2011-10-18T18:47:22-04:00 2010-12-31 ERNST & YOUNG US LLP 178 S RIO GRANDE STREET SUITE 400 SALT LAKE CITY UT 84101 990 2010-01-01 941682256 SUTTER GOULD MEDICAL FOUNDATION SUTT 9162866665 600 COFFEE ROAD MODESTO CA 95355 CHARLIE SANDERS 9162866665 2011-10-07 8013503300 2010 2016-03-07 17:11:31Z DAVID BENN 600 COFFEE ROAD MODESTO CA 95355 295508438 false X WWW.SUTTERHEALTH.ORG X 1985 CA SEE SCHEDULE O 13 12 1223 43 0 0 8680 12841 286437629 294827486 1851456 605175 39422 18724 288337187 295464226 79593 63130 0 0 62127853 66276200 0 0 0 233494238 234632241 295701684 300971571 -7364497 -5507345 218826950 204567963 194857095 189915608 23969855 14652355 X SEE SCHEDULE O false false 262925411 63130 294827486 SEE SCHEDULE O 262925411 true false false false false false false false false true false false false true true false true false false false false false false true false false true false true true true false false false false false false true true false false false false false false true false false false false true 643 0 true 1223 true false false false false false false false false false false X 13 12 false false false false true true true true true false false false true true true true true true true false CA X CHARLES SANDERS 2095216097 600 COFFEE ROAD MODESTO CA 95355 X DAVID BENN 40.0 X X 0 951817 423138 KAREN BUCHLER 1.0 X 0 0 0 MICHAEL CADRA MD DMD 1.0 X 0 0 0 CATHERINE CARDOZA-CONNER 1.0 X 0 0 0 PAUL DRAPER 1.0 X 0 0 0 BEVERLY FINLEY 1.0 X 0 0 0 KENNI FRIEDMAN 1.0 X X 0 0 0 JOHN GROVER 1.0 X X 0 0 0 JOE GUTIERREZ 1.0 X 0 0 0 PETER HOLZ 1.0 X X 0 0 0 TODD SMITH MD 1.0 X 0 0 0 JOHN WICKS ESQ 1.0 X 0 0 0 PHILLIP YU MD 1.0 X 0 0 0 PAUL DECHANT MD 40.0 X 0 820596 263893 LAURENCE DEMPSEY 1.0 X 0 325810 109118 CHARLES SANDERS 40.0 X 157380 62590 49662 GLEN HALVERSON 40.0 X 0 300727 22090 JOE HIRT 40.0 X 0 474289 127256 KATHERINE MANUEL 40.0 X 0 282463 103918 BRUCE TIGNER 40.0 X 0 332037 14746 STEPHANIE MILLER 40.0 X 203760 0 26952 KATHERINE RIX 40.0 X 146968 0 39718 ROBERTA EDGE 40.0 X 129561 0 31644 KATHLEEN TYRELL 40.0 X 129161 0 21898 SANDRA BELLEW 40.0 X 120564 0 28294 JAMES CONFORTI X 0 655804 261421 SARAH KREVANS X 0 1428383 666550 887394 5634516 2190298 22 true true false GOULD MEDICAL GROUP INC 600 COFFEE ROAD MODESTO CA 95355 MEDICAL SERVICES 102579573 CENTRAL VALLEY MEDICAL GROUP PO BOX 6900 RANCHO CUCAMONGA CA 91729 MEDICAL SERVICES 21238305 MEMORIAL MEDICAL CENTER PO BOX 1870 MODESTO CA 95355 MEDICAL SERVICES 10378499 PRASAD'S DELIVERY SERVICE 3212 MERLE AVENUE MODESTO CA 95355 DELIVERY SERVICES 760818 UCSF MEDICAL CENTER PO BOX 39000 SAN FRANCISCO CA 94139 MEDICAL SERVICES 666622 40 12841 12841 PATIENT SERVICE REVENUE 622110 294827486 294827486 294827486 604445 604445 0 0 24040 19240 4800 4800 4800 1100 370 730 730 730 38526 24602 13924 13924 0 0 0 295464226 294827486 623899 63130 63130 0 0 0 0 0 0 157380 0 157380 0 0 0 0 0 40191144 31009798 9181346 0 1715491 1323601 391890 0 20867315 16100344 4766971 0 3344870 2580761 764109 0 9320766 1784012 7536754 0 118973 8088 110885 0 20644 0 20644 0 0 0 0 0 0 0 49400 0 49400 0 1057854 989666 68188 0 277210 14115 263095 0 