bloximages.newyork1.vip.townnews.combloximages.newyork1.vip.townnews.com/elpasoinc.com/...RASBERRY & ASSOCIATES CERTIFIED COURT REPORTERS 420 EAST SAN ANTONIO SECOND FLOOR EL PASO,

RASBERRY & ASSOCIATES CERTIFIED COURT REPORTERS420 EAST SAN ANTONIO SECOND FLOOR EL PASO, TEXAS 79901 (915) 533-1199

1 IN THE UNITED STATES DISTRICT COURT

2 FOR THE WESTERN DISTRICT OF TEXAS

3 EL PASO DIVISION

4

5 IN RE: ) ) CHAPTER 11

6 EL PASO CHILDREN'S HOSPITAL ) CORPORATION, ) CASE NO. No. 15-30784

7 ) Debtor. )

8

9

10

11 The Oral Deposition of MICHAEL LAWRENCE NUNEZ,

12 taken at the request of El Paso Children's Hospital,

13 pursuant to Federal Rules of Civil Procedure, on

14 Monday, July 20, 2015, from 9:04 a.m. to 4:29 p.m., at

15 420 E. San Antonio, Second Floor, El Paso, Texas 79901.

16

17

18

19

20

21

22

23

24 Reported by:

25 Teri C. Finnegan, TX & NM CSR, RPR

Nunez, Michael L. 07-20-2015


2

1 A P P E A R A N C E S2 For El Paso Children's Hospital:3 Marvin E. Sprouse, III

Jennifer Wertz (Telephonically)4 Jackson Walker LLP

100 Congress Avenue, Suite 11005 Austin, Texas 78701

E-Mail: [email protected] [email protected] For El Paso County Hospital District d/b/a University

Medical Center of El Paso:8

Liz Boydston9 Timothy S. Springer (Telephonically)

Norton Rose Fulbright US, LLP10 2200 Ross Avenue, Suite 3600

Dallas, Texas 7520111 E-Mail: [email protected]

[email protected] Also present: Todd Patnode141516171819 I N D E X20 WITNESS: PAGE:21 MICHAEL LAWRENCE NUNEZ22 Examination by Mr. Sprouse 52324 CHANGES AND SIGNATURE PAGE 22825 CERTIFICATE OF COURT REPORTER 229

4

1 No. L Memo to Board of Managers of University 217 Medical Center of El Paso from John

2 Guggendahl, M.D., Vice Chair Dated July 24, 2014

3456789

10111213141516171819202122232425

3

1 EXHIBIT DESCRIPTION PAGE:2 No. A Debtor's Amended Notice of Rule 2004 8

Examination of El Paso County Hospital3 District d/b/a University Medical

Center of El Paso Corporate4 Representative5 No. B Letter to Louis Strubeck and Liz 11

Boydston from Jennifer F. Wertz Dated6 July 3, 20157 No. C Third Interim Order (I) Authorizing Use 38

of Cash Collateral, (II) ranting8 Adequate Protection, and (III)

Scheduling Final Hearing9

No. D El Paso Children's Hospital Weekly Cash 4610 Forecast, Actuals Through June 26, 201511 No. E El Paso County Hospital District d/b/a 154

University Medical Center of El Paso's12 Limited Objection to the Amended

Application of Debtor-In-Possession to13 Employ Jackson Walker LLP as Counsel

for Debtor14

No. F Executive Summary on Fiscal and Revenue 15615 Cycle Services being provided by UMC to

EPCH/Status Update: Planning and16 Development Committee November 201217 No. G Pledge and Security Agreement 15818 No. H Agreement on Obligations Between 163

University Medical Center of El Paso19 and El Paso Children's Hospital20 No. I Financing Statement 16921 No. J El Paso County Hospital District Fiscal 173

2015 Proposed Operating and Capital22 Budget Executive Summary and Budget

Assumptions23

No. K Document Acknowledgment/UMC-EPCH 19824 Contracted Services25

5

1 MICHAEL LAWRENCE NUNEZ,2 sworn by the Certified Court Reporter, testified as3 follows:4 EXAMINATION5 BY MR. SPROUSE:6 Q. Good morning, Mr. Nunez. My name is Marvin7 Sprouse. I am with Jackson Walker, LLP, proposed8 counsel for El Paso Children's Hospital Corporation,9 which I will refer to today as the debtor or the

10 Children's Hospital, if we can have that understanding.11 A. Yes.12 Q. Thank you.13 If you would say your full name for the14 record.15 A. Michael Lawrence Nunez.16 Q. Okay. Do you have any other names?17 A. No.18 Q. Where do you live, Mr. Nunez?19 A. I live in Las Cruces, New Mexico.20 Q. Do you commute to El Paso every day?21 A. Yes.22 Q. Mr. Nunez, let me just ask how far away is23 Las Cruces from El Paso?24 A. About 45, 50 minutes.25 Q. And you understand we're here today to take



6

1 your deposition.2 A. Yes.3 Q. Have you been deposed before?4 A. No.5 Q. Have you given testimony in other matters?6 A. No.7 Q. Have you been a party to any other civil8 lawsuit?9 A. No.

10 Q. Any criminal lawsuits?11 A. No.12 Q. Mr. Nunez, you understand that you're under13 oath today?14 A. Yes.15 Q. And you're sworn to tell the truth?16 A. Yes.17 Q. The court reporter is here to take down your18 answers and they can be used at a hearing or at a19 trial. Do you understand that?20 A. Yes.21 Q. Okay. And you're doing fine so far, but if22 you will please continue to answer verbally. Let's try23 to speak only one at a time for the sake of our good24 court reporter. If I interrupt you, let me know and25 I'll try to do a better job of letting you finish.

8

1 El Paso Children's to -- to University Medical Center.2 Q. What else did you review?3 A. That's all I can recall.4 Q. And who else did you talk about today's5 deposition besides the people here in this room?6 A. There was one other gentleman yesterday,7 Matthew, also with the legal counsel, and just with8 Mr. Valenti and also Edward Sosa who's our chief legal9 counsel with UMC just in terms of today was going to be

10 my deposition.11 Q. You mentioned a Mr. Valenti. Is that right?12 A. Yes. And he's a CEO for University Medical13 Center.14 MS. BOYDSTON: Marvin, do you mind if15 I -- I forgot to preserve all of my potential relevancy16 objections, if there are any. Is that okay so we don't17 have to keep doing that?18 MR. SPROUSE: That's fine with me.19 MS. BOYDSTON: Thanks.20 (Exhibit marked, No. A.)21 Q. (By Mr. Sprouse) Mr. Nunez, you've been22 handed a document that's been marked as Exhibit A and23 it has the caption for the bankruptcy case at the top24 and it says it's the Debtor's Amended Notice of Rule25 2004 Examination of El Paso County Hospital District

7

1 Can we agree that if you don't understand2 a question that you'll let me know?3 A. Yes.4 Q. And I'll do my best to repeat or rephrase the5 question for you.6 Is there any reason that you wouldn't be7 able to answer my questions today?8 A. No.9 Q. Have you spoken to anyone about today's

10 deposition?11 A. Yes.12 Q. Who have you talked to?13 A. My legal counsel and the parties that are14 right -- they're right next to me.15 Q. For the benefit of the record, can you16 identify who else is here?17 A. Liz with Norton Rose Fulbright and also Todd18 Patnode.19 Q. Did you review any documents in preparation20 for today?21 A. Yes.22 Q. What did you review?23 A. I reviewed -- I reviewed certain agreements,24 just kind of going back and trying to refresh --25 refresh my memories in terms of cash payments from

9

1 d/b/a University Medical Center of El Paso Corporate2 Representative.3 Do you see that? It's here.4 A. Oh, okay. Yes.5 Q. Have you seen this document before?6 A. No.7 Q. I'll represent to you that this is our notice8 provided through your counsel to you for your9 appearance here today and it says that you have been

10 designated as the corporate representative of UMC. Is11 that your understanding?12 A. My understanding now.13 Q. And today instead of saying El Paso Hospital14 District d/b/a University Medical Center of El Paso, I15 will just say UMC, if we can have that understanding.16 A. That's fine.17 Q. What title do you hold today at UMC?18 A. Chief financial officer.19 Q. Do you have any other titles at UMC?20 A. No.21 Q. Do you have any other roles at UMC?22 A. No.23 Q. Do you have any other employment that you're24 engaged in right now?25 A. No.



10

1 Q. Are you familiar with the Children's Hospital2 litigation with UMC?3 A. Yes.4 Q. And you understand there are lawsuits against5 UMC associated with the bankruptcy case.6 A. Yes.7 Q. Including a lawsuit by the Children's Hospital8 against UMC.9 A. Can you rephrase that.

10 Q. Sure. The Children's Hospital has sued UMC.11 Are you aware of that?12 A. Yes.13 Q. And I think you mentioned Norton Rose, but for14 the benefit of the record, can you tell us what15 Norton Rose is?16 A. They are our legal counsel in this proceeding.17 Q. Do you know who Lou Strubeck is?18 A. Yes, I do.19 Q. Who is he?20 A. He's the lead counsel for Norton Rose21 Fulbright in this matter.22 Q. Have you met Mr. Strubeck?23 A. Yes, I have.24 Q. I presume you know Ms. Boydston?25 A. Yes.

12

1 Q. Yes. Who would have received that2 communication?3 A. I received that communication.4 Q. And it was from inside legal counsel,5 Mr. Sosa?6 A. To my recollection that's where it came from.7 Q. Mr. Nunez, where did you go to high school?8 A. I went to high school -- Cobre High School in9 Bayard, New Mexico.

10 Q. Did you go to college?11 A. Yes.12 Q. Where did you go to college?13 A. New Mexico State University in Las Cruces, New14 Mexico.15 Q. Did you get a degree?16 A. Yes.17 Q. What was your degree in?18 A. A bachelor's of accountancy.19 Q. Do you have any other degrees?20 A. I have an associate's degree from New Mexico21 State, but no other advanced degrees.22 Q. Do you have any professional certifications?23 A. Yes. I'm a certified public accountant in the24 state of New Mexico. I'm also a certified healthcare25 financial professional within Healthcare Financial

11

1 (Exhibit marked, No. B.)2 Q. (By Mr. Sprouse) Mr. Nunez, I've handed you a3 document that's been marked Exhibit B. It's a letter4 from my law firm to your counsel -- or UMC's counsel5 dated July 3rd of 2015.6 Have you seen this letter before?7 A. No, I have not.8 Q. Okay. Mr. Nunez, I'll represent to you that9 this letter advises UMC of a duty to preserve documents

10 and information that relate to the bankruptcy case and11 the litigation between the Children's Hospital and UMC.12 What is UMC doing to preserve documents13 and information that relate to those matters?14 A. There was a communication that was sent out by15 our chief legal counsel not to destroy any documents as16 it relates to anything with the matter, UMC and El Paso17 Children's. We also had received communication from18 El Paso Children's not to destroy any documents19 obtained during the -- what we call the due diligence20 phase, during the period approximately from March21 through April 30th of this year, 2015.22 Q. You mentioned an internal communication23 related to preservation of documents. Is that right?24 A. The preservation of documents on the UMC side,25 yes.

13

1 Management Association, known as HFMA.2 Q. HF- --3 A. HFMA, Healthcare Financial Management4 Association.5 Q. What does it require to be certified by HFMA?6 A. There's the -- you have to pass a couple of7 exams. There's a general exam regarding healthcare8 matters and then a specialty exam which is accounting9 and finance. So upon the passage of those two exams,

10 then you become certified.11 Q. Are there any continuing education12 requirements or testing that is necessary for you to13 stay certified?14 A. Yes, there is.15 Q. Can you describe that for me.16 A. Yes. Under my license, my CPA license, I have17 to have 120 hours of continuing professional education18 every three years. And I do submit annual -- with my19 annual renewal, I do submit a rolling three years'20 worth of education. And within Healthcare Financial21 Management Association, there is also a minimum number22 of hours that I need to maintain. I don't remember off23 the top of my head what those HFMA hours are, but they24 are less than my license.25 Q. As a CPA?



14

1 A. I'm sorry?2 Q. As a CPA. You said they're less than your3 license.4 A. Yes, less than my CPA license requirements.5 Q. When did you become a CPA?6 A. About 1987.7 Q. And you've continuously been a CPA since then?8 A. Yes, I have.9 Q. Where have you worked since getting out of

10 college?11 A. Upon completion of college, I started my12 public accounting career with Arthur Andersen and13 Company in Albuquerque.14 Q. And what time period was that?15 A. That covered approximately 1985 through 1992.16 Then from 1992 through about 1997-'98 with another CPA17 firm in Albuquerque called Neff, N-E-F-F, and Company.18 Then subsequent to that with a firm called REDW,19 Rogoff, Erickson, Diamond and Walker, also in20 Albuquerque. Then in 2006 through 2000- -- no, 200121 through 2006 with Memorial Medical Center in Las22 Cruces, New Mexico. Then from 2006 to current, I've23 been with University Medical Center, El Paso.24 Q. When you started working with UMC, did it have25 a different name?

16

1 Q. And at some point you became the CFO. Is that2 right?3 A. That is correct.4 Q. When did you become the CFO of UMC?5 A. I was the interim CFO from June of 20106 through January 2011; then in January 2011, I became7 the permanent CFO.8 Q. Mr. Nunez, can you describe for the record9 your duties as the CFO.

10 A. There are varying duties and responsibilities11 as being a CFO, but primarily to account for to make12 sure that the financial records are in place adequately13 in accordance with generally accepted accounting14 principles, also meet the standards of generally15 accepted auditing standards to make sure that the16 financial operations of the -- when I say now17 University Medical Center, it's also and its -- and its18 two subsidiaries, which include El Paso First Health19 Plans and also University Medical Center Foundation.20 And also to include the preparation of21 annual budgets, operating budget, capital budget,22 prepare the annual tax rate to meet -- to come before23 the commissioners court, et cetera.24 Q. And you have that role for all three of the25 companies you mentioned?

15

1 A. Yes, at that time it was -- well, El Paso2 County Hospital District doing business as R.E.3 Thomason General Hospital.4 Q. When did the name change?5 A. Approximately 2007, 2008 time frame.6 Q. Do you know why it changed?7 A. Not specifically other than that was the board8 of managers' and senior management's wish to -- wish9 for the name change.

10 Q. What was your title when you began working for11 UMC in 2006?12 A. My title was corporate controller.13 Q. What were your duties as the corporate14 controller?15 A. My duties of the corporate controller was to16 ensure the financial records of the El Paso County17 Hospital District were adequate in accordance with18 generally accepted accounting standards and also at19 that time I did oversee the financial -- some of the20 financial operations of El Paso First Health Plans.21 Q. Okay. When you were hired, did UMC have a22 CFO?23 A. Yes.24 Q. Who was that?25 A. The gentleman's name was Phil Rivera.

17

1 A. No, primarily UMC in terms of -- UMC, the2 hospital, although I do get summarized financial3 information from El Paso First Health Plans and also4 from the Foundation as they roll up into UMC's5 consolidated financial statements.6 Q. Does El Paso First have its own CFO?7 A. Not a CFO, no.8 Q. Who performs the equivalent function there?9 A. There is a director of finance.

10 Q. Who is that?11 A. The person's name is Melinda Verosky,12 V-E-R-O-S-K-Y.13 Q. How long has Ms. Verosky had that role?14 A. More than ten years because she was here prior15 to me coming on board with UMC since 2006. I don't16 know the exact number of years.17 Q. Does the Foundation have the equivalent of a18 CFO?19 A. No, they do not.20 Q. Who manages the finances for the Foundation?21 A. That is done by the UMC's accounting staff.22 Q. And you're the head of that staff.23 A. The division reports to me.24 Q. Mr. Nunez, as the CFO who do you answer to at25 UMC?



18

1 A. Mr. James Valenti, the CEO.2 Q. Where is UMC?3 A. Address?4 Q. Yes.5 A. 4815 Alameda.6 Q. That's in El Paso?7 A. Yes, El Paso, Texas 79905.8 Q. Are there more than one building at that9 address for UMC?

10 A. Can you ask that again.11 Q. Sure. Are there multiple buildings at that12 address for UMC?13 A. With that address, no.14 Q. When was that facility built?15 A. Oh, I don't know. 1950s, I think, '60s. I16 don't know the actual date when it was built.17 Q. Is this the same building that houses the18 Children's Hospital?19 A. No.20 Q. Does UMC have any other locations besides the21 Alameda address?22 A. We have various neighborhood health centers23 also known as clinics throughout the city. There's24 probably seven, eight or nine clinics. We refer to25 them as neighborhood health centers.

20

1 Commissioner David Stout and Commissioner Andrew2 Haggerty.3 Q. How does one get on the County Commissioners4 Court?5 A. By election of the public.6 Q. Who is in charge of the County Commissioners7 Court?8 A. I'm not sure what you're asking.9 Q. You just testified as to who's on the

10 commissioners court. Is there one person who oversees11 that court?12 A. No, not that I'm aware of.13 Q. So they are coequal members?14 A. As far as to my knowledge, yes.15 Q. Is there seniority among the members of the16 commissioners court?17 A. Seniority from what perspective?18 Q. Who's been there the longest?19 A. The person that has been there the longest has20 been County Judge Veronica Escobar.21 Q. Are the other court members referred to as22 judges?23 A. No, they are not.24 Q. And how does she have that title?25 A. I am unaware as to how she has that title.

19

1 Q. Are additional clinics planned?2 A. Yes, there are.3 Q. How many?4 A. There are currently three additional clinics5 that are currently being planned.6 Q. When are those going to open?7 A. The anticipated opening dates are probably8 going to be 2017 for what I'm going to call the far9 west neighborhood health center, as well as the far

10 east neighborhood health center. There's a third one,11 the center -- what we refer to as central clinic which12 will probably open perhaps in the 2018 time frame.13 Q. Has UMC opened any clinics that are now shut14 down?15 A. Not that I'm aware of.16 Q. Mr. Nunez, what is the County Commissioners17 Court?18 A. The County Commissioners Court is a body that19 our board of managers, our seven board of managers,20 reports to. The commissioners court appoints the board21 of managers of UMC.22 Q. Who's on the County Commissioners Court?23 A. The County Commissioners Court, there is24 County Judge Veronica Escobar, there's also25 Commissioner Vincent Perez, Commissioner Carlos Leon,

21

1 Q. You referred to her as Judge Escobar?2 A. Yes.3 Q. And you don't refer to any of the other court4 members as a judge?5 A. That is correct.6 Q. Who on the commissioners court is most7 involved with the board of managers at UMC?8 A. I would say the two that are most involved are9 County Judge Escobar as well as currently right

10 now Commissioner David Stout since the University11 Medical Center is in his precinct.12 Q. Mr. Nunez, you've testified a bit about this,13 but how would you describe the relationship14 mechanically as to how things work between UMC and the15 County Commissioners Court?16 A. How they work mechanically is the county -- or17 the court approves UMC's annual budget -- its operating18 budget, capital budget, tax rate -- and then we do hold19 quarterly meetings with them, with the court.20 Mr. Valenti presents quarterly updates to the court,21 then I also present quarterly financial updates to the22 court as well.23 Q. Is there contact between UMC and the24 commissioners court more often than the quarterly25 meetings?



22

1 A. I am -- if there are outside of me, I am2 unaware of that.3 Q. Are there ever any special meetings between4 the commissioners court and the board of managers at5 UMC?6 A. Yes.7 Q. How do those occur?8 A. Those occur where there are at times pending9 items which do need to be taken down to the court.

10 UMC, we will request to be presented on the11 commissioners court agenda, we submit our request by12 the prescribed timeline to be presented on the agenda.13 Q. Has that happened in relation to the14 Children's Hospital bankruptcy?15 A. In recent months there has been a couple of16 meetings where we have gone into executive session to17 discuss matters pertaining to El Paso Children's18 Hospital.19 Q. Are those executive sessions open to the20 public?21 A. No, they are not.22 Q. Have you attended them?23 A. Yes, I've attended some.24 Q. Was the entire commissioners court present?25 A. At the various meetings that I was present for

24

1 Q. Has UMC's counsel participated in those2 executive sessions?3 A. Are you talking about internal counsel?4 Q. Well, let's start there. Yes.5 A. Internal counsel, yes.6 Q. That would be Mr. Sosa?7 A. Edward Sosa, yes, and also Bruce Yetter,8 Y-E-T-T-E-R.9 Q. Mr. Yetter works for Mr. Sosa. Is that right?

10 A. He works with the county attorney's office.11 Q. So he's not employed directly by UMC?12 A. That is correct.13 Q. Has other counsel been present at those14 executive session meetings?15 A. Yes, Norton Rose and Fulbright, specifically16 Lou Strubeck, and then also most recently Liz.17 Q. How is UMC governed?18 A. UMC is governed by our board of managers.19 There are seven.20 Q. Who are they?21 A. The seven current board members are Steve22 DeGroat, who's our board chairman; Lou Volk -- I'm23 sorry -- Jim Volk; Brother Nick Gonzalez; Tracy Yellen;24 Monica Narvaez; Joy Martinez; and Miguel Fernandez.25 Q. Do they have titles on the board of managers,

23

1 those executive sessions, yes, they were.2 Q. And who on the board of managers was present3 for UMC?4 A. To my recollection -- because there have been5 a couple of meetings -- there's been UMC Board Chairman6 Steve DeGroat; Board Person Tracy Yellen, Board Person7 Brother Nick Gonzalez, Board Person Monica Narvaez and8 also recently board member Joy Martinez.9 Q. Are minutes taken at these meetings?

10 A. I am not aware of that -- or I don't know the11 answer to that question.12 Q. But there are agendas that are circulated13 prior to the meetings. Is that right?14 A. Yes, there are.15 Q. Who prepares the agendas?16 A. I do not know who specifically from the county17 prepares the agenda.18 Q. Does UMC participate in the preparation of the19 agenda?20 A. Of the agenda of the court?21 Q. Of the executive sessions where they meet with22 Children's Hospital.23 A. Not that I'm aware of other than the -- other24 than submittal of -- for us to be placed on the agenda,25 but not in the preparation of the agenda.

25

1 the seven current members?2 A. Yes, there are three. There's a board chair,3 vice chair and also secretary.4 Q. Who's the chair?5 A. The chair is Steve DeGroat.6 Q. Who's the vice chair?7 A. Vice chair is Jim Volk.8 Q. And the secretary?9 A. Brother Nick Gonzalez.

10 Q. And for the remaining board of managers, what11 are they called?12 A. Board of managers.13 Q. What is the function of the board of managers.14 A. The board of managers' function is to oversee15 the operations of University Medical Center.16 Q. Does UMC have administrators?17 A. Yes.18 Q. Who are they?19 A. The administration team or administrators are20 Jim Valenti, CEO; Maria Zampini, chief operations21 officer; myself as chief financial officer; Joe Garcia22 as chief nursing officer; Edward Sosa as our chief23 legal officer; and then also Cathy Gibson who is our24 chief compliance officer. One more. Lorena Navedo25 who's our executive chief of staff.



26

1 Q. At UMC how does the board of managers relate2 to the UMC administrators?3 A. Can you rephrase that.4 Q. Sure.5 A. Relate in what manner?6 Q. I'm trying to understand the respective role7 or functions of the board of managers on the one hand8 and the administrators on the other hand. Can you9 explain how that works at UMC?

10 A. Okay. We present -- the CEO reports to the11 board of managers and we do have recurring monthly12 meetings of administration with the board of managers.13 We have regularly scheduled board of managers meetings.14 There are various subcommittee meetings --15 subcommittees that the board has, one is a financial16 committee, finance committee, the other is planning and17 development and the third one is the compliance18 committee.19 So various members from the board of20 managers are on each of those three subcommittees and21 based upon the agenda, that's how information is22 disseminated from management of UMC to the board of23 managers.24 Q. When you say "management of UMC," do you mean25 the administrators?

