Exhibit A Parkland Health & Hospital System (Parkland) serves Dallas County as public health provider, safety net hospital, academic medical center, regional resource for disaster preparedness, major trauma and burn center, and innovator in community health and wellness. While facing the challenges of the health care market and those unique to its public health role, Parkland achieves nationally recognized quality, cost efficiency and clinical excellence. Parkland Service Locations Dallas County Parkland proposes to construct a new hospital to replace the existing outdated facility and to expand to accommodate the Dallas County population growth. The total cost of the project is estimated to be $1,271 million, to be financed by up to $747 million in combination tax and revenues bonds, $150 million in philanthropy and the remainder from operating cash. Overview of Parkland The Dallas County Hospital District (the District), which operates Parkland, is a political subdivision of the state of Texas. The District is governed by a seven-member Board of Managers (the Board ) that is appointed by the Dallas County Commissioners. The Commissioners are also responsible for approving Parkland s budget and setting the annual tax rate assessment. Parkland is an integrated health system that consists of the following operations: Parkland Memorial Hospital an academic medical center that serves as the primary teaching hospital for The University of Texas Southwestern Medical School and provides: An inpatient service with 675 staffed adult beds; Level I Trauma Center that manages over 50 percent of all trauma cases in Dallas County, Regional resources for disaster preparedness and response; The only burn center in North Texas; and Emergency services providing over 140,000 annual visits and specialty outpatient services providing over 260,000 visits each year. A-1
Primary Care Network a network of 11 Community-Oriented Primary Care health centers, 11 Youth & Family Centers in partnership with the Dallas and Carrollton-Farmers Branch independent school districts, and the Homeless Outreach Medical Service that serves 30 Dallas County shelters. This network of centers extends primary care, prevention and wellness services throughout Dallas County. It has demonstrated reductions in costly and avoidable emergency room visits and preventable inpatient admissions. In 2006, Parkland assumed responsibility for the health care services for the inmates of the Dallas County Jail System. In aggregate, Parkland annually provides over 725,000 primary care visits. Health Plans In 1999, Parkland formed Parkland Community Health Plan, Inc. (Health Plan), a Medicaid HMO and later added a plan for those enrolled in Children s Health Insurance Program (CHIP). The Health Plan is regulated by the Texas Department of Insurance. There are approximately 150,000 beneficiaries enrolled in the two plans. In addition to the Health Plan, Parkland has established Parkland Health Plus for eligible indigent residents of Dallas County that annually serves approximately 77,000 patients. Parkland has a profound influence on the health of Selected Allied Health Training Affiliations the community, even for people who never receive Brookhaven College care within its walls. As an academic medical center, Collin County Community College training is central to Parkland s mission. It is the Dallas County Fire Department primary teaching hospital for The University of El Centro College Texas Southwestern Medical School, Parkland has Richland College over 1,200 medical students and over 1,200 residents Tarleton State University and fellows in training throughout the year. Texas A & M University Approximately half of the physicians practicing in Texas Tech University Health Sciences Center Dallas County obtained some component of their School of Allied Health formal training at Parkland. Parkland is also the Texas Woman s University UT Southwestern Allied Health Sciences School training center for many allied health care disciplines University of Houston including nurses, physician assistants, nurse University of Texas at Arlington practitioners, nurse anesthetists, paramedics, medical University of Texas Health Science Center technologists, dieticians, radiology technicians, San Antonio respiratory therapists, medical assistants, pharmacists, pharmacy technicians, social workers and chaplains. The organizations with which Parkland maintains training affiliations include those listed in the box to the right. A-2