17880562 17470991 409571 0 7690502 5652705 2037797 0 0 0 0 0 3095737 2484286 611451 0 203152 125784 77368 0 0 0 0 0 91827 70096 21731 0 4429617 0 4429617 0 0 0 0 0 12796709 11248492 1548217 0 574500 503691 70809 0 PHYSICIAN FEES 99088094 99088094 0 0 CAPITATED PURCHASE SERVICES 38392108 38392108 0 0 OTHER PURCHASE SERVICES 22802855 20695741 2107114 0 BAD DEBT EXPENSE 10914238 10914238 0 0 UTILITIES 1722293 1722040 253 0 4105200 683630 3421570 0 300971571 262925411 38046160 0 21486692 22288119 17801711 21254267 1510556 1521971 606996 517029 202663857 60900778 149056505 141763079 23581167 12125723 4783323 5097775 218826950 204567963 40523328 38110535 153351564 150563366 982203 1241707 194857095 189915608 X 23941048 14587022 28807 65333 23969855 14652355 218826950 204567963 X -5507345 -3810155 X X false true true X X 17758777 17758777 123704833 28318099 95386734 3851539 1725587 2125952 49415044 29416647 19998397 7933664 1440445 6493219 141763079 0 INSURANCE LIABILITIES 101168 OTHER LIABILITIES 1140539 1241707 FIN48 (ASC 740) FOOTNOTE FROM AUDIT PART X, LINE 2 THIS ORGANIZATION WAS PART OF A CONSOLIDATED FINANCIAL SYSTEM AUDIT. THE ASC 740 AUDIT FOOTNOTE DISCLOSURE FOR THE SUTTER SYSTEM IS AS FOLLOWS: DEFERRED INCOME TAX ASSETS, WHICH AS OF DECEMBER 31, 2010 AND 2009 WERE FULLY RESERVED, REFLECT THE NET TAX EFFECT OF TEMPORARY DIFFERENCES BETWEEN THE CARRYING AMOUNTS OF ASSETS AND THE LIABILITIES FOR FINANCIAL REPORTING AND THE AMOUNTS USED FOR INCOME TAX PURPOSES. AS OF DECEMBER 31, 2010 AND 2009, SUTTER HAD DEFERRED TAX ASSETS OF $13 (MILLION) RELATING PRINCIPALLY TO NET OPERATING LOSS CARRYOVERS. AS OF DECEMBER 31, 2010 AND 2009, SUCH DEFERRED TAX ASSETS WERE OFFSET BY A VALUATION ALLOWANCE OF $13 (MILLION). THE VALUATION ALLOWANCE DID NOT CHANGE IN 2010 OR 2009. FEDERAL NET OPERATING LOSS CARRYOVERS TOTALED $32 (MILLION) AT DECEMBER 31, 2010 AND WILL EXPIRE BETWEEN 2015 AND 2030. GOLF TOURNEY 38526 38526 2497 5250 10094 6761 0 38526 38526 2497 5250 10094 6761 24602 13924 true AMERICAN CANCER SOCIETY 1604 FORD AVENUE STE 8 MODESTO CA 95350 941170350 501(C)(3) 11400 DONATION MARCH OF DIMES 2937 VENEMAN AVE C170 MODESTO CA 95356 131846366 501(C)(3) 13095 DONATION MERCED COLLEGE 3600 M STREET MERCED CA 95340 770362218 501(C)(3) 7625 DONATION MODESTO CITY SCHOOLS 426 LOCUST STREET MODESTO CA 95355 770195326 501(C)(3) 7100 DONATION SALVATION ARMY PO BOX 1663 MODESTO CA 95350 941170408 501(C)(3) 8540 DONATION 5 0 PROCEDURES FOR MONITORING THE USE OF GRANT FUNDS PART I, LINE 2 THE SUTTER HEALTH SYSTEM HAS AN OVERLAP IN LEADERSHIP WHICH MONITORS THE USE OF GRANTS BETWEEN AFFILIATES. X X X true true X X X X true true false false false false false true false DAVID BENN 0 596953 0 350364 0 4500 0 407325 0 15813 0 1374955 0 374262 JAMES CONFORTI 0 409473 0 244335 0 1996 0 244061 0 17360 0 917225 0 189881 PAUL DECHANT MD 0 433802 0 301194 0 85600 0 245246 0 18647 0 1084489 0 189075 LAURENCE DEMPSEY 0 269089 0 52600 0 4121 0 97093 0 12025 0 434928 0 0 GLEN HALVERSON 0 251440 0 49000 0 287 0 12488 0 9602 0 322817 0 40198 JOE HIRT 0 356554 0 112420 0 5315 0 112682 0 14574 0 601545 0 127163 SARAH