28

1 A. Who has been on the UMC board the longest?2 In -- let me ask in the current mix-up or in the3 current structure?4 Q. Yes.5 A. That would be Tracy Yellen.6 Q. How long has she been there?7 A. I'm going to say probably coming up on five or8 six years.9 Q. How long has Mr. DeGroat been on the board of

10 managers?11 A. He was recently reappointed in April --12 April 1 of 2014, so in his current term, just over a13 year. But he served previously on the UMC board of14 managers in the mid-2000 time frame until about -- when15 he served his six years.16 Q. So this is his -- he's in his second17 six-year --18 A. Second reappointment.19 Q. Right.20 A. Yes.21 Q. Who selects the administrators at UMC?22 A. The -- well, I also refer to senior23 leadership, that's selected by Jim, by Jim Valenti.24 Q. Do his selections have to be approved by the25 board of managers?

27

1 A. Yes, the seven people that I just mentioned.2 Q. So the board of managers really oversees the3 administrators.4 A. No, I would say -- no, they don't oversee.5 They oversee the operations of the hospital. Jim is6 the only one that reports directly to the board of7 managers. All the other various members of senior8 leadership report directly to Jim, the CEO.9 Q. Are the board of managers paid by UMC?

10 A. No.11 Q. Are they volunteer?12 A. Yes.13 Q. Are the administrators paid by UMC?14 A. The administrators or senior leadership, yes.15 Q. How are the board of managers selected?16 A. The board of managers are -- they are not17 selected, they are appointed by the commissioners court18 members.19 Q. Is there a term that they're appointed for?20 A. Yes.21 Q. What are the terms?22 A. The current terms are two three-year terms not23 to exceed six years total.24 Q. Who's been on the board of managers the25 longest?

29

1 A. Not that I'm aware of.2 Q. Do his selections have to be approved by the3 commissioners court?4 A. No.5 Q. Who determines how the executives or6 administrators at UMC are paid?7 A. That is determined by Mr. Valenti as well as8 our human resources department.9 Q. Is that subject to commissioner court

10 approval?11 A. Not directly. I'll say indirectly through the12 approval of the overall budget.13 Q. Are UMC administrators paid on salary?14 A. Yes.15 Q. Are they eligible for bonus?16 A. Yes.17 Q. How does that work?18 A. The bonus?19 Q. Yes.20 A. There are annual goals that are first21 established by the board of managers for Mr. Valenti22 and then those goals are then passed on down to each of23 the respective areas, whether it's on the operations24 side, the nursing side, the financial side.25 So our goals are -- roll up to



30

1 Mr. Valenti's goals. And then at the end of the year,2 an evaluation is done by Mr. Valenti, you know, whether3 certain metrics have been met, scored, and then what4 the final percentage comes out to be.5 Q. Is Mr. Valenti also eligible for a bonus?6 A. Yes, he is.7 Q. And who evaluates his performance?8 A. The board -- there is a board compensation9 committee, so they evaluate his annual performance.

10 Q. Is that a subgroup of the board of managers?11 A. That is a subgroup. Let me back up just one12 step to clarify. The overall board of managers13 evaluates Mr. Valenti, but there is also a board14 compensation committee as well.15 Q. Who's on the board compensation committee?16 A. To my recollection the last meeting was --17 Mr. Jim Volk was on the compensation committee. I18 don't know who else is on there since there was a board19 turnover on April 1st, but prior to that was Bill20 Hanson who was a board chair and one other person I do21 not recall.22 Q. And Mr. Hanson's no longer on the board?23 A. That is correct, he is no longer on the board.24 Q. Are UMC administrators' salaries public25 information?

32

1 A. No, not in that tower.2 Q. Where is Children's Hospital?3 A. They are in a building right west of the4 Thomason Tower, what we call the Women's and Children's5 Tower.6 Q. You say it's the Woman's and Children's Tower?7 A. Yes.8 Q. What is the address for that building?9 A. I believe it's 4845 -- well, the Children's

10 portion is 4845 Alameda, which are floors six through11 ten. Floors one through five are contiguous to the12 4815 Alameda address, which is UMC's.13 Q. By "contiguous," what do you mean by that?14 A. Well, they're -- the first five floors of the15 Woman's and Children's Tower are UMC operations, part16 of the UMC. Floors six through ten are El Paso17 Children's Hospital.18 Q. Is the Women's and Children's Tower a building19 physically connected to the Thomason Tower?20 A. Physically connected, yes.21 Q. How so?22 A. By a hallway and then elevators.23 Q. Mr. Nunez, you testified, I believe, that the24 Children's Hospital is located on the sixth through the25 tenth floors of the Woman's and Children's Tower. Is

31

1 A. Yes, they are.2 Q. How would one find that information?3 A. Normally through an open records request.4 Q. Are administrator bonuses public information?5 A. Yes, they are.6 Q. And how can that information be obtained?7 A. Through an open records request as well.8 Q. Where are the administrative offices for UMC?9 A. We are located on the eighth floor of what we

10 call the Thomason Tower.11 Q. And that's at the Alameda address?12 A. 4815 Alameda, yes.13 Q. What else is in that building?14 A. The Thomason Tower?15 Q. Yes.16 A. On the first floor is our gift shop,17 radiology, laboratory, registration, admissions,18 ambulatory surgical wing, emergency room, trauma19 department. And then the floors six through seven are20 going to be nursing floors.21 Q. So that's basically a hospital. Is that22 right?23 A. Yes.24 Q. And that's also where Children's Hospital is25 located?

33

1 that right?2 A. That's correct.3 Q. Where are the administrative offices for the4 Children's Hospital?5 A. Administrative offices are on the basement6 floor of the Woman's and Children's Tower.7 Q. I believe you've testified somewhat as to what8 else is in that building, the Woman's and Children's9 Tower. Is the remaining space UMC space?

10 A. What remaining space?11 Q. Six through ten of the Woman's and Children's12 Tower is the Children's Hospital. Is that right?13 A. That's correct.14 Q. The basement contains the administrative15 offices for the Children's Hospital?16 A. That's correct.17 Q. What else is in the Woman's and Children's18 Tower?19 A. The Woman's and Children's Tower, floors two20 through five, are going to be the women's services --21 the women's services for UMC, mother/baby,22 labor/delivery.23 Q. What else does UMC have in that tower?24 A. In the Woman's and Children's Tower?25 Q. Yes.



34

1 A. To my recollection that is the women's2 services, labor and delivery. That's all I can recall.3 Q. Does UMC have a lobby area in the Woman's and4 Children's Tower?5 A. There is a lobby area -- yes, there is a6 combined joint lobby area for both UMC and for El Paso7 Children's, although there are -- by design, because of8 license requirements, there are two separate entrances,9 but they go to the same general lobby area.

10 Q. There's not a partition --11 A. No.12 Q. -- between one area and the other?13 A. No, there's not.14 Q. And if one were to visit the lobby in the15 Woman's and Children's Tower, could a person tell which16 portion of that lobby is allocated to the Children's17 Hospital and which portion is allocated to UMC?18 A. No, not that I -- it's just one general lobby19 area.20 Q. So it's a combined space?21 A. Yes.22 Q. Can a person get to the Children's Hospital23 without going through a UMC portion of the building?24 A. Other than the general lobby area, yes, they25 can go directly to the Children's Hospital. There are

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1 Q. Well, if it's a common space, how would one2 know that there are separate entrances?3 A. By the -- there are two separate entrances,4 one has the name UMC and the other has the name El Paso5 Children's Hospital.6 Q. So what you're referring to is the signage on7 the entrance.8 A. Yes.9 Q. But one could go in through the UMC entrance

10 and go to the Children's Hospital?11 A. That is correct.12 Q. And one could go through the Children's13 Hospital entrance and go to UMC?14 A. That is correct.15 Q. For the Woman's and Children's Tower, is there16 separate parking for the Children's Hospital and UMC?17 A. No.18 Q. Is the parking area combined for both UMC and19 Children's Hospital?20 A. Yes, there are two parking structures.21 There's a combined visiting parking center, it's about22 five floors. And then on the northwest part of the23 campus, there's a combined parking structure for the24 associates.25 Q. By "the associates," what do you mean?

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1 elevators that'll take you directly from the lobby area2 directly to the sixth floor.3 Q. And that's after going into what we've4 described as sort of the common lobby?5 A. The common area, yes.6 Q. In the Women's and Children's Tower, does UMC7 and the Children's Hospital have common elevators?8 A. There are one set of elevators that will take9 you to all floors, the one through ten. And then there

10 are another set of elevators that will just take you11 directly to -- only to the women's floors, the UMC12 floors. And then there's another set of elevators that13 will just take you directly to the Children's floors.14 Q. So there's three sets of elevators?15 A. Yes, to my recollection.16 Q. One is Children's Hospital only.17 A. Yes.18 Q. One is UMC only. Is that correct?19 A. Yes.20 Q. And one set of elevators can get you to both?21 A. Yes.22 Q. I think you mentioned the entrances to the23 women's and Children's Hospital -- did you say there24 are separate entrances from the outside?25 A. Yes.

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1 A. The associates of University Medical Center2 and the associates of El Paso Children's.3 Q. That would be the employees?4 A. The employees.5 Q. So the employees of UMC and the Children's6 Hospital park together?7 A. Yes.8 Q. In the same space?9 A. In the same space, yes.

10 Q. And the patients and visitors for UMC and the11 Children's Hospital park in the same space?12 A. That is correct.13 Q. And by "space," I mean facility.14 A. In the same parking structure, yes.15 Q. Right. Where do the physicians park?16 A. The physicians for both, whether they work17 for -- or whether they are seeing UMC patients or18 El Paso Children's Hospital patients, there is19 designated parking on the first floor of the visitor20 parking for physicians and then there's also overflow21 designated areas on the second and third floors of the22 visitor parking structure.23 Q. So the physicians for UMC and the physicians24 for the Children's Hospital share that dedicated25 parking area?



38

1 A. That is correct. Although there is probably2 about five or six designated parking spots solely for3 Children's -- physicians that are going to go to4 El Paso Children's -- to serve patients of El Paso5 Children's Hospital.6 Q. Why do they have reserved spaces?7 A. That was at the request of the Children's8 board.9 Q. But other than those five parking spaces, the

10 rest are open to physicians for both facilities?11 A. Yes.12 Q. And how many other parking spaces are there,13 do you know?14 A. Parking spaces for the entire structure?15 Q. For physicians.16 A. For physicians. Approximately the first17 floor, I'm going to venture a guess of probably about18 30 parking spots and then on the second floor an19 additional 15, third floor an additional 15.20 Q. Does that include the overflow that you21 mentioned?22 A. Yes. In the event of the first floor is full,23 you can go up to the second floor and go up to the24 third floor.25 (Exhibit marked, No. C.)

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1 the Children's Hospital to use cash pursuant to a2 budget through July 30th. Were you aware of that?3 A. I was aware of a document, not specifically4 through July 30th, but a 13-week budget from May 19th5 to whenever that 13-week period ended.6 Q. Are you aware, Mr. Nunez, that the Children's7 Hospital has asked for court authority to use cash8 beyond July 30th?9 A. No, I'm not aware of that.

10 Q. I'll represent to you that the Children's11 Hospital has made that request to use cash beyond July12 the 30th.13 Does UMC intend to object to the14 Children's Hospital use of cash beyond July the 30th?15 A. I am unaware of that.16 Q. Who would know?17 A. Our chief legal counsel, legal counsel.18 Q. Who else?19 A. Perhaps our board of managers and Mr. Valenti,20 if they've been consulted on it.21 Q. Mr. Nunez, let's turn to the back pages of22 Exhibit C, which is the Third Interim Cash Collateral23 Order, and there I think you'll find a budget.24 In the top left corner, you see that it25 states El Paso Children's Hospital Weekly Cash Forecast

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1 Q. (By Mr. Sprouse) Mr. Nunez, I've handed you a2 document that's been marked as Exhibit C and I'll3 represent to you that this is an order entered by the4 bankruptcy court in the Children's Hospital case and5 it's called the Third Interim Order Authorizing Use of6 Cash Collateral, Granting Adequate Protection, and7 Scheduling Final Hearing.8 Do you see that?9 A. Yes, I do.

10 Q. And at the top of the page, there's the11 signature of Bankruptcy Judge Mott. Do you see that?12 A. Yes, I do.13 Q. Have you seen this document before?14 A. No, I have not.15 Q. Have you heard of it before?16 A. No.17 Q. Looking at it today, do you have any18 understanding of its purpose?19 A. Right off the top, no, I do not.20 Q. I understand, Mr. Nunez, that UMC asserts that21 it has a lien on the cash held by the Children's22 Hospital. Is that right?23 A. I know that there is a lien, but as to a lien24 specifically on Children's cash, I am unaware of that.25 Q. I'll represent to you that this order permits

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1 and it provides for actuals through 6-26 of 2015. Do2 you see that?3 A. Yes, I do.4 Q. Have you seen this budget before?5 A. This particular one, yes, just a couple of6 days ago.7 Q. Has UMC done any analysis of the numbers in8 this budget?9 A. What type of analysis are you asking about?

10 Q. Well, I'll note that much of this budget11 provides a forecast. Do you see that?12 A. Yes.13 Q. So in other words that's for projected14 receipts and disbursements in the future. Would you15 agree with that?16 A. Yes, it does.17 Q. Has UMC evaluated any of the projections in18 this budget?19 A. I can only speak for myself, but, no, I have20 not performed any detailed analysis of this budget.21 Q. Has anyone at UMC done a detailed analysis of22 this budget?23 A. I'm not aware.24 Q. Has anybody at UMC done any analysis at all of25 this budget?



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1 A. I am unaware of that. If they have I would2 not know.3 Q. As the CFO would you know?4 A. No.5 Q. Who would know?6 A. Other than the persons that individually did a7 detailed analysis, if they did it without my knowledge,8 then that individual person.9 Q. Who at UMC would be responsible for looking at

10 these numbers and analyzing any aspect of this budget?11 A. Can you rephrase that question.12 Q. Who at UMC would be responsible for analyzing13 the numbers in this budget?14 A. I'm not certain there's anyone at UMC that is15 responsible for that.16 Q. Were you aware that there's a hearing17 scheduled for July the 30th before the bankruptcy18 code -- before the bankruptcy court that relates to19 this budget and the Children's Hospital use of cash20 going forward?21 A. I am aware of a cash collateral hearing on22 July 30th.23 Q. What is your understanding of what's going to24 happen at that hearing?25 A. My understanding was to discuss the uses --

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1 Q. So it is true that UMC is interested in the2 Children's Hospital's sources and uses of cash. Would3 you agree with that?4 A. On an overall perspective, yes.5 Q. But you have not done any analysis of the6 numbers in this budget. Is that correct?7 A. That is correct.8 Q. Who at UMC is responsible for analyzing the9 Children's Hospital's sources and uses of cash?

10 A. There's no one at UMC that's responsible for11 analyzing El Paso Children's sources and uses of cash.12 Q. But UMC is interested in those topics?13 A. Yes.14 Q. So how is it proceeding with its understanding15 of the Children's Hospital's sources and uses of cash?16 A. As items like this are presented to us, then17 that's how -- that's -- that's my knowledge in terms of18 what's happening or what's going on with El Paso19 Children's. Other than a document like this, I am20 unaware.21 Q. Mr. Nunez, I think you've testified that for22 this budget, which is attached to Exhibit C, you first23 saw it 24 to 48 hours ago. Is that right?24 A. That's correct.25 Q. In that time have you developed any opinions

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1 sources and uses of cash. But for a specific period,2 no, I was unaware of the purpose of the July 30th3 hearing.4 Q. Mr. Nunez, is UMC interested in the5 Children's Hospital's sources and uses of cash?6 A. Yes.7 Q. Why is that?8 A. To determine whether Children's has the9 ability to make payment on the services that UMC

10 provides.11 Q. Why else?12 A. That would be our primary reason for looking13 at this budget to see whether Children's would be able14 to pay for their services that UMC provides.15 Q. But you have not seen this budget before?16 A. Not till perhaps maybe 24, 48 hours ago. This17 specific one.18 Q. Sure. In your opinion as CFO, Mr. Nunez, does19 this budget relate to Children's Hospital sources and20 uses of cash?21 A. Based upon the title that's on the page,22 El Paso Children's Hospital Weekly Cash Flow Forecast,23 I would say, yes, this relates to El Paso Children's24 forecast for the period June 26th through the week25 ending September 25th.

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1 about the numbers in this budget?2 A. No, I have not.3 Q. So it's fair to say you don't dispute any of4 the numbers in this budget today?5 A. That is correct.6 Q. I think you alluded to other budgets that you7 may have seen related to the Children's Hospital. Is8 that right?9 A. No, not other budgets. Well, the --

10 previously the first budget that was submitted post the11 May 19th bankruptcy filing which showed a cash flow12 forecast from the period May 19th for the 13 weeks13 after May 19th.14 Q. You have seen that budget?15 A. Yes, that's the one I have seen, yes.16 Q. Did you analyze that budget?17 A. Yes.18 Q. Did you develop any opinions about it?19 A. Initially I thought it was incomplete because20 it didn't have information related to UMC on there. It21 had TBA or TBD, to be determined.22 Q. And subsequently did you obtain the23 information that would enable you to complete your24 analysis?25 A. No, no other information that -- did I



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1 receive.2 Q. Did you request additional information?3 A. Me personally?4 Q. Yes.5 A. No.6 Q. Did you personally request any information7 about that budget?8 A. No. From whom?9 Q. From anyone.

10 A. No.11 Q. Did anybody that you're aware of at UMC12 request additional information about the first budget13 related to the Children's Hospital bankruptcy filing?14 A. I have no knowledge of that.15 Q. Are you aware that the Children's Hospital is16 providing to UMC, through counsel, weekly financial17 information?18 A. I am unaware of that.19 Q. So it's safe to say you haven't seen that20 information. Is that correct?21 A. That is correct.22 (Exhibit marked, No. D.)23 Q. (By Mr. Sprouse) Mr. Nunez, you've been24 handed a document that's been labeled Exhibit D. Do25 you have that in front of you?

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1 A. If they told me, yes. But otherwise I would2 not.3 Q. Mr. Nunez, who works for you as the CFO?4 A. Who works for me as CFO? I have -- let's5 see -- information technology reports to me, materials6 management department reports to me, care management7 department reports to me, patient financial services8 reports to me, revenue cycle, finance. So there are9 probably about six or seven departments that report to

10 me.11 Q. And of the people or departments you just12 identified and the personnel therein, you're not aware13 of any of them having seen the budget I've handed to14 you, which is Exhibit D?15 A. That is correct, I am unaware, or if they had16 it, they have not presented it to me.17 Q. Is it safe to say today that you have formed18 no opinions about the information in this budget?19 A. That is correct.20 Q. And you're not ready to dispute any of the21 information in this budget?22 A. Yes, that's correct, since this is the first23 time I have seen it.24 MR. SPROUSE: Let's go off the record.25 (A discussion was had off the record.)

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1 A. Yes, I do.2 Q. And I'll note in the top left-hand corner it3 says El Paso Children's Hospital Weekly Cash Forecast,4 Actuals Through 6-26-2015.5 Do you see that?6 A. Yes.7 Q. And I'll represent to you that this is very8 similar to the budget attached to the Third Interim9 Cash Collateral Order, which was Exhibit C.

10 If you'll turn to the second page, I'll11 point out to you that this shows forecasts through the12 end of this year, 2015. Do you see this reference?13 A. Yes, I do.14 Q. Have you seen this document before?15 A. No, I have not.16 Q. Are you aware of anybody at UMC who has seen17 this document before?18 A. I am unaware of that.19 Q. Could it be, Mr. Nunez, that other people at20 UMC have seen this document and formed an opinion as to21 the numbers that are contained in it?22 A. Are you asking me is it possible?23 Q. Yes.24 A. It's certainly possible.25 Q. As the CFO would you know that?

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1 Q. (By Mr. Sprouse) We're back on the record.2 Just to conclude with my prior line of questions. If3 Children's Hospital wants to understand UMC's position4 with respect to its use of cash, who at UMC could we5 talk to about that?6 A. Rephrase or please ask it again.7 Q. Sure. If the Children's Hospital wants to8 understand UMC's position as to the Children's9 Hospital's proposed use of cash, who at UMC would we

10 talk to?11 A. That would be a combination of people. It12 would be through our legal counsel, board of managers13 and probably Mr. Valenti.14 Q. You said probably Mr. Valenti?15 A. Uh-huh.16 Q. You're not sure about him?17 A. No, I'd say him.18 Q. Very good.19 Mr. Nunez, it's my understanding that the20 Children's Hospital opened its doors on February the21 14th, 2012. Are you aware of that?22 A. Yes, I am.23 Q. Were you aware of that opening?24 A. Yes.25 Q. And you're aware of that date?



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1 A. Yes.2 Q. Were you there when it opened?3 A. Yes.4 Q. Was there a ceremony?5 A. Yes.6 Q. What do you remember about that?7 A. There was a ceremony, many people attended, a8 lot of dignitaries, cutting of the ribbon.9 Q. Was the media there?

10 A. Yes, the media was there.11 Q. Did El Paso have a children's hospital before12 that date?13 A. A separately licensed children's hospital14 before that date? No.15 Q. Did El Paso have a need for a separately16 licensed children's hospital before that date?17 A. In my opinion, based upon the studies that18 were done, yes, El Paso needed a children's hospital.19 Q. Is Children's Hospital in fact separately20 licensed?21 A. The El Paso Children's Hospital?22 Q. Yes.23 A. Yes, it is separately licensed.24 Q. What does that mean?25 A. It is a pediatric hospital only. It is not a

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1 A. Not that I'm aware of.2 Q. So no tax dollars go to the Children's3 Hospital today?4 A. Not that I'm aware of.5 Q. Is the Children's Hospital independent?6 A. What do you mean, "independent"?7 Q. In the sense of it being governed or managed,8 is it beholden to any other institution?9 A. The Children's Hospital in its current

10 structure is independent, it has its own legal11 structure, it's own governance, board of directors,12 senior management or leadership.13 Q. And your answer would be a good definition for14 what "independent" means, isn't it?15 A. In my opinion, yes, uh-huh.16 Q. Is the Children's Hospital nonprofit?17 A. Yes, it is a nonprofit organization.18 Q. What does that mean?19 A. It is not subject to federal income taxes20 under the Internal Revenue Code.21 Q. Is UMC also a nonprofit?22 A. Yes, it is.23 Q. So we've talked about the Children's Hospital24 being separately licensed, independent, nontaxing and25 nonprofit. Right?

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1 pediatric department of an overall acute care hospital2 that may provide adult services as well as pediatric3 services. There are specialized physicians that only4 deal with pediatric care.5 Q. Have you just defined with your answer what6 separately licensed means?7 A. In my opinion, yes.8 Q. Is the Children's Hospital nontaxing?9 A. The Children's Hospital is nontaxing.

10 Q. What does "nontaxing" mean?11 A. The ability to assess property taxes to12 collect property tax revenue.13 Q. So the Children's Hospital does not have that14 ability?15 A. In its current legal structure, it does not16 have that ability.17 Q. Does the Children's Hospital receive any tax18 revenue?19 A. To my knowledge, no.20 Q. Does the Children's Hospital receive any tax21 revenue indirectly?22 A. What do you mean "indirectly"?23 Q. For example the tax revenue may go to one24 entity and then flow through to the Children's25 Hospital. Are you aware of that happening?

