt, (ii) limitations on sales of assets, mergers and changes of ownership and (iii) maintenance of certain interest coverage ratios. ColumbiaJHCA was in compliance with all such covenants at December 31, 1995. Effects of Inflation and Changing Prices Various federal, state and local laws have been enacted that, in certain cases, limit ColumbiaJHCA's ability to increase prices. Revenues for acute care hospital services rendered to Medicare patients are established under the federal government's prospective payment system. Total Medicare revenues approximated 36% of total revenues in 1995, 35% in 1994 and 34% in 1993. Management believes that hospital industry operating margins have been, and may continue to be, under significant pressure because of deterioration in inpatient volumes, changes in payer mix, and growth in operating expenses in excess of the increase in prospective payments under the Medicare program, Management expects that the average rate of increase in Medicare pro- spective payments will approximate 2% in 1996. In addition, as a result of increasing regulatory and competitive pressures, ColumbiaJHCA's ability to maintain operating margins through price increases to non-Medicare patients is limited. Health Care Reform In recent years, an increasing number of legislative proposals have been introduced or proposed in Congress and in some state legislatures that would significantly affect health care systems in ColumbiaIHCA's markets. The cost of certain proposals would be funded in significant part by reduc- tions in payments by government programs, including Medicare and Medicaid, to healthcare provid- ers such as hospitals, While the Company is unable to predict which, if any, proposals for healthcare reform will be adopted, there can be no assurance that proposals adverse to the business of ColumbiaIHCA will not be adopted. Other Information In March 1996, the Tax Court ruled in Columbia/HCA's favor that the use of a hybrid (pri- marily the cash basis) method of accounting by certain of HCA's subsidiaries in calculating tax- able income for the years 1981-1986 clearly reflected taxable income. Had the Internal Revenue Service (the "IRS") prevailed on this issue, Columbia/HCA would have owed $614 million in taxes and interest. In February 1996, ColumbiaJHCA reached a partial settlement with the IRS in connection with examinations of HCA's federal income tax returns for 1981 through 1988. Issues totaling $486 million in potential taxes and interest payments were settled for approximately $87 million ($75 million paid in March 1994 and $12 million paid in November 1995). The payment and settlement of these items did not have any effect on the results of operations. ColumbiaJHCA is currently contesting income taxes and related interest aggregating approxi- mately $600 million proposed by the IRS for prior years. Management believes that final resolu- tion of these disputes will not have a material adverse effect on the financial position, results of operations or liquidity of Columbia/HCA. However, if all or a majority of the positions of the IRS are upheld, the financial position, results of operations and liquidity of ColumbiaJHCA could be materially adversely affected. Resolution of various other loss contingencies, including litigation pending against ColumbiaJHCA in the ordinary course of business, is not expected to have a material adverse effect on its financial position or results of operations. 15 r- COLUMBIAIHCA HEAL THCARE CORPORA nON CONSOLIDATED STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (Dollars in millions, except per share amounts) Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . Salaries and benefits ,.............,..................,.......,... Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . . . . . . . . . . . . , . . . . . , Other operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for doubtful accounts. . . . . . . . , . . . . . . . . . . . . . . . . . . , . . . . . . . . Depreciation and amortization . , . , . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense, . . , . . . , . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment income .,.,."",........,....,.............".,...,.. Merger and facility consolidation costs ....,............"..,...... Income from continuing operations before minority interests and income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . Minority interests in earnings of consolidated entities ............. Income from continuing operations before income taxes. . . . . . . . . . . . Provision for income taxes . , . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from operations of discontinued health plan segment, net of income taxes of $9 ..............,.,.....,...................... Extraordinary charges on extinguishments of debt, net of income tax benefits of $67 in 1995, $72 in 1994 and $59 in 1993. , . . . . . . . Net income ."",.......,..,.,....................... Earnings per common and common equivalent share: Income from continuing operations. . . . , . . . . . . . . . . . . . . . . . . . . . . . Income from operations of discontinued health plan segment ,. Extraordinary charges on extinguishments of debt .........". Net income ....................",.......,........... Shares used in computing earnings per common and common equivalent share (in thousands) . . . . . . . . , . . . . . , . . . . . . . . . . . . . . . . , . The accompanying notes are an integral part of the consolidated financial statements. 16 I ~ 1995 1994 1993 $17,695 $14,543 $12,678 7,101 5,963 5,202 2,558 2,144 2,015 3,418 2,722 2,351 998 853 699 981 804 689 460 387 415 (100) (69) (74) 387 159 151 15,803 12,963 11,448 1,892 1,580 1,230 113 40 18 1,779 1,540 1,212 715 611 492 1,064 929 720 16 (103) (115) (97) $ 961 $ 814 $ 639 $ 2.37 $ 2.16 $ 1.75 .04 (.23) (.27) (.24) $ 2.14 $ 1.89 $ 1.55 448,714 429,295 413,036 COLUMBIAIHCA HEAL THCARE CORPORATION CONSOLIDA TED BALANCE SHEET DECEMBER 31, 1995 AND 1994 (Dollars in millions, except per share amounts) ASSETS Current assets: Cash and cash equivalents ......,...................................... Accounts receivable, less allowances for doubtful accounts of $901- 1995 and $784 - 1994 ...........................................,.. Inventories ..........,............,................................,.,. Income taxes receivable . , . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other, , . . , . . . . . . . . . . , , . . . . . . , . . . , , , . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . , , . . . . Property and equipment, at cost: Land ...,.. ..........,..........,......... ............. ,..." .....,.... Buildings . . . . . . . , . . . . . . . . . . . , , . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . , . . . . Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . Construction in progress (estimated cost to complete and equip after December 31, 1995 - $923) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. , . Accumulated depreciation . . . . . . . . . . . . . , , . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . Investments of professional liability insurance subsidiary ......,..."....... Investments in and advances to affiliates ............,...................... Intangible assets net of accumulated amortization of $426 - 1995 and $310 - 1994 . . . . . . . . . . , . . . . . . . . . , . . . . . . . , . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . Other. . . . . , . . . . . , . . . . . . . . . . , . . . . , , . . . . . . . . . . . . . . . , . . . , . . . . , . . . . , . . . . . . . . . . . LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable .............,......,.......,.......,............,.... Accrued salaries .................................,...,.....,....,....,. Other accrued expenses .. , . . . . . . . . . . , . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . , . . . Long-term debt due within one year. . . . . . . . . , . . . . . . . . . , . . . . . , . . . . . . . . . . Long-term debt .....,......,..............,...............,................ Deferred taxes and other liabilities .......,...,....,........................ Minority interests in equity of consolidated entities .,....................... Stockholders' equity: Common stock $.01 par; authorized 800,000,000 voting shares and 25,000,000 nonvoting shares; issued and outstanding 431,699,700 voting shares and 14,119,000 nonvoting shares - 1995 and 427,837,300 voting shares and 14,119,000 nonvoting shares - 1994 . . . Capital in excess of par value ........"...,.............,........,..... Other. . . . . . . . . . . . . . . , . . , . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings. . . . . . , . . . . . , . . . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . . . . . . . . . The accompanying notes are an integral part of the consolidated financial statements. 17 1995 1994 $ 232 $ 68 2,665 2,346 406 373 113 15 784 545 4,200 3,347 926 874 6,649 6,086 5,826 5,175 914 478 14,315 12,613 ( 4,564) (3,987) 9,751 8,626 1,071 888 1,021 110 3,497 3,058 352 249 $19,892 $16,278 $ 829 $ 609 520 391 1,146 1,131 243 124 2,738 2,255 7,137 5,548 2,166 2,107 722 278 4 4,499 60 2,566 7,129 $19,892 4 4,405 23 1,658 6,090 $16,278 COLUMBIA/HCA HEAL THCARE CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (Dollars in millions) Common Stock Capital in Shares Par Excess of Retained (000) Value Par Value Other Earnings Total Balances, December 31, 1992. . . , , . , . . , . . . . . . . . 403,086 $4 $ 3,113 $ 66 $1,058 $4,241 Net income . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . 639 639 Cash dividends . , . . . . . . . . . . . . . . . . . . . . . . . . . (9) (9) Stock options exercised and related tax benefits, net of shares tendered in partial payment therefor. . . , , , . . , . . . . . . . 4,099 72 (35) 37 Spinoff transaction with Humana Inc.: Cash payment to Humana Inc. . . . , . . . . (135) (135) Noncash transactions: Issuance of notes payable. . . . . , . . . . . (250) (250) Distribution of net investment in discontinued health plan operations ...................... . (392) (392) Transfer of a hospital facility , , , . . . . (25) (25) Net unrealized gains on investment securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 27 Other ....,............................... 918 25 25 - Balances, December 31, 1993, . . . . . . . . . . . . . . . . . 408,103 4 3,210 58 886 4,158 Net income............... .. . . . . .......... 814 814 Cash dividends .......................... . (42) (42) Issuance of common stock. . . . . . . . . . . . . . . . . 26,356 1,066 1,066 Stock options exercised and related tax benefits, net of shares tendered in partial payment therefor. . . . . . . . . . . . . . . . 1,898 46 (16) 30 Net unrealized losses on investment securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . (30) (30) Other ,....,..,."....,................... 5,599 83 11 94 - - Balances, December 31, 1994. . . . . . . . . . . . . . . . . . 441,956 4 4,405 23 1,658 6,090 Net income , . , . . , . , . , . . . . . , , . . , . . . . . . . . . . . 961 961 Cash dividends . . . . . . , . . . . . . . . . . . . . . . . . . . . (53) (53) Stock options exercised and related tax benefits, net of shares tendered in partial payment therefor. . . . . . . . . . . . . . . . 3,458 100 (7) 93 Net unrealized gains on investment securities, , , , . , , . . . , . . , , . . . . . . . . . . . . . . . . 31 31 Other ,...,.,..",..,.".................. 405 (6) 13 7 -- - - Balances, December 31, 1995. . . . . . . . . . . . . . . . . . 445,819 $4 $ 4,499 $ 60 $2,566 $7,129 The accompanying notes are an integral part of the consolidated financial statements. 18 COLUMBIAIHCA HEAL THCARE CORPORATION CONSOLIDA TED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (I)ollars in millions) Cash flows from continuing operations: Net income ...................................................... Adjustments to reconcile net income to net cash provided by operating activities: Minority interests. . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Merger and facility consolidation costs. . . . . . . . . . . . . . . , , . . . . . . . Depreciation and amortization ...,.,......................... Deferred income taxes. . . . . . . . . . . . . . , . . . . , . , . . . , . , . . . , . . . . . . . . Change in operating assets and liabilities: (Increase) decrease in accounts receivable ................ Increase in inventories and other assets . . . . . . . . . . . . . . . . . . Increase (decrease) in income taxes. . . . . . . . . . . . . . . . . . . . . . . Increase (decrease) in other liabilities "....,............. Extraordinary charges on extinguishments of debt . . . . . . . . . . . . Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . . . . . . . Net cash provided by continuing operations. , , . . . . . . . . . . . . Cash flows from investing activities: Purchase of property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash acquired in connection with Medical Care America, Inc. merger transaction. . . . . . . . . . . . . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . Acquisition of EPIC Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of hospitals and health care facilities. . . . . . . . . . . . . . . . . . Sale of assets .."...,.,....."................................... Investments in and advances to affiliates ......................... Change in other investments .. . . . . . . . . . . . . . . , . . . . . . . . . . , , . . , . . . . . Other . . . . . . . . . , . . . . , . , , , . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . Net cash used in investing activities. . . . . . . . . . . . , . . . . . . . . . Cash flows from financing activities: Issuance oflong-term debt. . . . . . . . . . . . , . . . . . . . , , . . . . . . . . . . . . , , . . , , Net change in commercial paper borrowings and lines of credit. . , , Repayment of long-term debt . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . Payment to Humana Inc. in spinoff transaction . . . . . . . . . . . . . . . . . . . Payment of cash dividends ...........,.....,.,.,..............". Issuance of common stock , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . . . . , . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . , . . . . . , . . . . . . . . . . . . . . . Net cash provided by (used in) financing activities. . . . . . . . Change in cash and cash equivalents ...,............................. Cash and cash equivalents at beginning of period .....,............... Cash and cash equivalents at end of period ........................... Interest payments. . . . . . . . . . . , . , . . . , . . , , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax payments, net of refunds. . . . . . . . . . . . . . , . . . . . . . , . . . . . . . . . . . The accompanying notes are an integral part of the consolidated financial statements, 19 1995 1994 1993 $ 961 $ 814 $ 639 71 39 17 302 95 89 981 804 689 15 27 (58) (198) (99) 12 (174) (80) (9) (121) 1 (4) 218 (67) 2 170 187 156 29 26 52 - 2,254 1,747 1,585 (1,527) (1,206) (1,066) 106 (221) (1,333) (370) (167) 334 88 298 ( 609) (6) (12) (283) (226) 21 (182) (111) (41) - (3,600) (1,946) (967) 2,257 2,361 2,113 1,230 1,148 342 (1,969) (3,724) (2,973) (135) (50) (36) (40) 42 191 43 (21) (34) 1,510 (81) (684) 164 (280) (66) 68 348 414 - $ 232 $ 68 $ 348 $ 479 $ 404 $ 375 748 508 484 COLUMBIAIHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ACCOUNTING POLICIES Reporting Entity Columbia/HCA Healthcare Corporation ("Columbia/HCA") is a Delaware corporation that op- erates hospitals and ancillary health care facilities through (i) wholly owned subsidiaries, (ii) joint ventures or (iii) ownership of interests in various partnerships in which subsidiaries of Columbia/HCA serve as the managing general partner. Columbia/HCA owns and operates 319 hospitals and more than 130 ambulatory surgery centers. Columbia/HCA is also a partner in several 50/50 joint ventures that own and operate 19 hospitals and 3 ambulatory surgery centers which are accounted for using the equity method. The hospitals and surgery centers are located in 36 states, England and Switzerland. On April 24, 1995, Columbia/HCA completed a merger transaction with Healthtrust, Inc. - The Hospital Company ("Healthtrust") (the "Health trust Merger"). See Note 2 for a description of the specific terms of the Healthtrust Merger. On September 16, 1994, Columbia/HCA completed a merger transaction with Medical Care America, Inc, ("MCA") (the "MCA Merger"). See Note 3 for a description of the specific terms of the MCA Merger. On May 5, 1994, Healthtrust completed a merger transaction with EPIC Holdings, Inc. ("EPIC") (the "EPIC Merger"). See Note 4 for a description of the specific terms of the EPIC Merger. On February 10, 1994, Columbia Healthcare Corporation ("Columbia") completed a merger transaction with HCA - Hospital Corporation of America ("HCA") (the "HCA Merger"). In con- nection with the transaction, Columbia changed its name to Columbia/HCA. See Note 5 for a description of the specific terms of the HCA Merger. Columbia was formed on September 1, 1993 as a result of a merger involving Columbia Hos- pital Corporation ("CHC") and Galen Health Care, Inc, ("Galen") (the "Galen Merger"). See Note 6 for a description of the specific terms of the Galen Merger. Basis of Presentation The preparation of financial statements in conformity with generally accepted accounting princi- ples requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates, The consolidated financial statements include all subsidiaries and less than 100% owned en- tities controlled by Columbia/HCA. Significant intercompany transactions have been eliminated. Investments which Columbia/HCA does not control, but in which it has a substantial ownership interest and can exercise significant influence, are accounted for using the equity method. The MCA and EPIC Mergers and various other acquisitions and joint venture transactions have been accounted for under the purchase method. Accordingly, the accounts of these entities have been consolidated with those of Columbia/HCA for periods subsequent to the acquisition of controlling interest. The Healthtrust, HCA and Galen Mergers have been accounted for by the pooling-of-interests method. Accordingly, the consolidated financial statements give retroactive effect to these trans- actions and include the combined operations of Healthtrust, HCA, Galen and CHC for all periods presented. In addition, the historical financial information related to Healthtrust and Galen (which prior to the respective mergers were reported on a fiscal year ending August 31) have been recast to conform to Columbia/HCA's annual reporting period ending December 31. 