KREVANS 0 813872 0 602072 0 12439 0 645775 0 20775 0 2094933 0 533801 KATHERINE MANUEL 0 232572 0 49600 0 291 0 91936 0 11982 0 386381 0 37670 CHARLES SANDERS 133074 61774 24306 0 0 816 7173 24243 14794 3452 179347 90285 0 0 BRUCE TIGNER 0 279401 0 49300 0 3336 0 8300 0 6446 0 346783 0 43442 STEPHANIE MILLER 181093 0 22667 0 0 0 13025 0 13927 0 230712 0 0 0 KATHERINE RIX 146968 0 0 0 0 0 16500 0 23218 0 186686 0 0 0 ROBERTA EDGE 128771 0 790 0 0 0 22000 0 9644 0 161205 0 0 0 KATHLEEN TYRELL 129161 0 0 0 0 0 5882 0 16016 0 151059 0 0 0 RELEVANT INFORMATION REGARDING COMPENSATION ITEMS PART I, QUESTION 1A FIRST-CLASS TRAVEL: OFFICERS PAID BY SUTTER HEALTH MAY UPGRADE TO FIRST-CLASS TRAVEL FOR FLIGHTS GREATER THAN FOUR HOURS IN DURATION. TRAVEL FOR COMPANIONS: OFFICERS AND KEY EMPLOYEES PAID BY SUTTER HEALTH ARE ELIGIBLE TO BRING A COMPANION ON ONE BUSINESS TRIP PER CALENDAR YEAR AND HAVE THE COST OF THE AIRFARE AND MEALS PAID FOR BY SUTTER HEALTH. THE COST IS ADDED TO EMPLOYEE'S WAGES. TAX INDEMNIFICATION: STANDARD POLICY FOR ALL SUTTER HEALTH EMPLOYEES IS THAT NON-CASH GIFTS AND AWARDS ARE GROSSED-UP FOR TAX PURPOSES. THE AMOUNT OF THE GROSS-UP IS ADDED TO THE EMPLOYEE'S WAGES. SUPPLEMENTAL COMPENSATION INFORMATION PART I, QUESTION 3 THE CEO OF THE ORGANIZATION IS AN EMPLOYEE OF SUTTER HEALTH. THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. SEVERANCE PAYMENTS PART I, QUESTION 4A NAME: GLEN HALVERSON PAYMENT: $97,562 NAME: BRUCE TIGNER PAYMENT: $96,193 NONQUALIFIED RETIREMENT PLAN PART I, QUESTION 4B THE PURPOSE OF THE NONQUALIFIED RETIREMENT PLAN IS TO PROVIDE ADDITIONAL DEFERRED COMPENSATION BENEFITS TO THE PARTICIPANTS, WHO ARE MEMBERS OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES, BY PROVIDING FOR THE PAYMENT OF DEFERRED COMPENSATION AFTER THE COMPLETION OF THE SPECIFIED NUMBER OF YEARS OF SERVICE. ANNUALLY, SUTTER HEALTH MAKES A CONTRIBUTION TO EACH PARTICIPANT'S ACCOUNT BASED ON 4% OF BASE PAY. THERE IS AN ADDITIONAL CONTRIBUTION FOR EXECUTIVES WHOSE PENSION ELIGIBLE EARNINGS WERE GREATER THAN THE PENSION PAY CAP IN THE PREVIOUS YEAR. THE CALCULATION IS AS FOLLOWS: - PENSION ELIGIBLE EARNINGS - LESS PENSION PAYCAP AMOUNT - TIMES A SPECIFIC % BASED ON YEARS OF SERVICE THE PENSION RESTORATION PLAN IS DESIGNED TO HELP MAXIMIZE EACH PARTICIPANT'S RETIREMENT POTENTIAL BY PROVIDING A TARGETED BENEFIT THAT, ALONG WITH EACH PARTICIPANT'S OTHER RETIREMENT INCOME, PROVIDES: - 65% OF FINAL 4-YEAR AVERAGE SALARY IF PARTICIPANT RETIRES AT AGE 65 WITH 22.5 YEARS OF SERVICE. - 50% OF FINAL 4-YEAR AVERAGE SALARY IF PARTICIPANT RETIRES AT AGE 65 WITH 15 YEARS OF SERVICE. SINCE IT IS A TARGETED BENEFIT, ANNUAL CONTRIBUTION AMOUNTS VARY BASED ON ASSUMPTIONS MADE TAKING INTO ACCOUNT EACH PARTICIPANTS' AGE, YEARS OF SERVICE, AND OTHER RETIREMENT ACCOUNT BALANCES. NAME AND AMOUNT FOR 2010: DAVID BENN $144,700 LAURENCE DEMPSEY $14,700 PAUL DECHANT $32,800 SARAH KREVANS $149,800 GLEN HALVERSON $7,900 BRUCE TIGNER $8,300 JOE HIRT $17,600 KATHERINE MANUEL $8,200 JAMES CONFORTI $30,000 NON-FIXED PAYMENTS PART I, QUESTION 7 SPOT AWARDS ARE INFREQUENTLY USED TO REWARD EMPLOYEES. THERE