Through sound and conservative fiscal management, Parkland is debt-free and one of the most financially stable public hospitals in the nation. While Dallas County property taxes make up 38 percent of Parkland s total revenue the majority of funding (62 percent) is obtained from Medicaid, Medicare, insurance, collections from patients and other sources. Parkland was recently named as a Community Value Index Top 100 Hospital a recognition of its low costs, low charges and efficient use of financial resources for reinvestment back into the health care of the community. Parkland was also selected for the third time to the Thomson 100 Top Hospitals National Benchmarks for Success - the good housekeeping seal for patient safety, reasonable cost and reliability for good management. For the 15 th consecutive year, Parkland was recognized as a Best Hospital by U.S. News & World Report. Outdated Facilities Parkland s present hospital facility opened in 1954. Although it has been maintained, updated, and expanded throughout the past half century, the present facility cannot be modernized in a cost effective manner to meet current health care space standards for patient care and operational efficiency. The facility is not suited for the requirements of modern medical equipment, information systems, electrical, HVAC, telecommunications and other systems. Since 2001, independent architecture, engineering and consulting firms have been engaged to study the future use potential of Parkland s facilities. Those studies found: Renovations to the existing facility to meet code would result in significant reductions in the numbers of patients cared for; and Parkland no longer meets many state and federal building codes and its current grandfathered status cannot continue in perpetuity. Judge Jim Foster Commissioner Mike Cantrell Commissioner Maurine Dickey Commissioner Ken Mayfield Commissioner John Wiley Price Parkland Board of Managers Lauren McDonald, M.D. Chair Alan Walne, Vice Chair Louis Beecherl III Wendy Lopez * Dalton Lott Cobie Russell * Allan Shulkin, M.D. Current members of the Blue Ribbon Panel: Maurine Dickey, Dallas County Commissioner, liaison Kerney LaDay Cliff Boyd Ann Margolin Don Buchholz Boone Powell, Jr. Levi Davis Christopher Durovich Steve Coke Avant Jain, PhD Curtis Wallace Kathleen Wu * Former members of the Blue Ribbon Panel, appointed to the Board of Managers A-3
The conclusion of the studies can be summarized in one compelling statement: the current Parkland facilities cannot sustain the current Parkland business over the long term. Replacement is ultimately needed. In 2006, the Dallas County Commissioner s Court appointed the community-based Dallas County Hospital District Blue Ribbon Master Capital Plan Advisory Committee, (Blue Ribbon Panel) to study projected growth and master facility planning process for Parkland. The Blue Ribbon Panel s unanimous recommendation and the facility plan outlined below incorporate the following premises: Parkland s operational capacities will be designed to maintain historic levels of service for Dallas County s future projected population. Specifically, the plan for 862 inpatient beds (a 28 percent increase over the current beds) is targeted to provide care for approximately 40 percent of the projected unfunded admissions in the future. The facility design and development will incorporate industry best practices to optimize operational efficiency and will provide the flexibility to adapt to changes for decades to come. In addition to the replacement campus project, Parkland plans to develop four new Community Oriented Primary Care clinics and two specialty service clinics in areas of identified need. These investments, which will be funded from ongoing operations and support from the municipalities that are served, are not included in this project, but are complementary to it. Additional investments are included in the facility plan that are not included in this financing plan. The additional investments call for approximately 106 additional inpatient beds to develop new programs and selectively expand existing programs. The investments will be developed only as additional funding sources are identified and secured. The Board estimates that the annual gross revenues it will receive from the new facilities will be at least equal to its 2007 gross revenues of approximately $516 million, with increases each year due to increased patient services, increased levels of Medicare, Medicaid, and insurance collections, and payments from patients and other sources. The facility and financing plans presented below are believed to provide the greatest value to the community. This value proposition is demonstrated through the beginning of an unprecedented public health system capital campaign to obtain philanthropic support for the project. Early response to the campaign has been very positive and the Parkland Foundation believes the philanthropic community will contribute $150 million (12 percent) to the project. A-4