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1 A. Yes.2 Q. Do you know why the Children's Hospital was3 established with those attributes?4 A. I am unaware as to the specifics as to why.5 Q. Generally do you know why it would have been6 set up that way?7 A. No.8 Q. Who would know?9 A. I presume the legal counsel for El Paso

10 Children's Hospital Corporation.11 Q. Has the Children's Hospital been able to serve12 the region's pediatric patients since it opened?13 A. I would say yes.14 Q. So as far as patient services, the Children's15 Hospital has done what it was intended to do, hasn't16 it?17 A. I would say generally speaking, yes.18 Q. Does the Children's Hospital provide indigent19 pediatric care?20 A. I believe they do.21 Q. How would you define indigent?22 A. I would define indigent based upon UMC's23 policies -- I am unaware specifically as to El Paso24 Children's Hospital's specific policies -- as any25 El Paso County resident that meets the federal -- the



54

1 income guidelines as to -- as to the charity and2 indigent programs.3 Q. Who sets those guidelines?4 A. The guidelines -- I can only speak for on5 UMC's behalf -- is the guidelines are recommended by6 management and then are approved by the board of7 managers.8 Q. Are the guidelines tied to any state or9 federal standards that you're aware of?

10 A. The UMC's guidelines are normally established11 by the -- by the federal -- by the federal poverty12 guidelines that are set forth.13 Q. Are they tied directly to those guidelines or14 do they use that data as a benchmark?15 A. The data is used as a benchmark because we do16 have -- UMC does have other charity programs other than17 what we call our charity and indigent program.18 Q. What are those?19 A. They are what we call our CarePlus programs,20 they are for people that are above 100 percent of21 federal poverty guidelines, up to about 300 percent of22 federal poverty guidelines.23 Q. Are you aware of the Children's Hospital24 employing similar standards?25 A. Not specifically.

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1 do they not?2 A. Yes, directly through El Paso Children's3 Hospital emergency room.4 Q. And before the Children's Hospital opened,5 such patients would have gone to UMC?6 A. That is correct.7 Q. So now that there is a Children's Hospital,8 those patients are not going to UMC.9 A. Generally speaking they are not going

10 through -- to El Paso Children's other than the ones11 that come in through the trauma department and then are12 formally discharged from our hospital and then13 transferred to El Paso Children's.14 MR. SPROUSE: Can you read that response15 back, please.16 (The Court Reporter read back.)17 Q. (By Mr. Sprouse) So when you said "El Paso18 Children's," did you mean UMC?19 A. Yes, I meant UMC. Other than the ones who20 come through UMC's trauma department.21 Q. Just so the record is clear. Other than the22 indigent pediatric patients who come through UMC's23 trauma department, patients that go to the Children's24 Hospital formerly would have gone to UMC?25 A. Yes.

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1 Q. Generally?2 A. Generally speaking.3 Q. Is it your understanding that the Children's4 Hospital does so?5 A. Generally speaking, yes, but I am unaware as6 to their specific policies.7 Q. Prior to the opening of the Children's8 Hospital, had UMC been providing indigent pediatric9 care?

10 A. Prior to the opening, yes.11 Q. Has the Children's Hospital relieved UMC of12 the burden of providing indigent pediatric care?13 A. Yes, to the extent that they do not come in14 through our trauma unit and El Paso Children's Hospital15 provides pediatric care to the indigent.16 Q. And that has relieved UMC of the burden of17 providing such care?18 A. It has not relieved the burden because if they19 come in through our hospital, in other words our20 emergency room, we still have to provide the care.21 Q. Indigent pediatric patients come through the22 UMC emergency room. Is that correct?23 A. Specifically the trauma.24 Q. The trauma. But independent pediatric25 patients also go to the Children's Hospital directly,

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1 Q. Thus the Children's Hospital has relieved UMC2 of the burden of providing care to those indigent3 pediatric patients?4 A. Yes.5 Q. Because Children's Hospital is providing such6 independent pediatric care, is that saving UMC money?7 A. Since El Paso Children's is providing that8 care, UMC is not incurring costs, correct.9 Q. Which is another way of saying it saves UMC

10 money.11 A. One can view it that way, but I'll say UMC is12 not incurring the costs.13 Q. So when you say "not incurring costs," you14 mean not incurring obligations that UMC would have to15 pay?16 A. Correct.17 Q. So by virtue of El Paso Children's Hospital18 providing nontrauma indigent pediatric care, that19 function saves UMC money?20 A. We do not incur -- UMC does not incur the21 costs, because had we provided the costs, we would be22 paid for those services through the insurance23 companies, part of the patient service revenue.24 Q. Paid in full?25 A. Not on established charges, based upon



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1 contracts, contracted amounts with our insurance2 companies and with Medicaid.3 Q. When UMC provides care to its indigent4 patients, does it incur a loss for doing so?5 A. Generally speaking, yes.6 Q. So when the Children's Hospital provides7 indigent pediatric care, UMC is not incurring such8 losses. Isn't that right?9 A. That's correct.

10 Q. Which would be a monetary benefit to UMC.11 A. Yes.12 Q. Has anyone undertaken to put a dollar sign on13 that monetary benefit to determine its value?14 A. For what period of time?15 Q. For any period of time.16 A. Yes.17 Q. When has that been done?18 A. When we -- when I say "we," UMC along with19 Larry Duncan, the chief executive -- the first chief20 executive officer of El Paso Children's, as we were21 updating the 2007 feasibility study and working on what22 I'm going to call the 2010 pro formas, that's when we23 were looking at the -- specifically the costs of24 providing pediatric indigent care.25 Q. So in 2010, those would have been projections?

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1 A. 2010 as we were doing the 2010 pro formas.2 Q. Do those pro formas account for the expected3 increase in costs between then and 2015?4 A. The pro formas that we did back in 20105 probably would have only gone out to '12, '13, maybe6 perhaps through 2014.7 Q. I guess what I'm trying to understand is if8 you're using a million dollar figure for each year --9 and a million dollars of healthcare five years ago is

10 not the same as a million dollars of healthcare in11 2015. Do you agree with that?12 A. That is correct, yes, sir.13 Q. Would the costs of such healthcare increased14 or decreased over the last five years?15 A. It's increased.16 Q. Substantially?17 A. Define "substantially."18 Q. I'll ask a better question.19 Based upon your knowledge as the CFO,20 when we're talking about pediatric care, has there been21 an increase in such costs generally between 2010 and22 2015?23 A. Across the healthcare industry, based upon the24 medical consumer price index, yes.25 Q. What has that increase been?

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1 A. In 2010, yes, as we were updating the 20072 feasibility study.3 Q. And what did those projections show?4 A. The projections showed -- as we were working5 on them, we -- I had my finance team, specifically6 the -- our director of decision support, she pulled the7 three-year study going back 2010, 2009, 2008, as to the8 estimated costs of providing pediatric indigent care9 and in any one year, the amounts did not surpass $1

10 million.11 Q. Did the amounts approach a million dollars?12 A. Yes. When I said "did not exceed," they were13 approaching, you know, close to $1 million.14 Q. And since the Children's Hospital opened in15 2012, does UMC have data on those costs since then?16 A. Since the opening? No, we do not.17 Q. Is it UMC's belief today that the Children's18 Hospital has relieved UMC of that burden roughly to the19 tune of a million dollars a year?20 A. If the 2008, 2009 and 2010 data remain at21 their current level, one can preclude that those would22 also be the same amounts -- approximately the same23 amounts.24 Q. The most recent data points you had were from25 2010?

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1 A. It has been averaging -- each year's2 different -- probably two, three, four percent.3 Q. Annually?4 A. Yes, annually.5 Q. So because the Children's Hospital is6 providing pediatric care to the region, is it also true7 that pediatric patients in this region no longer have8 to travel to Dallas or Houston or other venues to9 receive that type of care?

10 A. For most healthcare services, yes. There are11 still some healthcare services that are not provided by12 El Paso Children's primarily in the cardiac area that13 they still have to go elsewhere to receive that care.14 Q. But for the noncardiac treatment now these15 children can stay here whereas in the past they would16 have to go to another city?17 A. That's correct.18 Q. Has the opening of the Children's Hospital19 attracted pediatric specialists to El Paso?20 A. Since the opening, yes, and prior to the21 opening, also yes.22 Q. How do you know that?23 A. I was involved in the -- there was pediatric24 subspecialist recruitment meetings that were happening25 even as early as 2010 which involved UMC leadership, El



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1 Paso Children's leadership at that time was Larry2 Duncan, as well as Texas Tech leadership.3 Q. What went into that recruiting effort?4 A. Larry Duncan led the charge in terms of the5 specialty areas that El Paso Children's was going to6 provide defined as to the number of subspecialist by7 each area which needed to be recruited and that was the8 plan in terms of, "These are the number of9 subspecialists we need for these areas," and so that's

10 when the recruitment efforts began.11 Q. Who else was undertaking that effort on behalf12 of the Children's Hospital?13 A. At that time and back as early as 2010, some14 of the board members that were the physicians -- if I15 remember specifically, Dr. John Guggedahl and also16 Dr. -- I have a hard time saying her last name --17 Sadhana -- I don't know how to spell that name, but18 they were on the El Paso Children's board at that time19 and also participated in these subspecialist meetings.20 Q. And who at UMC was involved in these21 recruitment efforts?22 A. The people that were involved, Mr. Valenti,23 our CEO, was involved in the recruitment. We also had24 my director of physician contracting at that time was25 Jesus Medrano, he would also attend those meetings as

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1 salary cost would be.2 Q. So prior to the Children's Hospital opening,3 the recruitment of pediatric subspecialists was a joint4 effort of UMC and the Children's Hospital?5 A. For the most part, yes, although there had6 been already some recruitment prior to even Larry7 coming on board in the summer of 2010 as we had8 hired -- as UMC had hired a couple of pediatric9 intensive care -- I don't know the actual specific --

10 some PICU doctors that were already working in the UMC11 PICU unit at the time.12 Q. Was the idea that those PICU doctors at UMC13 would transfer to the Children's Hospital when it14 opened?15 A. Yes.16 Q. So back to my question. It certainly was a17 joint effort between UMC and the Children's Hospital to18 recruit the initial pediatric subspecialists for the19 hospital?20 A. Yes. But even prior to anyone from El Paso21 Children's being officially, we were already22 recruiting -- UMC was already recruiting physician23 subspecialists prior to Larry Duncan coming on board.24 Q. Sure. And when did Mr. Duncan come on board?25 A. I believe it was July of 2010, the summer of

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1 well.2 Q. Anyone else from UMC?3 A. Myself, I would.4 Q. And what specifically did you do as part of5 that effort?6 A. I would specifically just look at to see from7 a -- from a recruitment standpoint the costs, which8 were being -- which were going to be incurred as we9 were assisting Larry Duncan at the time in terms of

10 salary ranges, medians, compared to MGMA standards, et11 cetera.12 Q. So UMC was performing that type of cost13 analysis for the Children's Hospital as a component of14 the recruitment effort?15 A. Yes.16 Q. What was Mr. Valenti doing as part of the17 recruitment effort?18 A. I don't know specifically, although I knew19 that he was -- I don't know specifically.20 Q. How about Mr. Medrano?21 A. Mr. Medrano, he would -- once we were told as22 to -- as to, "These are the specific physician23 subspecialties that were being recruited," he would24 look up salary medians in the MGMA books so that we25 could get an assessment as to what an approximate

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1 2010.2 Q. When did UMC's recruitment efforts begin for3 the Children's Hospital?4 A. I want to say they began as early as 2008 or5 2009 time frame.6 Q. Was there a point in time, Mr. Nunez, when UMC7 ceased to assist the Children's Hospital in the8 recruitment of pediatric subspecialists?9 A. I'm not aware of that.

10 Q. So that's ongoing to this day?11 A. If it's ongoing to that, I'm unsure. I think12 most of that responsibility is now on the El Paso13 Children's Hospital corporation.14 Q. Is such recruitment efforts, the joint15 recruitment efforts, did those continue after the16 Children's Hospital opened in February of 2012?17 A. If they did, not to the extent that they were18 initially. As El Paso Children's Hospital was19 developing their own leadership team, the more that20 they developed their own leadership team, the less that21 they needed our assistance.22 Q. Mr. Nunez, do you think those pediatric23 specialists would have come to El Paso if there was not24 a Children's Hospital here?25 A. Some, but I think the majority of the draw was



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1 because there was a separately licensed children's2 hospital.3 Q. Why was that appealing to these doctors?4 A. In my opinion because it is a -- it's a5 hospital only for pediatrics, so you have your6 subspecialists working for the Children's Hospital.7 Q. Have you talked to any doctors about that8 issue?9 A. No.

10 Q. How did you come by your opinion today?11 A. How did I come by my opinion? Based upon what12 I hear from other physicians as to why they've come to13 El Paso, whether it be in the media, whether if it be14 in comments that are said at physician meetings.15 Q. So you've heard from different sources that16 pediatric specialists have come to El Paso because17 there is a children's hospital here?18 A. Yes.19 Q. What do you know about the quality of patient20 care at the Children's Hospital since it opened?21 A. From what I've heard -- because since I'm not22 a clinician and I don't know specifically -- but what23 I've heard is that the clinical care has been24 excellent.25 Q. And by "clinical care," you mean staff, nurses

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1 worked on updating the -- that's why we did the 20102 pro formas because we knew that there were some pending3 changes in the Medicaid reimbursement from the State.4 Q. And that impacted the Children's Hospital5 financially?6 A. Yes, it did.7 Q. Who made those changes?8 A. The State of Texas Legislature.9 Q. Were those changes the fault of the Children's

10 Hospital in any way?11 A. No.12 Q. Did those changes affect UMC in any way?13 A. There were similar changes that also affected14 the adult hospitals as well as children's hospitals.15 Q. Did that result in a loss of revenue for the16 Children's Hospital?17 A. Yes.18 Q. Did those changes result in a loss of revenue19 for UMC?20 A. Not those specific changes, because there was21 specific changes that were made to Children's Hospital22 as well as similar changes -- not those same changes --23 to adult -- adult patients.24 Q. Were those changes made by the State at the25 same time?

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1 and doctors treating patients?2 A. Yes.3 Q. What is your understanding, Mr. Nunez, as to4 why the Children's Hospital filed bankruptcy?5 A. My understanding as to why they filed6 bankruptcy is due to the financial condition.7 Q. Can you be more specific than that?8 A. Of them not being able to pay all of its9 creditors.

10 Q. Do you know why that situation developed?11 A. Not specifically other than their revenues12 were less than their expenses.13 Q. Do you know what led to the revenues being14 less than the expenses?15 A. No, not specifically.16 Q. Generally do you know?17 A. No.18 Q. Are you aware of any factors which would have19 caused the Children's Hospital revenues to be less?20 A. There were some changes which did occur21 subsequent to the opening of Children's Hospital that22 were different than the 2007 feasibility studies in23 terms of Medicaid rate changes in terms of24 reimbursement from the State.25 And that's why we were -- that's why we

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1 A. You know, I think on the adult side it2 happened one year prior to the implementation on the3 children's side, which I'll generally refer to4 cost-based reimbursement went away for children's5 hospitals.6 Q. Was that similar to the changes that was made7 for the patients of UMC?8 A. Not similar, because on the adult side, we9 were never cost-reimbursed, there were just decreases

10 to the overall Medicaid reimbursement.11 Q. What is your understanding of the impact of12 those changes to the Children's Hospital?13 A. My understanding of those changes was that the14 revenues that had initially been projected did not15 materialize once the actual results started coming in.16 And that was a result of cost-based reimbursement going17 away for children's hospitals.18 There's a program known as the Upper19 Payment Limit program under Medicaid, that was also20 being phased out around December of 2011, when Health21 and Human Services Commission from the State had22 applied to CMS, the Center for Medicare and Medicaid23 Services, a -- what's called a Medicaid Section 101124 Waiver, which replaced the Upper Payment Limit program.25 And this program came into effect just three months



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1 prior to the opening of the Children's Hospital.2 Q. So is it fair to say that the anticipated3 revenues for the Children's Hospital were affected by4 these changes?5 A. Yes.6 Q. And the changes caused the Children's Hospital7 to have less revenue?8 A. Have lesser revenue, yes.9 Q. And this was roughly about the time that the

10 Children's Hospital opened?11 A. About the time the Children's Hospital opened,12 although the cost-based reimbursement for Children's13 Hospital happened after the first eight months of14 operation.15 Q. So that would have been in late 2012?16 A. Late 2012, which would have commenced for the17 State fiscal year beginning September 1 of 2012.18 Q. And by late 2012 the Children's Hospital had19 already entered into a series of agreements with UMC.20 Is that right?21 A. Yes, uh-huh.22 Q. And those agreements set forth certain payment23 obligations from the Children's Hospital to UMC?24 A. Yes, uh-huh.25 Q. And there were some assumptions that went into

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1 receiving cash collections about the August time frame,2 about six months after they opened.3 Q. Mr. Nunez, you're aware that before the4 Children's Hospital, there were a series of agreements5 between the Children's Hospital and UMC. Is that6 correct?7 A. Yes.8 Q. One of those was for the space or the facility9 lease.

10 A. Yes.11 Q. Are you aware of that?12 A. Yes.13 Q. Did UMC have an expectation at the time that14 the Children's Hospital would be able to pay the15 amounts that were set forth in the lease and the other16 agreements with UMC?17 A. As set forth in the payment schedule, yes.18 Q. Was that understanding based upon projections19 that had been made prior to entering into those20 agreements?21 A. Based upon projections and also input,22 dialogue, between both managements of UMC and also23 El Paso Children's.24 Q. And you've just testified that the changes25 that were made to Medicaid reimbursements in late 2012

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1 the Children's Hospital's ability to pay those2 obligations, weren't there?3 A. Yeah, there were varies assumptions, yes.4 Q. Did the assumptions take into account the5 changes to cost-based reimbursements that were6 implemented in late 2012?7 A. The assumption from my part, no, because that8 was not specifically brought to us by the El Paso9 Children's management. So prior to when the contracts

10 were being entered into, the biggest assumption was11 when they -- they began operations in February of 2012.12 By the time that they obtained their Medicare13 licensure, then obtained their Medicaid license, and14 then upon the receipt of those two licenses then were15 able to contract out with insurance companies.16 That period, that was the biggest17 assumption, so we had assumed probably about a18 six-month time period where El Paso Children's Hospital19 was not receiving any cash flow from any insurance20 companies and also Medicaid despite providing services21 for about six months.22 And right about the sixth-month mark was23 when they started to receive. Once upon receiving24 their Medicare license, Medicaid license, contracts25 with all the insurance companies, then they started

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1 affected the Children's Hospital's revenue?2 A. Yes.3 Q. Were those changes taken into account prior to4 the entering into of these agreements including the5 lease agreement?6 A. No, because we didn't know the impact of the7 changes.8 Q. So that came as a surprise to UMC?9 A. What came as a surprise?

10 Q. The changes to the cost-based reimbursements11 in late 2012?12 A. No, that's not correct.13 Q. Okay. You did or did not know that those14 changes were coming?15 A. We did know that changes were forthcoming down16 the road, yes, we did.17 Q. When did you learn that?18 A. I would say when we started working on the19 pro formas -- the updated pro formas about the 201020 time frame, depending on when the Texas Legislature21 biennium was, whether it was 2009-2010 or 2010-2011,22 that's when we were hearing word from Health and Human23 Services Commission that there were more than likely24 upcoming pending changes to the Medicaid reimbursement,25 along with the dissolution of the Upper Payment Limit



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1 program being replaced by the Medicare Section 10112 program, the waiver program as to how it's currently3 known.4 Q. So you weren't surprised by the changes?5 A. No.6 Q. Did the pro formas take into account that7 those changes would, in fact, happen?8 A. We made an estimate in terms of as to what the9 impact would be, because the final rules had not been

10 written, so we made an estimate as to what that would11 be forthcoming subsequent to the changes.12 Q. Do you remember what your estimates were?13 A. No, I don't remember right now.14 Q. Were they significant?15 A. We had estimated potentially perhaps a ten16 percent reduction. We had just made some estimates,17 "If it went down ten percent, here's what the impact18 would be; if it went down 12 percent." So there were19 various scenarios that were discussed with El Paso20 Children's leadership at that time.21 Q. So there was a worse case scenario that you22 had contemplated?23 A. We all didn't know what worse case scenario24 was.25 Q. You just described a limit to the impact of

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1 A. That I do not know. You'd have to ask El Paso2 Children's leadership about that.3 Q. So you had estimated a potential range of the4 impact of these anticipated changes.5 A. That is correct.6 Q. And were those anticipated changes taken into7 account by UMC when it entered into the preopening8 agreements with the Children's Hospital?9 A. Can you rephrase that one more time.

10 Q. Were the anticipated changes to the cost-based11 reimbursement revenue for the Children's Hospital taken12 into account by UMC when it was entering into the13 preopening agreements with the Children's Hospital?14 A. There's various agreements.15 Q. Yes.16 A. Are you talking specifically about the17 preopening agreements?18 Q. Yes.19 A. You're talking about the -- in those cases,20 no, because those were actual costs that were being21 incurred by El Paso Children's, what we call the22 preopening costs. So those were the costs that were23 incurred by El Paso Children's as they were developing24 their leadership team as early as the summer of 2010 up25 to the hired -- up to the opening date of February of

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1 these changes which were anticipated. Is that right?2 A. No, not a limit. Just estimates as to if a3 certain percentage reduction was, but we didn't know if4 the limit was 10 percent, 15 percent, 20 percent, we5 did not know that.6 Q. What percentage did the changes ultimately7 result in?8 A. I can't recall right now.9 Q. Were they more or less than what you had

10 estimated?11 A. Estimated from when?12 Q. Your testimony was that you had estimated the13 impact of these anticipated changes, cost-based14 reimbursements. Right?15 A. Uh-huh.16 Q. One number you gave was six percent, another17 number you gave was 12 percent. Is that correct?18 A. A certain percentage.19 Q. A certain percentage?20 A. Uh-huh.21 Q. And ultimately the changes were implemented.22 Is that also right?23 A. Yes, that is correct.24 Q. So my question is what percentage reduction in25 revenues did the changes cause?

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1 2012. So those were the preopening agreements or what2 I refer to as the preopening agreements.3 Q. Sure. With respect to the lease, let's take4 that as an example, were the anticipated changes to5 cost-based reimbursements taken into account by UMC6 when it was entering into the lease with the Children's7 Hospital?8 A. By UMC alone or with El Paso Children's9 leadership, the dollar went back and forth in terms of

10 what the cost would be, so between both organizations11 we were negotiating all contracts.12 Q. I understand that, Mr. Nunez. Let me just ask13 you. Did UMC anticipate that the Children's Hospital14 would be able to pay the rent, for example, set forth15 in the facility lease?16 A. Yes.17 Q. What was the basis of that expectation?18 A. The basis of the expectation was based upon19 the pro formas.20 Q. Is the pro forma tied to revenue?21 A. The pro forma is tied to the overall22 operations.23 Q. Which includes revenue?24 A. Which includes revenue.25 Q. For the revenue that you just referenced, did



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1 that include anticipated changes to the cost-based2 reimbursement for Medicaid in late 2012?3 A. That was one component.4 Q. It was considered by UMC?5 A. It was considered by UMC and also El Paso6 Children's.7 Q. Are you aware that certain -- let me just8 strike that.9 Certain feasibility studies were

10 conducted prior to the opening of the Children's11 Hospital.12 A. Yes, I was aware.13 Q. How many were undertaken?14 A. I do not know.15 Q. Are you aware of the Kurt Salmon Associates16 feasibility study?17 A. I am aware of that. I've heard of it.18 Q. What do you know about that Kurt Salmon19 feasibility study in particular?20 A. Very little. I was not involved with that21 one.22 Q. Was there one subsequent to that?23 A. No, not a feasibility study, no.24 Q. So that's the most recent one.25 A. Feasibility study, to my knowledge, yes.