ARE NO SPECIFIC GUIDELINES FOR THE AMOUNT OF THE SPOT AWARD BUT THE AMOUNT TENDS TO NOT EXCEED 5% OF GROSS PAY. ANNUAL INCENTIVE PLAN (AIP) THE PURPOSE OF THE PLAN IS TO FOCUS EXECUTIVES ON SPECIFIC, SHORTER-TERM GOALS THAT ARE CRITICAL TO THE ACHIEVEMENT OF AFFILIATE, REGION, AND SYSTEM-WIDE OBJECTIVES THAT DRIVE OVERALL ORGANIZATION PERFORMANCE. A PORTION OF THE PLAN AWARD IS DISCRETIONARY IN THAT THE SUPERVISOR MAY ADD +/- 5% TO THE AWARD PROVIDED THE TOTAL AWARD (FORMULA PORTION PLUS DISCRETIONARY) DOES NOT EXCEED THE MAXIMUM ESTABLISHED FOR ANY GIVEN EXECUTIVE. LONG TERM PERFORMANCE PLAN (LTPP) Sutter Health also employs long term performance plans which are designed to focus on longer term strategic objectives of the organization. Sutters long term performance plan approach is a combination of both longer term measures of organization success and key organization strategies which require the combined effort of all leadership to achieve success. Sutter uses a common fate approach in that all plan participants are measured against the same, organization wide criteria vs. individual efforts. This fosters a common purpose across leadership and a shared sense of accountability for the overall success of Sutter Health. To ensure that extraordinary efforts by individuals can be recognized and that actions of leadership are consistent with supporting Sutter Healths overall Mission, Vision, and Values, Sutters long term incentive plan approach also incorporates a CEO discretionary component. This unique feature allows the President & CEO the ability to modify individual awards within limits that have been pre-approved by the Sutter Health Compensation Committee. This includes both the reduction and increase of award amounts. Such modifications generally do not exceed +/- 20% and are employed judiciously and are reviewed by the Compensation Committee. CSCDA 2005A 680164610 130911U24 2005-10-19 22102890 CONSTRUCTION-STOCKTON/MODESTO MOBS false false false CSCDA 2005BC 680164610 130795EG8 2007-05-01 4891662 REFUNDING - 07/18/95 false false false CHFFA 2007A 521643828 13033PQ37 2007-05-01 35300000 CONSTRUCTION-STOCKTON/MODESTO MOBS false false false CSCDA 2008BC 680164610 130795TD9 2008-05-14 85463936 CONSTRUCTION-STOCKTON/MODESTO MOBS false false false 23105476 2299563 27018397 2008 false false true true 4965040 364898 2008 true false true true 38236648 34981402 2011 false false true true 89674042 4846972 72907831 false false true true false true true false true 0.00120 0.00000 0.00120 true false true true false true 0.00100 0.00000 0.00100 true false true true false true 0.00010 0.00000 0.00010 true false true true false true 0.00130 0.00000 0.00130 true false false false false false false false false false false false false false false false false false false false false false false false false SEE SCHEDULE O KAREN BUCHLER MD TRUSTEE 72028 SEE PART V false PAUL DRAPER TRUSTEE 425143 SEE PART V false DESCRIPTION OF BUSINESS TRANSACTIONS INVOLVING INTERESTED PERSONS SCHEDULE L, PART IV KAREN BUCHLER, MD TRUSTEE OF SUTTER GOULD MEDICAL FOUNDATION (SGMF). SPOUSE WORKS FOR SGMF