20 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 1 - ACCOUNTING POLICIES (Continued) Revenues Columbia/HCA's health care facilities have entered into agreements with third-party payers, including government programs and managed care health plans, under which Columbia/HCA is paid based upon established charges, cost of providing services, predetermined rates by diagnosis, fixed per diem rates or discounts from established charges. Revenues are recorded at estimated amounts due from patients and third-party payers for the health care services provided, including anticipated settlements under reimbursement agreements with third-party payers. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with a maturity of three months or less when purchased. Carrying values of cash and cash equivalents approximate fair value due to the short-term nature of these instruments. Accounts Receivable Accounts receivable consist primarily of amounts due from the Medicare and Medicaid pro- grams, other government programs, managed care health plans, commercial insurance companies and individual patients. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market. Property and Equipment Depreciation expense, computed by the straight-line method, was $859 million in 1995, $722 million in 1994 and $631 million in 1993. Columbia/HCA uses component depreciation for build- ings. Depreciation rates for buildings are equivalent to useful lives ranging generally from 20 to 25 years. Estimated useful lives of equipment vary generally from 3 to 10 years. Investments On December 31, 1993, Columbia/HCA adopted the provisions of Statement of Financial Ac- counting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"), which requires that investments in debt and equity securities be classified accord- ing to certain criteria. Intangible Assets Intangible assets consist primarily of costs in excess of the fair value of identifiable net assets of acquired entities and are amortized using the straight-line method generally over periods rang- ing from 30 to 40 years for hospital acquisitions and periods ranging from 5 to 20 years for physi- cian practice, home health and clinic acquisitions. To the extent that operating results indicate the probability that the carrying values of certain long-lived assets and the related identifiable intangible assets have been impaired, Columbia/HCA would prepare projections of the undiscounted cash flows from operations of the acquired entity over the remaining amortization period. If the projections indicated that the recorded cost would not be recoverable, such cost amounts would be reduced to estimated fair value. 21 ~ COLUMBIAIHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 1 - ACCOUNTING POLICIES (Continued) Noncompete and debt issuance costs are amortized based upon the lives of the respective contracts or loans. Professional Liability Insurance Claims Provisions for loss for professional liability risks are based upon actuarially determined esti- mates, To the extent that subsequent claims information varies from management's estimates, earnings are charged or credited. Minority Interests in Consolidated Entities The consolidated financial statements include all assets, liabilities, revenues and expenses of less than 100% owned entities controlled by Columbia/HCA. Accordingly, management has re- corded minority interests in the earnings and equity of such entities. Columbia/HCA is a party to several partnership agreements which generally include provi- sions for the redemption of minority interests using specified valuation techniques. Earnings per Common and Common Equivalent Share Earnings per common and common equivalent share are based upon the weighted average number of common shares outstanding adjusted for the dilutive effect of common stock equiva- lents, consisting primarily of stock options. Fully diluted earnings per common and common equivalent share are not presented because such amounts approximate earnings per common and common equivalent share. Newly Issued Accounting Standards In October 1995, Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), was issued which, if elected, would require companies to use a new fair value method of valuing stock-based compensation plans. Columbia/HCA has elected to continue following present accounting rules under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" which uses an intrinsic value method and often results in no compensation expense. However, in 1996, in accordance with SFAS 123, Columbia/HCA will provide pro forma disclosure of what net income and earnings per share would have been had the new fair value method been used. In March 1995, Statement of Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of' ("SFAS 121"), was issued. SFAS 121 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. SFAS 121 also addresses the accounting for long-lived assets that are expected to be disposed of. Columbia/HCA will adopt SFAS 121 in the first quarter of 1996 and, based on current circumstances, does not believe the effect of adop- tion will be material. I Reclassifications Certain prior year amounts have been reclassified to conform to the 1995 presentation, 22 COLUMBIA/HCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 2 - HEAL THTRUST MERGER The Healthtrust Merger was consummated on April 24, 1995. Shares of Healthtrust common stock were converted on a tax-free basis into approximately 80,411,800 shares of Columbia/HCA voting common stock (an exchange ratio of 0.88 of a share of Columbia/HCA common stock for each share of Healthtrust common stock). The Healthtrust Merger has been accounted for as a pooling of interests, and accordingly, the consolidated financial statements give retroactive effect to the Healthtrust Merger and include the combined operations of Columbia/HCA and Healthtrust for all periods presented. The following is a summary of the results of operations of the separate entities for periods prior to the Healthtrust Merger (dollars in millions): Pooling ColumbialHCA Healthtrust Adjustments Combined Three months ended March 31, 1995 (unaudited): Revenues. . . . . , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . , , $ 3,337 $1,043 $ - $ 4,380 Net income. .....,." .... ... ,.. ... .. . ......... 292 66 358 1994: Revenues. . . . . . . , . . . . . . . . . , . . . , . . . . . . . , . . . . . . . $11,132 $3,430 $(19) $14,543 Income from continuing operations . . . . . . , . , . . . 745 186 (2) 929 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 186 (2) 814 1993: Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , , . . . . $10,252 $2,443 $(17) $12,678 Income from continuing operations . . . . . . . . . . . . 575 147 (2) 720 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . 507 134 (2) 639 Pooling adjustments have been recorded to eliminate revenues and expenses associated with computer information services provided to Healthtrust by Columbia/HCA and to eliminate dis- counting of Healthtrust professional liability loss provisions to conform to the Columbia/HCA method. NOTE 3 - MCA MERGER The MCA Merger was consummated on September 16, 1994. MCA was a national provider of health care services through the operation of freestanding surgical facilities. In connection with the MCA Merger, all outstanding shares of MCA common stock were con- verted on a tax-free basis into approximately 21,093,600 shares of Columbia/HCA voting common stock (an exchange ratio of 0.7042 of a share of Columbia/HCA common stock for each share of MCA common stock). The following is a summary of the aggregate purchase price (dollars in millions, except per share data): Fair value of Columbia/HCA common stock ($42.25 per share) issued in exchange for all outstanding MCA common stock...... ............ .. ,...... Fair value of options to purchase Columbia/HCA common stock issued in exchange for all outstanding options to purchase MCA common stock. . . . . . . . Transaction costs ................".....................,........."......... $ 891 15 6 $ 912 23 COLUMBIA/HCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3 - MCA MERGER (Continued) The MCA Merger has been accounted for by the purchase method, and accordingly, the ac- counts of MCA have been consolidated with those of Columbia/HCA since September 1, 1994. The excess of the aggregate purchase price over the estimated fair value of net assets acquired (includ- ing property and equipment of $217 million) approximated $903 million. See Note 10 for pro forma information. NOTE 4 - EPIC MERGER The EPIC Merger was completed on May 5, 1994. EPIC was a health care services provider that owned and operated 32 general acute care hospitals. In connection with the EPIC Merger, EPIC stockholders were paid $7.00 for each outstanding share of EPIC common stock (an aggregate cost of $266 million, including transaction costs). In addition, Healthtrust assumed approximately $713 million of EPIC long-term debt, of which ap- proximately $681 million was refinanced. The EPIC Merger was financed through the public of- fering of 5,262,400 shares of Healthtrust common stock (effected for the Healthtrust Merger ex- change ratio), borrowings under bank credit agreements and internally generated funds. The EPIC Merger has been accounted for under the purchase method, and accordingly, the accounts of EPIC have been consolidated with those of Columbia/HCA since May 1, 1994, The excess of the aggregate purchase price over the estimated fair value of net assets acquired (includ- ing property and equipment of $516 million) approximated $577 million. See Note 10 for pro forma information. NOTE 5 - HCA MERGER The HCA Merger was completed on February 10, 1994. In connection with the HCA Merger, Columbia stockholders approved an amendment to Columbia's Certificate of Incorporation chang- ing the name of the corporation to "Columbia/HCA Healthcare Corporation". HCA was then merged into a wholly owned subsidiary of Columbia/HCA. Shares of HCA Class A voting common stock and Class B nonvoting common stock were converted on a tax-free basis into approximately 166,846,000 shares of Columbia/HCA voting common stock and approximately 18,990,000 shares of Columbia/HCA nonvoting common stock, respectively (an exchange ratio of 1.05 shares of Columbia/HCA common stock for each share of HCA voting and nonvoting common stock). The HCA Merger has been accounted for as a pooling of interests, and accordingly, the consolidated financial statements give retroactive effect to the HCA Merger and include the combined opera- tions of Columbia and HCA for all periods presented. NOTE 6 - GALEN MERGER The Galen Merger was consummated effective as of September 1, 1993. In connection with the Galen Merger, CHC, a Nevada corporation, was merged into Columbia. Each CHC share of common stock was converted on a tax-free basis into one share of Columbia common stock. Imme- diately subsequent thereto, a wholly owned subsidiary of Columbia was merged into Galen, at which time Galen became a wholly owned subsidiary of Columbia. In connection with this trans- action, Columbia issued approximately 123,830,000 shares of common stock in a tax-free exchange for all of the outstanding common shares of Galen (an exchange ratio of 0.775 of a share of Co- lumbia common stock for each share of Galen common stock). The Galen Merger has been ac- counted for as a pooling of interests, and accordingly, the consolidated financial statements give retroactive effect to the Galen Merger and include the combined operations of CHC and Galen for all periods presented. 24 COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 7 - SPINOFF TRANSACTION AND DISCONTINUED OPERATIONS Prior to the Galen Merger, Galen began operating its hospital business as an independent publicly held corporation on March 1, 1993 as a result of a tax-free spinoff transaction (the "Spin- off') by Humana Inc. ("Humana"), which retained its managed care health plan business. The Spinoff separated Humana's previously integrated hospital and managed care health plan busi- nesses and was effected through the distribution of Galen common stock to then current Humana common stockholders on a one-for-one basis. For accounting purposes, because of the relative significance of the hospital business, the pre- Spinoff consolidated financial statements of Galen (and now those of Columbia/HCA) include the separate results of Humana's hospital business, while the operations and net assets of Humana's managed care health plans have been classified as discontinued operations. In connection with the Spinoff, Galen entered into various agreements with Humana which were intended to facilitate orderly changes for both the hospital and managed care health plan businesses in a way which would be minimally disruptive to each entity. Revenues of the discontinued managed care health plan business (included in discontinued operations in the accompanying consolidated statement of income) were $523 million in 1993, NOTE 8 - MERGER AND FACILITY CONSOLIDATION COSTS 1995 In the second quarter of 1995 Columbia/HCA recorded the following pretax charges in con- nection with the Healthtrust Merger and certain facility consolidation costs (dollars in millions): Employee benefit and certain severance actions. . . . . . . . . . . . . . . . . . . . , . . . , . . . .. $ 46 Investment advisory and professional fees. .. . . . . . . , .. . . . ,... . , . . . . . . . . . . . . .. 14 Costs of information systems consolidations, primarily related to the write down of assets. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . , , . , . . . . . . . . 19 Other ...........,.......................................................... 26 105 Writedown of assets in connection with consolidation of duplicative facilities and facility replacements. . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . 282 $387 . The writedown of assets relates to management's assessment of certain markets in which there exists duplication of services and excess capacity in hospital facilities. In the identified mar- kets, Columbia/HCA expects to be able to provide services more cost effectively by eliminating the fixed costs of the facilities being closed and applying the fixed costs of the other facilities to a larger patient base. The charge that was incurred is the amount considered necessary to record the identified assets at their estimated net realizable value and is substantially a non-cash charge. Columbia/HCA expects to have all replacement facilities in progress and to have com- pleted the identified facility consolidations within twelve months. ~ 25 COLUMBIAIHCA HEALTH CARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 8 - MERGER AND FACILITY CONSOLIDATION COSTS (Continued) 1994 In the first quarter of 1994, the following pretax charges were recorded in connection with the RCA Merger (dollars in millions): Employee benefit and certain severance actions. , . . . . . . . . . . . . , , . . . . , , , , . . . . .. $ 40 Investment advisory and professional fees. , . . , , . . . . . . . . . . . . . . . , , , , . . . , , . . . . . 12 Writedown of assets in connection with consolidation of duplicative facilities . , 53 Costs of information systems consolidations, primarily related to the write down of assets. , . . , . , . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . , . . . , . . . . . . . . . 42 Other ...............,....................................,..",.........". 12 $159 1993 In the third quarter of 1993, the following pretax charges were recorded in connection with the Galen Merger (dollars in millions): Employee benefit and certain severance actions. . . . . . . . . . . . . , . . . . . . . . . . . . . . .. $ 47 Investment advisory and professional fees. . . . , , . . . . . . . . . . , . , , . . . . . , . , . . , . . . . 15 Write down of assets in connection with consolidation of duplicative facilities , , 63 Administrative facility asset write downs and conversion costs associated with the transaction . . . . . . . . . . . . . . . . . . . . , , , . . . . . . . . . . . . . . . . , , . . . . . . . . . . , . . 16 Provision for loss on planned sales of assets. . . . . . . . . . . . . . . . , , . . . . , . . . . . . . . . . 10 $151 26 COLUMBIAlHCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 9 - OTHER BUSINESS COMBINATIONS During the past three years, Columbia/HCA has acquired various hospitals and related ancil- lary health care facilities (or controlling interests in such facilities), all of which have been ac- counted for by the purchase method. Accordingly, the aggregate purchase price of these transac- tions has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed based upon their respective fair values. The consolidated financial statements include the accounts of acquired entities since the respective acquisition dates. The following is a summary of acquisitions consummated during the last three years under the purchase method of accounting (excluding the MCA and EPIC Mergers) (dollars in millions); 1995 1994 1993 Number of hospitals. . . . , , . , , . . . . . , . . . . . . . . . . . . . . . , , . . . . . . . , . . . . . . . . . . . Number of licensed beds. . . . . . , , , , . . . . . . . . . . . . . . . . . . . . . , . . , , . . . . . , . . . . . Purchase price information: Fair value of assets acquired ...,.................................. Fair value ofliabilities assumed ,. . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . , . . Net assets acquired ,.......,....""...............,.......... Net assets sold in exchange for acquired properties. . . . . . . . . . . . . , . , . Contributions from minority partners . , . , , . . . , . . , , . . . . . . . . , . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . , . . . . . . , . , . . . . . . . , , . . . . . . . . . . . Net cash paid. . . . . . . . . . . . . . . , . , , . . . . . . . . . . . . . . . . . . . . . . . . . . , . , . 29 12 5,647 3,065 6 1,297 $ 608 (63) 545 (45) (331) (124) (28) (4) (6) (9) -- $ 1,333 $ 370 $ 167 $ 1,816 (148) 1,668 $ 254 (50) 204 -- -- The purchase price paid in excess of the fair value of identifiable net assets of acquired enti- ties included in the table above aggregated $418 million in 1995, $118 million in 1994 and $18 million in 1993. The pro forma effect of these acquisitions on Columbia/RCA's results of operations prior to consummation was not significant. NOTE 10 - PRO FORMA INFORMATION The following unaudited pro forma information reflects the combined operating results of Columbia/RCA, MCA and EPIC as if the MCA Merger and EPIC Merger had occurred at the beginning of the periods indicated (dollars in millions, except per share data). -:. Revenues ,.......",.,......."..............,...................,..,....,. Income from continuing operations .............,........................... Net income. . . . , . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . , . Earnings per common and common equivalent share: Income from continuing operations .....,............................... Net income .,......................"..."............................. 1994 1993 $15,222 $14,157 950 711 923 528 $ 2.13 $ 1.60 2.07 1.18 27 COLUMBIA/HCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 11 - INCOME TAXES Provision for income taxes consists of the following (dollars in millions): Current: Federal. . , . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . , . . . . . . . , . . . State ...........................,.,...............,..,..............., Deferred: Federal . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . , , . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . State .....,....,........,........."..............................,... 1995 1994 1993 $594 $447 $463 106 83 89 - - - 700 530 552 12 70 (60) 3 11 - - 15 81 (60) - - $715 $611 $492 A reconciliation of the federal statutory rate to the effective income tax rate follows: 1995 1994 1993 Federal statutory rate. . . . . . . . . . . . . . , . . . . . , . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . State income taxes, net of federal income tax benefit ... . . . . . . . . . . . . , . . . . . . . Costs in excess of net assets acquired . , . . . . , , . . . . . . . , . . . . . . . , . , . . . . . . . . , , . . Other items, net ....................,.............................,....... Effective income tax rate ..., . . . . . . . . . , . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0% 4.0 4,0 4.7 1.6 1.3 1.2 (0.4) (0.6) (0.4) 40.2% 39.7% 40,5% A summary of deferred income taxes by source included in the consolidated balance sheet at December 31 follows (dollars in millions): 1995 1994 Assets Liabilities Assets Liabilities $ $ 887 22 - Depreciation , , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . Long-term debt ,.............,.....,.................,.".. Professional liability risks. . , . . , . . . . . . . . . . . . . . . . . , . . . . . . , , , . Doubtful accounts. . . . . . . . . , . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property losses. . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash basis . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compensation. , . . . . , , . . . . , . . , . . . . . . . . . . . . . , , . . . . . . . , . . . . . . . Capitalized leases. . , . . . . . . . . . . . . . . . , . . . . . . . , , . , . . . . . . . . . . . . Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . $ $ 870 21 409 216 34 55 19 335 $1,068 350 - $1,259 - -- 366 216 46 18 39 63 19 362 - $1,072 346 $1,294 - Deferred income taxes totaling $379 million and $314 million at December 31, 1995 and 1994, respectively, are included in other current assets. Noncurrent deferred income taxes, included in deferred taxes and other liabilities, totaled $570 million and $536 million at December 31, 1995 and 1994, respectively. At December 31, 1995, federal and state net operating loss carryforwards (expiring in years 1996 through 2011) available to offset future taxable income approximated $99 million and $446 million, respectively. Utilization of net operating loss carryforwards in anyone year may be limited and, in certain cases, result in a reduction of intangible assets. Net deferred tax assets included in the table above related to such carryforwards are not significant. 28 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 11- INCOME TAXES (Continued) The Internal Revenue Service (the "IRS") has issued statutory notices of deficiency in connec- tion with its examination of HCA's federal income tax returns for 1981 through 1988. Columbia/HCA is currently contesting these claimed deficiencies in the United States Tax Court. The IRS has proposed certain adjustments in connection with its examination of HCA's 1989 and 1990 federal income tax returns. ColumbiaIHCA is currently contesting the 1989 and 1990 adjust- ments with the IRS. In August 1995, the IRS issued a statutory notice of deficiency in connection with its examination of HCA's 1991 federal income tax return. ColumbiaIHCA is currently con- testing the 1991 claimed deficiency in the United States Court of Federal Claims. The following is a discussion of certain disputed items and information on the settlement of certain items. 1981-1988 Tax Litigation A Tax Court decision is expected in 1996 regarding disputes over the valuation of the Healthtrust preferred stock and stock purchase warrants HCA received in connection with the sale of certain of its subsidiaries to Healthtrust in 1987, HCA's method of calculating its deduction for doubtful accounts, the depreciable lives utilized by HCA for constructed hospital facilities, investment tax credits, vacation pay deductions and income from foreign operations. The IRS is claiming an additional $190 million in income taxes and $256 million in interest through Decem- ber 31, 1995 with respect to these issues. A Tax Court decision is also expected in 1996 regarding HCA's claim that insurance premi- ums paid to its wholly owned insurance subsidiary ("Parthenon") are deductible. Through Decem- ber 31, 1995, ColumbiaIHCA is seeking a refund totaling $63 million in income taxes and $122 million in interest. Leveraged Buy-out Expenses The IRS has proposed the capitalization of various expenses incurred in connection with HCA's 1989 leveraged buy-out transaction, which HCA deducted in calculating taxable income for the years 1989-1991. If the IRS prevails on these issues, ColumbiaIHCA would owe additional income taxes of $95 million and interest of $50 million through December 31, 1995. Tax Court Decision-Method of Accounting In March 1996, the Tax Court ruled in ColumbiaIHCA's favor that the use of a method of accounting, primarily based upon the cash method, by certain of HCA's subsidiaries in calculating taxable income for the years 1981-1986 clearly reflected taxable income. Had the IRS prevailed on this issue, Columbia/HCA would have owed $68 million in income taxes and $546 million in interest as of December 31, 1995. This ruling did not have any effect on the results of operations. Partial Settlement In February 1996, HCA and the IRS filed a stipulation of settled issues with the Tax Court regarding the 1981-1988 tax litigation, As a result of the partial settlement, the following issues have been resolved: (1) in connection with hospitals acquired by HCA in 1981 and 1985, the allocation of costs to identifiable intangibles with ascertainable useful lives and to goodwill; (2) HCA's use of straight-line rather than accelerated depreciation to calculate its basis in the stock of the subsidiaries sold to Healthtrust in 1987; and (3) certain investment tax and foreign tax credits which had been previously disallowed by the IRS. Had the IRS prevailed on these issues, ColumbiaIHCA would have owed an additional $197 million in income taxes and $289 million in interest as of December 31, 1995. ColumbiaIHCA paid $38 million in income taxes and $49 29 r [ I I i COLUMBIAIHCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 11 - INCOME TAXES (Continued) million of interest ($75 million paid in March 1994 and $12 million paid in November 1995) in settlement of these issues. The payment and settlement of these items did not have any effect on the results of operations. Management believes that RCA properly reported its income and paid its taxes in accordance with applicable laws and agreements established with the IRS during previous examinations, and that final resolution of these disputes will not have a material adverse effect on the results of operations or financial position of ColumbiaIHCA. NOTE 12 - PROFESSIONAL LIABILITY RISKS ColumbiaIHCA insures a substantial portion of its professional liability risks through a wholly owned insurance subsidiary. Provisions for such risks underwritten by the subsidiary, including expenses incident to claim settlements, were $177 million for 1995, $134 million for 1994 and $132 million for 1993, Amounts funded to the insurance subsidiary were $270 million for 1995 (including $83 million of previously unfunded risks related to prior years), $253 million for 1994 (including $146 million related to prior years) and $62 million for 1993. Allowances for professional liability risks, included principally in deferred taxes and other liabilities, were $1.2 billion at both December 31, 1995 and 1994. ColumbiaIHCA adopted the provisions of SFAS 115 on December 31, 1993. Accordingly, stock- holders' equity was increased by $27 million (net of deferred income taxes) to reflect the net unrealized gain on investments (all held by the wholly owned insurance subsidiary) classified as available for sale. The adoption of SFAS 115 had no effect on earnings in 1993. During 1995 and 1994, stockholders' equity was increased by $31 million and decreased by $30 million, respective- ly, to reflect the change in net unrealized holding gains and losses on securities classified as available for sale. Prior to 1995 ColumbiaIHCA classified certain debt securities as held to matu- rity (none of which were sold or transferred before actual maturity). ColumbiaIHCA no longer classifies debt securities as held to maturity. 30 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 12 - PROFESSIONAL LIABILITY RISKS (Continued) A summary of the insurance subsidiary's investments at December 31 follows (dollars in millions): 1995 Available for sale: Fixed maturities: United States Government. . . . . . . . . . . . . . . . . . States and municipalities. . . . . . . . . . . . . . . . . . . Mortgage-backed securities ................. Corporate and other . . , , . . . , , . . . . . . . . . . . . , . . Money market funds. . . . . . . , . . . . . . . , . . . . . . . . Commercial paper . . . . . . . . . . . . . . . . . , . . . . . . . . Redeemable preferred stocks . . . . . . . . . . , . . . . . Equity securities: Perpetual rate preferred stocks ..........". Common stocks. , , , , , . , . . . . , . . . . . . . . . . . . . . , . Amounts classified as current assets. , . . . . . . . . . . . . . . . Investment carrying value .......................... Held to maturity: United States Government obligations. . . . . . , . . . . . Commercial paper. . . . . . . . . . . . . , . . . . . , . . . . . . . . . . . . Available for sale: Fixed maturities: United States Government.. ., , , , , .. . . . . ... .. States and municipalities. . . . . . , . . . , . . . . . . . . . . Mortgage-backed securities. . . . . . . . . . . . . . . . . . . Corporate and other. . . . . . . . . . . . . . . , , . . . . . . . . . Money market funds .,.............,..,..".. Redeemable preferred stocks. . . . . . . . . . . . . , , . , , " Equity securities: Perpetual rate preferred stocks ..."".,...... Common stocks ",................,."....... Amounts classified as current assets ........,......... Investment carrying value .........,.................. 31 Amortized Cost $ 23 434 103 62 195 81 35 - 933 - 8 185 - 193 - $1,126 - Unrealized Amounts Gains Losses Fair Value - $ 1 16 2 2 $- $ 24 450 104 64 195 81 35 953 (1) 21 (1) 1 30 (6) - - 31 (6) $52 $(7) 9 209 - 218 - 1,171 (100) $1,071 1994 Amortized Unrealized Amounts Fair Cost Gains Losses Value $ 5 $ - $ - $ 5 192 192 - - 197 197 38 360 57 79 58 16 608 29 144 173 $978 3 (1) 37 (12) 351 (3) 54 (3) 76 58 (1) 15 - - (20) 591 30 (8) 155 - - (8) 185 - $(28) 973 (85) $888 3 1 19 20 $23 COLUMBIA/HCA HEAL THCARE CORPORA nON NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 12 - PROFESSIONAL LIABILITY RISKS (Continued) The cost and estimated fair value of debt and equity securities at December 31, 1995 by contractual maturity are shown below (dollars in millions), Expected and contractual maturities will differ because the issuers of certain securities may have the right to prepay or otherwise redeem such obligations without penalty. Available for sale: Due in one year or less. . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . Due after one year through five years. . . . . . . . . . . . . . . . . . . . . . . . Due after five years through ten years. . . . . . . . . . . . . . . . . . . . . . . Due after ten years ............................"........... Equity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortized Fair Cost Value - $ 343 $ 343 103 105 191 198 296 307 - - 933 953 193 218 - - $1,126 $1,171 - - - The fair value of the subsidiary's investments is based generally on quoted market prices. The average maturity of the above investments (excluding common stocks) approximated 4.4 years at December 31, 1995 and the tax equivalent yield on such investments averaged 9% for 1995, 8% for 1994 and 10% for 1993, Tax equivalent yield is the rate earned on invested assets, excluding unrealized gains and losses, adjusted for the benefit of nontaxable investment income. Sales of securities for the years ended December 31 are summarized below (dollars in mil- lions). The cost of securities sold is based on the specific identification method. Fixed maturities: Cash proceeds .................................................. Gross realized gains ....................,.................,..... Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . Equity securities: Cash proceeds ...... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . Gross realized gains ......"..............."..."...........". Gross realized losses . . . . . . . . . . . . , . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . 32 1995 1994 $427 $134 3 1 1 2 $149 $ 98 33 16 8 5 1993 $185 4 $106 19 10 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 13 - LONG-TERM DEBT Capitalization A summary of long-term debt at December 31 follows (dollars in millions): Senior collateralized debt, 3.5% to 18% (rates generally fixed) payable in periodic installments through 2034 ....,.....................,........,.,. Senior debt, 3.0% to 13.3% (rates generally fixed) payable in periodic installments through 2095 . . , , . , . . . . . . . . . . . . . . . . . . . . . . , , . . . . . . . . , . . . . . , . . . Senior debt (floating rates averaging 5.9%) payable in periodic installments through 1997. .. . . . . . . . . , , . . . . . . . . . . . . . , , . , . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . Commercial paper (floating rates averaging 6.1%) ..... . . . . . , . . , . . . . . , . . , . . . . Commercial paper (rates generally fixed averaging 6.3%) .... . , , . . . . . . . . . . . . . Bank credit agreements (floating rates averaging 6.1%) . . . . . . . . . . . . . . . . , . . . . , Bank line of credit (floating rates averaging 6.0%) . . . . . , . . . . , . , , . . . . . . . . . . . . . Subordinated debt, 6.8% to 11.5% (rates generally fixed) payable in periodic installments through 2015 . . . . , . , . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . , . , Total debt, average life of ten years (rates averaging 7.1%) ...,............., Amounts due within one year. , . . . . . . . . , . . . . . . . . . . . . . , . . . . . . . , . . . . . . . . . . . . . . Long-term debt. , . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . , . , , . . . . . . . . . . . . . . . . . . . . . . . 1995 1994 - - $ 203 $ 239 3,774 1,522 270 299 2,607 1,630 300 56 709 49 149 121 1,124 - 7,380 5,672 243 124 - - $7,137 $5,548 Credit Facilities Subsequent to December 31, 1995, ColumbiaJHCA amended its revolving credit agreements (the "Credit Facilities") from an aggregate amount of $3.75 billion to $4.0 billion. The Credit Facilities comprise a $2.5 billion five-year revolving credit agreement and a $1.5 billion 364-day revolving credit agreement. The Credit Facilities were established to support ColumbiaJHCA's commercial paper programs and replace prior revolving credit agreements. Interest is payable generally at either LIB OR plus .18% to .35% (depending on ColumbiaJHCA's credit rating), the prime lending rate or a competitive bid rate. The Credit Facilities contain customary covenants which include (i) limitations on additional debt, (ii) limitations on sales of assets, mergers and changes of ownership and (iii) maintenance of certain interest coverage ratios. Significant Financing Activities Healthtrust Merger In connection with the Healthtrust Merger, ColumbiaJHCA completed exchange offers for sub- stantially all of Healthtrust's $1.0 billion subordinated notes and debentures. ColumbiaJHCA defeased the remaining $44 million of unexchanged subordinated notes and debentures in the third quarter. Additionally, in connection with the Healthtrust Merger, $706 million of borrowings under the Healthtrust $1.2 billion credit agreement were refinanced. 