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1 Children's Hospital?2 A. That's my understanding.3 Q. Whereas the 2007 -- strike that.4 So how was the 2007 feasibility study5 used to obtain support for a Children's Hospital?6 A. From my recollection at that point, there was7 many what I'll call town hall meetings or meetings with8 a lot of the leaders, groups, in terms of that were9 being done by the group that wanted support for the

10 Children's Hospital so that's what it was being used11 for.12 Q. So that 2007 feasibility study was presented13 to the public?14 A. Yes.15 Q. It was also presented to the County16 Commissioners Court?17 A. Yes.18 Q. How did the public react to the feasibility19 study?20 A. From my recollection, based upon newspaper21 articles, there was a general feeling, yes, that22 El Paso needed a separately licensed Children's23 Hospital. There was -- from the service standpoint,24 yes. But the biggest question was -- because I guess25 it had been talked about for many, many years, even ten

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1 Q. And that was in 2007. Right?2 A. I believe that's the date of the report, 2007.3 Q. What was -- and if we can for the 2007 Kurt4 Salmon feasibility study, I'll just call that the 20075 feasibility study. Can we have that understanding?6 A. Yes, uh-huh.7 Q. What was the role of UMC in relation to the8 2007 feasibility study?9 A. I do not know. I wasn't involved with that.

10 Q. You were at UMC at the time, though. Right?11 A. Yes, I was. I had just started like six12 months before.13 Q. Have you seen the 2007 feasibility study?14 A. Only in glance, but not in its entirety.15 Q. So you haven't read it in full?16 A. No, I haven't.17 Q. Do you know what it says?18 A. No, but generally speaking that the Children's19 Hospital, which was a needed service, was -- that was20 the effort that was going to be taken to the21 commissioners court so we could get that on the22 election, on the bond election. That's what the23 purpose of that study was.24 Q. So your recollection is the 2007 feasibility25 study was used to support the planning for the

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1 years prior to this study -- is whether it could be2 financially viable.3 Q. What did the feasibility say about the4 financial viability of a Children's Hospital?5 A. I don't recall anything specifically about6 that.7 Q. Generally?8 A. Generally is that it could be successful based9 upon -- you know, based upon the model that was being

10 presented, that, yes, it was viable, thus that's why it11 was being taken down to the court and to the public.12 Q. You mentioned a model. Is that a financial13 model?14 A. A financial model or the type of model as to15 the assumptions which were being used in this case.16 Q. And that model was in the feasibility study?17 A. From my understanding, yes.18 Q. What do you know about the model that was in19 the feasibility study?20 A. What I know about the model is that one of the21 biggest advantages is how it could be worked was about22 the cost-based reimbursement.23 Q. Is that the same cost-based reimbursement that24 was changed in late 2012?25 A. Yes.



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1 Q. Are you aware of whether the 2007 feasibility2 study anticipated the changes that were made to3 cost-based reimbursements?4 A. I am not aware -- no, I am not aware because5 the discussion by the legislature didn't occur until6 around the 2009, 2010 time frame.7 Q. So those changes could not have been in the8 feasibility study?9 A. I don't believe they were because they were

10 unknown at the time.11 Q. What was the reaction of the County12 Commissioners Court to the feasibility study?13 A. I don't know specifically. I didn't attend14 the actual meetings.15 Q. Who was on the court at that time?16 A. I do not know specifically. I do recall17 County Judge Cobos, Anthony Cobos, Commissioner Dan18 Haggerty, I think Commissioner Veronica Escobar was on19 the court. Those are three -- those are the three that20 I recall. I don't recall the other two.21 Q. So Judge Escobar was involved even in 2007?22 A. 2007, to my recollection, yes.23 Q. At some point the commissioners court decided24 to go forward with the Children's Hospital. Isn't that25 right?

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1 A. Yes.2 Q. Do you recall what the percentage of the vote3 was?4 A. No, I don't recall of the total votes or --5 no, I don't recall the specifics.6 Q. Was it passed by a strong margin?7 A. From what I recall, it was passed by a pretty8 slim or narrow margin.9 Q. Mr. Nunez, at some point a decision was made

10 that a children's hospital would be located on the UMC11 campus. Is that right?12 A. From my -- yes, from what I recall, yes.13 Q. How was that determination made?14 A. I don't know specifically as to how that was15 determined.16 Q. Who would know?17 A. Jim Valenti would know, board members of UMC18 at the time back in the 2008 time frame would probably19 know as to the final site selection as to how it ended20 up being that it was going to be on the UMC campus.21 Q. Did it benefit UMC to have the children's22 hospital on UMC campus?23 A. In my opinion, no.24 Q. I think you testified earlier that some25 pediatric patients end up at the Children's Hospital

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1 A. That's right.2 Q. So what was the next step?3 A. The next step from what I recall once the4 court put the item on the election, then there was a5 campaign, a public campaign, to go ahead and to try to6 garner support for the Children's Hospital as it went7 out to the general public for vote.8 Q. Was there an election?9 A. Yes, there was an election.

10 Q. What was the outcome of the election?11 A. The outcome of the election was a successful12 passage of the bonds to construct the El Paso13 Children's Hospital.14 Q. Is that how the issue was presented to the15 voters in the form of bond approval?16 A. Can you state that again.17 Q. Sure. Did the voters approve bonds to18 construct the Children's Hospital?19 A. Yes.20 Q. Were the voters asked to vote on whether or21 not to construct a children's hospital?22 A. Yes.23 Q. They were?24 A. Yes.25 Q. And they voted yes?

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1 through the UMC trauma unit. Is that right?2 A. That's correct.3 Q. Is the trauma unit in the Women's and4 Children's Tower?5 A. The trauma unit is in the Thomason Tower of6 the UMC campus.7 Q. Which is a separate but attached building?8 A. Yes, it's the building that is east of the9 Woman's and Children's Tower.

10 Q. Are you aware of any benefits to the11 Children's Hospital for being located on the UMC12 campus?13 A. In my opinion the benefits would be14 centralized location, particularly for the physicians,15 whether you're all on one campus. Yes, it is easier in16 the event of a trauma -- a pediatric patient coming in17 through UMC's trauma ward, then being discharged and18 transferred to the El Paso Children's Hospital, it19 just -- it's just down the hall. As well as the -- if20 there are NICU-related infants that are being birthed21 at UMC's Women's and Children's Center, they could just22 be gone up a couple of floors in the elevator. So23 those are -- I guess those are the benefits of being on24 campus.25 Q. Do the Children's Hospital and UMC share



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1 resources?2 A. Yes we do.3 Q. In what way?4 A. Resources, informational technology platform,5 clinical systems, financial systems. Other shared6 resources include environmental services, power plant.7 There was also previously, although they may have cut8 back, such as accounting, human resources, quality9 management, laboratory services, imaging services.

10 Those are -- there's about 20 different arrangements,11 but those are the type of shared resources between both12 organizations on the same campus.13 Q. Mr. Nunez, do you know how the start-up of the14 Children's Hospital was to be funded?15 A. Can you be specific about the "start-up" and16 about what time frame.17 Q. I'm talking about the construction costs, for18 example, the recruitment efforts and the other things19 that we've discussed today that led up to the opening20 of the Children's Hospital.21 A. Okay. I wasn't sure whether you meant22 start-up right up to or no. The start-up costs post23 the election of November of 2007 with the passage of24 the bonds in May of 2008, the start-up costs were being25 borne by UMC.

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1 MR. SPROUSE: Let's go off the record.2 (A recess was had.)3 Q. (By Mr. Sprouse) Mr. Nunez, we're back on the4 record. Before we broke you stated that the bond5 funds -- which I think you said were $120 million. Is6 that right?7 A. Yes.8 Q. That those funds were used to pay for the9 bricks and mortar of the Children's Hospital.

10 A. Correct.11 Q. And by "bricks and mortar" did you mean the12 physical construction costs?13 A. Yes, physical construction costs.14 Q. And that would include the materials?15 A. Materials, design development fees, et cetera,16 all costs related to the construction of the Children's17 Hospital.18 Q. And the Women's and Children's Tower was also19 constructed at that time. Is that right?20 A. Yes, it was, at the same time.21 Q. Were the bond funds used to pay for the22 construction of the non-Children's Hospital portion of23 that building?24 A. No, there was a separate bond issue that UMC25 had, it was specifically the 2005 bond series master

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1 Q. What was the role of the bonds in the planning2 and payment of costs for the Children's Hospital?3 A. The whole of the -- can you say that again.4 Q. You testified earlier that there was a -- the5 public approved bonds associated with the Children's6 Hospital. Is that right?7 A. Yes.8 Q. How does that relate to the construction and9 start-up planning for the Children's Hospital?

10 A. The bonds paid for the -- what I'll call the11 bricks and mortar of the Children's Hospital. The12 bonds were not used to pay for any type of operational13 costs that were incurred by UMC known as the start-up14 costs prior to the opening of the Children's Hospital.15 So the bonds were strictly for bricks and mortar of the16 building and for some medical equipment.17 Q. How much of the bricks and mortar of the18 Children's Hospital did the bonds pay for?19 A. Of the $120 million bond issue, I want to say20 probably close to about 95 to 100 million, because the21 remaining 18 to 20 million was for medical equipment.22 Those are the approximate numbers.23 Q. Sure.24 A. Do you mind if I take a quick run to the25 restroom.

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1 facility project, that -- that's where the source of2 the funds came to construct the first five floors of3 the Woman's and Children's Tower.4 Q. So the later bond election in 2007 was just5 for the Children's Hospital portion of that building?6 A. Yes, which the vote in '07, officially the7 2008 bond series for floors six through ten.8 Q. Which is the Children's Hospital?9 A. Yes.

10 Q. And were the bond revenues sufficient to pay11 for all of the -- what you've described as the bricks12 and mortar?13 A. For the Children's Hospital? Yes.14 Q. So when that was constructed, the bond money15 paid for all of the construction costs?16 A. Of the Children's Hospital, yes, uh-huh.17 Q. Did the bond money get used to fund the18 acquisition of equipment as well?19 A. Yes. There was approximately 18 to20 $20 million in the 2008 bond series that was used to21 purchase medical equipment.22 Q. So when the Children's Hospital opened in23 2012, the building itself or the portion of the24 building itself that Children's Hospital occupied had25 been fully paid for?



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1 A. Not -- not fully paid for because there's2 still bonds outstanding, but the construction costs to3 all the -- to the general contractors and4 subcontractors, yes, they were paid.5 Q. And I'm not talking about the money that's6 owed on the bonds so I'll be clear about that. But the7 money that was raised through the bonds fully paid for8 the construction costs of the Children's Hospital9 before it opened?

10 A. Yes.11 Q. So nothing was owed other than the bonds?12 A. Well, there may have been -- as of the date of13 the opening, there may have still been construction14 invoices still lingering in. But it's safe to15 reasonably say that for a portion of time after the16 Children's Hospital all invoices that led to the17 construction of the Children's Hospital were fully paid18 for by the bond series.19 Q. So 100 percent of the costs of construction of20 the Children's Hospital was funded through the bonds?21 A. Yes, the 2008 bonds.22 Q. How were bonds to be repaid.23 A. The 2008 bonds are to be repaid through an24 annual debt service. They're paid for by the El Paso25 County taxpayers.

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1 then the property tax bills are then sent out2 October 1.3 Q. And you testified earlier today that the4 Children's Hospital is nontaxing entity. Isn't that5 right?6 A. That is correct.7 Q. So who assesses the tax to pay back the bond?8 A. They are assessed through University Medical9 Center.

10 Q. So University Medical Center, UMC, is a taxing11 entity?12 A. UMC is a taxing entity, yes.13 Q. How is the Children's Hospital governed?14 A. The Children's Hospital is governed through15 its board of directors.16 Q. How else?17 A. That's through the board of directors.18 Q. When was the Children's Hospital board19 created?20 A. I can't recall specifically as to when they21 were created.22 Q. Was it before 2010?23 A. I want to say on or about that time because I24 believe the articles of incorporation were filed25 shortly after the bond election in '07, the bond

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1 Q. Did all the revenue from the 2008 bonds go to2 the Children's Hospital or the construction of the3 Children's Hospital?4 A. The bond proceeds went to University Medical5 Center, not to El Paso Children's, but the bond -- but6 the funds were to be used solely for the construction7 of the Children's Hospital.8 Q. Funds flowed to UMC?9 A. Yes, because they were UMC's bonds.

10 Q. Right. And UMC allocated those proceeds to11 the construction of the Children's Hospital?12 A. Yes.13 Q. I think you testified that the bonds will be14 paid through a tax. Is that right?15 A. Yes.16 Q. How is that tax assessed?17 A. The tax is assessed as during -- during our18 budget season, we note through the bond amortization19 schedules as to what the upcoming annual debt service20 is going to be and then we include that as part of21 the -- we include it as part of the -- what's known as22 the interest and debt portion, the I and S portion of23 the property tax rate. It is taken to our board for24 its approval, to the commissioners court for its25 approval. Then upon the commissioners court approval,

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1 proceeds, so the actual articles I think were sometime2 in 2008, 2009, and then the creation of the board of3 directors of El Paso Children's.4 Q. Who was on that initial board?5 A. I don't recall.6 Q. Do you remember any names?7 A. No, I do not.8 Q. When did Mr. Duncan come into the picture?9 A. Summer of 2010.

10 Q. The board was already in existence at that11 time?12 A. A good portion of the El Paso Children's board13 was already in existence at that time, yes.14 Q. So in 2010 who was on the Children's Hospital15 board?16 A. I recall Sam Legate was the board chair;17 Dr. Guggendahl was the vice chair; the physician's name18 that I cannot pronounce, she was secretary; there was19 also Rosemary Castillo, Mary Lou Camerena, Kristen Cox,20 Cynthia Villa, she was an ex-officio from UTEP. Those21 were the majority of the members that I recall. There22 may have been more, but I can't recall all of them.23 Q. Mr. Nunez, have you ever served on the24 Children's Hospital board?25 A. Yes.



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1 Q. When was your tenure?2 A. It started when I became chief financial3 officer as an ex-officio member of the El Paso4 Children's Hospital.5 Q. What does "ex-officio" mean?6 A. Ex-officio means that I participate in the7 board meetings, I have no vote, and upon request, if8 there were items that went into executive session,9 there were many times that I was asked by the

10 Children's board chair if I would -- if I could remove11 myself because I had no voting authority.12 Q. If you could do what yourself?13 A. If I could remove myself from the meeting when14 they went into executive session as I had no voting15 authority.16 Q. So you would leave the meeting?17 A. Yes.18 Q. And did that in fact happen?19 A. Yes.20 Q. When did you become an ex-officio member of21 the Children's Hospital board?22 A. Upon employment -- when I became CFO, which23 would have been in 2010.24 Q. What other ex-officio members did the25 Children's Hospital board have in 2010?

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1 one of our board members, that position that one of our2 board members filled that slot.3 Q. Who was that?4 A. Back then it was Bill Hanson who was our5 former board chair.6 Q. So he became an ex-officio member of the7 Children's Hospital board?8 A. Bill Hanson became an ex-officio member of the9 El Paso Children's board, yes.

10 Q. He took the role that formerly was held by11 Mr. Valenti?12 A. That is correct.13 Q. Is Mr. Hanson still having that duty?14 A. No, he is no longer on the UMC board.15 Q. Who replaced him?16 A. I believe it was Brother Nick Gonzalez.17 Q. Is Mr. Gonzalez still on the Children's18 Hospital board as an ex-officio member?19 A. I am unaware of that.20 Q. Who else has been an ex-officio member of the21 Children's Hospital board that you haven't mentioned?22 A. The only one was my predecessor in my role,23 Phil Rivera, who was the CFO of UMC. Those -- that's24 all that I can remember.25 Q. When was the last time you attended a

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1 A. In 2010, also Mr. Valenti, who was the CEO.2 The CEO of UMC and the CFO of UMC are ex-officio3 members of El Paso Children's Hospital. In addition to4 that there was the president of Texas Tech. Ex-officio5 member at that time, it was Dr. Manuel De La Rosa, who6 is now -- that is now Dr. -- presently Richard Lyon.7 And then also the other ex-officio member was Cynthia8 Villa from Texas Tech.9 Q. You said that Mr. Valenti was the CEO. Did

10 you mean he was the CE0 of UMC?11 A. CEO of UMC, yes.12 Q. Did he ever have a board or other title at the13 Children's Hospital?14 A. No, other than ex-officio board member.15 Q. Are you still today an ex-officio member of16 the Children's Hospital board?17 A. Actually, to my knowledge, yes.18 Q. Is Mr. Valenti still?19 A. No.20 Q. When did he stop being an ex-officio?21 A. He resigned his position, I'm going to22 venture, by the summer of 2012.23 Q. Did he attend any board meetings after that?24 A. Attend any Children's board meeting after25 that? No. He was -- the position was then replaced by

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1 Children's Hospital board meeting?2 A. Last time was probably on last August of 2014.3 Q. Have there been board meetings since?4 A. Yes, there have been El Paso Children's board5 meetings since.6 Q. Have you been invited to them?7 A. No, I have not been.8 Q. Are you aware if Mr. Valenti has attended any9 El Paso Children's Hospital board meeting since he

10 stepped down as an ex-officio member?11 A. No, I am not aware of any.12 Q. Mr. Nunez, who has been the CEO of the El Paso13 Children's Hospital since it opened?14 A. The first CEO was Larry Duncan from the summer15 of 2010 through March of 2014. He was then later16 succeeded by Ray Dziesinski up through September of17 2014. He was then succeeded by a gentleman by the name18 of Mr. Jim Sexton through January of 2015. And then19 now by Mark Herbers, who's also known as their CRO,20 chief restructuring officer.21 Q. Who made the decision to hire Mr. Duncan?22 A. The board of directors of El Paso Children's23 Hospital.24 Q. Was that done in consultation with UMC at all?25 A. I believe it was. At that point in time, the



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1 summer of 2010, I do recall my predecessor, Phil, being2 involved in the interviews of the candidates that were3 being brought on-site.4 Q. Do you know why Mr. Duncan left?5 A. The announcement was that he had resigned at6 the end of March and he wanted to pursue other7 opportunities.8 Q. He was succeeded by Mr. Dziesinski?9 A. Yes.

10 Q. Did UMC have any decision in the role of11 Mr. Dziesinski as the CEO of the Children's Hospital?12 A. Not as the CEO of El Paso Children's.13 Q. Did UMC have a role in the selection as --14 strike that.15 Did UMC have any contact with16 Mr. Dziesinski before he became the CEO of Children's17 Hospital?18 A. Yes.19 Q. In what capacity?20 A. I was asked by the El Paso Children's Hospital21 to be on the search committee for the Children's22 Hospital CFO once David Mier had resigned.23 Q. And was Mr. Dziesinski selected to fulfill24 that position?25 A. Yes, he was selected to fulfill the role of

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1 Q. What role did he have prior to becoming CEO?2 A. From my understanding he had been a retired3 chief executive officer and was coming out of4 retirement to fill the CEO on a consulting basis.5 Q. Was he considered to be an interim CEO?6 A. I believe so.7 Q. Did UMC have any role in Mr. Sexton's8 selection for that purpose?9 A. No.

10 Q. I think you had testified that Mr. Herbers11 succeeded Mr. Sexton. Is that right?12 A. Yes.13 Q. Was there any gap of time between Mr. Sexton14 and Mr. Herbers?15 A. If there was, maybe a short period of time, a16 week or so.17 Q. Mr. Nunez, you've testified as to a number of18 agreements that were entered into between the19 Children's Hospital and UMC prior to the Children's20 Hospital opening in February of 2012. Isn't that21 right?22 A. That's correct.23 Q. One of those agreements was a master24 agreement. Are you familiar with that document?25 A. Yes.

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1 chief financial officer.2 Q. Of the Children's Hospital?3 A. Of the Children's Hospital.4 Q. When was that?5 A. That was early April of 2014.6 Q. He was hired as CFO in early April of 2014?7 A. Yes.8 Q. And you participated in that recruitment?9 A. Yes.

10 Q. Who else at UMC?11 A. No one else from UMC.12 Q. Then Mr. Dziesinski became the CEO through13 September of 2014?14 A. Yes, I think shortly about a week after he was15 here, then he was promoted to the CEO.16 Q. And he resigned?17 A. And then he resigned in approximately18 September.19 Q. Why did he resign?20 A. To my knowledge he had taken this role as an21 interim role and he wanted to get back to his family in22 Nashville.23 Q. Then Mr. Sexton became the CEO of Children's24 Hospital.25 A. Yes.

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1 Q. What was its purpose?2 A. To outline I guess the overall structure of3 the relationship between UMC and El Paso Children's as4 it pertained to the overall services agreements that5 were going to come underneath the master agreement.6 Q. So that document contains the general terms7 that govern the parties' overall relationship?8 A. I believe so, yes.9 Q. There's also a lease agreement. Isn't that

10 right?11 A. There are actually three leases. There's a12 facility lease agreement, a medical equipment lease13 agreement and an informational technology lease14 agreement.15 Q. Let's talk about the facility lease agreement.16 What is the purpose of that?17 A. Is to provide the rental of the building to18 El Paso Children's Hospital at negotiated rates.19 Q. I think you mentioned a medical services20 lease?21 A. A medical equipment.22 Q. Medical equipment lease.23 A. Yes, uh-huh.24 Q. What is the purpose of that?25 A. A medical equipment is the medical equipment



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1 that was purchased -- there's actually two components2 of the medical equipment. There's what I'm going to3 call the nonbond-funded medical equipment, which4 represents equipment that was purchased by University5 Medical Center while the pediatric services were being6 performed at UMC, for the undepreciated costs that was7 going to be leased over to El Paso Children's.8 The second component of that was going to9 be the bond-funded medical equipment that was going to

10 be leased -- purchased and then leased also over to El11 Paso Children's.12 And the informational technology lease is13 for the -- all the devices, information technologies,14 computers, devices, laptops that were going to be15 leased over to El Paso Children's.16 Q. Is there an administrative services agreement?17 A. Administrative services agreement? Yes, there18 is.19 Q. What is the purpose of that agreement?20 A. To outline all the various administrative21 support functions, the shared services that both22 organizations used on the campus. And then all the23 individual agreements were going to be as an appendix,24 for example, the finance department, that was going to25 be Appendix A; human resources department, Appendix B,

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1 by Edward Sosa, our chief legal officer.2 Q. Who signed on behalf of the Children's3 Hospital?4 A. If I recall correctly, Larry Duncan as well as5 Jill Vogel who was El Paso Children's legal counsel.6 Q. How were those agreements negotiated?7 A. The agreements -- all agreements were8 negotiated probably over a six- to seven- to9 eight-month time period from the summer of 2011 up to

10 the opening of the Children's Hospital in February of11 2012.12 Q. Did you participate in those negotiations?13 A. Yes, I did.14 Q. Who was negotiating on behalf of the15 Children's Hospital?16 A. At that point in time was Larry Duncan, their17 chief executive officer, and David Mier, their chief18 financial officer.19 Q. Who was negotiating on behalf of UMC?20 A. One other person was Jill Vogel, the legal21 representation for El Paso Children's.22 UMC was Jim Valenti, myself, Edward Sosa,23 chief legal officer, and at times Ms. Lety Flores, the24 UMC controller. Bruce Yetter was also involved for UMC25 and he's also our legal counsel.