AS A CLINICAL ANALYST. PAUL DRAPER TRUSTEE OF SUTTER GOULD MEDICAL FOUNDATION. SGMF LEASES SPACE IN A BUILDING THAT HE OWNS VIA AN ARMS-LENGTH AGREEMENT. MISSION STATEMENT PART I, LINE 1 AND PART III, LINE 1 THE MISSION OF SUTTER GOULD MEDICAL FOUNDATION IS TO ENHANCE THE HEALTH AND WELL-BEING OF PEOPLE IN THE COMMUNITIES WE SERVE, THROUGH A NON-PROFIT COMMITMENT TO COMPASSION AND EXCELLENCE IN HEALTH CARE SERVICES. THE FOUNDATION CONTRACTS WITH GOULD MEDICAL GROUP, INC., A PROFESSIONAL CORPORATION THAT EMPLOYS LICENSED PHYSICIANS AND PROVIDERS. THE MISSION OF THE GROUP IS TO PROVIDE AND MANAGE HIGH QUALITY, COST EFFECTIVE, COMPASSIONATE HEALTH CARE FOR THE PATIENTS OF SUTTER GOULD MEDICAL FOUNDATION. EXEMPT PURPOSE ACHIEVEMENTS FORM 990 PART III, LINE 4A HISTORY GOULD MEDICAL GROUP, INC. WAS FORMED IN 1948 BY DOCTORS J.H. BARR, BROTHERS C.R. AND V.J. MAINO, EVELYN MAYMAN AND HARRY STEWARD. THE CLINIC WAS NAMED IN HONOR OF LONGTIME LOCAL PHYSICIAN NED GOULD. OVER THE YEARS, THE GROUP CONTINUED TO ADD PROVIDERS AND BEGAN TO OUTGROW ITS SMALL CLINIC. IN 1955, THE MAIN CLINIC LOCATED AT 600 COFFEE ROAD WAS BUILT. DURING THE 1980S, GOULD OPENED CARE CENTERS IN MODESTO, CERES AND PATTERSON. THESE CARE CENTERS BRING HIGH QUALITY HEALTHCARE TO WHERE PATIENTS LIVE. IN 1986, THE PHYSICIANS FORMED THE GOULD MEDICAL FOUNDATION, A 501(C)(3) NON-PROFIT COMMUNITY BENEFIT ORGANIZATION. A CLINICAL RESEARCH DEPARTMENT, HEALTH EDUCATION DEPARTMENT AND THE HEALTH LIBRARY SUPPORT OUR COMMUNITY BENEFIT EFFORTS. IN 1993, GOULD MEDICAL FOUNDATION AFFILIATED WITH SUTTER HEALTH, ONE OF THE LARGEST NON-PROFIT HEALTH CARE SYSTEMS IN NORTHERN CALIFORNIA. SUTTER GOULD MEDICAL FOUNDATION HAS EXPANDED ITS CARE CENTERS TO TURLOCK, TRACY, STOCKTON AND LODI. TODAY, THE FOUNDATION CONSISTS OF OVER 289 PROVIDERS IN 23 CARE CENTER LOCATIONS THROUGHOUT THE CENTRAL VALLEY. COMMUNITY BENEFIT AND CHARITY CARE BENEFITS SGMF AND SUTTER HEALTH ARE NOT-FOR-PROFIT ORGANIZATIONS WHOSE PRIMARY MISSION IS TO PROVIDE HIGH-QUALITY AFFORDABLE HEALTH CARE TO THE PUBLIC. AS SUCH, THEIR FACILITIES PROVIDE A NUMBER OF COMMUNITY BENEFITS, IN THE FORM OF CHARITABLE CONTRIBUTIONS, INDIGENT CARE AND COMMUNITY PROGRAMS. IN 2010, FOR EXAMPLE, SGMF PROVIDED OVER $13.1 MILLION DOLLARS IN TOTAL QUANTIFIABLE COMMUNITY BENEFITS. SGMF WILL CONTINUE THIS TRADITION, INCLUDING THE SERVICES DETAILED BELOW. MEDICARE, MEDI-CAL, HEALTHY FAMILIES AND CARING FOR THE UNINSURED FOR THE CONVENIENCE OF PATIENTS, SGMF PARTICIPATES IN MORE THAN 16 MAJOR HEALTH INSURANCE PLANS, INCLUDING MANAGED CARE PLANS (HMOS), AND CARES FOR MEDICARE, MEDI-CAL AND SELF-PAY PATIENTS. AS THE LOCAL POPULATION AGES AND MEDICARE REIMBURSEMENT INCREASINGLY FAILS TO COVER COSTS, MANY SENIOR PERSONS HAVE DIFFICULTY ACCESSING HEALTH CARE SERVICES. SGMF REMAINS COMMITTED TO SERVING THE ENTIRE LOCAL COMMUNITY, AND IS ONE OF A SHRINKING NUMBER OF HEALTH CARE ENTITIES THAT ACCEPTS NEW MEDICARE PATIENTS, THROUGH ARRANGEMENTS WITH HEALTH INSURANCE COMPANIES SUCH AS UNITED HEALTHCARE (AARP MEDICAL COMPLETE), HEALTH NET (SENIORITY PLUS) AND BLUE CROSS (FREEDOM BLUE). MANY SGMF PATIENTS