1995 During 1995 Columbia/HCA issued $150 million of 6.63% notes due 2002; $100 million of 6,73% notes due 2003; $125 million of 6.87% notes due 2003; $150 million of 8.7% notes due 2010; $150 million of 9.0% notes due 2014; $150 million of 7.19% debentures due 2015; $125 million of 7.58% debentures due 2025; $150 million of 7.05% debentures due 2027 and $200 million of 7.5% debentures due 2095. 33 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 13 - LONG- TERM DEBT (Continued) 1994 During 1994 ColumbialHCA issued $175 million of 6.5% notes due 1999; $50 million of 7.6% notes due 2001; $50 million of 8.02% notes due 2002; $100 million of 8.13% notes due 2003; $150 million of 7.15% notes due 2004; $200 million of 10.25% notes due 2004; $55 million of 8.05% notes due 2006; $150 million of 8.85% notes due 2007; and $150 million of 8.36% notes due 2024. Addi- tionally, ColumbiaIHCA issued $100 million and $200 million of LIB OR-based notes with final maturities of 1996 and 1997, respectively. During 1994 a $40 million 9% subordinated mandatory convertible note due 1999 was con- verted into approximately 2.2 million shares of ColumbiaIHCA common stock, 1993 During 1993 ColumbialHCA issued $150 million of 6.13% notes due 2000, $300 million of 8.75% subordinated debentures due 2005 and $150 million of 7.5% notes due 2023. General Information Borrowings under the commercial paper programs are classified as long-term debt due to the credit available under the revolving credit agreements discussed above and management's inten- tion to refinance these borrowings on a long-term basis, Maturities of long-term debt in years 1997 through 2000 are $250 million, $120 million, $218 million and $411 million, respectively. Such amounts reflect maturities of debt for certain short- term debt classified as long-term, based upon maturities under the revolving credit agreements. Approximately 4% of ColumbiaIHCA's property and equipment is pledged on senior collateralized debt. During the past three years ColumbiaIHCA has reduced interest costs and eliminated certain restrictive covenants by refinancing or prepaying high interest rate debt, primarily through the use of existing cash and cash equivalents and issuance of long-term debt, commercial paper and equity. Amounts refinanced or prepaid totaled $1.8 billion in 1995, $2.2 billion in 1994 and $1.4 billion in 1993. After-tax losses from refinancing activities aggregated $103 million ($.23 per share) in 1995, $115 million ($.27 per share) in 1994 and $97 million ($.24 per share) in 1993. The estimated fair value of ColumbiaIHCA's long-term debt was $7.7 billion and $5.7 billion at December 31, 1995 and 1994, respectively, compared to carrying amounts aggregating $7.4 billion and $5.7 billion, respectively. The estimate of fair value is based upon the quoted market prices for the same or similar issues of long-term debt with the same remaining maturities. 34 COLUMBIA/HCA HEAL THCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 14 - CONTINGENCIES Management continually evaluates contingencies based upon the best available evidence, In addition, allowances for loss are provided currently for disputed items that have continuing sig- nificance, such as certain third-party reimbursements and deductions that continue to be claimed in current cost reports and tax returns, Management believes that allowances for loss have been provided to the extent necessary and that its assessment of contingencies is reasonable. Management believes that resolution of con- tingencies will not materially affect ColumbiaIHCA's financial position or results of operations. Principal contingencies are described below: Revenues - Certain third-party payments are subject to examination by agencies admin- istering the programs. ColumbiaIHCA is contesting certain issues raised in audits of prior year cost reports, Professional liability risks - ColumbiaIHCA has provided for loss for professionalliabil- ity risks based upon actuarially determined estimates. Actual settlements and expenses inci- dent thereto may differ from the provisions for loss. Income taxes - ColumbiaIHCA is contesting adjustments proposed by the IRS. Spinoff - Certain subsidiaries of ColumbiaIHCA are parties to risk-sharing arrange- ments with Humana. Regulatory review - Federal regulators are investigating certain financial arrangements with physicians at two psychiatric hospitals. Litigation - Various suits and claims arising in the ordinary course of business are pend- ing against ColumbiaIHCA. 35 COLUMBIA/HCA HEAL THCARE CORPORA nON NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 15 - CAPITAL STOCK The terms and conditions associated with each class of ColumbiaIHCA common stock are substantially identical except for voting rights. All nonvoting common stockholders may convert their shares on a one-for-one basis into voting common stock, subject to certain limitations. In addition, certain voting common stockholders may convert their shares on a one-for-one basis into nonvoting common stock. Columbia/HCA has plans under which options to purchase common stock may be granted to officers, employees and directors. Generally options have been granted at not less than the market price on the date of grant. Exercise provisions vary, but most options are exercisable in whole or in part beginning one to four years after grant and ending four to fifteen years after grant. Activ- ity in the plans is summarized below (share amounts in thousands): Balances, December 31, 1992. . . . . . . . . . . . . . . . . . . . . . . , . . . , . . , , . . . , , Granted. . . . . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . , , . . , . . , . . , . . , , , . . Exercised. . . . , . . . . . . , , . , . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancelled or lapsed. . . . . . . . . . , . . . , . . , . . . . . . . . . . . . . . . . . . . . . . . . Balances, December 31, 1993. . . . . . . . . . . . . . . . , . . , . . . . , . . , . . . . . . . . . Granted. . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conversion of MCA stock options. . . . . . , . . . . . . . . , , , . . . . . . . . , . . Exercised, . , . . . . , , . . . . . . . . . . . . . . . . , . . . . . . . , . . . . . . . . . . . . . . . . . . Cancelled or lapsed. . . . , . . . . . . . . . . . . . . , . . . . . . . . . , . . . . . . . . . . . . Balances, December 31, 1994. . . . , . . . . , . . , . . . . . . . . . . . . . . . . . , . . . . . . Granted. . . . . . . . , . . . . . . . . . . . , , . , . , , . , , . . . . . . . . . . . . . . . . . . . . . . . Exercised. . . . . . . . . . . . , . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancelled or lapsed. . . . . . . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . Balances, December 31, 1995. . . . . , . . . . . . . . . , . . . . , , . , . . . . . , , , . . , . . Shares under Option 16,213 2,613 ( 4,123) (852) - 13,851 5,271 938 (1,921) (1,574) 16,565 6,267 (3,656) (1,586) 17,590 Option Price per Share $ 0.22 to $25.71 0.01 to 33.38 0.01 to 23.37 0.22 to 25.71 0.01 to 33.38 34.24 to 43.38 5.64 to 57.16 0,22 to 37.63 0.22 to 57.16 0.01 to 57.16 39,77 to 48.75 0.01 to 47.04 0,22 to 57,16 $ 0.22 to $57.16 At December 31, 1995, options for 5,519,900 shares were exercisable. Shares of common stock available for future grants were 8,941,900 at December 31, 1995 and 14,075,200 at December 31, 1994. Shares of common stock reserved for the employee stock purchase plan were 8,615,200 at Decem- ber 31, 1995. ColumbiaIHCA has adopted a stockholder rights plan under which common stockholders have the right to purchase Series A Preferred Stock in the event of accumulation of or tender offer for certain percentages of ColumbiaIHCA's common stock. The rights will expire in 2003 unless re- deemed earlier by ColumbiaIHCA. ColumbiaIHCA has authorized 25 million shares of preferred stock. No preferred shares have been issued. In September 1993 the Board of Directors initiated a regular quarterly cash dividend on the common stock of $.03 per share. 36 COLUMBIAlHCA HEALTHCARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 16 - EMPLOYEE BENEFIT PLANS Columbia/HCA maintains noncontributory defined contribution retirement plans covering substantially all employees. Benefits are determined as a percentage of a participant's earned income and are vested over specified periods of employee service. Retirement plan expense was $110 million for 1995, $107 million for 1994 and $121 million for 1993. Amounts equal to retire- ment plan expense are funded annually. Columbia/HCA maintains various contributory savings plans which are available to employ- ees who meet certain minimum requirements. Certain of the plans require that Columbia/RCA match an amount ranging from 25% to 100% of a participant's contribution up to certain maxi- mum levels. The cost of these plans totaled $24 million for 1995, $39 million for 1994 and $33 million for 1993. Columbia/HCA contributions are funded periodically during the year. NOTE 17 - ACCRUED EXPENSES A summary of other accrued expenses at December 31 follows (dollars in millions): 1995 1994 -- Workers' compensation....... . . .... .. .. . . ..... . ..... .............. . Taxes other than income. . . . . . . . . . . . . . . . . . , , . , . . . , . , , . . . , , , , . , , , . . . . Professional liability risks ..,.............,......"......,.,......,. Employee benefit plans . , , , . . . , . . , , . . . . . . , . . . . . . . . . . . , . . . . . . , . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . , , . . , . , , . . . , . , , , . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . $ 130 226 115 185 199 291 $1,146 $ 136 181 133 187 170 324 - $1,131 - - 37 COLUMBIA/HCA HEAL THCARE CORPORATION QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) (Dollars in millions, except per share amounts) Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income (loss): Before extraordinary charges (a) . . . . . . , . . . . . . . . . . . . . , , . . . Extraordinary charges on extinguishments of debt ......, Net income (loss). . . . . . . . . . . , , . , . . . . . . . . . . . . . . . . . . . . . Per common share: Earnings (loss): Before extraordinary charges (a) . . . . . . . . . . . . . . . . . . . . . Extraordinary charges on extinguishments of debt .,. Net income (loss). . . . . . . . . , . . . . . . . . . , , , , . . . . , . . . . Cash dividends, , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market prices (b): High..,.,.......,......................,........... . Low......,.........................,..,.....,...... Revenues. . . . . . . . . , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income: Before extraordinary charges (c) . . . . . . . . , . . . . . . , , . . . . . , , . Extraordinary charges on extinguishments of debt ,....., Net income .,.,....,...................,.....,...... Per common share: Earnings: Before extraordinary charges (c) . . . . . . . . . . . . . , . . . . . . . Extraordinary charges on extinguishments of debt .,. Net income ...........,.....""......",.....,. Cash dividends. . . , . . . . . . . , , . . . . . . . , . . . . . . . . . . . . . . . . . . . . . Market prices (b): High...,...............,......,..........,......... . Low....".....,........,.....".................... 1995 First Second Third Fourth - $4,380 $4,361 $4,371 $4,583 358 78 274 354 (96) (7) - - - 358 (18) 267 354 .80 .17 .61 .79 (.21) (.02) - - .80 (.04) .59 .79 .03 .03 .03 .03 44% 46 49'V8 54 35918 380/'8 42Y2 460/'8 1994 First Second Third Fourth - - $3,432 $3,521 $3,668 $3,922 187 243 213 286 (92) (23) - - 95 243 190 286 .45 .58 .49 .64 (.22) (.05) - - - .23 .58 .44 .64 .03 .03 .03 .03 45% 43 44 43914 33% 36Y2 38% 33Y2 (a) Second quarter results include $235 million ($.53 per share) of costs related to the Realthtrust Merger and the con- solidation of certain facilities. See Note 8 of the Notes to Consolidated Financial Statements. (b) Represents high and low sales prices of Columbia/HCA. Columbia/HCA common stock is traded on the New York Stock Exchange (ticker symbol COL). (c) First quarter results include $102 million ($.24 per share) of costs related to the RCA Merger. See Note 8 of the Notes to Consolidated Financial Statements. 38 REPORT OF MANAGEMENT To our Stockholders Management is responsible for the preparation, integrity and objectivity of the consolidated financial statements and related notes. To meet these responsibilities, management maintains a system of internal control intended to insure that key employees adhere to the highest standards of personal and professional integrity. Although no cost effective internal control system will preclude all errors and irregularities, we believe the established system of internal control provides reasonable assurance that the assets are safeguarded, transactions are recorded in accordance with management's policies and the financial information is reliable. The consolidated financial statements of Columbia/HCA Healthcare Corporation have been prepared in confor- mity with generally accepted accounting principles and include amounts based upon our best estimates and judgments. These financial statements have been audited and reported on by our independent auditors, Ernst & Young LLP, in accordance with generally accepted auditing standards. The Audit Committee of the Board of Directors, consisting entirely of outside directors, meets regularly with management, internal auditors and Ernst & Young LLP and reviews audit plans and results as well as manage- ment's actions taken in discharging responsibilities for accounting, financial reporting and internal control. Ernst & Young LLP and the internal auditors have direct and confidential access to the Audit Committee at all times to discuss the results of their examinations. 1~ c..Cð.-~~ Kenneth C. Donahey - -. Senior Vice President and Controller REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders Columbia/HCA Healthcare Corporation We have audited the accompanying consolidated balance sheet of Columbia/HCA Healthcare Corporation as of December 31, 1995 and 1994, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial state- ments based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and dis- closures in the financial statements. An audit also includes assessing the accounting principles used and signifi- cant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Columbia/HCA Healthcare Corporation at December 31, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31,1995 in conformity with generally accepted accounting principles, ~.