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Ask MRSC

June 2015

Ask MRSC

In the periodic Ask MRSC PHD (Public Hospital Districts) e-newsletter, MRSC consultants respond to questions posed by officials and staff of Washington public hospital districts. Submit your own question via our simple online form.

IN THIS ISSUE


1. May an employee of a public hospital district run for a position on the board of commissioners for that same district?

Yes. An employee of a hospital district may run for a commissioner position at the same district. However, if elected, that employee would be prohibited from serving in both positions simultaneously. RCW 70.44.040(3) prohibits a commissioner from also serving as an employee of the same hospital district, stating:

    No person may hold office as a commissioner while serving as an employee of the public hospital district.

So, if a hospital district employee runs for a commissioner position at the same hospital district, and if that candidate wins and chooses to take office as a commissioner, he/she will need to resign from his/her position as a district employee before taking office.

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2. Must hospital district board member positions (e.g., President, Vice-President) be ratified each year?

Regarding the appointment of officers for a hospital district board of commissioners, RCW 70.44.050 provides, in relevant part (emphasis added):

    The commission shall organize by election of its own members of a president and secretary, shall by resolution adopt rules governing the transaction of its business and shall adopt an official seal.

Pursuant to RCW 70.44.050, the board is required to elect from its own members a president and secretary. If the board would like to elect its members to other positions as well, the board can do so through the rules it adopts to govern the transaction of board business. In your question, you refer to a vice president. The board can have a vice president, but it must also have a president and secretary as required by RCW 70.44.050.

RCW 70.44.050 doesn't address how long a commissioner elected to serve as president or secretary is to serve in that position, so we think the board can adopt, through its board rules, its own provisions related to the terms of such officer positions. You also refer to ratifying the election of the board's officers each year. Again, this isn't addressed by RCW 70.44.050, so the board can adopt its own rule provision in this regard. If the board has existing rules on these issues, it must follow those rules, unless it explicitly waives the rule at issue.

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 3. We have a current contract with an air provider for our EMS service. Is there a threshold of an amount of price increase that we would have to go out to bid for this service?

We would regard the EMS-related contract as described as a contract for services. RCW 70.44.140 provides that all work ordered and materials purchased by a hospital district in excess of $75,000 must be by contract via a competitive bidding process. However, RCW 70.44.140 doesn't impose any bidding requirements for services, such as the service at issue here. Our conclusion that the bidding requirements set forth in RCW 70.44.140 don't apply to contracts for services is consistent with discussions we've had with attorneys who represent hospital districts and from discussions with the Washington State Auditor's Office.

Of interest as well may be RCW 70.44.060(10), which provides authority for hospital districts to contract for various types of services.

Although state law doesn't require the district to engage in a competitive bidding process for such service contracts, we think it's advisable to use a competitive process in some manner to ensure that the district can effectively assess options regarding which provider is most qualified to provide this service for a price that's reasonable. If the district has adopted policies in this regard, it needs to follow those policies.

Generally, a request for proposal (RFP) process can be effective in meeting those objectives. An important component in such a process is to establish clear criteria upon which to evaluate the proposals that are received. We recommend criteria that will allow the district to effectively evaluate and determine which of the RFP proposers is the most qualified to serve the district regarding this service for a reasonable price.

We recommend that you consult with your district's legal counsel regarding this matter as well.

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4. What are the bidding requirements related to hospital districts and purchases of equipment or supplies that aren't related to a public works project?

The applicable statutory provision is RCW 70.44.140, which provides, in relevant part:

    (1) All materials purchased and work ordered, the estimated cost of which is in excess of seventy-five thousand dollars, shall be by contract. ...
We regard the terms "equipment" and "supplies" as distinct from the term "materials." Because "equipment" and "supplies" aren't referenced in RCW 70.44.140, a hospital district isn't required to use a bid process for their purchase. That said, we generally recommend that hospital districts obtain comparative quotes from different suppliers.

RCW 70.44.140 also provides that if the estimated purchase is $15,000 or less, the district may use a vendor list as provided in RCW 39.04.190. Additionally, hospital districts can engage in cooperative purchases through interlocal agreements. See, e.g., chapter 39.34 RCW.

Rural public hospital districts (i.e., those whose geographic boundaries don't include a city with a population greater than 50,000 - see RCW 70.44.460) may contract with other rural public hospital districts to provide for the health care needs of the people served by the hospital districts, including related to entering into cooperative purchases and allocations of medical equipment and technologies. This cooperative authority for rural hospital districts is in addition to authority otherwise granted to hospital districts via chapter 39.34 RCW. See, RCW 70.44.450.

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If you have comments for the newsletter editor, please contact Joe Levan, Legal Consultant.

Washington city, county, and public hospital district officials and members of the Washington Association of Sewer and Water Districts and Enduris (elected and/or staff) can call or email MRSC free of charge for advice and information on local government issues.

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