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1 all the other shared services that Children's was going2 to purchase from UMC.3 Q. Is there a diagnostic image services4 agreement?5 A. Yes. I refer to those as contractual6 services. There's a diagnostic imaging and then also7 laboratory.8 Q. What is the purpose of those agreements?9 A. The purpose of those agreements are for the --

10 also to provide for the purchase of those services from11 El Paso Children's, them purchasing those services from12 University Medical Center.13 Q. I think you mentioned had IT services?14 A. Yes. There are -- there's IT -- there are two15 components of informational technology. One is for the16 actual equipment, which I describe as part of the IT17 lease, but then there are also the services provided by18 UMC's IT department that's in the administrative19 services portion of the agreement.20 Q. We talked about several agreements and if we21 could have an understanding that I'll just refer to22 them as the agreements.23 A. Okay.24 Q. Who signed these agreements on behalf of UMC?25 A. They were signed by Mr. Valenti and then also

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1 Q. I think you had testified that Mr. Yetter2 actually works directly for a different entity. Is3 that right?4 A. Yes, he works for the county attorney's office5 as does Edward Sosa, he also works for the county6 attorney's office.7 Q. They perform legal services --8 A. Services for UMC.9 Q. Thank you. Was anybody else representing UMC

10 as counsel during those negotiations?11 A. I don't recall that there were any other12 outside counsel.13 Q. You said Jill Vogel was counsel for the14 Children's Hospital. Is that right?15 A. That is correct.16 Q. Do you know how she was hired?17 A. She was initially the law firm that was18 helping Children's out in its initial -- during the19 filing of the -- of its tax exemption status to the20 IRS, the articles of incorporation, bylaws, through the21 law firm of Kemp Smith.22 Q. So Ms. Vogel worked at Kemp Smith during the23 initial phase for planning the Children's Hospital?24 A. Yes. And at some point in time she became an25 employee of El Paso Children's, I don't recall what the



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1 actual -- the actual time frame.2 Q. But Children's Hospital had hired Kemp Smith.3 Is that right?4 A. I believe so, yes.5 Q. Did Kemp Smith work for UMC?6 A. Not to my knowledge.7 Q. Who made the decision that Kemp Smith would8 represent the Children's Hospital?9 A. I don't know.

10 Q. Did UMC have any participation in selection of11 Kemp Smith?12 A. To my knowledge, no.13 Q. Who would know?14 A. I don't know.15 Q. Was the Children's Hospital represented by16 outside counsel in the negotiation of the agreements?17 A. If you'll define Jill Vogel as outside18 counsel, because I think she was technically outside19 counsel at the time during the negotiations of all the20 agreements.21 Q. Kemp Smith.22 A. Through Kemp Smith, yes.23 Q. Any other law firms?24 A. To my knowledge, no.25 Q. Mr. Nunez, what was your role in the drafting

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1 based upon per unit items or whether if it was a2 salaried cost based upon FTEs, so based upon actual3 costing.4 Q. And is there a difference between the actual5 costs you just testified to and what was being charged6 to the Children's Hospital under the agreement?7 A. The only item I'm aware of is there was a five8 percent administrative fee that was assessed on some of9 the agreements, not all of the agreements.

10 Q. What was the purpose of the five percent11 administrative fee?12 A. The purpose of the five percent administrative13 fee was to cover any other administrative costs, you14 know, which were being incurred outside specifically of15 those services, like say, for example, my time was not16 included in any -- specifically in any of those17 agreements although there was some of my time being18 involved, et cetera. So that was the purpose of the19 five percent administration fee.20 Q. So what was charged to the Children's Hospital21 under the agreements was the actual costs to UMC plus22 the administrative fee?23 A. That is correct.24 Q. Any other components of what was charged to25 the Children's Hospital?

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1 of the agreements?2 A. In the drafting of the agreements with the3 assistance of Ms. Lety Flores, we would come up with4 the approximate costing, whether it be on a per unit5 basis as to level of services that Children's Hospital6 was requesting, whether if it be FTE's, employees, or7 if it'd be medical supplies or nonmedical supplies in8 trying to come up with the approximate costs.9 Q. For the Children's Hospital?

10 A. Yes, for the services that El Paso Children's11 Hospital was requesting from UMC.12 Q. What was your role in the negotiation of the13 agreements?14 A. The role of my -- my role was as we were15 discussing one agreement at a time -- and when I say16 "one agreement," even the administrative services17 agreement, there was 20 components of that -- we would18 bring up one appendix at a time and say, "Okay, based19 upon the services requested by El Paso Children's,"20 then I would represent then, "Okay, then here's what21 our initial cost estimates for all these services will22 be."23 Q. And how did you arrive at those cost24 estimates?25 A. Through the help of my accounting department

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1 A. Under the administrative services agreement,2 those are the ones that are primarily FTEs and/or3 actual costs. Now the contractual services agreements4 are a little bit different, the lab and the radiology,5 because that's based upon actual patient volume.6 Q. When you say "actual costs," what do you mean7 by that?8 A. The actual costs that had been incurred for9 the most recent time period, for the most recent 12

10 months. So if services were being requested from this11 date, say January 1 through December 31st, we would do12 a look-back of what the actual costs were for the13 previous 12 months.14 Q. By "actual costs," you mean the cost to UMC?15 A. The cost to UMC, yes.16 Q. And that was passed through to the Children's17 Hospital pursuant to the agreements?18 A. Yes.19 Q. Plus the administrative fee?20 A. Plus the five percent administration fee.21 Q. Was the administrative fee ever more than five22 percent?23 A. No.24 Q. What changes did the Children's Hospital make25 to the agreements or request be made to the agreements



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1 before they were executed?2 A. There was a lot of dialogue going back and3 forth based upon each specific agreement in terms of4 the services needed. They would initially provide,5 "These are the services that El Paso Children's is6 actually requesting from UMC," then we would tally up7 in terms of what -- you know, what the costs would be,8 a lot of dialogue back and forth on every single9 agreement.

10 Q. Have the agreements been amended since they11 were entered into in 2012?12 A. Certain agreements have been amended, yes,13 since the opening back in 2012.14 Q. When were the agreements executed?15 A. I believe the majority of the agreements were16 executed right prior to the opening of the Children's17 Hospital.18 Q. In February of 2012?19 A. About February 2012. There may have been some20 that may have been executed earlier, but I would need21 to -- I guess I would need to go back and check with22 legal counsel on the actual dates, because there were23 many agreements that had been agreed to, we were just24 now waiting finalization of the legal language going25 back and forth between both organizations.

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1 Q. Which ones?2 A. In October of 2012, the finance piece -- the3 finance portion of the administrative services4 agreement was amended as Children's Hospital wanted to5 take over the majority of the financial reporting6 functions of that agreement. That was one example that7 was amended.8 Another one that I know that was amended9 was probably one year later, September 1 of 2013, was

10 the imaging and laboratory services.11 And then an exhaustive amendment to all12 agreements was done in the summer of 2014, myself, Ray13 Dziesinski from El Paso Children's, Elias Armendariz14 from El Paso Children's, where we went through most all15 of the administrative services agreements as they were16 beginning to request less services from us.17 Q. And the administrative services agreement and18 its components were amended then?19 A. At least from the content as to what was20 amended. Now, whether the actual agreement was amended21 itself to include that, I am unaware of that.22 Q. So help me understand what you mean by the23 content versus the agreement.24 A. Okay. In terms of the actual costing by each25 of the administrative services agreement, here's the

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1 Q. Do you recall, Mr. Nunez, whether the2 Children's Hospital contested or disputed the final3 versions of any of these agreements?4 A. There were a couple of agreements that had not5 been agreed to, that both managements of both6 organizations couldn't come to final terms on certain7 agreements, so those -- so on both sides, we -- both8 managements pushed them up to the board level. UMC9 management pushed it up to UMC's board level, the same

10 on the El Paso Children's side. So there were a couple11 of agreements then that the board levels of both12 organizations finally came to terms.13 Q. Do you remember which ones those were?14 A. Not specifically.15 Q. Do you know if the boards came to an accord on16 those final agreements?17 A. Yes, they did.18 Q. Do you recall when the final drafts of all19 these agreements were presented to the Children's20 Hospital?21 A. No, I do not recall specifically the date as22 to when all the drafts were presented to them.23 Q. You mentioned that some of the agreements had24 been amended. Is that right?25 A. Yes.

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1 financial portion, here's the human resources portion,2 the materials management portion, both senior3 managements from both groups sat down over about a4 two-month period and went through contract -- agreement5 by agreement to come up with a new revised annual6 amount.7 Q. What were the revisions based on?8 A. The revisions were primarily based upon9 what -- based upon the level of Children's Hospital

10 wanting the services from UMC. And in some cases, in11 some agreements, in some appendix to the administrative12 service agreement, they were now requesting less13 services; others they stayed the same.14 Q. Does UMC enter into agreements with third15 parties on behalf of the Children's Hospital?16 A. I'm not sure if I understand the question.17 Q. An example would be there's a vendor that's18 not UMC that provides a service. Does UMC contract19 with any vendors for the purpose of providing services20 to the Children's Hospital?21 A. One example I can think of is laundry. The22 contract that UMC has, the organization's name I23 believe is Supreme Laundry, is we went ahead and24 contracted with them at a pass-through cost to El Paso25 Children's and the primary reason for that was based



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1 upon volume, UMC was able to get better rates as2 opposed to El Paso Children's would have been simply on3 their own organization strictly based upon volume.4 Q. Are there other examples of agreements with5 third parties?6 A. That's the only one that I can think of.7 Q. So how are the costs allocated between UMC and8 the Children's Hospital for laundry?9 A. For laundry? Based upon the invoice that UMC

10 gets specifically for El Paso Children's, that's a11 pass-through cost.12 Q. Is UMC using the same laundry service?13 A. Yes.14 Q. And there's not a separate contract with15 Supreme Laundry and the Children's Hospital, is there?16 A. Directly between El Paso Children's Hospital17 and Supreme Laundry, that is correct, there is not one.18 Currently not one.19 Q. Is the Children's Hospital invoiced separately20 by Supreme Laundry for its laundry needs?21 A. No, that contract is through UMC, then UMC22 invoices El Paso Children's Hospital.23 Q. So how does UMC know what to invoice for24 laundry to the Children's Hospital?25 A. Based upon the invoices that we get from

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1 there were really years of planning. Is that correct?2 A. Yes.3 Q. And you participated in that planning?4 A. Yes, when I became CFO.5 Can I go back on -- to the previous6 question about the contracts?7 Q. Yes.8 A. Am I allowed to?9 Q. Yes.

10 A. There are also IT contracts that are directly11 between us -- between University Medical Center and IT12 vendors solely for El Paso Children's. And those -- on13 those contracts I am aware that there are amendments14 specifically for the additional -- for El Paso15 Children's Hospital as an affiliated member of UMC for16 the use of those services. I wanted to make that point17 on IT contracts.18 Q. Thank you, Mr. Nunez. We'll talk more about19 that in a moment.20 Just to back up, you mentioned there were21 years of planning that went into the Children's22 Hospital. Is that correct?23 A. Yes.24 Q. And when you became CFO, you were involved in25 that planning?

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1 Supreme Laundry, here's UMC's usage, here's Children's2 Hospital usage.3 Q. How does Supreme Laundry know how to allocate4 the different buckets of laundry?5 A. That I do not know.6 Q. But they do know somehow?7 A. Yes, they would have to.8 Q. There's one contract with Supreme Laundry. Is9 that right?

10 A. I don't know that. There may be one contract,11 two components. I don't know the specifics of the12 contract.13 Q. But UMC has negotiated that contract with14 Supreme Laundry for itself?15 A. Yes.16 Q. And for the Children's Hospital?17 A. Yes.18 Q. Did UMC consult with the Children's Hospital19 about the laundry services contract?20 A. Yes. At that time it was determined we could21 get better rates --22 Q. Based upon value?23 A. -- based upon volume.24 Q. Mr. Nunez, we've talked this morning about the25 planning that went into the Children's Hospital and

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1 A. Yes.2 Q. Prior to the Children's Hospital opening?3 A. Yes.4 Q. Did UMC want the Children's Hospital to5 succeed?6 A. Yes.7 Q. What steps did UMC take to make sure that the8 Children's Hospital succeeded?9 A. One of the steps I can think of was the shared

10 services concept, which was rather than create another11 administrative infrastructure, both organizations would12 share the same administrative services to keep the13 administrative services down.14 Another component was on the15 informational technology area. If -- during the time16 that we were -- upon the passage of the bond vote and17 in creating the information technology platforms, if --18 some of the vendors wanted to charge El Paso Children's19 Hospital as a separately complete different20 organization, but those costs would have been21 astronomical compared to we negotiated contracts with22 them being, quote, unquote, an affiliate of University23 Medical Center.24 So those were a couple of areas we were25 thinking of to try to keep the overall expense level



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1 down so that El Paso Children's Hospital could strictly2 concentrate on providing the clinical services.3 Q. You mentioned the shared services. I know you4 testified to that before, but I think you were talking5 about in the past. There are shared services even to6 this day. Isn't that right?7 A. Yes, that is correct.8 Q. What are those today?9 A. The same, the use of the power plants,

10 environmental services, dietary, lab, imaging, almost11 the same amount of -- they virtually remain unchanged.12 Q. By "shared," what do you mean by that?13 A. The shared services is rather than -- say, for14 example, although the -- say like accounting and15 finance. Rather than have two accounting teams, we16 could have just one accounting team providing the17 service for both organizations. Same with human18 resources. You can have one -- just one department19 providing services for both.20 Since the concept being that those21 services or those departments previously were part of22 UMC, rather than to have two separate HR departments,23 two separate accounting departments, two separate24 quality management departments, et cetera, we would25 share resources for economies of scale.

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1 A. Affiliate not from a legal perspective, but an2 affiliate from the contract perspective with the3 third-party vendors.4 Q. Sure.5 MR. SPROUSE: Let's go off the record.6 (A recess was had.)7 Q. (By Mr. Sprouse) Mr. Nunez, we've just8 returned from a break and I want to pick up kind of9 where we left off. I'm going to ask you some follow-up

10 questions, but first I want to know if you've heard the11 name Bruce Howell?12 A. No.13 Q. Do you know Ryan Mielke?14 A. The name sounds familiar. Ryan Mielke. Yes,15 he's with UMC.16 Q. Okay.17 A. Our public relations director, yes.18 Q. What does public relations entail?19 A. He's in charge -- Ryan is in charge of20 handling our public affairs office. His21 responsibilities include correspondence with media,22 with the court, he prepares Mr. Valenti's weekly23 newsletter, the open records requests for information24 that come to UMC goes through his office and then he25 disseminates it to the attorneys, et cetera. So those

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1 Q. So for the personnel providing these shared2 services, are they UMC employees?3 A. For the shared services -- yes, they are UMC4 employees.5 Q. Then UMC in turn bills the Children's Hospital6 for some portion of those services based upon the7 agreements?8 A. Based upon the agreements, yes.9 Q. And you mentioned IT and that's another

10 example of the planning that was done for UMC and the11 Children's Hospital and how they might share resources.12 Isn't that right?13 A. Correct.14 Q. So I think your word was that with respect to15 IT services, there's been negotiations with third-party16 vendors. Is that right?17 A. Correct.18 Q. And there are contracts with third-party19 vendors?20 A. Yes.21 Q. And what UMC has done is had those vendors22 treat UMC and the Children's Hospital as affiliates of23 each other.24 A. Yes.25 Q. And "affiliate" is your word?

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1 are primarily his responsibilities.2 Q. Have you talked to Mr. Mielke about the3 Children's Hospital case?4 A. There has been some questions he has come to5 me based upon certain items over the last week or two.6 Q. And what did they relate to?7 A. Last week he came to me because he was8 asking -- he had seen -- whether if I had read one of9 the latest articles in the newspaper about comments

10 about UMC's financial condition, that we are weak, and11 that was probably the -- one of the few times that I've12 talked to Ryan Mielke about.13 Q. Who said that UMC's financial condition was14 weak?15 A. It was reported in the newspaper. I don't16 recall specifically who said it, but other than it was17 reported that -- in someone's opinion it was reported18 that UMC's financial condition is weak.19 Q. Was that the El Paso Times?20 A. Yes. The El Paso Times that I read it, yes.21 Q. Did you disagree with the notion that the22 financial condition of UMC is weak?23 A. Most certainly.24 Q. Would you say that the financial condition of25 UMC today is strong?



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1 A. That's all perspective.2 Q. But not weak?3 A. Correct.4 Q. What word would you use?5 A. Stable, as per -- as per the most recent6 standard -- as opposed to Fitch's most recent bond7 rating on UMC had us as stable.8 Q. Stable and improving or stable and headed in a9 different direction?

10 A. Simply stable.11 Q. No trend?12 A. No, those are not the comments.13 Q. Before the break, Mr. Nunez, we talked about14 how UMC was instrumental in helping the Children's15 Hospital in its initial planning stages. Do you recall16 that?17 A. Yes.18 Q. And that included the Children's Hospital's19 finances. Is that correct?20 A. Yes.21 Q. Staffing?22 A. Yes.23 Q. How the Children's Hospital would receive24 services?25 A. Not necessarily how the Children's would

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1 an emergency entrance for that purpose for the2 Children's Hospital?3 A. I believe so. That's -- that's what the4 purpose was for, to have two separate entrances, one5 for El Paso Children's and one for UMC.6 Q. Is there a separate place that an ambulance7 will pull in with Children's Hospital patients versus8 patients for the UMC portion of that building?9 A. I'm not aware as to the physical layout as to

10 the arriving ambulances.11 Q. You just don't know?12 A. I don't know.13 Q. Who would know?14 A. Who would know?15 Q. Yeah.16 A. Definitely our chief operations officer who's17 in charge of facilities, that's Maria Zampini.18 Q. What are housekeeping services?19 A. I'm sorry?20 Q. Housekeeping services?21 A. What are they?22 Q. Yes, what are they?23 A. The general cleaning of the hospital floors,24 whether it be patient rooms, the lobby, to make sure25 that the hospital premises are always kept clean.

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1 receive services, how -- upon negotiation how we would2 provide services.3 Q. And the plan included how the Children's4 Hospital would pay its bills?5 A. Upon negotiation as to how the -- El Paso6 Children's would pay its bills, yes.7 Q. And that planning included the architecture of8 the space that the Children's Hospital would come to9 occupy?

10 A. Yes.11 Q. Does the Children's Hospital have its own12 loading dock?13 A. No. There's one centralized loading dock for14 both organizations.15 Q. Why was the facility designed in such a way16 that they would have to share a loading dock?17 A. That I am not -- I was not privy or part of18 those discussions.19 Q. Does the Children's Hospital have its own20 emergency bay?21 A. They have their own emergency department22 separate and apart from UMC's. That was one of the23 license requirements from the State.24 Q. If an ambulance pulls up to the facility with25 a child in need of emergency pediatric care, is there

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1 Q. Does UMC have its own staff for the purpose of2 housekeeping?3 A. Yes, we do.4 Q. Are those UMC employees?5 A. They are UMC employees, yes.6 Q. Do they also provide housekeeping to the7 Children's Hospital?8 A. Yes.9 Q. What are dietary services?

10 A. Dietary services are to provide the meals for11 the patients of either UMC and Children's and also to12 the associates of both organizations.13 Q. Is that function contracted out to a14 third-party vendor?15 A. No.16 Q. It's done in-house?17 A. Yes, we do it in-house, UMC does it in-house.18 Q. So UMC staff provides dietary services?19 A. Yes.20 Q. And that same staff provides dietary services21 for the Children's Hospital?22 A. Yes.23 Q. How would you define payroll services?24 A. As to what it is or what we provide?25 Q. What is it?



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1 A. Payroll services?2 Q. Yes.3 A. Is the accumulation of payroll records via4 time sheets and time cards so that we can pay our5 employees biweekly.6 Q. Does UMC have its own staff for payroll7 services?8 A. Yes, we do.9 Q. Does that same staff provide payroll services

10 to the Children's Hospital?11 A. Yes.12 Q. These are UMC employees?13 A. These are UMC employees, yes.14 Q. What are accounting services?15 A. Accounting services are the processes16 necessary to do the financial reporting, monthly17 financial reporting, of its revenues and expenses for18 the month.19 Q. Does UMC have a staff for accounting services?20 A. Yes, we do.21 Q. Does UMC use any third-party vendors for those22 functions?23 A. No, we don't.24 Q. Does UMC staff provide accounting services to25 the Children's Hospital?

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1 A. Not necessarily for the functions, but we do2 contract with third parties for the use of software so3 that we can complete those functions.4 Q. Does UMC provide revenue cycle services to the5 Children's Hospital?6 A. We provide some revenue cycle services to El7 Paso Children's.8 Q. What is provided?9 A. The overall maintenance of the -- since there

10 is one chargemaster for both organizations, we11 provide -- we maintain the chargemaster for both12 organizations. Other than that a lot of the more13 detailed other procedures are done by El Paso14 Children's as they have some revenue cycle employees.15 Q. What's a chargemaster?16 A. Chargemaster is a -- it's a book of all of the17 procedures that a hospital can provide by department,18 there's a specific code for each procedure, and based19 upon that that's how we establish what the established20 charges are going to be.21 Q. Who publishes this chargemaster?22 A. It's not necessarily published, but it's23 maintained within our information technology system.24 Q. Was it created by UMC?25 A. We have our own -- yes, we have our own

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1 A. No.2 Q. Who does that for the children's hospital?3 A. I'm sorry?4 Q. Who does that for the Children's Hospital?5 A. Children's Hospital has their own employees to6 do the financial reporting functions for El Paso7 Children's.8 Q. Has that always been the case?9 A. No.

10 Q. When did that change?11 A. October 1 of 2012.12 Q. Prior to that date did UMC staff provide13 accounting services to the Children's Hospital?14 A. Yes.15 Q. What is a revenue cycle?16 A. Revenue cycle. Our department, our revenue17 cycle department, it consists of responsibilities for18 the charge description maintenance of the hospital,19 ensuring that all the revenue codes and all the billing20 codes are set appropriately so that we can bill for our21 services to insurance companies.22 Q. Does UMC have its own staff for revenue cycle?23 A. Yes, we do.24 Q. Does UMC contract with third-party vendors for25 any of those functions?

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1 chargemaster.2 Q. And the Children's Hospital also uses that3 same chargemaster?4 A. Yes.5 Q. And you referenced certain software associated6 with the revenue cycle?7 A. Yes.8 Q. And that software is leased from a third-party9 vendor?

10 A. Yes, we pay a third-party vendor for the use11 of it, a license.12 Q. Does the Children's Hospital use that same13 software?14 A. I'm not certain of that.15 Q. Who would know?16 A. I'm sorry?17 Q. Who would know?18 A. The El Paso Children's employees.19 Q. What is human resources?20 A. Human resources is our department that is21 responsible for all the human resources policies and22 procedures, the hiring, the training, maintaining the23 certifications, maintaining personnel records.24 Q. For staff?25 A. I'm sorry?



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1 Q. It's for staff?2 A. Yes, for employees. I refer to them as3 associates.4 Q. Sure.5 Does UMC have associates that perform the6 human resources functions for UMC?7 A. Yes.8 Q. Does UMC provide human resources services to9 the Children's Hospital?

10 A. Some services.11 Q. What services are provided?12 A. I'm not certain specifically, but I know that13 there are some services being provided to El Paso14 Children's, although that's been reduced over the last15 couple of years.16 Q. So it's your understanding that Children's17 Hospital does some of its human -- or some of its own18 human resources work --19 A. Yes.20 Q. -- and some of it is done by UMC?21 A. That is correct.22 Q. Mr. Nunez, today we've talked about equipment23 leases and I know those are part of the agreements24 between the parties. Is there equipment that's leased25 by UMC from third-party vendors?