¡ hLLP ERNST & YOUNG LLP Nashville, Tennessee February 14, 1996, except for Note 11 as to which the date is March 8, 1996 39 SENIOR OFFICERS Richard L. Scott President and Chief Executive Officer David T. Vandewater Chief Operating Officer Stephen T. Braun Senior Vice President and General Counsel Victor L. Campbell Senior Vice President Richard E. Chapman Senior Vice President - Information Systems David C. Colby Senior Vice President and Treasurer Kenneth C. Donahey Senior Vice President and Controller W. Leon Drennan Senior Vice President-Internal Audit James M. Fleetwood, Jr. President - Florida Group Samuel A Greco Senior Vice President - Financial Operations Jay Grinney President - Eastern Group Neil D. Hemphill Senior Vice President - Human Resources/Administration Jamie E. Hopping President - Western Group Frank M. Houser President - Physician Management Services Daniel J, Moen President - Columbia Sponsored Networks Group Joseph D. Moore Senior Vice President - Development Lindy B. Richardson Senior Vice President - MarketingIPublic Affairs Richard A Schweinhart Senior Vice President - Columbia Sponsored Networks James D. Shelton President - Central Group Donald E. Steen President - International Group David R. White President - Mid-America Group BOARD OF DIRECTORS R. Clayton McWhorter Chairman of the Board Columbia/HCA Healthcare Corporation Thomas F. Frist, Jr., M.D. Vice Chairman of the Board Columbia/HCA Healthcare Corporation Richard L. Scott President and Chief Executive Officer Columbia/HCA Healthcare Corporation Magdalena Averhoff, M.D. Practicing Physician Charles J. Kane Retired Chairman of the Board Third National Corporation (a bank holding company) Sister Judith Ann Karam, CSA Major Superior of the Sisters of Charity of St, Augustine (nominee) John W. Landrum Owner, Springlake Farms (a farm operations and real estate management company) T. Michael Long Partner, Brown Brothers Harriman & Co, (a private banking firm) Donald S. MacNaughton Retired Chairman and Chief Executive Officer, Hospital Corporation of America, former Chairman and Chief Executive Officer, The Prudential Insurance Company of America Rodman W. Moorhead III Senior Managing Director E.M. Warburg Pincus & Co., Inc. (a specialized financial services firm) Carl E. Reichardt Retired Chairman of the Board and Chief Executive Officer, Wells Fargo and Company (a bank holding company) Frank S. Royal, M.D. Practicing Physician Robert D. Walter Chairman and Chief Executive Officer Cardinal Health, Inc. (a pharmaceutical distribution company) William T. Young Chairman of the Board W.T. Young, Inc. (warehouse company and horse farm) 40 STOCKHOLDER INFORMATION Corporate Office: Columbia/HCA Healthcare Corporation One Park Plaza Nashville, Tennessee 37203 (615) 327-9551 Annual Meeting: The Annual Meeting of Stockholders of Columbia/HCA Healthcare Corporation will be held May 9, 1996 at 1:30 p.m., Central Daylight Time, at Columbia's Corporate Office, One Park Plaza, Nashville, Tennessee. Stock Listing: N ew York Stock Exchange Ticker symbol: COL Additional Investor Information: Questions and requests for additional information from stockholders, security analysts, brokers, and other investors should be addressed to the Investor Relations Department at the Corporate Office. Investor Contact: Victor L. Campbell Senior Vice President (615) 320-2053 (615) 320-2266 FAX Stock Certificates and Dividends: Questions concerning stock certificates and dividends should be addressed to Columbia's transfer agent, National City Bank. Transfer Agent: National City Bank Shareholder Services Group P.O. Box 5756 Cleveland, OH 44101-0756 (216) 575-9313 (800) 622-7809 ;¡¡¡Jill'" OCOWMBIA/HCA Healthcare Corporation One Park Plaza Nashville, Tennessee 37203 (615) 327-9551 For additional information on Columbia programs call: 1-800-220-0183 Columbia's home page is http://www.columbia.net or America Online (keyword:columbia.netj Columbia One Source Magazine The Senior Friends Association Columbia VISA Card CITY OF NORTH RICHLAND HILLS Department: Environmental Services Council Meeting Date: 10/27/97 Subject: Interlocal AQreement for Household Hazardous Waste Agenda Number: GN 97-120 Disposal with the City of Fort Worth The City of Fort Worth is due to open the Environmental Resource Collection Center (ERCC) in November. The ERCC, which is located at 6400 Bridge Street, will accept household hazardous waste from citizens in cities that sign an Interlocal Agreement for use of the facility. This is one part of the Household Hazardous Waste Program that will compliment the Mobile Unit which we purchased with a grant from NCTCOG and TNRCC. The Interlocal Agreement is very similar to the one that the City Council has signed each year for services during the three yearly one day events which we have participated in with Fort Worth and Tarrant County in the past. The major change is the deletion of the "Indeminification clause." With the opening of the ERCC and the purchase of the Mobile Units, there will be no need for the single yearly event. NRH citizens will be able to take their household hazardous waste directly to the ERCC which is approximately seven miles from City Hall, located just off of NE Loop 820 at the John T. White exit. The ERCC will be open two to three days each week. NRH will be billed for the number of households that use the ERCC each quarter at the rate of $75.00 per household which is the same rate that we budgeted for each year during the collection events. To enable each participating city to keep track of the number of households using the Center, Fort Worth was asked to institute a voucher system where citizens would obtain the vouchers from each city and hand them in when taking their items to the ERCC. These vouchers will then be used for billing purposes to keep an accurate count for each city. In addition, NRH Environmental Services will hand out the vouchers so that we can then keep track for budget purposes. It should be noted that the attached Interlocal Agreement is for "individual drop-off' use of the ERCC. There will be a separate Interlocal Agreement for use of the Mobile Unit when it becomes operational next Spring. Fort Worth would like to open the ERCC and operate it for two to three months before putting the Mobile Units in the field. RECOMMENDATION: It is recommended that the City Council approve Interlocal Agreement for Household Hazardous Waste with the City of Fort Worth for the use of the Environmental Resource Collection Center. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Acct. Number Sufficient Funds Available 01-55-02-4800 I FIMnC» DIleClor Page 1 of " ""^-.'-' .~"._,_. """'---""'--~'.~-----------"~".~-- STATE OF TEXAS § § § § § KNOW ALL PERSONS BY THESE PRESENTS COUNTY OF TARRANT INTERLOCAL AGREEMENT FOR PARTICIPATION IN FORT WORTH'S ENVIRONMENTAL COLLECTION CENTER HOUSEHOLD HAZARDOUS WASTE PROGRAM THIS AGREEMENT is entered into by and between the City of Fort Worth, Texas, a home-rule municipal corporation situated in Tarrant County, Texas, hereinafter called "Fort Worth," acting herein by and through Charles Boswell, its duly authorized Assistant City Manager, and the City of , Texas, a home-rule municipality situated in County, Texas, hereinafter called "Participating City," acting herein by and through , its duly authorized WITNESSETH WHEREAS, Texas Govemment Code, Chapter 791, authorizes the formulation of interlocal cooperation agreements between and among municipalities; and WHEREAS, Texas Government Code, §791.011 provides that a local government may contract with another to perform governmental functions and services, and §791.003(3)(H) defines waste disposal as a governmental function and service; and WHEREAS, Texas Government Code, §791.025 provides that a local government may agree with another local government to purchase services; and WHEREAS, Fort Worth and Participating City desire to enter into an interlocal agreement whereby Fort Worth will purchase the services of a waste disposaVrecyding firm or firms and will administer a household hazardous waste collection program; and WHEREAS, Fort Worth and Participating City mutually desire to be subject to the provisions of Texas Government Code, Chapter 791, also known as the Interlocal Cooperation Act; NOW THEREFORE, it is agreed as follows: 1. DEFINITIONS A. Unless a provision in this Agreement explicitly states otherwise, the following terms and phrases, as Used in this Agreement, shall have the meanings hereinafter designated. Page 1 ·_---_._~----^-".~ _._._--~---_._------_._---_._------~_..__.~---~_._--_.-_._~._----~- Act of God means an act occasioned by the direct, immediate, and exclusive operation of the forces of nature, uncontrolled or uninfluenced by the power of man and without human intelVention. Environmental Collection Center means the City of Fort Worth Department of Environmental Management facility located at 6400 Bridge Street, Fort Worth, Texas, which is to be used by Fort Worth for the aggregation of household hazardous wastes that have been brought to the facility by participating cities' households for subsequent recycling, disposal, and/or reuse. Environmental damaaes means all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorney's fees and disbursements and consultant's fees, any of which are incurred subsequent to the execution of this Agreement as a result of the handling, collection, transportation, storage, disposal, treatment, recovery. and/or reuse of waste pursuant to this Agreement, or the existence of a violation of environmental requirements pertaining to same, and including without limitation: (a) Damages for personal injury and death, or injury to property or natural resources; (b) Fees incurred for the selVices of attorneys, consultants, contractors, experts. laboratories and all other costs incurred in connection with the investigation or remediation of such wastes or violation of environmental requirements including, but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remediation, removal, response, abatement, containment, closure, restoration or monitoring work required by any federal, state or local governmental agency or political subdivision, or otherwise expended in connection with the existence of such wastes or violations of environmental requirements, and including without limitation any attorney's fees, costs and . expenses incurred in enforcing this Agreement or collecting any sums due " 'hereunder; and (c) Liability to any third person or governmental agency to indemnify such person or agency for costs expended in connection with the items referenced in subparagraph (b) herein. Environmental reauirements means all applicable present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states, and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments, and orders relating to the protection of human health or the environment, including without limitation: Page 2 ~_"_~~~>_.'_"_"_"M_~~'~.'~__~.___~~_~__~_._~_~,___,._ (a) All requirements, including but not limited to those pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of hazardous materials, pollutants, contaminants, or hazardous or toxic substances, materials, or wastes whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, storm water, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, or hazardous or toxic substances, materials, or wastes, whether solid, liquid, or gaseous in nature; and (b) All requirements pertaining to the protection of the health and safety of employees or the public. Force maieure means decrees of or restraints by a governmental instrumentality, acts of God, work stoppages due to labor disputes or strikes, failure of Fort Worth's contractor(s) to perform pursuant to their agreements with Fort Worth for the conduct of the collection of household hazardous waste, fires, explosions, epidemics, riots, war, rebellion, and sabotage. Household hazardous waste means any solid waste generated in a household by a consumer which, except for the exclusion provided for in 40 CFR § 261.4(b)(1), would be classified as a hazardous waste under 40 CFR Part 261. Manifest means the uniform hazardous waste manifest form(s) furnished by the TNRCC to accompany shipments of municipal hazardous waste or Class 1 industrial solid waste for waste transported to a site in Texas, or the comparable manifest of the receiving state if the waste is transported out of Texas, Participatina cities, when used in the plural, means Fort Worth, Participating City, and all other cities which have entered into interlocal Agreements with Fort Worth for the ECC household hazardous waste collection program. Person means an individual, corporation, organization, government, or governmental subdivision or agency, business trust, partnership, association, or any other legal entity. ." Waste has the same meaning as "solid waste" as that term is defined in Texas Health and Safety Code §361.003, and including hazardous substances. B. Unless a provision in this Agreement explicitly states otherwise, the following abbreviations, as used in this Agreement, shall have the meanings hereinafter designated. CERCLA - Comprehensive Environmental Response, Compensation, and liability Act. CPR - cardiopulmonary resuscitation. DOT - United States Department of Transportation. ECC - Environmental Collection Center. Page 3 -~--~---------~----_.._._---_..._.__.,.'"--------_.- --.--~-------...---------~ EPA - United States Environmental Protection Agency. HAZCA T - hazardous categorization. HAZWOPER - hazardous waste operations and emergency response. HM - hazardous materials. HHW - household hazardous waste. 2. PURPOSE The purpose of this Interlocal Agreement (hereafter "Agreement") is the provision of services by Fort Worth to Participating City whereby, subject to the terms and conditions specified below. Fort Worth will administer and supervise a regional household hazardous waste collection program, which will be available to households within Participating City. 3. TERM This Agreement shall be effective from November 1,1997, through September 30,1998, and may be extended for two one-year terms by Agreement of all parties. 4. SERVICES OF FORT WORTH Fort Worth agrees to perform the following services for Participating City in connection with the ECC household hazardous waste collection program: A. Fort Worth will administer a regional household hazardous waste collection program. This program will include the operation of the Environmental Collection Center, which will accept for disposal and/or recycling household hazardous waste from households located within Participating City. Fort Worth shall not accept compressed flammable gas containers; radioactive materials; explosives or potentially shock sensitive materials; biological, etiologic, and infectious materials; wastes from businesses; and. any other wastes that Fort Worth has determined are unacceptable. B. Fort Worth will employ personnel. perform administrative activities, and provide administrative services necessary to perform this Agreement. C. Fort Worth will enter into a contract(s) with a waste disposaVrecycling firm or firms for the handling, collection, transportation, storage, disposal, treatment. recovery. and/or reuse of household hazardous waste, which is collected at the ECC. Such firm(s) shall be required pursuant to the contract(s) to assume generator status for the waste Page 4 ~-- -.,,~,.- "---"""-"M~·<___-"~,---,·~·,,,~_____~_,__,__,__w_.~_.~____._. collected, (excluding used oil, lead-acid batteries and anti-freeze) to choose a disposal site for the waste subject to fort worth's approval, and to indemnify fort worth and participating cities against any and all environmental damages and the violation of any and all environmental requirements resulting from the handling, collection, transportation, storage, disposal, treatment, recovery, and/or recycling of waste collected pursuant to this agreement, when said environmental damages or the violation of said environmental requirements was the result of any act or omission of contractor, its officers, agents, employees, or subcontractors, or the joint act or omission of contractor, its officers, agents, employees, or subcontractors and any other person or entity. THE PARTIES RECOGNIZE THAT ALTHOUGH THE FIRM(S) WILL BE REQUIRED TO ASSUME GENERATOR STATUS, THIS ASSUMPTION WILL NOT RELIEVE PARTICIPATING CITIES OF LIABILITY FOR THE WASTE UNDER FEDERAL LAW AND STATE LAW. Fort Worth will arrange for recycling vendors for used oil, batteries and anti-freeze. D. Fort Worth will, if requested by Participating City, provide Participating City with copies of waste manifests for shipments of waste from the ECC. E. Fort Worth will meet with all participating cities in May of 1998 to provide an accounting of actual costs of the ECC household hazardous waste program, in order to begin negotiations for Agreements for fiscal year 1998-1999. F. Fort Worth will act under this Agreement in accordance with all applicable state and federal laws. 5. DUTIES OF PARTICIPATING CITY Participating City agrees to perform the following duties in connection with the household hazardous waste collection program: A. Participating City will designate one of its employees, and another as an alternate, to act as its household hazardous waste collection coordinator to interact with Fort Worth. .' , B. Participating City will coordinate and fund all program advertising targeted to its own citizens, as it deems necessary. Such advertising shall include the type of wastes that will be accepted at the ECC and the requirement of proof of residency. Participating City may choose to utilize a voucher system for its residents in order for them to bring HHW to the ECC. If Participating City chooses to use such a system, it shall notify Fort Worth of same. C. Participating City will advise its citizens when it has reached the maximum number of households allocated under this Agreement for participation in the program, and inform them that they can no longer use the service. Page 5 ~---_._-~~-------~---------- ------,-----~--- ----- ,-------..------.-------- 6. RIGHT OF REFUSAL OF WASTE Participating City agrees that Fort Worth shall have the right to refuse to accept waste at the ECC from a resident of Participating City and to eject such individual from the premi~es of the ECC if in the reasonable judgment of Fort Worth:' A. The waste is not household hazardous waste; B. The waste fails to meet other established criteria established by this Agreement, or that have been established by Fort Worth subsequent to the execution of the Agreement; C. The individual does not have sufficient identification to establish that he/she is in fact a resident of Participating City; D. Participating City has implemented a voucher system for its residents to dispose of waste, and the individual does not have a valid voucher; or E. The waste or the individual presents a hazard to the ECC or to persons or property at the ECC. 7. COMPENSATION A. Participating City agrees to pay Fort Worth the sum of $75.00 per household for households, for a total not to exceed amount of $ , as compensation for its participation in the program. This is an amount that fairty compensates Fort Worth for its services under this Agreement. The total not to exceed amount shall be paid to Fort Worth in four equal installments from funds currently available to Participating City. The quarterty installments shall be due no later than ten (10) days following receipt by Participating City of an invoice from Fort Worth. Fort Worth will bill Participating City on November 15,1997, January 15,1998, April 15, 1998. and July 15, 1998. B. The inVoices will include the number of Participating City's households that contributed HHW to the program during the quarter, the total amount to-date charged against Participating City's account, and the amount remaining in Participating City's account. C. Fort Worth will notify Participating City when at least 75% of the not to exceed amount of this Agreement has been spent, and will cut off Participating City's residents trom using the ECC when Participating City's allocated funds have been exhausted. D. At the end of the term of the Agreement, Fort Worth shall provide a final accounting to Participating City, which will include the total number of Participating City's households which participated in the program, the total cost of spill response charged to Participating City, and the amount of any balance remaining in the account. If a balance remains in the account, Participating City will have the option of receiving a refund or rolling the funds over into the next year's account. Fort Worth shall pay no interest to Participating City on the funds in its account. Page 6 - -"- M~·_·"···',^·'~'~'~.'