ARE INSURED THROUGH MEDICARE, MEDI-CAL OR HEALTHY FAMILIES. THIS GROUP ACCOUNTS FOR A SIGNIFICANT PORTION OF THE HEALTH CARE SERVICES WE PROVIDE, IN LARGE PART DUE TO THE INCREASED HEALTH CARE NEEDS OF SENIOR PATIENTS ON MEDICARE. IN 2010, SGMF CARED FOR OVER 18,767 MEDI-CAL PATIENTS, AND GOULD OB/GYNS DELIVERED 437 BABIES OF MEDI-CAL PATIENTS. REIMBURSEMENT FROM MEDI-CAL AND OTHER SERVICES FOR THE POOR AND UNDERSERVED DOES NOT MEET THE ACTUAL COST OF PROVIDING CARE, AND EACH YEAR SGMF SPENDS MILLIONS OF DOLLARS TO CARE FOR THESE PATIENTS. IN 2010, FOR EXAMPLE, SGMF PROVIDED OVER $10.6 MILLION DOLLARS IN TOTAL QUANTIFIABLE SERVICES FOR THE POOR AND UNDERSERVED. THIS INCLUDES PROVIDING UNPAID CARE TO MEDICALLY INDIGENT PATIENTS AND DISCOUNTED CARE TO QUALIFIED PATIENTS. SGMF ALSO HELPS WORK OUT NO-INTEREST PAYMENT PLANS TO HELP PATIENTS WHO HAVE BECOME UNINSURED DUE TO LOSS OF EMPLOYMENT. DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS FORM 990, PART VI, QUESTIONS 6 & 7A THIS CORPORATION IS AN AFFILIATE OF SUTTER HEALTH, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION. SUTTER HEALTH IS THE SOLE MEMBER WITH THE RIGHT TO ELECT AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS. DESCR CLASSES OF PERSONS, DECISIONS REQUIRING APPR & TYPE OF VOTING RIGHTS FORM 990, PART VI, QUESTION 7B SUTTER HEALTH AS THE SOLE MEMBER OF THE ORGANIZATION IS ENTITLED TO EXERCISE FULLY ALL RIGHTS AND PRIVILEGES OF MEMBERS OF NONPROFIT CORPORATIONS UNDER THE CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION LAW, AND ALL OTHER APPLICABLE LAWS. THE MEMBER HAS THE RIGHTS AND POWERS TO APPOINT (AND REMOVE) MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS, SUBJECT TO THE PROVISIONS OF THE BYLAWS, IN ADDITION, THE MEMBER HAS THE RIGHT TO APPROVE THE FOLLOWING ACTIONS OF THE CORPORATION'S BOARD OF DIRECTORS: A. MERGER, CONSOLIDATION, REORGANIZATION, OR DISSOLUTION OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; B. AMENDMENT OR RESTATEMENT OF THE ARTICLES OF INCORPORATION OR THE BYLAWS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; C. ADOPTION OF OPERATING BUDGETS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY, INCLUDING CONSOLIDATED OR COMBINED BUDGETS OF THE CORPORATION AND ALL SUBSIDIARY ORGANIZATIONS OF THE CORPORATION; D. ADOPTION OF CAPITAL BUDGETS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; E. AGGREGATE OPERATING OR CAPITAL EXPENDITURES ON AN ANNUAL BASIS THAT EXCEED APPROVED OPERATING OR CAPITAL BUDGETS BY A SPECIFIED DOLLAR AMOUNT TO BE DETERMINED FROM TIME TO TIME BY THE GENERAL MEMBER; F. LONG-TERM OR MATERIAL AGREEMENTS INCLUDING, BUT NOT LIMITED TO, BORROWINGS, EQUITY FINANCINGS, CAPITALIZED LEASES AND INSTALLMENT CONTRACTS; AND PURCHASE, SALE, LEASE, DISPOSITION, HYPOTHECATION, EXCHANGE, GIFT, PLEDGE, OR ENCUMBRANCE OF ANY ASSET, REAL OR PERSONAL, WITH A FAIR MARKET VALUE IN EXCESS OF A DOLLAR AMOUNT TO BE DETERMINED FROM TIME TO TIME BY THE DIRECTORS OF THE GENERAL MEMBER, WHICH SHALL NOT BE LESS THAN 10% OF THE TOTAL ANNUAL CAPITAL BUDGET OF THE CORPORATION; G. APPOINTMENT OF AN INDEPENDENT AUDITOR AND HIRING OF INDEPENDENT