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1 facilities.2 Q. Fair enough.3 Is there any other equipment that is4 shared by the facilities?5 A. Is there any other equipment that is shared by6 the facilities?7 Q. Yes.8 A. Not that I'm aware of.9 Q. How would you define IT services?

10 A. IT services are what's needed so that11 associates can perform their functions whether if it's12 in the clinical floors or whether if it's in the13 administrative financial areas.14 Q. What does "IT" stand for?15 A. Information technology.16 Q. And I understand UMC contracts with some third17 parties for the provision of IT services?18 A. No.19 Q. That's all done in-house?20 A. IT services? That is correct.21 Q. Does UMC have its own IT staff?22 A. Yes, we do.23 Q. Does UMC provide IT services to the Children's24 Hospital?25 A. Yes, we do.

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1 A. Yes.2 Q. Is any of that leased equipment also used by3 the Children's Hospital?4 A. To my knowledge, no.5 Q. But UMC provides equipment to the Children's6 Hospital for use by the Children's Hospital?7 A. Yes.8 Q. And that's pursuant to a lease agreement?9 A. Yes.

10 Q. What equipment is used by both UMC and the11 Children's Hospital?12 A. In regards to?13 Q. Well, I presume there are many different kinds14 of equipment. So my question is what equipment is15 specifically used by both UMC and the Children's16 Hospital?17 A. I'm not aware of the equipment that -- the IT18 equipment that is used by both organizations. We share19 the same platform, a computer system. Now, each20 organization has their own laptops, computer devices,21 but in terms of shared devices I don't believe there22 are any.23 Q. Other than IT, is there any equipment that is24 shared by the facilities?25 A. There's no IT equipment that is shared by the

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1 Q. Using the same staff?2 A. Yes.3 Q. What is a server?4 A. It could be a data server that houses lots of5 information whether if it be financial, clinical,6 personnel matters, et cetera.7 Q. It would be fair to say it's a type of8 computer equipment?9 A. Yes.

10 Q. Does UMC have servers?11 A. Yes, we do.12 Q. Are they on-site?13 A. There are some that are on-site and there are14 some that are also off-site depending -- yeah, there15 are some that are off-site as well.16 Q. The ones that are off-site, are they off-site17 at UMC properties?18 A. No, those are with the related vendors.19 Q. So there are non-UMC vendors that provide20 space for some UMC servers?21 A. No. They are UMC vendors.22 Q. Is UMC invoiced by these third parties?23 A. Yes.24 Q. What are the invoices for?25 A. For our use of their application systems and



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1 also the number of licenses that we use.2 Q. UMC has contracts with third-party vendors for3 IT services. Is that right?4 A. Yes.5 Q. Do those contracts with third parties involve6 services that are also provided to the Children's7 Hospital?8 A. There are -- yes, there are portions of those9 contracts that have been segregated for additional

10 licenses or users for El Paso Children's Hospital use.11 Q. Has the Children's Hospital contracted12 directly with these third-party IT vendors?13 A. Not that I'm aware of.14 Q. So UMC has a contract with a third-party IT15 vendor in some cases. Is that correct?16 A. Yes.17 Q. Some of the services from that third-party18 vendor are used by the Children's Hospital?19 A. Yes.20 Q. The invoice from the third-party vendor goes21 to UMC?22 A. Yes.23 Q. Does an invoice come from the third-party24 vendor to the Children's Hospital?25 A. Not that I'm aware of.

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1 A. Yes.2 Q. -- or a server that is contracted to UMC by a3 third-party vendor?4 A. Yes.5 Q. And just for our understanding, Mr. Nunez,6 when I say "the servers," are we talking about either7 the UMC servers or the servers from the third parties,8 if we can have that agreement?9 A. Generally, yes, unless there are specific

10 items that are broken up between UMC servers and11 third-party servers.12 Q. Fair enough. And if you will correct me if13 you can make that distinction.14 A. Okay.15 Q. Children's Hospital e-mail is run from one of16 the servers. Is that right?17 A. From my understanding, yes.18 Q. Children's Hospital financial information is19 run from one of the servers?20 A. Yes.21 Q. And Children's Hospital patient information is22 on one of the servers?23 A. Yes.24 Q. Children's Hospital payroll is on one of the25 servers?

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1 Q. So when the invoice comes to UMC, how does UMC2 allocate between the services provided to UMC and the3 services provided to the Children's Hospital?4 A. Our informational technology director, Janina5 Prada, she is responsible for the allocation on the6 breakout of those invoices between both organizations.7 Q. What metrics does she use to break those8 invoices out?9 A. I don't know. You would have to ask her.

10 Q. Is there a formula in the agreements that sets11 that out?12 A. I don't know specifically. You would have to13 ask her.14 Q. Does the Children's Hospital have its own15 server?16 A. Not that I'm aware of.17 Q. Does the Children's Hospital use a server?18 A. Yes.19 Q. That server is either a UMC server or a server20 from a third-party vendor contracted to UMC?21 A. Yes.22 Q. Yes to both parts of that question?23 A. If you can repeat that.24 Q. Sure. So Children's Hospital uses a server25 that is either a UMC server --

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1 A. Yes.2 Q. Children's Hospital billing is on one of the3 servers?4 A. That I'm not certain because Children's5 Hospital contracts with an outside third party for6 their billing functions.7 Q. Is it your testimony that Children's Hospital8 contracts itself with a third-party vendor for billing?9 A. Yes.

10 Q. And UMC is not a party to those contracts?11 A. That is correct.12 Q. Has that always been the case?13 A. Yes.14 Q. Was there ever a time when Children's Hospital15 billing was on an a UMC server?16 A. Not the billing function, no.17 Q. The billing function has always been discrete18 and exclusively with the Children's Hospital or one of19 its vendors?20 A. Yes. From day one, yes.21 Q. Who has access to the information on the UMC22 servers?23 A. UMC associates based upon their job title and24 also responsibility.25 Q. Can UMC access the Children's Hospital



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1 financial information on the servers?2 A. No.3 Q. Is the access to that information restricted?4 A. Yes.5 Q. In what way?6 A. We cannot access their -- UMC associates7 cannot access Children's information and vice versa,8 Children's associates cannot access UMC information.9 Q. Is it your testimony, Mr. Nunez, that no one

10 at UMC can access the Children's Hospital financial11 information on the UMC servers?12 A. After October 1 of 2012.13 Q. It's completely separate?14 A. Yes.15 Q. Even though it's on the same servers?16 A. It's on the same server.17 Q. Would that include patient information?18 A. Most definitely, yes.19 Q. Can UMC access Children's Hospital e-mails?20 A. To my knowledge, no. Well, the general21 associates, no, but if in the event of there's an issue22 with the e-mail system, then the dedicated IT personnel23 would be able to go in as part of our IT services to24 try to find out what's wrong with the e-mail server.25 Q. To fix a problem in other words?

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1 A. Utilities as in -- help me out.2 Q. Sure. Gas, electric, water, trash.3 A. The ones you just mentioned.4 Q. Are there other utility services that you're5 aware of that Children's Hospital uses?6 A. Not that I'm aware of.7 Q. Are the utilities separately metered for the8 Children's Hospital?9 A. I don't believe -- no, they're not.

10 Q. There's one meter for UMC?11 A. There may be several meters throughout the12 campus, but in terms of if they're separately metered13 for each organization, no.14 Q. Children's Hospital is paying UMC for15 utilities. Isn't that right?16 A. Up until May 19th they were not paying, they17 were being charged.18 Q. Is it UMC's position that Children's Hospital19 has an obligation to pay UMC for the utilities that the20 Children's Hospital uses?21 A. Yes.22 Q. How are those charges determined?23 A. I don't specifically know that. You would24 have to talk to the person that oversees that25 department specifically.

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1 A. Yes.2 Q. Would UMC access the Children's Hospital3 e-mails for any other purpose?4 A. No.5 Q. Has it ever?6 A. To my knowledge, no, nor have I.7 Q. If the Children's Hospital wants to set up a8 new e-mail account, how would the Children's Hospital9 do that?

10 A. The HR director from El Paso Children's would11 fill out a form upon hiring and send that to our12 information technology department and the UMC associate13 or associates that are responsible for that duty would14 then set up the e-mail account.15 Q. Would that be a difficult thing to do?16 A. I wouldn't think so.17 Q. How long would it take?18 A. That I don't know.19 Q. Who would know?20 A. Our information technology department.21 Q. You've told me who the head of that is. Can22 you tell me again, please?23 A. Janina Prada, last name P-R-A-D-A.24 Q. What utilities services does the Children's25 Hospital use?

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1 Q. So I understand the process, for example,2 there's a power company that provides electricity to3 the facility. Is that right?4 A. Yes.5 Q. UMC gets an invoice for that electricity?6 A. Yes.7 Q. Then UMC in turn bills the Children's Hospital8 to recoup some portion of the money that goes into that9 invoice?

10 A. Correct.11 Q. Same for gas?12 A. Yes.13 Q. Same for water?14 A. Yes.15 Q. Same for trash?16 A. Yes.17 Q. Are you aware of a separate contract that18 speaks to how those utilities are allocated?19 A. I believe there's a contract that does20 specifically address those.21 Q. What are environmental services?22 A. We talked about those earlier. It's the23 general upkeep and maintenance of the hospital floors,24 the patient rooms, lobby area, et cetera.25 Q. Is that the same as housekeeping?



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1 A. Yes.2 Q. So environmental services and housekeeping3 mean the same thing?4 A. Yeah. In my definition, yes.5 Q. Which term do you use?6 A. Usually environmental services.7 Q. What is nurse support education?8 A. We provide our nursing support education to9 the departments, the clinical floors, clinical

10 departments of El Paso Children's, whether it be11 ranging from upcoming Joint Commission standards to12 patient quality indicators, that type of thing.13 Q. Does UMC have associates that are dedicated to14 those functions?15 A. Yes, we do.16 Q. Does UMC provide nurse support education to17 the Children's Hospital?18 A. I believe we do. I still believe we continue19 to do so.20 Q. And again that's from UMC associates21 performing that function?22 A. Yes.23 Q. For both UMC and the Children's Hospital?24 A. Yes, for both.25 Q. What is quality management?

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1 for the Children's Hospital?2 A. Not that I'm aware of.3 Q. Does UMC receive philanthropic contributions?4 A. Not directly.5 Q. How does it do so indirectly?6 A. Through the University Medical Center7 Foundation -- of El Paso Foundation.8 Q. I know you testified a little bit about that9 this morning. What is the purpose of the Foundation?

10 A. The purpose of the Foundation is to seek11 donations, fund raising, whether it be for clinical12 programs, equipment, for both organizations.13 Q. Did you say for both organizations?14 A. Yes.15 Q. And what do you mean by "both organizations"?16 A. For UMC and for El Paso Children's.17 Q. Is the Foundation subject to the board of18 managers at UMC?19 A. The Foundation has its own board of directors.20 Q. Is there any overlap between the board at UMC21 and the Foundation?22 A. No, there is not.23 Q. Does the Children's Hospital have any24 personnel on the Foundation board?25 A. There is -- the CEO is an ex-officio member of

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1 A. Our quality management department is -- they2 are the department that are responsible for keeping up3 with the latest quality standards whether set forth by4 Medicare, Medicaid, insurance companies, and ensuring5 that those are being maintained throughout all the6 clinical floors.7 Q. Does UMC have associates that perform that8 function?9 A. Yes, we do.

10 Q. Do UMC associates for the quality management11 also provides those services to the Children's12 Hospital?13 A. I believe we do, yes.14 Q. Does UMC receive quality management services15 from any outside vendors?16 A. Yes, on a consultative basis.17 Q. What would be an example of when they would do18 that?19 A. An example would be just on a recent Joint20 Commission study we had consulted with a company to21 come do an inspection up front since we knew -- do an22 inspection of the hospital as we were coming up for our23 triennial Joint Commission study.24 Q. Does UMC ever contract with third-party25 vendors for quality management that perform services

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1 the University Medical Center of El Paso Foundation.2 Q. How does the Foundation solicit donations?3 A. They seek whether through grants, they'll do4 grant writing. They'll also go out and do campaigns5 here in the city and at the county for whether it be6 specific purposes and/or specific pieces of medical7 equipment.8 Q. And the Foundation performs that function for9 both UMC and the Children's Hospital?

10 A. Yes, they do.11 Q. Mr. Nunez, you do some work for the Foundation12 also. Is that right?13 A. I'm sorry?14 Q. You do some work for the Foundation?15 A. What type of work do you mean?16 Q. Any work. Part of your duties.17 A. I serve on the board, but in terms of any18 other work for the Foundation, no, I do not.19 Q. Thank you.20 You serve on the board for the21 Foundation?22 A. Yes.23 Q. Does UMC have its own staff that's dedicated24 to soliciting donations?25 A. Yes.



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1 Q. And that's different from what's the2 Foundation?3 A. How the arrangement is, they are University4 Medical Center employees, but then they are contracted5 with University Medical Center of El Paso Foundation6 for the use of those employees.7 Q. Does the Foundation have its own employees?8 A. No, they do not.9 Q. Are they -- are the people who work for the

10 Foundation all UMC employees who have been contracted11 with the Foundation?12 A. Yes. And the Foundation may have on contract13 a grant writer every now and then in the event that14 they need to do so, but they're primarily UMC15 employees.16 Q. How does the Foundation solicit donations for17 the Children's Hospital?18 A. In the manner that I described earlier. They19 will go through grant writing, seeking philanthropic20 monies from the community, from the foundations, from21 organizations. So the same process that they do for22 UMC, they do the same for El Paso Children's.23 Q. If somebody called UMC and wanted to make a24 donation to the Children's Hospital, would they be25 referred to the Foundation?

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1 A. I believe it comes through my monthly -- CFO2 monthly financial report, yes.3 Q. What are the different parts of that4 $100 million claim?5 A. It's broken up by the various agreements that6 we have: The three lease agreements, facility lease,7 medical equipment lease, IT equipment lease,8 administrative services and contractual services.9 Q. So these are accrued amounts that have not

10 been paid?11 A. That is correct.12 Q. Will attorney's fees be a part of the UMC13 claim?14 A. No. Well, okay, let me back up. Are they15 part of that 100 -- or the $100 million number that I16 track? No, they are not. Specifically to answer your17 question whether the attorney's fees are going to be18 part of the claim, I do not know the answer to that19 question specifically.20 Q. Who would know?21 A. Our legal counsel.22 Q. When the Children's Hospital was being planned23 for, was it expected that the revenues from the24 Children's Hospital to UMC would help UMC support the25 Children's Hospital?

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1 A. Yes. To the University Medical Center of2 El Paso Foundation, yes.3 Q. And if someone called the Children's Hospital4 and wanted to make a donation to the Children's5 Hospital, would they also be referred to the6 Foundation?7 A. Yes.8 Q. Mr. Nunez, in the bankruptcy case UMC has9 asserted that it has a claim against the Children's

10 Hospital. Are you aware of that?11 A. I'm aware generally, yes.12 Q. Do you know the amount of that claim?13 A. No, I do not.14 Q. It's been represented in the pleadings filed15 on behalf of UMC that it has a claim of approximately16 $100 million against the Children's Hospital. Have you17 heard that figure before?18 A. Yes.19 Q. Who did you hear it from?20 A. The news media.21 Q. Excuse me?22 A. The news media.23 Q. Media.24 As the CFO of UMC are you preparing the25 constituent parts of that claim?

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1 A. Can you restate that or rephrase that.2 MR. SPROUSE: Reporter, can you help me3 with that.4 (The Court Reporter read back.)5 A. No, I would generally say no.6 Q. (By Mr. Sprouse) What was UMC's expectation7 with respect to the revenues it would receive from the8 Children's Hospital?9 A. Our expectation was that Children's would pay

10 for services that UMC provided to the El Paso11 Children's.12 Q. So the obligations of the Children's Hospital13 to UMC are set forth in the agreements. Is that right?14 A. As set forth in the agreements, yes.15 Q. And what UMC wants is to get paid for the16 services provided to the Children's Hospital?17 A. For all amounts due under all agreements to18 include services and leases.19 Q. And those obligations represent actual costs20 and perhaps an administrative fee. Is that right?21 A. For the administrative services, yes.22 Q. Does UMC have an expectation that the revenues23 from the Children's Hospital would help UMC do other24 things?25 A. No.



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1 Q. Has it ever been UMC's expectation that2 revenue from the Children's Hospital would help UMC do3 other things?4 A. Other things such as?5 Q. Open new clinics?6 A. Oh. No.7 Q. You're familiar with Deloitte, the consulting8 firm?9 A. Yes.

10 Q. And they've been hired by UMC in this case?11 A. I'm not sure who they've been hired by, but I12 am familiar with Deloitte.13 Q. What's your understanding of their function in14 the case?15 A. Provide a financial analysis.16 Q. To UMC?17 A. For this bankruptcy matter.18 Q. Are you working with Deloitte in that effort?19 A. Yes.20 Q. Who else at UMC is working with Deloitte?21 A. The other person is Lety Flores, who's my22 corporate controller, UMC's corporate controller.23 Q. What else is Deloitte doing in the case?24 A. As far as I know that's what they are doing.25 Q. Who's paying Deloitte?

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1 11 case?2 A. No, I do not.3 Q. Do you know what a Chapter 11 plan is?4 A. Generally, yes.5 Q. What is it?6 A. In my opinion, a plan that is submitted by an7 organization who has filed for Chapter 11 to be able to8 get out of Chapter 11.9 Q. Have you seen a plan for --

10 A. No.11 Q. Has UMC had to file claims in other bankruptcy12 cases?13 A. Not that I'm aware of.14 Q. Has UMC developed its own Chapter 11 plan in15 this case?16 A. Not that I'm aware of. I have not been17 involved in any discussions.18 Q. Has UMC been in contact with any third parties19 about partnering with UMC to take over any aspect of20 the Children's Hospital?21 A. Say that again.22 Q. Has UMC been in contact with any third parties23 who might partner with UMC to take over the Children's24 Hospital?25 A. To my knowledge, no.

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1 A. I am not certain.2 Q. As the CFO of UMC have you seen any invoices3 from Deloitte?4 A. No.5 Q. Do you know who gets the Deloitte invoices?6 A. No, I do not.7 Q. Have you seen invoices from Norton Rose?8 A. Yes.9 Q. Does UMC intend to file a proof of claim?

10 A. I have no idea what that is.11 Q. A proof of claim is a document that's filed in12 a bankruptcy case by a creditor to show how much the13 creditor believes that it is owed by the debtor. Does14 that make sense to you?15 A. Yeah.16 Q. Are you preparing a proof of claim on behalf17 of UMC?18 A. No.19 Q. Do you know what exclusivity is?20 A. In general terms, yes.21 Q. And what is it?22 A. Where one may have an exclusive contract.23 Let's say a vendor wants to have exclusivity, an24 exclusive contract to provide services.25 Q. Do you know what exclusivity is in a Chapter

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1 Q. Who would know?2 A. If it would have been, our board of directors3 and Mr. Valenti.4 Q. Is it a goal of UMC to take over the5 Children's Hospital?6 A. In my opinion, no.7 Q. Is it a goal of UMC to have more control over8 the Children's Hospital in the future than it does9 today?

10 A. To provide financial assistance and for the11 well-being of El Paso Children's, from that12 perspective, to help them out.13 MR. SPROUSE: Let me object to that14 response as nonresponsive.15 Q. (By Mr. Sprouse) Mr. Nunez, is it a goal of16 UMC to have more control over the Children's Hospital17 in the future than it has today?18 A. I guess we would need to ask the board of19 managers that question.20 Q. Do you know?21 A. No, I do not know.22 MR. SPROUSE: Let's go off the record.23 (A recess was had.)24 Q. (By Mr. Sprouse) Mr. Nunez, are you aware of25 any potential claims against the officers and directors



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1 of the Children's Hospital for any reason?2 A. No, I'm not aware of any claims.3 Q. Are you aware of any investigation into such4 claims?5 A. No, I am not.6 (Exhibit marked, No. E.)7 Q. (By Mr. Sprouse) Mr. Nunez, you've been8 handed a document marked as Exhibit E. It's a pleading9 filed by UMC and it's an objection to the amended

10 application of the Children's Hospital to employ11 Jackson Walker. I paraphrased the caption there, but12 do you see that there in the middle of page?13 A. Yes, I do.14 Q. Have you seen this document before?15 A. No, I have not.16 Q. Turn with me to paragraph 4, numbered17 paragraph 4. It says: Immediately after filing its18 petition, in a desperate attempt to find a scapegoat19 for its mismanagement of the Children's Hospital, the20 debtor essentially declared war on UMC.21 Did I read that correctly?22 A. Yes.23 Q. Mr. Nunez, do you believe that the Children's24 Hospital was mismanaged?25 A. I'm sorry. I was reading the sentence. I'm

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1 expense management have been done or better processes2 have been done? The answers could be yes.3 Q. But you could say that about any organization,4 couldn't you?5 A. Correct.6 Q. Are you aware of any way in which the7 Children's Hospital was financially mismanaged?8 A. I believe not.9 Q. Do you believe that the Children's Hospital

10 has declared war on UMC?11 A. This is the first time I've seen that12 statement.13 Q. I understand that, Mr. Nunez, but I'm asking14 your opinion. Do you believe that the Children's15 Hospital has declared war on UMC?16 A. Up until today, no.17 Q. What changed your mind today?18 A. Reading this sentence.19 Q. You're not aware of any basis that would20 support that allegation beyond what's in this pleading?21 A. Any basis? No, I would not speculate.22 (Exhibit marked, No. F.)23 Q. (By Mr. Sprouse) Mr. Nunez, I've handed you a24 document that's been marked as Exhibit F. It says at25 the top: Executive Summary on Fiscal and Revenue Cycle

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1 sorry. The question?2 Q. Do you believe that Children's Hospital was3 mismanaged?4 A. Can you define "mismanaged"?5 Q. In this case, Mr. Nunez, I'm going to refer6 you to the pleading, which is Exhibit E, the first7 sentence of paragraph 4 and I'll note again that this8 is a pleading filed on behalf of UMC.9 A. Who is the debtor?

10 Q. The debtor is the Children's Hospital.11 A. Okay. I'm looking at the term "mismanagement12 of the Children's Hospital." I guess I'm looking at it13 from a couple of standpoints. Was there any14 mismanagement of funds? I would not -- I was -- I15 don't believe there was any nor has there ever been any16 mention in any of the auditors' reports performed by17 Children's Hospital auditors Moss Adams.18 Q. So as the CFO of UMC and as its designated19 representative today, you're not aware of any basis20 that would support the statement that UMC -- or that21 the Children's Hospital was financially mismanaged?22 A. I mean that's -- I mean that's why I asked for23 the definition of "mismanagement." Now, were there --24 could -- were there times that, okay, that their25 revenues were less than their expenses, could better

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1 Services being provided by UMC to EPCH.2 Do you see that?3 A. Yes, I do.4 Q. Have you seen this document before?5 A. No.6 Q. And I'll note that it's also dated at the top7 November 2012. Do you see that?8 A. Yes.9 Q. Do you know who might have prepared this

10 document?11 A. No, I do not.12 Q. Under the heading Scope of Services, it says:13 UMC will provide the following financial services.14 Do you see that?15 A. Yes.16 Q. The list is accounts payable, payroll, systems17 maintenance and reporting, asset management and18 reporting, miscellaneous billing and banking processes,19 net patient receivable reporting, budget process and20 reporting, interim and annual audits, auditing and21 miscellaneous. Do you see that?22 A. Yes, I do.23 Q. Were those the services that UMC was providing24 to the Children's Hospital in November of 2012?25 A. No, not in its entirety, because the contract



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1 had been changed October 1st of 2012.2 Q. Was UMC providing more or fewer services than3 those listed?4 A. As of what date?5 Q. November 2012.6 A. Less.7 Q. Which of these services should be removed?8 A. That I would not know the specific answers. I9 would know generally accounts payable.