.'_m~~_,__·__~,_,.._.",.,w".,__.,><_....,.,.,.~___._,.~._'_,~__~~,._ 8. IMMUNITY It is expressly understood and agreed that, in the execution of this Agreement, none of the participating cities waives, nor shall be hereby deemed to waive, any immunity or defense that would otherwise be available to it against daims arising in the exercise of governmental powers and functions, and that the services described in this Agreement are a governmental function. 9. FORCE MAJEURE A delay or failure of Fort Worth to perform services pursuant to this Agreement shall be excused to the extent that the delay or failure to perform resulted from a force majeure event, and the delay or failure was beyond the control of Fort Worth and not due to its fault or negligence. Participating City shall not have, and hereby waives, any claim whatever for any damages resulting from delays or failure to perform caused by a force majeure event. 10. TERMINATION The parties shall each have the right to terminate the Agreement for any reason, with or without cause, upon thirty (30) days' written notice to the other party. 11. NOTICE Any notices required to be given under this Agreement shall be delivered as follows: If to Fort Worth: Or. Edward Sierra, Director Department of Environmental Management 1000 Throckmorton Fort Worth, Texas 76102 If to Participatina City: 12. ENTIRETY This Agreement contains all commitments and Agreements of the parties hereto, and no other oral or written commitments shall have any force or effect if not contained herein. Page 7 13. SEVERABILITY In the event anyone or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein. 14. VENUE Should any action, real or asserted, at law or in equity, arise out of the terms and conditions of this Agreement, venue for said action shall be in Tarrant County, Texas. 15. AUTHORITY This Agreement is made for Fort Worth and Participating City as an Interlocal Agreement, pursuant to Texas Government Code, Chapter 791. 16. AUTHORIZATION The undersigned officers and/or agents of the parties hereto are properly authorized officials and have the necessary authority to execute this Agreement on behalf of the parties hereto, and each party hereby certifies to the other that any necessary resolutions extending such authority have been duly passed and are now in full force and effect. EXECUTED IN TRIPLICATE in Fort Worth, Tarrant County, Texas. CITY OF FORT WORTH PARTICIPATING CITY ." By: Name: Title: Date: By: Charles Boswell Assistant City Manager Date: APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FORM AND LEGALITY: Marcia WIse Assistant City Attorney City Attorney Page 8 ATTEST: Alice Church City Secretary !i~ ATTEST: Page 9 "H"__'__'_"__~____~__________ City Secretary '- CITY OF NORTH RICHLAND HILLS Department: Legal Council Meeting Date: Subject: Authorization of Eminent Domain Proceeding on Agenda Number: Calloway Branch (B) - Chapman to Hightower - Resolution No. 97-49 1 0/27/97 GN 97-121 Public Works staff has so far been unsuccessful in acquiring drainage easements as follows: Parcel No, 1 - Drainage Easement belonging to Jeff and Vicki Graham Parcel No. 3 - Drainage Easement belonging to Jerry and Shirley Winter Negotiations are continuing and voluntary acquisition may still occur. Recommendation: It is recommended the City Council pass Resolution No, 97-49 authorizing eminent domain proceedings if the property can't be acquired through negotiations. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other umber Sufficient Funds Available Finance Director ì Page 1 of RESOLUTION NO, 97-49 WHEREAS, the Public Works Department has attempted to negotiate a purchase of the drainage easement parcels below for the Calloway Branch Drainage Project (B)- Chapman to Hightower; and WHEREAS, the effort to purchase the needed drainage easements for the appraised value has not been successful. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The Attorney and Staff are authorized to commence and prosecute to completion eminent domain proceedings against the following: (1) Calloway Branch (B) - Chapman to Hightower Drainage Easement, Parcel 1 City of North Richland Hills, Tarrant County, Texas, belonging to Jeff and Vicki Graham. (2) Calloway Branch (B) - Chapman to Hightower Drainage Easement, Parcel 3, City of North Richland Hills, Tarrant County, Texas, belonging to Jerry and Shirley Winters. 2. The Council finds that the above drainage easement parcels are needed for a public municipal purpose and directs that eminent domain proceedings be used to procure the needed property if negotiations fail. PASSED AND APPROVED this 27th day of October, 1997, APPROVED: Tommy Brown, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for the City CITY OF NORTH RICHLAND HILLS Subject: Appointment to Park and Recreation Facilitip.~ Development Corporation Council Meeting Date: 10/27/97 Agenda Number: GN 97-122 Department: City Secretary Due to the death of Mr. Larry Bracke, Place 7 on the Park and Recreation Facilities Development Corporation is vacant. Mayor Brown has recommended Mr. Danny Blankenship for appointment as a Citizen Member. Recommendation: It is recommended that the City Council take action on the proposed appointment to Place 7. Finance Review Source of Funds: Acct. Number Bonds (GO/Rev,) Sufficient Funds Available Operating Budget _ Other - 't··~~d~ Department Head Signature _ CITY COUNCIL ACTIO Flnlnce Director Page 1 of .. CITY OF NORTH RICHLAND HILLS Subject: Designation of Records Management Officer- Ordinance No. 2248 Agenda Number: 10/27/97 GN 97-123 Department: City Secretary Council Meeting Date: The Local Government Code requires that the City designate a Records Management Officer. In the past the City Secretary has designated the individual holding the position of Records Management Officer. This position is presently vacant and will not be filled with a Records Manager. The City Secretary who is responsible for the administration of the North Richland Hills Records Management Program, is requesting the City Council to designate the position of the City Secretary as the Records Management Officer for the City. Recommendation: It is recommended that the City Council approve Ordinance No. 2248. '--- Finance Review Source of Funds: Acct. Number Bonds (GO/Rev.) Sufficient Funds Available Operating Budget _ Other _ "--@'aoU~~ Department Head Signature CITY COUNCIL ACTION IT, Finance Dnctor Page 1 of ORDINANCE NO. 2248 WHEREAS, by Ordinance No. 1444, the City Council had heretofore established a Records Management program to be administered and implemented by the City Secretary; and WHEREAS, the City is required by statute to designate a Records Management Officer (RMO); and WHEREAS, the City Secretary had previously designated Ms. Kathryn Brown as the Records Management Officer of the City, NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The prior designation of Ms. Kathryn Brown is revoked, The designation of the City Secretary as the Records Management Officer of the City of North Richland Hills be and is hereby approved and her appointment shall be effective upon passage and approval of this ordinance. 2. The duties of the Records Management Officer shall be those imposed by Ordinance No. 1444, Chapter 203 of the Local Government Code and the Charter of the City. PASSED AND APPROVED THIS 27th Day of October, 1997, APPROVED: Tommy Brown - Mayor ATTEST: Patricia Hutson - City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire - Attorney for the City CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Department Council Meeting Date: Subject: Amending City Ordinance #1804 - To Address Tobacco Use in City Parks - Ordinance No. 2249 Agenda Number: 10/27/97 GN 97-124 After receiving a request from four families of children involved in youth sports, the Parks and Recreation Board discussed eliminating smoking at athletic complexes at their June 2, 1997 meeting. Representatives from the Richland Youth Association and the North Richland Hills Girls Softball League were present and in attendance at the subsequent October 6th meeting as well. The Board recommended that the Richland Youth Association add a no smoking policy to their organizational by-laws. The youth sports associations have taken that request under advisement for consideration. The youth sports associations had questions regarding their legal authority to regulate use of tobacco and desired City support through signage and policy for enforcement. The Board requested the Parks and Recreation Department post "no smoking" on the rules and regulation signs being installed as a part of the standard park signage. The Parks and Recreation Board engaged in considerable discussion, thoughtful debate and deliberation, in response to citizen concerns on this issue, prior to making a recommendation to City Council. The primary issues as discussed by the board were, setting appropriate examples for youth participating in activities in city parks, consideration of "passive smoke" impacts on non- smoking participants and spectators, and finally the appearance of our parks and the litter maintenance costs caused by non-biodegradable cigarette butts. The Board placed emphasis on the impacts to spectators and cited numerous examples of both public and private "open air" sports venues that currently prohibit smoking including, Birdville Stadium,The Ballpark in Arlington and all high school sport fields throughout the state. The Board also discussed the advantages and disadvantages of various enforcement issues and do not anticipate additional police support to be necessary. Police intervention is currently not a problem or impact at our facilities that currently prohibit smoking by policy such as NRH20 and the Richland Tennis Center. The Board is not requesting an aggressive pursuit of smokers but more of a responsive approach on a complaint basis. The impacts on the police department should be nominal, much like enforcement of our litter laws which are fairly low priority items handled by officers on a complaint basis or by virtue of passively observing violations. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other ',- ~ ~~-..._~-- Department Head Signature CITY COUNCIL ACTION Acct. Number Sufficient Funds Available Finane» Director Page 1 of _ól- CITY OF NORTH RICHLAND HILLS The Board also directed staff to research and evaluate a mechanism to legally prohibit smoking. Additionally, the City Manager recently received a request to eliminate smoking in all parks. Options for Council consideration could be: 1. The Parks and Recreation Board, at their October 6, 1997 meeting, approved a recommendation to the City Council for the adoption of an ordinance to create a smoke-free and tobacco free environment within all city parks. Attached is a draft of the proposed Ordinance the Parks and Recreation Board recommended for City Council consideration (Draft Ordinance "A"). Staff would like to provide two alternative recommendations, with proposed ordinances attached, for Council consideration as follows: 2. Prohibit use of tobacco within 20 feet of youth sporting events including courts and bleachers, playgrounds, concession buildings, restrooms and posted natural areas. Spectators or park users wishing to use tobacco would be required to leave the field, court, bleacher and playground area by a distance of at least 20 feet. This distance will allow for spectators to view a game and parents to watch their children on a playground. This alternative eliminates spectators and the children from the immediate exposure to tobacco, as well as improving litter control in and around the bleacher areas (Draft Ordinance "B"). ',-- 3. Allow the use of tobacco in paved parking areas only. This alternative creates a tobacco free environment, improves litter control, and reduces the risk for potential grass fires, especially in non-irrigated parks, by making it simplier to determine a violation of the ordinance without a distance regulation. This alternative will enhance the City's enforcement efforts (Draft Ordinance "C"). In addition to these alternatives, use of tobacco products would continue to be prohibited in the Recreation Center, Senior Adult Centers, NRH20 Family Water Park, Richland Tennis Center and any other park projects jointly developed on school district property. RECOMMENDATION: It is recommended that Council review the recommendations of the Park and Recreation Board and Staff and consider amending Ordinance No. 1804 to include addressing tobacco use in city parks. Attachment: Proposed Ordinances Letter ',-, Page B- of ~ Draft Ordinance "A" ORDINANCE #2249 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: Ordinance #1804 shall be amended to read as follows: 1. It shall hereafter be unlawful for any person to smoke tobacco, chew tobacco or dip tobacco or snuff within the confines of any city-owned and operated building or any city-owned park. 2. It is the intent of the council in passing this ordinance to create a smoke-free and tobacco- free environment within all city buildings and city parks. 3. Notice of this ordinance shall be given by posting written "THIS FACILITY IS TOBACCO FREE" signs at or near the main entrance of each building. Each letter in the sign shall be at least 1.5 inches in height. Notice of this ordinance shall be given on all Rules and Regulations signs located in all parks. 4. Any person violating this ordinance shall be guilty of a misdemeanor and fined not in excess of $200 for each offense. 5. This ordinance shall be in full force and effect from and after its date of passage and publication as provided by law. PASSED AND APPROVED this _ day of ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for City ,1997. APPROVED: Tommy Brown, Mayor Draft Ordinance "B" ORDINANCE #2249 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: Ordinance #1804 shall be amended to read as follows: 1. It shall hereafter be unlawful for any person to smoke tobacco, chew tobacco or dip tobacco or snuff within the confines of any city-owned and operated building or within 20 feet of youth sporting events including courts and bleachers, playgrounds, concession buildings, restrooms and posted natural areas. Use of tobacco products will be prohibited at NRH20 Family Water Park, Richland Tennis Center and any other Park and Recreation facilities jointly developed on school district property. 2. It is the intent of the council in passing this ordinance to create a smoke-free and tobacco- free environment within all city buildings or within 20 feet of youth sporting events including courts and bleachers, playgrounds, concession buildings, restrooms and posted natural areas. Use of tobacco products will be prohibited at NRH20 Family Water Park, Richland Tennis Center and any other Park and Recreation facilities jointly developed on school district property. 3. Notice of this ordinance shall be given by posting written ''THIS FACILITY IS TOBACCO FREE" signs at or near the main entrance of each building. Each letter in the sign shall be at least 1.5 inches in height. Notice of this ordinance shall be given on all Rules and Regulations signs located in all parks, specifying the regulated areas. 4. Any person violating this ordinance shall be guilty of a misdemeanor and fined not in excess of $200 for each offense. 5. This ordinance shall be in full force and effect from and after its date of passage and publication as provided by law. PASSED AND APPROVED this _ day of ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for City ,1997. APPROVED: Tommy Brown, Mayor Draft Ordinance "C" ORDINANCE #2249 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: Ordinance #1804 shall be amended to read as follows: 1. It shall hereafter be unlawful for any person to smoke tobacco, chew tobacco or dip tobacco or snuff within the confines of any city-owned and operated building or any city-owned park with the exception of paved parking areas only. 2. It is the intent of the council in passing this ordinance to create a smoke-free and tobacco- free environment within all city buildings and city parks with the exception of paved parking areas only. 3. Notice of this ordinance shall be given by posting written "THIS FACILITY IS TOBACCO FREE" signs at or near the main entrance of each building. Each letter in the sign shall be at least 1.5 inches in height. Notice of this ordinance shall be given on all Rules and Regulations signs located in all parks. 4. Any person violating this ordinance shall be guilty of a misdemeanor and fined not in excess of $200 for each offense. 