Facility Plan The $1,271 million facility plan includes construction of the following components: An 862 Adult-Bed Hospital that serves as a full-service acute care hospital and houses a Level 1 Trauma Center and Burn Center. Completion is projected in 2014. Outpatient Center(s) adjacent to the hospital with associated diagnostic and therapeutic services, and integrated physician office space to enhance patient safety and physician access and productivity. The outpatient centers will complement the hospital-based services while providing an optimal environment for care. Office Building(s) located near the hospital for support personnel, designed to optimize productivity and minimize occupancy costs. Parking configured to supply a cost effective mix of parking garages and surface parking lots to meet the parking needs of patients, visitors, physicians and employees. Financing Plan Parkland expects to continue to fund its ongoing capital and operating programs in the same fiscally conservative manner with which it has always operated. To fund the facility plan described above, Parkland proposes to supplement its traditional funding sources by implementing the financing plan outlined below. The financing plan solicits investments by Dallas County taxpayers and the Dallas philanthropic community, and capitalizes on Parkland s strong financial position and stewardship. Forty-one percent of the facility plan will be financed from sources other than debt. Components of the financing plan, which will fully fund the facility plan, along with a description of the nature of each aspect of funding, are presented in the chart below: A-5
Combination Tax and Revenue Bonds: If the Proposition at the Election is approved by the voters, and subject to the Parkland Board s Cash Management and Dent Issuance Policy summarized below, up to $747 million of bonds are projected to be issued in two or more series, payable from a combination of selected Parkland revenues (including revenues from automobile parking in an estimated annual amount of at least $3,082,861) and its property tax. The pledged revenues will be applied to pay a portion of the debt service on the bonds, thus reducing the amount needed from tax revenues to pay them when due. Based upon current assumptions as to the maximum amount of bonds to be issued, to the amount of pledged revenues, to the future value of taxable property within the District, and to bond market conditions, maturities, and interest rates at the expected times of issuance of the bonds, the District projects that the tax rate assessed to pay the bonds will never exceed $0.025 per $100 of assessed valuation of taxable property. Philanthropy: The Parkland Foundation projects the community will contribute $150 million to the facility plan. Cash Management and Debt Issuance Policy: The Parkland Board has established and maintains a Cash Management and Debt Issuance Policy that requires Parkland to maintain certain cash reserves. Although Parkland is currently debt-free, this policy permits Parkland to achieve a high credit rating according to standards established by national credit rating agencies, thus lowering the interest cost on bonds that may be issued for Parkland s facility plan. The Board intends to use $250 million of these existing cash reserves to pay for a portion of the costs of the facility plan. Additionally, the Board currently expects an additional $100 million of future cash to be available for that purpose. Should this future cash not be generated as projected, the outpatient centers could be delayed until the future cash is generated. It will be the Board s on-going policy to further reduce the amount of bonds being issued to finance the facility plan should additional cash amounts become available that are not needed to pay current operating costs and to maintain the reserves required to maintain Parkland s high credit standing. A-6
Impact on Dallas County Taxpayers For 2008, Parkland is supported in part by the proceeds of property taxes levied at the rate of $0.254 per $100 of assessed valuation, or $254.00 per year for the a home in Dallas County with a taxable assessed value of $100,000. In the event that the Proposition at the Election is approved by the voters, the tax levy is expected to increase by $0.02 in 2010, another $0.005 in a subsequent year, and by $0.01 in 2014 for operations of the new hospital, as shown below: Estimated Impact for Home with Taxable Assessed Value of $100,000 Estimated Estimated Tax Change from 2008 Tax Year Tax Rate on $100,000 Home Estimated Tax 2008 $ 0.254 $ 254.00-2009 0.254 254.00 $.00 2010 0.274 274.00 20.00 2012 to 2014 0.279 279.00 25.00 2014 0.289 289.00 35.00 Parkland is committed to providing quality health care services to the residents of Dallas County, with the highest degree of financial stewardship and maximum value to the Dallas County taxpayers. Should additional funding become available, Parkland plans to reduce the amount of bonds issued, thus limiting future property tax increases on Dallas County taxpayers. A-7