COUNSEL EXCEPT IN CONFLICT SITUATIONS BETWEEN THE GENERAL MEMBER AND THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; H. THE CREATION OR ACQUISITION OF ANY SUBSIDIARY OR AFFILIATE ENTITY; I. CONTRACTING WITH AN UNRELATED THIRD PARTY FOR ALL OR SUBSTANTIALLY ALL OF THE MANAGEMENT OF THE ASSETS OR OPERATIONS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; J. APPROVAL OF MAJOR NEW PROGRAMS AND CLINICAL SERVICES OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY. THE GENERAL MEMBER SHALL FROM TIME TO TIME DEFINE THE TERM "MAJOR" IN THIS CONTEXT; K. APPROVAL OF STRATEGIC PLANS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; L. ADOPTION OF QUALITY ASSURANCE POLICIES NOT IN CONFORMITY WITH POLICIES ESTABLISHED BY THE GENERAL MEMBER; M. ANY TRANSACTION BETWEEN THE CORPORATION, A SUBSIDIARY OR AFFILIATE AND A DIRECTOR OF THE CORPORATION OR AN AFFILIATE OF SUCH DIRECTOR. IN ADDITION, THE GENERAL MEMBER SHALL HAVE THE AUTHORITY (BY A VOTE OF NOT LESS THAN TWO-THIRDS (2/3) OF ITS BOARD), TO DECLARE A MAJOR ACTIVITY REQUIRING APPROVAL. DESCRIBE THE PROCESS USED BY MGMT &/OR GOVERNING BODY TO REVIEW FORM 990 FORM 990, PART VI, QUESTION 11A SUTTER HEALTH HAS A CENTRALIZED TAX DEPARTMENT RESPONSIBLE FOR THE PREPARATION OF THE FORM 990. ANNUALLY THE TAX DEPARTMENT PROVIDES TRAINING AND EDUCATION TO AFFILIATE PERSONNEL WHO ASSIST THE TAX DEPARTMENT IN COLLECTING AND REVIEWING DATA TO BE REPORTED ON THE FORM 990. THE PREPARATION MATERIAL IS REVIEWED BY VARIOUS DEPARTMENTS INCLUDING TAX, FINANCE, OFFICE OF THE GENERAL COUNSEL, AND HUMAN RESOURCES. ADDITIONALLY, THE CHIEF FINANCIAL OFFICER SIGNS OFF ON THIS DATA BEFORE THE RETURN GOES TO THE PREPARATION STAGE. A NATIONAL ACCOUNTING FIRM PREPARES AND/OR REVIEWS THE RETURN. A COMPLETED RETURN IS THEN REVIEWED BY THE TAX DEPARTMENT AND THE AFFILIATE WITH THE CHIEF FINANCIAL OFFICER GIVING HIS/HER APPROVAL BEFORE THE RETURN IS FILED. DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST FORM 990, PART VI, QUESTION 12 EACH INDIVIDUAL BOARD MEMBER AND OFFICER HAS TO SIGN AN ACKNOWLEDGEMENT FORM THAT THEY HAVE READ THE POLICY. ANNUALLY A DISCLOSURE STATEMENT IS COMPLETED BY ALL OFFICERS AND BOARD MEMBERS. ON THIS STATEMENT THE INDIVIDUAL WILL LIST A WIDE RANGE OF INFORMATION WHICH INCLUDES BUSINESS RELATIONSHIPS, EMPLOYMENT RELATIONSHIPS, PROPERTY INTERESTS, AND THOSE OF RELATED PARTIES. THE CEO AND BOARD CHAIR WILL REVIEW THE STATEMENTS AND MONITOR SITUATIONS THAT MAY POSE A POTENTIAL CONFLICT OF INTEREST. THE CEO AND BOARD CHAIR MAY CONSULT WITH THE OFFICE OF THE GENERAL COUNSEL AS NECESSARY. IF THERE IS A POTENTIAL CONFLICT OF INTEREST RELATED TO A PARTICULAR TRANSACTION, THE INTERESTED TRUSTEE MUST DISCLOSE THE EXISTENCE AND NATURE OF THE RELATIONSHIP. THE BOARD CHAIR MAY APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE THE CONFLICT. UNTIL THE POTENTIAL CONFLICT IS RESOLVED, THE BOARD CHAIR MAY REQUEST THE TRUSTEE TO NOT PARTICIPATE DURING RELATED PRESENTATIONS AND DISCUSSIONS. IN ALL CIRCUMSTANCES INVOLVING AN ACTUAL CONFLICT, THE INTERESTED TRUSTEE SHALL REFRAIN FROM VOTING ON ANY MATTER RELATED TO THE TRANSACTION. PROCESS