5. This ordinance shall be in full force and effect from and after its date of passage and publication as provided by law. PASSED AND APPROVED this _ day of ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for City ,1997. APPROVED: Tommy Brown, Mayor May 17,1997 Mr. Jim Browne Director, Parks and Recreation City of North Richland Hills 6720 NE Loop 820 North Richland Hills TX 76180 Dear Me Browne: \Ve are writing to you as residents of North Richland Hills and as concerned parents. Our children participate in and benefit greatly by the sports programs offered by Richland Youth Association at Richfield Park. The cooperative effort of your Department's staff and the many volunteers have made this facility one we should all be proud of But we're not, because of one problem_ Sl\IOKING! The many thoughtless adults who continually smoke while sitting in the bleachers, standing by the bleachers or along the fences next to the playing fields and the dug-outs obviously have no consideration or respect for the children who are affected by their second-hand smoke, Not to mention how unsightly and littered the grounds have become from all the extinguished cigarette butts. We have been told that the reason there is no ordinance prohibiting smoking at the park facilities is because they are outdoors. When a person smokes while sitting in the middle of the raised bleachers adjacent to the playing fields, their second-hand smoke encompasses all innocent bystanders, both children and adults. Any breeze which may be blowing only aggravates the disbursement of the smoke. The City of North Richland Hills operates a family water park that is an outdoor facility in which smoking is prohibited. Can the same reasoning involved in prohibiting smoking at NRHzO be applied to its youth sports facility? Or could at least a restriction be placed on smoking in and around the playing fields, bleachers, and dug-outs? Signs could be posted on the fences at each field indicating the no-smoking area similar to the signs Birdville Independent School District has posted on the playing fields adjacent to its schools. \Ve strongly urge you to consider this request so that all the residents of North Richland Hills can truly be proud of their City in its efforts to ensure the safety and future of our children. :XClL(.tL-té /J¿A.a 0 ' (;;- 7C 5 -4-,-1...('/1... ~1..kA- '-.J] I't" / L/'; 7 ,~((, \-(c¡.. ,-Cl ~-J- ((' "5G.~ -.;L{I(j 5 .& "L . 7 L.... I g () '~LJcfj¡~ r.., '7.:2 {CLL I..{)A .51 Y). ~r)-,I(] rid ¡'·kUs ÏŸ 76(£0 8n-5ì7- t¡36{ - .\d Cl 'Y¡/,o( 1:1 CtiJ. '<./L~ (, '7,7 (1 L.1. drJ. .s<.v 6-1.. '"11 f' H ï Y' TGI fù ? . 1·5(~-.J:) U -~'t~$f~o \ . CITY OF NORTH RICHLAND HILLS Support Services Council Meeting Date: Department: Subject: Engineering Services for HVAC Chiller System Replacement Agenda Number: 10/27/97 PU 97-89 As part of the 1997-98 fiscal year budget, funding was appropriated for the replacement of the heating and air conditioning chilled water system at the Recreation Center. The firm of Romine, Romine, and Burgess, Inc. has been selected to prepare the specifications and design drawings for the project. Romine, Romine, and Burgess, Inc. has successfully worked with the City on other HV AC projects and has agreed to provide all contract documents and construction administration for the fee of $24,000. Recommendation: It is recommended City Council award the Contract for engineering services for the Recreation Center HVAC replacement to Romine, Romine, and Burgess, Inc. for the fee of $24,000. Finance Review Source of Funds: Acct. Number 13-70-06-6000 Bonds (GO/Rev.) Sufficient Funds Available Operating Budget _ ~ Other - ~ [.- ~~ ~ Department Hea Ignature CITY COUNCIL ACTION FinllnC» Director Page 1 of 1 CITY OF NORTH RICHLAND HíLLS I Department: Public Works Approve Sale of a Portion of Lot 25, Block 1-R, Subject: Holiday West Addition - Resolution No 97-48 Council Meeting Date: 10/27/97 Agenda Number: PU 97-90 The Çity was given Lot 25, Block 1-R, Holiday West Addition from Northeast Construction Company (Hamm and Sandlin) on April 3, 1997. This is a vacant lot to be used for access from Holiday Lane into a concrete drainage channel. The residence adjacent to and north of this lot, 5601 Jamaica Circle (Lot 1, Block 19, Holiday West Addition), is owned by Gary Jones. Mr. Jones has a small backyard. He had bought his house thinking he would also acquire Lot 25 in back of his house to give him more yard area, The City was given Lot 25 prior to Mr. Jones finalizing a contract on the lot. Public Works staff has determined that part of the lot could be sold to Mr. Jones and still allow us the access we need into the drainage channel from Holiday Lane. The compensation to the City will be $375.00, which is the cost of surveying the portion of the lot conveyed to Mr. Jones. Recommendation: "-..., It is recommended Council approve Resolution No. 97-48, authorizing the Mayor to execute a Special Warranty Deed conveying 6,789.7 square feet of Lot 25, Block 1-R, Holiday West Addition to Gary Jones for $375.00, Finance Review Acet. Number Sufficient Funds Available Finance Director Page 1 of RESOLUTION NO. 97-48 WHEREAS, the City of North Richland Hills was given ownership of Lot 25, Block 1-R, Holiday West Addition for access from Holiday Lane into a concrete drainage channel; and WHEREAS, Gary Jones, the owner of Lot 1, Block 19, Holiday West Addition, has offered to purchase for $375.00 a portion of Lot 25, Block 1-R, Holiday West Addition (6,789.7 square feet) for access purposes to his adjacent land; and WHEREAS, the City has no use for the 6,789.7 square feet in question; and WHEREAS, the City can sell a portion of Lot 25, Block 1-R, Holiday West Addition and have access from Holiday Lane into the concrete drainage channel. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of North Richland Hills, Texas, that the Mayor is to execute a Special Warranty Deed for 6,789,7 square feet to Gary Jones as the act and deed of the City. PASSED AND APPROVED, this 27th day of October, 1997. 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I III 2... ~ ~ . ~ .. .- ~ ¿ } ._ BUENOS A ¡ RE S CR ,,/ 3'/ '1 ,2131 /30 I H '12/3 '/' '/7 - 3 - ... I 12 U II .. '0 " S t6 " .8 - en :3 II )I 8 20 " W % 2\ .. 0 " 22 :r en 21 2. J 12 u II ,. 10 I' I t6 " .. II )I 20 w > 21 Q 0 0 22 >: 23 2. ~ ..., ......'" - - \. 13 I I I ' 1 I ! I I , . . I I 2 8:8A~CI:R 6 7 6 S ~ '(, " .. u ~ -.." Cf- .0 " . 'd 3S ~ I 38 " 17 12 10 II- - II I 8AH.UoIA CT"OG ---:;- 37 "I'J ! 20 f5 -tV IC ð ¡--- 23 I 22 21::1 5 æt-- ä5 . ~,~fMU~ r-;-1¡1 I -., 26 21 28 ~ ¡ 31 ]0 29 ~ 1 .I--f '.. I-- 6 37 , 38 2. . 33 2' 3A 3 3. 2A 2 3J i 32 I' \ .... 12 .. , ~ 2./ 2' 26 \ I 21 12. ! 2' /2' i 23 ¡ ~~2S 2. 2\· 2, ,~. 15 I" ~"Ë/NT3I:GD,:T " 6 12 II ~i\' i' 10 II II _~:..... )1 ....~r;ol _~...;. 10 \, ð " ,,'~ 3S 38 ' ..~, 20 §~?f:2 SAO PAUl.O CT\~J7 .,.' .~ is. \ . 21 g" 1 I I 10 I ~, z n ~ 4 .. 4[" '" '" ~<;. , ~ 33 23 I ~ II /'0 i . /7 ii, J . 12 , -) \ ~_ 24 t 12 . I I 4 13 4 ".. \ 3 } · " 28/27 281~ 2.1ª~ª12I¡201,si "!"!"I 15 ~ r ~ ~ , ,.. 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SPECIAL WARRANTY DEED THE STATE OF TEXAS, KNOW ALL MEN BY THESE PRESENTS: COUNTY OF TARRANT ) That the City of Horth Richland Hills, Texas, a municipal corporation, of the County of Tarrant, state of Texas, for and in consideration of the sum of THREE HUNDRED SEVENTY-FIVE DOLLARS ($375.00) and other good and valuable consideration to the undersigned paid by Grantee herein named, the receipt hereby acknowledged, have GRANTED, SOLD AND CONVEYED, and by these presents do GRANT, SELL AND CONVEY, unto Gary Jones the following described real property in Tarrant County, State of Texas, to wit: EXHIBITS "A" and "B" describe the tract and are attached made a part hereof. hereto and TO HAVE AND TO HOLD the above described premises, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Gary Jones, his heirs and assigns forever and said Grantor does hereby bind its successors and assigns, to Warrant and Forever Defend, all and singular the said premises unto the said Grantee, his heirs and assigns, against every person whomsoever lawfully claiming, or to claim the same, or any part thereof, by, through or under said corporation but not otherwise. The conveyance made herein is a portion of Lot 25, Block lR, West Addition. Grantor hereby allows Grantee the right of ingress from the remainder of Lot 25, Block lR, Holiday West Addition into property herein conveyed. Holiday and egress the WITNESS my hand at North Richland Hills, Texas, this Ocotber, 1997. day of CITY OF NORTH RICHLAND HILLS, TEXAS By: STATE OF TEXAS COUNTY OF TARRANT ) Corporate Acknowledgment . ~. .. This instrument was acknowledged before me on the day October, 1997, by Tommy Brown, Mayor of the City of North Rich1and Hills, Texas, a municipal corporation, on behalf of said corporation. Notary Public, State of Texas Mailing Address of Grantee: City Secretary City of North Richland Hills 7301 N.E. Loop 820 North Richland Hills, Texas 76180 DESCRIPTION OF PROPERTY SITUATED in the City of North Richland Hills Tarrant County, Texas and being a portion of Lot 25 Block 1-R of Holiday West Addition (Holiday West 1) an addi- tion to the City of North Richland Hills as recorded in Volume 388-126, Page 93 of the Plat Records of Tarrant County, Texas (P,R.T.C.T,), and being more particularly described by metes and bounds as follows; BEGINNING at an iron rod found in place at the southwest corner of Lot 1, Block 19 of Holiday West (Holiday West 2) Addition an addition to the City of North Richland Hills as recorded in Volume 388-127, Page 29 of the Plat Re- cords of Tarrant County, Texas; THENCE, South 89 degrees 39 minutes 56 seconds East, with the existing south property line of said Lot 1, 90.71 feet to a point for a corner; THENCE, South 09 degrees 52 minutes 33 seconds West, 82.46 feet to a one half inch iron rod set for a corner; THENCE, North 75 degrees 17 minutes 24 seconds West, 95.6 feet to a one half inch iron rod set for a corner; THENCE, North 07 degrees Og minutes 34 seconds East, 58.0 feet to a one half inch iron rod set for a corner in the north property line of the aforesaid Lot 25 and the south property line of lot 2 of Block 19 of the aforesaid Holiday West 2; THENCE, South B9 degrees 39 minutes 56 seconds East, with the north property line of said Lot 25 and the south property line of said Lot 2, 8.68 feet to the Point of Beginning and containing 0.1559 acres (6,789.7 square feet) of land more or less. TO ALL PARTIES INTERESTED IN TITLE TO THE PREMISES SURVEYED, I DO HEREBY CERTIFY THAT THE ABOVE LEGAL DESCRIPTION WAS PREPARED FROM PUBLIC RECORDS AND FROM AN ACTUAL AND ACCURATE SURVEY UPON THE GROUND AND THAT SAME IS TRUE AND CORRECT. Company Name: Eddie L. Dunn R.P.L.S. By: -V~-,~-d3-~~ . Eddie L. Dunn Registered Professional Land Surveyor, Texas No. 4580 . Date of Survey September, 1997 :\r¿. v<:> POINT OF BEGINNING FOR DESCRIPTION 90.71' I / / ~'" {:Y ,>,,'- <¡.~'" ~~ ò ,,'<' oj It) \ \ \ \ w . "" I") à-. ~ " o 2 0.1559 ACRES <6,789.7 SQ. FT.) ~ ~ ~ ~ ~ £2 ~ o ::r: ,>,,'- q.~'" ....q.~ \ \ \ \' \ DRAwING SHOwING N.7S·17, ¿411./. . . . HOLIDAY \,lEST' ADDITION . LOT 25 BLOCK 1-R VOL. 388-126, PG. 93. RESULTS OF A SURVEY OF A PORTION OF LOT 25 BLOCK 1-R OF HOLIDAY \,lEST ADDITION, VOL. 388-127, PG. 29, PLAT RECORDS TARRANT COUNTY, TEXAS. SURVEYED ON THE GROUND UNDER MY SUPERVISION IN SEPTEMBER OF 1997 o 20' .....--- GRAPHIC SCAL£: IN FEET l' = 20' <40' I (SEE ACCOMPANYING DESCRIPTION) ~~ÆJ-~ EDDIE L. DUNN R.P.L.$. NO. ..580 7083 BAKER BLVD. RICHLAND "TEXAS 76116 AE\h ~FJ1 7-1- EDDIE 1. DUNN REGISTERED PROFESSIONAL LAND SURVEYOR JOB NO.: 9-97-225 DATE: 9-22-97 COGO FlLE:9-97-224 ACAD FILE: 225.D\JG DRAWN BY: J.B. COMPUTED BY:E.L.D. CHECKED BY: E.L.D. (817) 284-5539 CITY OF NORTH RICHLAND HILLS ,,_. Department: Finance / Public Works Subject: Aw;:¡rd Rid fnr Annll::ll Ct')ntr::ld fnr TOp Snil, S(;l'1n ::Inn Flex Base to HJG Trucking in the Amount of $60,400 Agenda Number: 1 0/27/97 PU97 -91 Council Meeting Date: In the 1997/98 approved budget, Council appropriated funds for the purchase of top soil, cushion sand and flex base. Formal bids were solicited for an annual supply contract and the results are outlined below. Big City Crushed Concrete $16,400 (incomplete bid) HJG Trucking 'S..···'·60"..·'··:··::::::4:::··:·0--:-·:·0'::·:·· . .. -. .. . ... ... ..,...:,:.,.:.:.....::J::::..::.....,;,...:: Lowery Sand & Gravel $66,740 This material will be used by the Public Works/Utility Department. Bidders were requested to submit bids on estimated annual quantities of the above referenced materials and deliver on an as need basis. The bid submitted by Big City Crushed Concrete was an incomplete bid and did not meet the minimum specifications. HJG Trucking met all the general -.. conditions and specifications of the bid. Recommendation: It is recommended City Council award the bid for an annual contract to supply top soil, sand and flex base to HJG Trucking in the amount of $60,400. Finance Review 02-11-01-3080 Acct. Number 02-11-02-3080 Sufficient Funds Available ~~ Fin..... Director ~ Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Fire Department Council Meeting Date: 1 0/27/97 PU 97-92 Subject: Authorize Purchase of Fire Incident Command Vehicle Agenda Number: Through State of Texas Cooperative Purchasing Contract in the Amount of $33,900 In the 1997/98 approved budget, Council appropriated funds for the replacement of the fire incident command vehicle used in the Fire Department. This vehicle will replace a unit that is ten years old and has over 100,000 miles. It will be assigned to the shift commander and is in service seven days a week, 24 hours-a-day. This vehicle can be purchased from Classic Chevrolet through the State of Texas cooperative purchasing program in the amount of $33,900. Funds are also available to purchase miscellaneous equipment such as radio, lights, siren and a command module. Recommendation: It is recommended City Council authorize the purchase of a 1998 fire incident command vehicle from Classic Chevrolet through the State of Texas cooperative purchasing program in the amount of $33,900. '~- Finance Review Source of Funds: Bonds (GO/Rev.) ~. erating Budget ----X- o er --------;:,1 ~ I _ ,,/ 06-01-03-6600 Finance Direaor Page 1 of CITY OF NORTH RICHLAND HILLS _ Department: Finance / Police Department Council Meeting Date: 10/27/97 PU 97-93 Subject: Award Bid far PaliGe nepartm~:mt FIp.ctri~~1 Rp.nnv~tinn toAgenda Number: Dickey Electric in the Amount of $11 ,496 Formal bids were solicited for the electrical renovation in the Police Department Dispatch area. The results are outlined below. Dickey Electric m1::,::¡¡Iªª $16,000 $16,760 $21,905 $24,000 Zachry Electrical Contractors Freemen Electric Knight Electric Ed's Electric Company This work will cover the additional wiring necessary to support the new uninterrupted power \'-.. supply and removal of two old UPS units. It also includes re-wiring the Dispatch area, break room and all major electrical required in connection with the Police Department renovation project. Dickey Electric met all the specifications and general conditions of the bid and can complete the project in 20 days. Recommendation: It is recommended City Council award the bid for the Police Department Electrical Renovation project to Dickey Electric in the amount of $11, 496. Source of Funds: Bonds (GO/Rev,) Operating Budget _ o r Finance Review Acct. Number 28-08-01-6000 Sufficient Funds Available '-- Department Head Signature CITY COUNCIL ACTIO FI......ce Director Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Public Works Council Meeting Date: 10/27/97 PU 97-94 Subject: Award Bid for Semi-Annu~1 Tr~ffir. M~tp.ri~l~ !=\lJpply Agenda Number: Contract to Roadrunner Supply in the amount of $34,354 As part of the 1997/98 approved budget Council appropriated funds for the purchase of various traffic materials. Formal bids were solicited for a semi-annual contract to supply these items. The results are outlined below. Roadrunner Traffic Supply "ªª¡IiR4 Centerline Supply, Inc. $34,689 Vendors were supplied a list of items and estimated quantities to bid on and will be required to hold the prices for a six-month period. Sign blanks, sign faces, street markers, and reflective sheeting are some of the items included under this bid. Materials will be ordered and delivered on an as need basis. The bid submitted by Centerline supply was an incomplete bid and some items did not meet the minimum specifications. Roadrunner Supply met all the specifications and general conditions of the bid. '--- Recommendation: It is recommended City Council award the semi-annual traffic materials supply contract to Roadrunner Traffic Supply in an amount not to exceed $34,354. Finance Review Acct. Number 01-60-01-2860 Sufficient Funds Available FI....... Dnd., Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Subject: Award Bid for 1998 Truck with Aerial nRvi~R to Classic/Durant Chevrolet in the Amount of $81,169 Agenda Number: 1 0/27/97 PU 97-95 Council Meeting Date: As part of the 1997 Capital Improvements Program, Council appropriated funds for the purchase of a truck with an aerial device. Formal bids were solicited and the results are outlined below. Classic/Durant Chevrolet 1ª1::¡¡Î:~ª $81,765 $83,497 $83,614 UEC Equipment Company Teco, Inc. Southwest International This equipment will be used by the Public Works Department for traffic signal installation and maintenance as well as maintenance on the pre-emption system emitters. Classic/Durant Chevrolet met all the specifications and general conditions of the bid and can deliver the truck in 150 days. Recommendation: It is recommended City Council award the bid for the 1998 truck with aerial device to Classic/Durant Chevrolet in the amount of $81 ,169. Source of Funds: Bonds (GO/Rev.) Operating Budget Other Finance Review Acct. Number 10-01-67-6000 Sufficient Funds Available Finance Director Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Subject: Award Bid for 199R Vp.hid~!