10 Q. As being a service provided?11 A. Okay. Let me backtrack. The services that12 are being provided, payroll -- that may be the only13 one.14 Q. And for the next line it says: UMC will15 provide the following revenue cycle services.16 Do you see that?17 A. Yes, I do.18 Q. And of that list there which services has UMC19 provided to Children's Hospital?20 A. As of what date?21 Q. November 2012.22 A. I would not know the specifics of the revenue23 cycle services contract.24 (Exhibit marked, No. G.)25 Q. (By Mr. Sprouse) Mr. Nunez, you've been

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1 Q. So who signed this document on behalf of the2 Children's Hospital?3 A. It looks to be Lawrence Duncan, President and4 Chief Executive Officer. Approved as to Form by Legal5 Counsel appears to be Vogel, V-O-G-E-L, so I presume6 that to be Jill Vogel.7 Q. And I'll note that Ms. Vogel's signature is8 dated -- it looks like 4-11-13. Do you see that?9 A. Yes, I do.

10 Q. Who signed this on behalf of UMC?11 A. James N. Valenti, President and Chief12 Executive Officer. Approved as to Form by Edward Sosa,13 legal counsel for UMC, dated February 26, 2013.14 Q. And for UMC you recognize the Legal Counsel15 signature as being Mr. Sosa's?16 A. Yes, I do.17 Q. What was the purpose of this document?18 A. I'm not sure.19 Q. Were you involved in its drafting?20 A. No, I was not.21 Q. Were you involved in its negotiation?22 A. No, I don't believe so.23 Q. You said you had seen it before. Isn't that24 right?25 A. Yes.

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1 handed a document that's been marked as Exhibit G and2 it says Pledge and Security Agreement. Have you seen3 this document before?4 A. Yes.5 Q. Can you describe it for me, please.6 A. This is the pledge and security agreement7 dated -- it's blank -- made by El Paso Children's8 Hospital Corporation d/b/a El Paso Children's Hospital,9 a Texas private nonprofit corporation, to El Paso

10 County Hospital District d/b/a University Medical11 Center of El Paso.12 Q. Mr. Nunez, do you know what a Bates number is?13 A. No.14 Q. I'll direct you to the bottom right-hand15 corner. There's some letters and numbers, it says,16 "EPCH 07217." Do you see that?17 A. Yes, I do.18 Q. And I'll represent to you that's the Bates19 number of this document. And so this document is20 number 7217. Do you see that?21 A. Yes.22 Q. If you would turn with me to the page that's23 numbered 7224 and this appears to be the signature page24 of this document. Would you agree with that?25 A. Yes, it does appear to be that.

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1 Q. When have you seen it?2 A. Upon execution as a -- I think probably at a3 board meeting, at a UMC board meeting, as to the latest4 agreements that had been signed.5 Q. But it's your testimony you don't know what it6 does?7 A. That is correct. I can assume by the pledge8 and security agreement that it places some type of9 pledge and security on Children's, but that's my

10 assumption.11 Q. And at the time that this document was12 executed based upon the signatures and dates we just13 looked at, what was happening in the relationship14 between the Children's Hospital and UMC?15 A. Based upon the dates, February 2013,16 April 2013, would have been 12 months after the17 Children's Hospital opened, is Children's was in the18 process of meeting their required payment during19 fiscal -- of their fiscal year 2013 of 24 million and20 this just acknowledged probably the one year21 anniversary that they were in default on certain of the22 agreements.23 Q. And by "default," you mean they had missed24 some payments?25 A. They had missed some payments, yes.



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1 Q. Do you know why they missed the payments?2 A. No, I do not know why.3 Q. Earlier you testified about changes to the4 Medicaid cost-based reimbursements. Is that right?5 A. Yes.6 Q. Could that have affected the Children's7 Hospital's ability to make payments to UMC?8 A. It could have, possibly.9 Q. But you don't know today?

10 A. No, I don't know for certain.11 Q. Are you aware of any other reasons that the12 Children's Hospital could not pay its bills?13 A. Other than not having the cash to pay the14 bills, no.15 Q. And just to make sure the record's clear, are16 you aware of any reasons that the Children's Hospital17 didn't have the cash to pay its bills?18 A. I don't know any specific reason.19 Q. Generally do you know?20 A. No.21 Q. Does anyone at UMC know?22 A. That I would have no idea.23 Q. Mr. Nunez, do you know anything about an24 agreement on obligations between UMC and the Children's25 Hospital from February of 2013?

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1 schedule of payments for the period October '12 through2 September 30 of 2013 and then 2013 through 2015.3 It was going to now also put a -- yes, on4 the next page, page 4 -- a limit on the arrearage of5 60 million.6 Q. And you've testified that you provided some of7 the information that went into this document. Is that8 right?9 A. Yes.

10 Q. And did you also participate in the11 negotiations over this document?12 A. No, not in the negotiations.13 Q. You said that you were aware of some14 discussion over whether this document should be called15 a forbearance agreement.16 A. Yes.17 Q. What do you remember about that?18 A. That initially the document that was being --19 the draft that had been provided to El Paso Children's20 did have actually "Forbearance Agreement" on that, but21 Children's Hospital had objected to the wording on it22 and the wording "Agreement on Obligations" between both23 organizations was acceptable to both organizations.24 Q. So it's your recollection that Children's25 Hospital didn't want this to be called a forbearance

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1 A. Yes.2 Q. What do you know about it?3 A. I was asked to prepare it from UMC's legal4 counsel to provide amounts as to the amount of5 arrearages that El Paso Children's Hospital was at that6 point in time and to provide those amounts.7 (Exhibit marked, No. H.)8 Q. (By Mr. Sprouse) Mr. Nunez, I've handed you a9 document that's been marked as Exhibit H. Do you

10 recognize this?11 A. Yes, I do.12 Q. Can you describe it for me, please.13 A. It's a document called the Agreement on14 Obligations Between UMC and El Paso Children's Hospital15 that was effective February 1 of 2013.16 And I believe the purpose of this17 document was -- there was a lot of discussion about18 this, whether this was actually, quote, unquote, a19 forbearance agreement and after a lot of discussion on20 both organizations it was changed to this agreement on21 obligations.22 But it basically stated, from what I23 recall, was that because of the arrearages for the24 amounts owed, a new payment plan was going to be25 established. Yes, there was. It's on page 3 of 12,

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1 agreement?2 A. Yes, correct.3 Q. And UMC was willing to call it something other4 than a forbearance agreement?5 A. Yes, and thus the Agreement -- the term6 Agreement on Obligations.7 Q. So I presume at this time the Children's8 Hospital was not paying some obligations that UMC9 claimed that the Children's Hospital owed?

10 A. They were behind in their payments, yes.11 Q. Do you know why they were behind in their12 payments?13 A. No.14 Q. Was there any discussion on the UMC side as to15 why the Children's Hospital might be behind?16 A. Sure. We talked about it in terms of what17 could it be.18 Q. What kind of ideas did you have?19 A. Cash flow issues, just not getting enough20 revenues coming in, were there billing issues, those21 kind of observations.22 Q. Mr. Nunez, you were involved in the planning23 of the Children's Hospital before it opened as the CFO24 of UMC. Isn't that right?25 A. Yes.



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1 Q. And you had some understanding of how the2 Children's Hospital's financing and revenues was to3 work going forward.4 A. Yes.5 Q. And when the Children's Hospital and UMC6 entered into the agreements, including the lease7 agreement, in 2012, it was the expectation of UMC that8 the Children's Hospital would be able to pay those9 obligations.

10 A. Yes.11 Q. What changed between that point in time and12 the circumstances that gave rise to this document,13 Exhibit H?14 A. Can you rephrase that. What changed or --15 Q. You've testified that UMC entered into the16 agreements with the Children's Hospital with an17 expectation that the Children's Hospital would be able18 to pay those obligations.19 A. Yes.20 Q. And at this point in time represented by this21 document, Exhibit H, the Children's Hospital was not22 able to pay its obligations.23 A. Right.24 Q. So my question is what changed between25 February 2012 and February 2013 such that the

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1 up phase and as a result EPCH is presently unable to2 make payments to the District in full accordance within3 the terms of the covered agreements.4 Did I read that correctly?5 A. Yes.6 Q. Are you familiar with the changes in7 healthcare funding at the state and federal level that8 are referenced in this paragraph?9 A. Not specifically.

10 Q. Do you know generally what this refers to?11 A. It could be.12 Q. What is your understanding?13 A. My understanding is healthcare funding at the14 state level whether if it was Medicaid supplemental15 payments and/or the change of the reimbursement from16 cost-based reimbursement to what's called APDRGs.17 Q. Do you believe that that statement in Clause K18 refers to the changes you just testified to?19 A. I'm not certain as to what the clause is in20 paragraph K since I did not write this paragraph.21 Q. Are the statements in Clause K consistent with22 what you're -- strike that.23 Are the statements in Clause K consistent24 with your recollection of what was happening with25 respect to healthcare funding at the state and federal

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1 Children's Hospital could not pay its bills?2 A. What changed, I'm not sure. All I know on my3 side was that El Paso Children's had fallen behind on4 their scheduled payments to UMC.5 Q. So as the CFO of UMC all you know is the money6 is owed and it's not coming in.7 A. Per the agreements, yes.8 Q. You don't know why the money's not coming in?9 A. Correct. I was not an El Paso Children's

10 Hospital employee.11 Q. Have you actually read this document?12 A. I've read portions of it.13 Q. In 2013?14 A. I can't remember when specifically I read it.15 Q. Have you read it recently?16 A. No, not recently.17 Q. If you'll look with me on the second page of18 Exhibit H, Clause K. And I'll let you read that to19 yourself and if you would please let me know when20 you're finished reading it.21 A. Okay.22 Q. I'll read a portion of Clause K. It says:23 Significant changes in health care funding at the state24 and federal level have impacted the projected revenue25 generation and cash flow available to EPCH in its start

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1 level at the time?2 A. At the state level, not the federal level.3 Q. Do you believe those changes at the state4 level impacted the Children's Hospital revenue5 generation?6 A. The revenue generation from the period7 September 1 going forward -- September 1 of 2012 going8 forward, not for the months prior to September 1st of9 2012.

10 Q. But the Children's Hospital would have been11 impacted by those changes by February of 2013.12 Correct?13 A. Possibly so. And when you look at the average14 days standing -- outstanding in accounts receivable,15 September, October, November -- five months -- yes,16 possibly so.17 Q. Are you aware of any discussions at UMC around18 the time period of this document, Exhibit H, that19 suggested that there was mismanagement at the20 Children's Hospital?21 A. No.22 (Exhibit marked, No. I.)23 Q. (By Mr. Sprouse) Mr. Nunez, I've handed you a24 document that's been marked as Exhibit I. I'll25 represent to you that it's a financing statement that



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1 we had found on the Secretary of State's website. Have2 you seen this document before?3 A. No, this is the first time I've seen this4 document.5 Q. Are you familiar with financing statements of6 this type?7 A. UCC financing statements? Yes, I am familiar8 with them.9 Q. Do you know what the purpose of this document

10 is?11 A. No.12 Q. Do you know who the debtor identified on this13 document is?14 A. The debtor as it's defined here, El Paso15 Children's Hospital Corporation.16 Q. I'll note in the top right-hand corner there's17 a date of May 28, 2014. Do you see that?18 A. Yes, I do.19 Q. I'll represent to you that this document was20 filed on that date. Do you have any information about21 that?22 A. I'm sorry?23 Q. Did you know that it was filed on that date?24 A. No, I did not. Well, did I know it was filed25 on that date at that point in time? No. Subsequently,

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1 A. What was late May of 2014? The filing was2 according to here.3 Q. I understand --4 A. Yeah.5 Q. -- but you just talked about learning that the6 Children's Hospital may not be able to pay for the7 remainder of 2014.8 A. That was mid-April of 2014.9 Q. And you believe that that understanding by UMC

10 led to the filing of this document?11 A. I do not know that.12 Q. Do you see any connection between UMC's13 concerns over the Children's Hospital's ability to pay14 and the filing of this document?15 A. Possibly, but I do not know that for certain.16 Q. Do you have an understanding of what this17 document does?18 A. A general understanding.19 Q. What is your understanding?20 A. My understanding is that it placed a security21 interest in El Paso Children's. UMC had placed a22 security interest in El Paso Children's.23 Q. By virtue of this document?24 A. By virtue of filing of this document.25 Q. And what did the Children's Hospital receive

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1 based upon previous discussions over the last several2 months, I became aware of a filing that occurred in3 late May of 2014.4 Q. What was happening in the relationship between5 UMC and the Children's Hospital in May of 2014?6 A. In May of 2014? Okay. That was a time that7 David Mier, the chief financial officer, had left the8 El Paso Children's Hospital; Larry Duncan, the chief9 executive officer, had left El Paso Children's; Paul

10 Ocon, the chief nursing officer, had also left the11 organization.12 Ray Dziesinski was now the interim CEO in13 April of 2014, and upon a week being here, that's when14 he had mentioned to me -- or he had pulled me aside15 prior to a meeting and informed me that based upon his16 cash flow projections for El Paso Children's for the17 rest of 2014 and 2015, that he could not foreseeably18 see that El Paso Children's would be able to make a19 single payment to UMC for the remainder of 2014 and20 possibly into 2015.21 So the -- given that with the background,22 the concern of Children's Hospital's inability to pay23 UMC for the services we were providing, it became a24 very grave concern.25 Q. And that was in late May of 2014?

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1 in exchange?2 A. I don't know the answer to that.3 Q. Who would know?4 A. El Paso Children's Hospital members or their5 legal counsel. I do not know the answer to that6 question.7 Q. Mr. Nunez, can you find Exhibit G for me.8 A. Okay.9 Q. Exhibit G is the pledge and security

10 agreement. Do you see that?11 A. Yes.12 Q. And we've talked about the dates this was13 signed in 2013. Is that right?14 A. Yes.15 Q. And this Exhibit G was signed a year before16 Exhibit I was filed.17 A. Okay.18 Q. Do you know why there is that gap in time19 between the execution of Exhibit G and the filing of20 Exhibit I?21 A. No, I do not.22 Q. Who would know?23 A. I would ask Eddie Sosa, our chief legal24 counsel, and Bruce Yetter, our legal counsel.25 (Exhibit marked, No. J.)



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1 Q. (By Mr. Sprouse) Mr. Nunez, you've been2 handed a document marked as Exhibit J and it says at3 the top: Fiscal 2015 Proposed Operating and Capital4 Budget, Executive Summary and Budget Assumptions. Do5 you see that?6 A. Yes.7 Q. Do you recognize this document?8 A. Yes.9 Q. Can you describe it for me.

10 A. It's the UMC's consolidated executive summary11 that was given to UMC's board of managers and also to12 the commissioners court.13 Q. For what purpose?14 A. As part of our -- getting our annual 201515 operating and capital budget approved.16 Q. Who prepared this document?17 A. I prepared it with the assistance of my18 finance team.19 Q. Were you responsible for the preparation of20 this document?21 A. Yes, I guess overall, yes, I'm the chief22 financial officer.23 Q. When was it prepared?24 A. It was probably prepared late May, early June25 of 2014, as we were commencing our budget work sessions

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1 A. For University Medical Center, El Paso First2 Health Plans and University Medical Center Foundation,3 yes.4 Q. If you'll look at the bottom of the first5 page, three bullet points from the bottom, there's a6 reference to Unrestricted Cash Reserves. Do you see7 that?8 A. Yes, I do.9 Q. And it says there that the unrestricted cash

10 reserves are projected to be $34 million. Do you see11 that?12 A. Yes, I do.13 Q. And is that the amount of unrestricted cash14 reserve that UMC expected to have at the end of fiscal15 year 2015?16 A. If I may go back. Looking at this document,17 this document was probably a draft, but it's not the18 final version of our fiscal 2015 budget. This was19 probably an earlier draft.20 The reason I know that is the decrease in21 net position here is 11 million, but the final budgeted22 decrease in net position was approximately 16 million,23 so this is not the latest -- the final draft of the UMC24 2015 budget.25 Q. Fair enough.

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1 with both the board of managers and the commissioners2 court.3 Q. And there are references in this document to a4 fiscal year. Do you see those?5 A. Yes, fiscal year 2015.6 Q. So I presume "FY" means fiscal year.7 A. Fiscal year, yes.8 Q. What is the fiscal year for UMC?9 A. September 30th. It starts October 1 of each

10 year and ends the following September 30th.11 Q. Does the Children's Hospital have the same12 fiscal year?13 A. Yes, they do now.14 Q. And you say they do now?15 A. Yeah. They originally had a calendar year16 end.17 Q. When did they make the change?18 A. 2011 -- 2010, 2011 time frame.19 Q. Before it opened?20 A. I believe before it opened, yes.21 Q. So as long as the Children's Hospital's been22 open, it's been on the same fiscal year as UMC?23 A. That is correct.24 Q. And you said this is the consolidated budget.25 Is that right?

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1 With respect to unrestricted cash2 reserves in this draft, it shows a projection of3 $34 million. Do you see that?4 A. Yes, I do.5 Q. Was that the projection for the end of fiscal6 year 2015?7 A. At the time of this draft, when this was done,8 that was what it was projected to be at the end of9 fiscal 2015.

10 Q. In the final version of this document, what11 was the projected unrestricted cash reserve?12 A. I don't know. I'd have to go back to the13 final version.14 Q. Do you know if it was more or less than15 $34 million?16 A. I'm going to -- well, I don't know. I do not17 know. I'd have to go back to the final version.18 Q. Where can one find the final version of this19 document?20 A. This is on the UMC's website.21 Q. This draft is?22 A. No. The final version is on the UMC website23 as is our operating and capital budget.24 Q. With that reference to unrestricted cash25 reserves, what does "unrestricted" mean?



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1 A. The accounting terminology between restricted2 and unrestricted is if it's restricted, it's restricted3 for a specific purpose whether if it's for items to be4 used for the purchase of equipment and/or for a5 specific purpose like a clinical department.6 Unrestricted means that there are no restrictions at7 all, you can use the cash for equipment and/or8 operations.9 Let me give an example. Bond funds, that

10 has a restriction, so any bond proceeds are not11 included in this unrestricted cash reserve definition.12 Q. So I would presume that an unrestricted cash13 reserve is a good thing for a business entity to have.14 A. Sure.15 Q. And this shows at the time of this draft that16 UMC anticipated having an unrestricted cash reserve of17 $34 million?18 A. With this draft, yes.19 MS. BOYDSTON: Marvin, can I ask where20 you're going with this, because this wasn't included in21 the scope of the examination and a 2004 is only22 debtor's finances and this is all about UMC. It's not23 in the scope of the examination and the agreement with24 Jennifer and with Patty, we -- they agreed not to ask25 in the 2004 exam anything about UMC's financials.

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1 Q. Sure. For the tax revenue that's referenced2 here, was it expected that any of that tax assessment3 was being imposed to pay costs related to indigent4 pediatric care?5 A. To pay or give credit to El Paso Children's6 hospital for the indigent care, yes.7 Q. How much of that figure would have been8 designated for that purpose?9 A. Approximately one million.

10 Q. So was it the expectation of UMC that it would11 receive one million dollars in tax revenue for that12 purpose?13 A. As part of the overall tax revenue that we14 receive for indigent care, for providing indigent care15 for the El Paso County residents, yes, and then we use16 that as a -- not as a payment to El Paso Children's17 Hospital, but as a credit against their obligations18 that they owed UMC.19 Q. And how would that credit be documented?20 A. The credit? How that was documented was we21 knew that it was approximately one million dollars22 based upon the previous studies that we had done back23 in 2008 and 2009 and 2010, and then upon the submittal24 of detailed records by El Paso Children's Hospital in25 terms of the level of unreimbursed pediatric care, then

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1 MR. SPROUSE: Counsel, if you'll give me2 a few questions, I think I'll make that clear. There's3 quite a bit in here about the Children's Hospital. And4 you can renew your objection, certainly.5 Q. (By Mr. Sprouse) At the bottom of page 1,6 there's a reference to Property Tax Revenue. Do you7 see that?8 A. Yes.9 Q. And that relates to UMC's ability to raise

10 taxes as a taxing entity. Is that correct?11 A. That is correct.12 Q. Would any portion of that tax revenue be13 allocated to the Children's Hospital?14 A. Specifically for the Children's Hospital? The15 debt service that serviced the bonds for the Children's16 Hospital, that's an amount that's included in the17 interest and debt service portion of the tax rate.18 Q. Would any portion of that tax revenue go to19 the Children's Hospital for the funding of the20 Children's Hospital non-bond obligations?21 A. No.22 Q. Was any portion of that tax allocation23 provided to UMC based upon costs related to indigent24 pediatric care?25 A. What is the question again, please.

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1 that's when we would finalize what that final amount2 was.3 Q. Is that determination made as part of the tax4 assessment every year?5 A. No, not specifically.6 Q. So you --7 A. As part of the overall tax rate.8 Q. And of the revenues collected, then you would9 make a determination of how much could be allocated for

10 that purpose?11 A. Yeah, upon the submittal from El Paso12 Children's Hospital as to their unreimbursed indigent13 pediatric care.14 Q. And on an annual basis this tax is collected.15 Is that right?16 A. Yes.17 Q. And on an annual basis was a credit provided18 to the Children's Hospital based upon what you just19 testified to?20 A. To my recollection, yes. For the first -- for21 the first year, it would have been eight-twelfths of22 that amount -- or seven and a half months for its first23 year, 2012.24 Q. Prorated?25 A. Prorated. And then 2013, 2014 would be



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1 approximately a million dollars, but yet upon the2 submittal of data from El Paso Children's Hospital to3 UMC.4 Q. When you say data submitted by the Children's5 Hospital, what are you referring to?6 A. They were to provide a detailed level of7 pediatric care, no names needed to be included, just in8 terms of patient level detail that listed out, "Here9 are the services provided to pediatric indigents,

10 indigent patients, here is the cost related to11 providing that care, here are the payments received and12 here's the unreimbursed care."13 Q. Did Children's Hospital always provide UMC14 with the data that was necessary to make those15 determinations?16 A. No.17 Q. When did that not happen?18 A. At the end of the first year, 2012, September19 of 2012.20 Q. Did it happen in 2013?21 A. Yes. At the end of September 2013, no patient22 level -- no detail of the unreimbursed costs was23 provided.24 Q. So there was no credit?25 A. Not a credit -- we still kept the credit, we

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1 "With EPCH Reserve" and one says, "No EPCH Reserve."2 Do you see that?3 A. Yes, I do.4 Q. And for the column "With EPCH Reserve," we5 find again the figure of over $34 million. Do you see6 that?7 A. Yes, I do.8 Q. Is that the same $34 million figure that's9 referenced on the first page?

10 A. On this draft, yes.11 Q. So according to this draft and that chart, if12 the Children's Hospital paid nothing to UMC for fiscal13 '15, UMC would still have unrestricted cash reserves of14 over $34 million at the end of fiscal '15. Is that15 right?16 A. The consolidated operations of University17 Medical Center, to include El Paso First and the18 Foundation, would approximate 34 million.19 Q. And that's with no revenue from Children's20 Hospital?21 A. Not revenue, no cash payments.22 Q. No cash payments.23 A. From El Paso Children's.24 Q. Just so the record's clear, with no cash25 payments from the Children's Hospital in fiscal '15,

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1 just didn't know whether if it was going to be trued-up2 or trued-down.3 Q. Was the credit applied to any obligations owed4 by the Children's Hospital?5 A. It was applied -- it was applied against the6 unreimbursed costs that UMC provided for the pediatric7 residents that were serving El Paso Children's8 Hospital. Those two amounts, coincidently, were about9 a million dollars apiece.