FOR DETERMINING COMPENSATION FORM 990, PART VI, QUESTION 15 THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. IN ORDER TO ENSURE EXTERNAL COMPETITIVENESS, NATIONAL, CALIFORNIA AND LOCAL MARKET AREA COMPENSATION DATA COMPARISONS ARE REVIEWED. COMPETITIVE ANALYSIS INCLUDES: (A) BASE SALARY, (B) TOTAL CASH (BASE SALARY + ANNUAL INCENTIVE) AND (C) TOTAL REMUNERATION (BASE SALARY + ANNUAL INCENTIVE + BENEFITS AND LONG TERM INCENTIVE). THIS ANALYSIS INCLUDES COMPARABLE ORGANIZATIONS AND GEOGRAPHIC CONSIDERATIONS. FOR THE MOST SENIOR EXECUTIVE POSITIONS, NATIONAL COMPARISONS FOR ORGANIZATIONS SIMILAR IN SIZE, SCOPE AND COMPLEXITY AS SUTTER HEALTH ARE MOST APPROPRIATE SINCE IT IS A NATIONAL MARKETPLACE IN WHICH SUTTER COMPETES FOR EXECUTIVE TALENT. ON THE OTHER HAND, BECAUSE CALIFORNIA'S UNDERLYING COMPENSATION STRUCTURE IS HIGHER THAN NATIONAL DATA (ESPECIALLY IN THE BAY AREA), REGIONAL PAY COMPARISONS AND ADJUSTMENTS ARE MADE. ALL OFFICERS OF THE ORGANIZATION (I.E., CEO, CFO, COO) UNDERGO A REVIEW AND COMPENSATION COMMITTEE APPROVAL ANNUALLY. KEY EMPLOYEES AND OTHER EXECUTIVES OF SUTTER HEALTH WHO ARE CONSIDERED DISQUALIFIED PERSONS FOR FORM 990 REPORTING PURPOSES ARE HANDLED IN THE SAME MANNER. AVAIL OF GOV DOCS, CONFLICT OF INTEREST POLICY, & FIN STMTS TO GEN PUBLIC FORM 990, PART VI, QUESTION 19 THE SUTTER HEALTH SYSTEM POSTS ITS CURRENT AND PAST AUDITED FINANCIAL STATEMENTS AT SUTTERHEALTH.ORG. OTHER DOCUMENTS ARE ALSO LOCATED AT THIS WEBSITE INCLUDING THE ANNUAL REPORT, MISSION STATEMENT, HISTORY, AND LINKS TO AFFILIATE WEBSITES. HOURS PER WEEK DEVOTED TO RELATED ORGANIZATION FORM 990, PART VII THE FOLLOWING BOARD MEMBER/OFFICER OF THE ORGANIZATION IS A FULL-TIME (40 HOURS PER WEEK) EMPLOYEE OF SUTTER HEALTH AND THEIR SUTTER HEALTH SALARY IS REPORTED HEREIN. THIS INDIVIDUAL RECEIVES NO COMPENSATION FOR THEIR SERVICE AS BOARD MEMBER/OFFICER OF THIS ORGANIZATION. LAURENCE DEMPSEY OTHER CHANGES IN FUND BALANCE FORM 990, PART XI, LINE 5 CHANGE IN UNREALIZED GAIN/(LOSS) $ (203,447) EQUITY TRANSFERS (NET) (3,606,708) ------------ $(3,810,155) ============ COMPILATION, REVIEW AND AUDIT OF INDEPENDENT ACCOUNTANT FORM 990, PART XII, QUESTION 2 ANNUALLY THE SUTTER HEALTH SYSTEM HAS AN AUDIT OF COMBINED BALANCE SHEETS AND STATEMENTS OF OPERATIONS PERFORMED BY INDEPENDENT AUDITORS. AN AUDIT COMMITTEE SELECTS THE AUDITORS AND REVIEWS RESULTS. SCHEDULE K SUPPLEMENTAL INFORMATION SCHEDULE K, PART V GLOBAL DISCLOSURE PART I, COLUMN (E): THE ORGANIZATION'S SOLE CORPORATE MEMBER IS A CONDUIT BORROWER OF TAX-EXEMPT BOND ISSUES THAT ALLOCATES PORTIONS OF EACH ISSUE TO SUBSIDIARY ORGANIZATIONS. THE ORGANIZATION IS ONLY REPORTING THE AMOUNT IT HAS BEEN ALLOCATED. PART II, LINE 7: ISSUANCE COSTS WERE FUNDED THROUGH AN EQUITY CONTRIBUTION. SGMF SPECIFIC PART I, LINE B, COLUMN (F): THE INITIAL BONDS ISSUED IN 2005 WERE NEW MONEY BONDS THAT WERE RETIRED AND REISSUED ON MAY 1, 2007. ACCORDINGLY, WHERE APPROPRIATE, SCHEDULE K REFLECTS THE CURRENT REFUNDING BONDS THAT WERE TREATED AS REISSUED RATHER THAN REFLECTING THE "NEW MONEY" BONDS. 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