=: Agenda Number: 1 0/27/97 PU 97-96 Council Meeting Date: In the 1997/98 approved budget, Council appropriated funds for the purchase of vehicles. Formal bids were solicited for four 1998 pick-ups and one 1998 Lumina with one bid received from Classic Chevrolet in the amount of $81,313. Staff contacted two vendors who requested bid packages and one said they just missed the date and the other said they did not have time to complete the pricing information. Both have indicated they would respond if the vehicles are re-bid. The prices submitted by Classic Chevrolet are State contract pricing. Staff feels it is in the best interest of the City to accept the bid submitted by Classic Chevrolet. Classic Chevrolet met all the specifications and general conditions of the bid and can deliver the vehicles in 75 days. Council also appropriated funds for the purchase of a pickup to be used by the Parks Department maintenance workers. Formal bids were solicited for this vehicle and one bid was received from Hudiburg Chevrolet for a 1998 Crew Cab truck in the amount of $22,367. Staff contacted two other vendors that requested bid information to find out why they did not submit a bid. One vendor was off on medical leave and the other vendor did not want to submit a bid for one truck. '---- Hudiburg Chevrolet met all the general conditions and specifications of this bid and can deliver the truck in 120 days. They agreed to hold the price of the truck so all 1998 vehicles could be awarded and ordered at the same time. Staff always attempts to secure as many bids as possible, and when we only receive one, we call to find out why others did not submit. As mentioned above, we did this in these cases. It is frustrating when we only receive one bid, and it is Council's option to reject the bids and authorize Staff to re-bid the vehicles. However, since these two companies have bid, it appears unfair to them to reject the bids as they have already disclosed their prices. Therefore, we suggest award the bids submitted. Recommendation: It is recommended City Council award the bid for four trucks and one Lumina to Classic Chevrolet in the amount of $81,313 and award the bid for a four-door truck to Hudiburg Chevrolet in the amount of $22,367. 06-01-03-6600 Finance Review ~1 -01 -01 -ññOO Acct. Number 09-75-02-6400 Sufficient Funds Available Source of Funds: Bonds (GO/Rev,) Operating Budget )ther e CITY COUNCIL ACTION FI.....ce Dlrec:lOt .',,- Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Parks and Recreation Council Meeting Date: 10/27/97 PU 97-97 Subject: Authorization to Fxhmd Annw:: r.ontr;:¡r.t for thA Printing Agenda Number: of the Leisure Resource Guide with F.J, Business Forms In the 1997/98 approved budget, Council appropriated funds for the printing of the Leisure Resource Guide that is distributed by the Parks and Recreation Department. The Leisure Resource Guide brochure is printed three times a year and contains information and schedules for activities and classes held at the Recreation Center and the Parks. The brochure is mailed to all residences located within the City and placed in various locations at City Hall, the Library and Recreation Center. Formal bids were solicited for an annual contract to print the brochure and Council awarded the contract to F.J. Business Forms at the November 11, 1996 meeting (PU 96-85). The contract covers the layout, design and printing of the brochure. The amount for printing each issue will vary depending on the information to be included. F.J. Business Forms has produced quality work and met the required deadlines this past year. The company has offered to extend the contract an additional year at the 1996/97 contract prices. Recommendation: It is recommended City Council extend the annual contract for the layout, design and printing of the Leisure Resource Guide to F.J. Business Forms. Finance Review re CITY COUNCIL ACTION 01-75-20-4010 Source of Funds: Bonds (GO/Rev.) Operating Bud et _ ther Finance 0.8C10, Page 1 of LEISURE RESOURCE GUIDE The following information was submitted for the layout and printing of 25,000 brochures in the 1996/97 bid request: 24 page brochure (1) Camera ready copy furnished (2) Production film (negatives) furnished Layout/Design Printing F,J. Business Forms $660 $3,797 Leway Composing $2,112 No bid Dallas Offset No bid $4,823 Tarrant/Dallas Printing $2,295 $12,459 Rendon Graphics $2,652 No bid CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Council Meeting Date: 10/27/97 Subject: Award Bid for Service Center MeZ7anine Project to Team Design in the Amount of $92,300 Agenda Number: PU 97-98 In the 1996/97 budget, Council appropriated funds for the renovation of the Equipment Services and Public Works/Utility areas. Formal bids were solicited for the Service Center Mezzanine project and the results are outlined below. P.D.M.S., Inc, 1:::ª2~ßºº:i: $ 93,700 $109,316 $113,831 $121,000 $136,000 Team Design Marathon Contractors The Ridgemont Company Walker Building Corp, Mart, Inc. '",-.- The renovation will add a second floor above the Equipment Services and Public Works/Utility areas that will be used for additional storage. Team Design met all the specifications and general conditions of the bid and can complete the project in 120 days. Recommendation: It is recommended City Council award the Service Center Mezzanine Project to Team Design in the amount of $92,300. Finance Review Acct. Number 13-70-02-6000 Sufficient Funds Available Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other \........ ~~ Æ~ . Department H Signature CITY COUNCIL ACTION "' An...... Director Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Library Council Meeting Date: 10/27/97 Authorize Payment to Information Access Company Agenda Number: PAY 97-14 for CD-Rom Data Base Subscriptions Subject: In the 1997/98 approved budget, Council appropriated funds for miscellaneous electronic database subscriptions. The Library's Plan of Service calls for it to provide access to periodical indexes and full-text articles of interest to our customers. The attached invoice from Information Access Company (lAC) is an annual renewal of the library's subscriptions to two such tools on CD-ROM: (1) lAC's Health Reference Center compilation of current articles, journals, and texts on medicine and health, and (2) lAC's General Businessfile Select with Business ASAP, an enormously rich full-text source of current business news and information. Both of these products are very popular with library users, and are heavily used. The invoice total is $11,857.00, and it therefore requires Council approval before payment. Information Access Company is a sole-source provider for these products. Recommendation: It is recommended that Council authorize payment to Information Access Company in the amount of $11 ,857,00 Source of Funds: Bonds (GO/Rev.) Operating Budget Other \.y~ R~~ Department Head Signature CITY COUNCIL ACTION TEM - Finance Review Acct. Number Sufficient Funds Available 01-50-02-2650 - , Finance Director - PaQe 1 of __·_w_·~·____~~_~__·_~__·~~_·,,,__ ,.,,---,~"--~,----~ .- >- z C C C C C C C 0 ~ w c c c c c c c 0 >- ::¡; ~ - z ° N ~ U C 0 U\ c c N ,... ,.. ,.., ::¡;z c ,.. &tt ,.., U\ U\ ,.., 00 U\ c - - CO CIO ,.. u~ '" <fJc: N U\ N .. æ ° :;; U C. ... 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I LL r:J:J Z -Jw"="lJ)-- ClCICOCl Z 0 I- 0 0 r:J:J _o"'ob~ zz Z I&J (I) U (I) .- ~ ct: ~~ð¡;:b CCCL.< u LLI (.) (I) c:~~;¡:'-o ..J O.J :z: ..J :z: LtJ < Q.. o>~;- :Z:ZO:Z: LLI U LLI U .J LLI ~ ~¡¡¡ë3 0 U:J.JU U Z (I) Z LIJ .- a. ::?E ...ua:: -: ....< .... z .... .... (I) U > <fJ~~ 63 \!!<fJ<fJ"'''' O::QIIJO:: a: IIJ CL. LLI I- = 0 ~!zf2~ z 0:: U'I < U'I IIJ ..... :z: .. :z: w I¡, (I) ..J ..... Z O:::Jwob a: 0 C,,;) ~8~¡;; .-ZOI- fß ..... ,.., < M .... UI 0 . ..... <:iuc:;¡:,- O::I-NO:: IIJ ..... .... ~ z<o~ 01-,...0 ...J 0:: U (I) U (I) Z I- 3:ž~':': z<.oz ~. < U) < ::> .... a. ¡¡¡~¡¡j~ % 0:: I&J 0:: m .... 0:: ¡-.¡ :.:: è l- I- Z I- (I) 0:: " =-... < ..J 0 .... 0 ..J LLI U 0 ...J ~S N < ..... (I) ..... z U U) ,... '" ...J LLI Z ::> Z LIJ .... m 0 '" = ...J :z: .... Q .... (þ 0:: ::> ,... ~ ëD a. (I) 0'\ - N M .. &tt ~w"''''<OW~1 ·~ CITY OF NORTH RICHLAND HILLS / Department: Police Department . Authorize Payment tQ MQtorola for Annl,Jal Mobile. Data Subject: -.Jerminal An1enna Site Fees - Resolution No. 97-150 Council Meeting Date: 10-27-97 Agenda Number: PAY 97-15 The annual Mobile Data Terminal Antenna Site fees are now due in the amount of $13,356.00. The department is repaid a large portion of this amount from income as agreed to in the Interlocal Agreements with other a"rea cities. Recommendation: It is recommended that the City Council approve Resolution No. 97-50 authorizing payment to Motorola for the annual Mobile Data Terminal Antenna Site fees in the amount of $13,356.00. Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Finance Review Acct. Number'03-90-00-3465 Sufficient Funds Available artment Head Signature CITY COUNCIL ACTION FlMnce Dlrec10r Page 1 of RESOLUTION NO. 97-50 WHEREAS, the City has a continuing agreement with Motorola to provide the Mobile Data Terminal Antenna Site fees; and WHEREAS, the City continues to receives a discount if this agreement is paid annually instead of monthly; and . WHEREAS, the total annual amount for the period from October 1, 1997 through September 30, 1998 was billed by Motorola in the amount of $13,356.00 for the antenna site rental; and WHEREAS, the Police Department is repaid a large portion of this amount from income from the Interlocal Agreement with other area cities. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS THAT: The City Manager be, and is hereby, authorized to pay the annual charges by Motorola in the amount of $13,356.00 from the following account: 03-90-00-3465 PASSED AND APPROVED THIS 27th DAY OF OCTOBER, 1997. MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: ,. ATTORNEY FOR THE CITY .. ® MOTOROLA INVOICE PAYMENT DUE UPON RECEIPT OF INVOICE N711LDOO 10/07/97 1307 E. ALGONQUIN RD. SCHAUMBURG, IL 60196 3547-01347-01272 1000720707-0011-001 FOR QUESTIONS CONCERNING THIS INVOICE, CONTACT: TO NORTH RICHLAND HILLS, CITY OF TOM SHOCKLEY-ASST POLICE CHIEF 7301 NE LOOP 820 NORTH RICHLAND HILLS, TX 76180 CUSTOMER SERVICE REP PHI (800) 247-2346 ADDITIONAL INFORMATION ON BACK BULLETIN -- If you have the capability to pay us electronically, please call Customer Service at (800) 247-2346 for more information. Ncta: Mc!crc!a'z EFT pr~f~r~nce Is ED!BANX~10 or ^C~ CTX. ------------------------------------------------------------------------------------------------------------------------------ BASIC CHARGES =======> ANTENNA SITE RENT CTY CNTR FT WORTH TX UNIT UNIT UNIT DATA XMITTER DARCOM LINK DATA TXMITTER 10/01/97 TO 09/30/98 10/01/97 TO 09/30/98 10/01/97 TO 09/30/98 4,452.00 4,452.00 4,452.00 =================== - TOTAL INVOICE AMOUNT $13,356.00 ..Please Retu!'n This Po!'tion With You!' Payment .. Please put your customer account number and invoice number on your check for prompt processing Invoice Number N711LDOO D CHANGE OF ADDRESS Invoice Date 10/07/97 - PLEASE MARK THIS BOX AND ENTER THE NEW ADDRESS ON THE REVERSE SIDE Customer Account Number 1000720707-0011 SEND PAYMENT TO: .. Please Pay This Amount .. $1 6.00 '. , NORTH RICHLAND HILLS, CITY OF TOM SHOCKLEY-ASST POLICE CHIEF 7301 NE LOOP 820 NORTH RICHLAND HILLS, TX 76180 ® If/IOTORO&.A P.O. BOX 730023 DALLAS, TX 75373-0023 ...... CITY OF NORTH RICHLAND HILLS Department: Police Department S. AJ.lthorize Pa~ment to =Rla forrf'nrg~1 ~obile Data ubJect: ~ervlce Agr ement - utlon o. -5 Council Meeting Date: 10-27-97 Agenda Number: PAY 97-16 The annual Mobile Data Terminal Service Agreement fees are now due in the amount of $72,240.00. The department is repaid a large portion of this amount from income as agreed to in the Interlocal Agreements with other area cities. Recommendation: It is recommended that the City Council approve Resolution No. 97-51 authorizing payment to Motorola for the annual Mobile Data Terminal Service Agreement fees in the amount of $72,240.00. Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Finance Review Acct. Number -,,03-90-00-3465 Sufficient Funds Available ',--, ent Head Signature CITY COUNCIL ACTION FINII'Iœ Director Page 1 of RESOLUTION NO. 97-51 WHEREAS, the City has a continuing service agreement with Motorola to provide service for all Mobile Data Terminals and related equipment; and WHEREAS, the City continues to receives a discount if this agreement is paid annually instead of monthly; and WHEREAS, the total annual amount for the period from October 1, 1997 through September 30, 1998 was billed by Motorola as $72,240.00 for the service agreement; and WHEREAS, the Police Department is repaid a large portion of this amount from income from the Interlocal Agreement with other area cities. 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W ui w II) )( w 0 0 ~ W > Z ..J ~ ] <I: Õ w Q, II) ~ >- ~~ ..J IL - ..J W <C <I: :rl ~ ::> ~ ~Q, ..J Z ~ ~ U ..I Z 0: >- <I: c¡: W :J: 0:: U ::> ... ... w ... Z SE 0:: Z :J: Z Z W <I: 0 ... W <I: II) ::> :¡¡ 0 :¡¡ a ~ 3JJJJ Q, ~ ,... CITY OF NORTH RICHLAND HILLS Department: Police Department Council Meeting Date: Author,' Payment to Mptorola for the North Richlaod Hills Subject: nn onsbrtlum Radio Mamtenance l,;ontract- Keso utlOnAgenda Number: 10-27-97 PAY 97-17 The annual maintenance agreement for all Motorola radios and related equipment is now due in the amount of $163,858.19. The City receives a discount if this agreement is paid annually instead of monthly. The Department is repaid $145,837.26 from income from the Interlocal Agreements with other area cities. Funding Source: 16-01-01-4460 $145,837.26 $ 18,020.93 03-91-00-3460 Recommendation: It is recommended that the City Council approve Resolution No. 97-52 authorizing payment to Motorola for the North Richland Hills Annual Consortium Radio Maintenance Contract in the amount of $163,858.19. Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Finance Review Acct. Number 03-91~0-3460 & 16-01-01-4460 Sufficient Funds Available FlMnce OnClOr Page 1 of RESOLUTION NO. 97-52 WHEREAS, the City has a continuing maintenance agreement with Motorola to provide service for all radios and related Motorola equipment; and WHEREAS, the City continues to receives a discount if this agreement is paid annually instead of monthly; and WHEREAS, the total annual amount for the period from October 1, 1997 through September 30,1998 was billed by Motorola in the amount of $163,858.19; and WHEREAS, the Police Department is repaid $145,837.26 from income from the Inter/ocal Agreement with other area cities. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS THAT: The City Manager be, and is hereby, authorized to pay the annual charges by Motorola in the amount of $163,858.19 from the following accounts: 03-91-00-3460 16-01-01-4460 $145,837.26 $ 18,020.93 PASSED AND APPROVED THIS 27th DAY OF OCTOBER, 1997. MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: ,. ATTORNEY FOR THE CITY 0 N 0 .... It) 0 en "II 0 to;- W CO M C .... 0 'i' u Ø) u .... <Ø ¡¡; 0 l- . Z W 0:: == W W C W 0:: 0:: 0 ~ CI æ ~ ... .. w ~ ~ == 1J .. 0 e. l- E I/) ;:) 1J u 1J 1:: , ~ 1J ) > 1:: u f) ...... en - .... N - 0 .... Ê :J :e åi 0 7õ U) 0 C 0 ~ - 0 ~ ü !Æ x 'D C \D III ~ Ù :c :-) oS u :,¡ CIÌ ii ,.:. .r: ~ <Ø 1:: ~ c: Q) 0 :,¡ ~ ~ 6 ~ Z I P ~ 0 0) ~ ~ C) ... ì:.- <Ø c: III .!!! III ~ 0 w c: ~ ~ '1:; == q: Q e( .., III Z C .~ ëi ~ 0:: Q:: c: :t:: III W e ::: '- Q == e=:b 0 c e C) 0 I- og~ I/) :e ;:) (,)~ u U ;:) -I Û a.. I Z W "I. 0 CI I&. W ~ 0 -I W I U ~ <é ... 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"',... w « en a ::!: 0 ~~ ::!: 'ì ]]]] >- ~ « x a IL ..J o z EJ m W > .:.¡ Æ ~D ~ ::¡ ot ú.i I- " ot !1! o ... ~ 0 .: ... m I- u ii I- Z o o North Richland Hills Consortium Contract 1997 Annual Payment Schedule Consortium City Total 97-98 Annual Annual Total Annual Payments Payment, Payment Discounts After Discounts . (cost escalations factored) Discount Tarrant County Sheriffs Ofe $57,368.16 0.026914 $1,544.01 $55,824,15 North Riehland Hills $18,519.36 0.026914 $498.43 $18,020.93 Riehland Hills PO & FO $4,431.84 0.026914 $119.28 $4,312.56 Grapevine PO & FO $17,061.12 0.026914 $459.18 $16,601.94 Haltom City $13,367.04 0.026914 $359.76 $13,007.28 Keller $9,104.16 0.026914 $245.03 $8,859.13 Bedford $16,607.04 0.026914 $446.96 $16,160.08 Colleyville $9,390.24 0.026914 $252.73 $9,137.51 Euless $22,541.28 0.026914 $606.68 $21,934.60 Totals $168,390.24 $4,532.05 $163,858.19 f Oct. 25, 1996 Page 1 CITY OF NORTH RICHLAND HILLS Department: Police Department Subject: Relocation of Public Safety Radio Equipment Council Meeting Date: Agenda Number: 10-27-97 PAY 97-18 A part of the original Crime Control and Prevention District budget was a proposal to upgrade the Police Communications capability. All radio equipment for Fire, Police and EMS is currently housed in a room containing neither heating nor air conditioning. As a result of outside venting this room cannot be kept as clean as desirable for the operation of sensitive electronics. This room is also the interface point between internal and external electrical power for the Police wing of City Hall. Radio frequencies in close proximity to electrical power are known to cause the introduction of static in radio communications. This is obviously not a desirable circumstance. Moving this equipment to the recently renovated space will result in a more protected environment for all these sensitive pieces of equipment as well as reducing interference. DFW Communications is Motorola's sole authorized maintenance and service provider, This firm will complete this work as part of the upgrade of the Motorola Consoles. DFWs bid for moving all electronics from its current location to the newly prepared electronic room is $19,839.' This cost includes new racks, coaxial cables as well as an estimated 100 hours of labor to remove and reinstall all equipment in the protected environments. Recommendation: It is recommended that the City Council authorize the rnove of all emergency radio equipment by DFW Communications for the amount of $19,839.00. Finance Review Source 01 Funds: Bonds (GO/Rev,) o rating Budget -,-- o h r ¿ö-u8-u 1-öOuu Acct. Number 1- 1- Sufficient Funds Available partment Head Signature CITY COUNCIL ACTION FlMnce DfNCIOr Page 1 01