10 Q. Have such credits been provided to the11 Children's Hospital subsequently?12 A. Subsequent to?13 Q. 2013.14 A. 2013. I believe so, but I'll have to go back15 and verify that for 2014.16 Q. Mr. Nunez, if you'll turn to the second page17 of Exhibit J, there's a chart at the bottom. And above18 that chart is a statement that says: Assuming El Paso19 Children's Hospital (El Paso Children's) would be able20 to pay for their leases and service agreements which21 approximate 28 million, below is an analysis of its22 impact.23 Do you see that?24 A. Yes, I do.25 Q. And there's two columns there. One says,

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1 according to this draft, UMC anticipated unrestricted2 cash reserves at the end of fiscal '15 of over3 $34 million?4 A. That is correct. That is still below the5 target of our double-A bond rating at that time.6 Q. If you'll turn with me to page 3, it says at7 the top "2015 Budget Uncertainties." Do you see that?8 A. Yes, I do.9 Q. Under El Paso Children's at the top, it says:

10 Service and lease-type agreements with the El Paso11 Children's approximate 28 million; however, no cash12 receipts from El Paso Children's are anticipated in13 2015.14 Do you see that?15 A. Yes.16 Q. Did you write that sentence?17 A. Yes.18 Q. When you prepared this draft, was it the19 expectation of UMC that it would receive no receipts,20 no cash receipts, from the Children's Hospital in21 fiscal year 2015?22 A. Yes, based upon Children's Hospital23 representation.24 Q. And it goes on to say that: As such, UMC is25 applying a 100 percent loss reserve on these service



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1 and lease-type agreements. Is that right?2 A. That is correct.3 Q. What does that mean, a 100 percent loss4 reserve?5 A. Meaning that although we would be, from an6 accounting perspective, accounting for the revenue, so7 that we can keep track of the amounts that are still8 currently owed by El Paso Children's from an accounting9 and auditor's perspective, we would be putting an

10 allowance of -- on the -- on the collectability of11 that -- of those services, meaning that of the12 $28 million in revenue, we didn't expect that we were13 going to receive any cash payments, so thus we had a14 100 percent reserve allowance in accounting terms.15 Q. So back to this unrestricted cash reserve16 number of over $34 million -- do you remember we talked17 about that?18 A. Uh-huh.19 Q. If, in fact, the Children's Hospital made any20 payments to UMC in fiscal year 2015, that would go to21 increase the unrestricted cash reserve figure that's22 identified in this document?23 A. It would increase the projected cash balance,24 yes.25 Q. So if the Children's Hospital paid UMC a

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1 A. Yes, I do.2 Q. And the first sentence says: Health and Human3 Services Commission (HHSC) has had challenges in timely4 implementing the waiver program and has delayed5 Medicaid supplemental payments in 2012, 2013 and 2014.6 Do you see that?7 A. Yes.8 Q. Do you know what that refers to?9 A. Yes.

10 Q. Can you explain it.11 A. Yes. In December of 2011, when Health and12 Human Services Commission did away with the former13 Upper Payment Limit Program, known as UPL, and went to14 the waiver -- the Section 1115 Waiver Program, there's15 two components to the waiver program. There's the16 Uncompensated Care pool and the Delivery System Reform17 Incentive Payment program pool, known as DSRIP. One's18 known as UC, the second one as DSRIP.19 HHSC had many administrative challenges20 in implementing the waiver program, so thus a lot of21 payments that were due to Texas hospitals beginning22 December of 2011 on through 2012 were delayed when, in23 fact, they were probably almost about a year behind in24 payment of these provider payments to all Texas25 hospitals.

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1 million dollars in fiscal '15, the projected2 unrestricted cash reserve would go up to $35 million?3 A. Based upon this draft, yes.4 Q. So any amounts that are paid would increase5 the unrestricted cash reserves of UMC as projected6 here?7 A. The projected cash balances, yes.8 Q. Since 2012, when the Children's Hospital9 opened, how much tax money has gone to the Children's

10 Hospital either as revenue or as a credit?11 A. Since 2012, approximately 800-and-some-12 thousand in 2012, then about a million each year13 subsequent to that.14 Q. So each year, it's been two full years15 subsequent to 2012?16 A. Yes, for 2013 and 2014.17 Q. So approximately $2.8 million?18 A. Approximately, yes.19 Q. Based upon what you know today, is the20 Children's Hospital due any additional tax revenue or21 credits?22 A. Not that I'm aware of, no.23 Q. If you look at page 3, on the bottom there's a24 heading that says, "Medicaid Transformation Waiver."25 Do you see that?

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1 Q. Has that had an impact on the revenue to UMC?2 A. Not on the revenue, but on the cash receipts,3 cash from Health and Human Services Commission.4 Q. So by virtue of the changes that are5 referenced in the sentence I just read to you, UMC has6 less cash receipts or fewer cash receipts?7 A. Yes. From the time and delays on payment from8 HHSC, yes, we will be having -- if HHSC had -- was back9 to its original schedule under the UPL program, our

10 cash balances probably would have been higher as well,11 as with any other Texas hospital.12 Q. Have the challenges referenced here from HHSC13 also affected the cash receipts at the Children's14 Hospital?15 A. Yes. Any Texas hospital.16 Q. Are those challenges in any way the fault of17 the Children's Hospital?18 A. No.19 Q. Who's responsible for those challenges?20 A. Well, address that with the Health and Human21 Services Commission.22 Q. Have these challenges that are referenced been23 significant for UMC?24 A. Yes.25 Q. Have they been significant for the Children's



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1 Hospital?2 A. Yes.3 Q. Have they impacted the Children's Hospital in4 its ability to pay UMC?5 A. Those challenges from HHS- -- rephrase that6 question again.7 Q. I'm going to read the sentence again so the8 record's clear. Okay?9 A. Yes.

10 Q. Health and Human Services Commission (HHSC)11 has had challenges in timely implementing the waiver12 program and has delayed Medicaid supplemental payments13 in 2012, 2013 and 2014.14 Did I read that correctly?15 A. Yes.16 Q. I believe it's your testimony that the17 challenges referenced in that sentence have impacted18 UMC.19 A. Yes.20 Q. And the challenges have also impacted the21 Children's Hospital?22 A. Yes, partially.23 Q. And my question is have the challenges that24 are represented by this statement also impacted the25 Children's Hospital in its ability to pay UMC?

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1 Q. And why was the certification not signed by2 the Children's Hospital?3 A. You would have to ask El Paso Children's4 personnel about that.5 Q. Do you believe that Children's Hospital lost6 revenue because it didn't sign these certain7 statements?8 A. Yes.9 Q. How much?

10 A. It was projected in -- I'm going to cross11 fiscal years here with HHSC years. The 2013 final12 payment from an HHSC perspective that would have been13 received by El Paso Children's in May of 2014 would14 have approximated eight million dollars.15 And then the same thing happened 1216 months later, just a couple of months ago, and we had17 projected that number to be about 12 million.18 Q. So that's eight million in 2013 and 12 million19 in 2014?20 A. Yes. And when I say "2013," I'll refer to21 what HHSC calls demonstration year. That's actually22 their 2012 -- their 2013 year, their 2014 year, but23 those payments were almost like one year in arrears.24 Q. So 2013 would have been related to 2012?25 A. Yes.

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1 A. Indirectly, yes, because of less cash2 receipts, but that's partly -- part of that is through3 HHSC, the payments related to the UC final payment for4 2013 and for 2014. That was not the -- the -- that was5 under Health and Human Services Commission. That was6 because El Paso Children's Hospital did not sign7 certain certification statements required by the8 program, then they did not -- they were not entitled to9 receive any uncompensated care dollars for 2013 and

10 2014.11 Q. Did you say that because the Children's12 Hospital did not sign certain statements, it did not13 receive uncompensated care revenues? Is that right?14 A. That is correct. There's some annual15 certification statements that had been previously16 signed by the prior CEO, Larry Duncan, and that's when17 El Paso Children's did receive uncompensated care18 payments for 2012 and the advance payment in 2013.19 But upon -- when the final payment for20 2013 was going to be distributed, since Larry Duncan21 had left, we had been advised as UMC being the22 sponsoring IGT entity, intergovernmental transfer23 entity, for El Paso Children's that the updated24 certification statements from the new CEO and/or the25 board be obtained.

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1 Q. And 2014 would have related to 2013?2 A. Yes.3 Q. Is there a deadline when those statements are4 required to be submitted?5 A. Yes.6 Q. What is the deadline?7 A. The deadlines vary upon when HHSC is going to8 make those final payments. So depending upon when9 they're done, they need to be submitted a couple of

10 weeks before the actual payments are done.11 Q. What was the deadline for 2014, if it's12 passed?13 A. The one that just happened?14 Q. Yes.15 A. The 2014 year to be paid in 2015? The date16 was, I think, early -- what they call the IGT date, the17 date that the sponsoring hospital provides the IGT,18 would have been around June 2nd, but those19 certification statements would have had to have been on20 file usually a couple of weeks before.21 Q. And it's your understanding that didn't22 happen?23 A. Correct.24 Q. And you said that UMC was the I- -- was the25 sponsoring --



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1 A. The sponsoring IGT entity, yes.2 Q. For Children's Hospital.3 A. Yes.4 Q. What does that mean?5 A. Meaning that we, as UMC, as we are a6 governmental hospital, under the Medicaid's7 supplemental programs, a governmental hospital can put8 up a funds transfer to the State on behalf of itself or9 a private hospital such as El Paso Children's, then the

10 State would take advantage of the -- what's called the11 Federal FMAP, Federal Medical Assistance Program,12 offered by the federal government. The match -- the13 money -- the IGT plus the match would then come back14 to -- you know, come back to the individual hospitals,15 whether in this case El Paso Children's or UMC, as part16 of a Medicaid Supplemental Program.17 Q. You've testified that the Children's Hospital18 would have been eligible for those revenues, but it now19 is not because it didn't timely submit certain20 statements. Is that right?21 A. That is correct.22 Q. You've also testified that you don't know why23 the statements were not submitted?24 A. Not specifically know why.25 Q. Do you generally know?

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1 when Children's had elected not to sign the2 certification statements, then us, as being the3 sponsoring entity, had to report to HHSC, "This is how4 much we are putting up on behalf of X hospital, Y5 hospital, Z hospital," and we put a zero beside El Paso6 Children's.7 Q. Somebody from HHSC called you and said, "Is8 that right?"9 A. They wanted just to validate that.

10 Q. When was that?11 A. It was the Friday before Memorial Day 2014.12 Q. And what about for this most recent year?13 A. This most recent year? There was a lot of14 questions going back between whether we were going to15 be the sponsoring IGT entity. We had every intent to16 do so, but then upon the bankruptcy filing on May 19th,17 then the decision was told to me that we were not going18 to be doing any IGTs in May of 2015.19 Q. Who told you that?20 A. Mr. Valenti.21 Q. That was his decision?22 A. That would have been -- that's what he23 communicated to me.24 Q. So you don't know whether or not the25 certifications would have been filed by Children's

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1 A. I have an idea based upon what I've heard is2 that El Paso Children's -- at that time Ray Dziesinski,3 who had just been on board for about two or three4 months after replacing Larry Duncan, he wasn't quite up5 to -- he wasn't aware of these Medicaid supplemental6 programs, so he felt uncomfortable in signing those7 certification statements.8 Q. Are they under oath?9 A. I'm not sure about that.

10 Q. And you're referring to Mr. Dziesinski?11 A. Yes.12 Q. Did he tell you those things?13 A. No, it was -- that was hearsay coming back to14 UMC. Because we had -- UMC had to then -- first off,15 the State had called me when I initially had responded16 that we were not going to be putting up any IGT monies17 on behalf of El Paso Children's, then they contacted me18 just wanting to verify that that was truly the case,19 and then at that point in time I had my Medicaid20 consultants and attorneys -- I gave them the message,21 then they followed up with Health and Human Services22 Commission attorneys as well.23 Q. Did you say that UMC is not sponsoring24 Children's Hospital and HHSC contacted you about that?25 A. We were going to be the sponsor, but we -- but

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1 Hospital this year for last year because UMC decided2 not to be the sponsor?3 A. No, not because we decided not to be the4 sponsor. We did not know whether the certification5 statements had been signed -- or I was unaware that the6 certification statements for this year, 2015, had been7 signed.8 Q. Did you make any inquiry about that?9 A. No.

10 Q. So help me understand what Mr. Valenti told11 you again about the IGT.12 A. For this year, for May of 2015, up until the13 last day that we had to decide, you know, he came and14 told me that it was decided that we would not be15 putting up the intergovernmental transfer for El Paso16 Children's nor was Texas Tech going to be putting up17 the IGT for El Paso Children's.18 Q. And that was because of the bankruptcy?19 A. He didn't specifically say that, I just -- I20 just presumed it was related to the bankruptcy filing.21 Q. If the Children's Hospital had wanted UMC to22 be the IGT sponsor this year, would UMC have done so23 despite the bankruptcy?24 A. Up until the bankruptcy we had a lot of25 discussions and it was our intent that we were going to



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1 IGT on behalf of El Paso Children's.2 Q. And the bankruptcy changed that?3 A. I don't know specifically that it changed4 that, I'm guessing it did. But I don't know that. I5 don't know how the final decision came to be.6 MS. BOYDSTON: Can we take a small break?7 MR. SPROUSE: Sure. Let's go off the8 record.9 (A recess was had.)

10 Q. (By Mr. Sprouse) Mr. Nunez, we're back on the11 record. I've got an exhibit here that's somewhat12 unwielding, but I'm sure we'll manage.13 (Exhibit marked, No. K.)14 Q. (By Mr. Sprouse) Mr. Nunez, you've been15 handed a document that's been marked as Exhibit K. Do16 you recognize this document?17 A. Not in the way that it's presented to me.18 Q. Can you explain?19 A. Yes, I can. The first page is a document that20 looks familiar to me based upon the date, September 18,21 2014, the signatures by Ray Dziesinski and myself on22 September 19th of 2014. That one page looks familiar.23 The second page, this 11 by 17 document,24 with the date up at the top updated September 22nd,25 2014, I believe that's the document that was referenced

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1 Q. Do you remember signing this document?2 A. This one page, yes, I do, but not in relation3 to this document that's presented that has an updated4 September 2nd, 2014, date.5 Q. Can you tell me what the signed document6 represents?7 A. The signed document represents -- if we had8 the correct 7306, for lack of a better word, it would9 represent the renegotiations that took place between

10 University Medical Center management and El Paso11 Children's Hospital management as it related to the12 service agreements, which would have been the items13 that are highlighted in green going to the lease14 agreement -- not the base rent, because that wasn't15 negotiated as part of Ray, myself, and Elias16 Armendariz, and then as well as under the IT agreement,17 the IT equipment that was bond funded.18 All the other sections that are19 highlighted in green are the renegotiations of the20 service agreements and the portions of the lease21 agreement that took place over about an eight-week22 period, so we could get these outlined for fiscal 2015.23 Q. So there's another version of this spreadsheet24 that does, in fact, relate to the first page of this25 exhibit?

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1 to -- it says updated September 18th of 2014. This2 says updated September 2nd of 2014. This may have been3 a draft, because we were going through various drafts4 since July.5 And then the third page, that doesn't6 look familiar to me.7 Q. And by "third page," just for the record,8 you're referencing the document with the Bates label of9 EPCH 07307. Is that right?

10 A. Yes, 7307 and 7308.11 Q. You don't recognize that.12 A. At least not in the context of this -- of13 this -- of 7012.14 Q. And 7012 says across the top, "Document15 Acknowledgment." Do you see that?16 A. Yes.17 Q. And I believe that's your signature there at18 the bottom. Is that right?19 A. Yes, that is correct, a facsimile of my20 signature.21 Q. And there's the signature for Mr. Dziesinski22 also.23 A. That is correct.24 Q. Both signed September 19th of 2014.25 A. Correct.

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1 A. Yes. If I remember correctly, there's one2 that's dated actually September 18th of 2014.3 Q. Where would we find that document?4 A. I believe I have a copy of it in my office.5 Q. Does it look similar to this one?6 A. It looks very similar, yeah, I just don't know7 the final amounts since, again, there were many8 revisions that were being --9 MR. SPROUSE: I'll make a request for a

10 copy of that document to counsel.11 MS. BOYDSTON: Okay.12 Q. (By Mr. Sprouse) Do you recall between this13 draft and the final version of the spreadsheet what14 might have changed?15 A. One of the last final items that was being16 talked about was the IT portion, which is under section17 5, the IT. Now, if this indicates that group of the18 2,955,000, that was probably -- there may have been one19 other item, but I don't recall, I just know that the20 final version was dated September 18th.21 Q. And you pointed out that there's some lines22 here that say "Bond Funded." What does that reference?23 A. Yes, these -- specifically item number 2,24 lease, on the base rent, which was bond funded, this25 gets back to the discussion on the base rent about the



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1 construction of the facility that was paid for by the2 bonds, and then there was also some IT equipment that3 was also paid for through the bonds.4 Now, these items here, the ones that are5 shaded in white, if you go down to the bottom, Pending6 Final Review and Agreement, these items were not7 negotiated by Ray Dziesinski, Elias Armendariz who is8 the chief operations officer at El Paso Children's, and9 myself, as these items were going to be deferred up to

10 both boards.11 So all the other items in green, even the12 utilities portion, the engineering portion, and13 security and guest service portion of the lease, we had14 agreed to terms, and then all the other items that are15 in green are the items that we had renegotiated and had16 come to an agreement to terms. But the items in white,17 these items were going to be deferred to both boards18 for final resolution.19 Q. So for fiscal '15, across the top of the page,20 do you see that?21 A. Yes.22 Q. There are two columns, one for expense basis23 and one for cash basis. Do you see that?24 A. Yes.25 Q. Can you explain the differences between

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1 in the event that there would be cash deferments on2 some of these payments, that's what that column was to3 represent.4 Q. Which one?5 A. The difference between cash basis and expense6 basis. But in this case since we had -- we had not7 negotiated or come to a final agreement, that's why the8 items were labeled in white, and the cash basis9 amounts, those are still yet to be determined.

10 Q. It appears to me for fiscal '15, if we look at11 the column with the green cells going down for expense12 basis, we have the same number in cash basis.13 A. Yes. For almost, I think, about 95 percent of14 them, yes.15 Q. Where do you see different figures?16 A. There's a different figure in -- under IT17 equipment, one time capital, those are monies that had18 been expended by UMC prior to the bond issue, about19 10.5 million. We were still going to follow the lease20 agreement from a Children's Hospital perspective from21 an expense basis and from a UMC perspective a revenue22 source, but yet there was -- we had agreed that there23 was going to be no payments in fiscal '15 for that one24 agreement.25 Q. Can you show me where that is on the page?

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1 expense basis and cash basis?2 A. In the context of this document, since we --3 since Ray -- Ray, Elias and I were not responsible for4 the portions of the base rent of the lease and the IT5 equipment that was bond funded, we wanted to recognize6 the difference between what is currently per the7 agreements, per all the signed agreements, where the8 base rent was approximately 11.6 million, but there had9 been no resolution or renegotiation of that expense

10 amount to any type of final cash -- cash payment.11 So those amounts were left blank as those12 items were going to be deferred to both organization13 board levels for final determination.14 Q. Let me make sir I'm understanding you. So for15 the column that's designated expense basis across this16 spreadsheet, that refers to what the various contracts17 provided.18 A. Yes, the signed agreements.19 Q. And for the columns that say cash basis, those20 reflect the adjusted figures that would be charged to21 the Children's Hospital based upon UMC's negotiations22 with the Children's Hospital?23 A. Not exactly. If in the event that there was a24 difference between the contracted amount that was in25 the current signed agreements to a final agreed upon,

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1 A. Yes. IT 2,366,000. It's the first -- I think2 it's the first line item under the IT block if you go3 to the left.4 Q. I do see that. And so where the cell in the5 column for cash basis, there's not a figure provided?6 A. Correct, because we had agreed to defer any7 payment -- any cash payment on that lease, although the8 lease amount is still applied.9 Q. By "deferment", you mean that the money's

10 still owed, but it can be paid later?11 A. Yes.12 Q. When would it be due?13 A. That was going to be determined later, but in14 the meantime our charge from both of our boards was to15 get renegotiated lease agreements for fiscal 2015. So16 that's -- I believe here that's the only one example17 where the -- if it's green, the difference between18 expense basis and cash basis; all the other ones, they19 were going to be the same.20 Q. And I see for medical equipment lease going21 across, it's also green, it does say bond funded, but22 for fiscal '15, it shows an amount of $1.3 million and23 then a blank under the cash column. Do you see that?24 A. Yes.25 Q. Does that also indicate a deferment or an



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1 agreement to defer?2 A. A deferment. Although there was an expense of3 1.3 million, a deferment of any cash payment for fiscal4 '15. And then the only two that were left open were5 going to be the IT equipment bond funded and the base6 rent bond funded.7 You know, let me go back and check to the8 final document that I have, but now I question on the9 medical equipment bond funded why that's green, because

10 the items that were bond funded should have been white.11 Maybe that was a change between the September 2nd12 printout to the September 18th.13 Q. And it's your testimony that if it's in white14 that meant that it was to be resolved by the respective15 boards?16 A. Yes.17 Q. And there's a final version of this document18 which doesn't have the white rows. Is that right?19 A. No. The -- there is a September -- I believe20 there's a September 18th document where there are the21 white rows for the bond funded and -- for the base rent22 bond funded, IT equipment bond funded. The only one23 that I question right now based upon this version is24 the medical equipment bond funded, because it was the25 intent of both parties, myself on the UMC side, Elias

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1 discussions.2 Q. For the final version of this spreadsheet, did3 anybody sign the actual spreadsheet?4 A. The actual -- no. When it was presented to me5 by Ray, when he came to my office, it was these two6 spreadsheets.7 Q. And for the items on the spreadsheet that were8 deferred, that was by agreement?9 A. That was by agreement between Ray, Elias

10 Armendariz, the chief -- El Paso Children's chief11 operations officer as well, and then myself, that was12 the agreement that we had.13 Q. Was it your testimony that there wasn't a due14 date for payment of the deferred amounts?15 A. No, that was going to be deferred to the board16 levels to decide.17 Q. For the base rent, was there ever an18 expectation that Children's Hospital would be able to19 pay the rent amounts based upon IGT revenues?20 A. Say that again.21 Q. Was it the understanding of UMC at any point22 that Children's Hospital would use the revenue from the23 IGT to pay the base rent?24 A. No.25 Q. What is El Paso Specialty Hospital?

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1 and Ray, is that anything related to the bond funded2 would be resolved by the boards.3 Q. Were those items resolved when you signed this4 document, Exhibit K?5 A. No, they were not resolved.6 Q. They were not resolved?7 A. Yeah.8 Q. So the final version of this spreadsheet9 that's in your office still reserves those categories

10 for later resolution?11 A. For later resolution. Those were to be12 resolved by both boards.13 Q. Were they resolved by the boards later?14 A. No, they were not.15 Q. So there was an open issue as to fiscal '1516 for those items?17 A. For the items pertaining to the bond funded18 amounts.19 Q. Which includes base rent?20 A. Base rent on the lease, IT equipment bond21 funded, and I'm also going to say the medical equipment22 that was bond funded.23 Q. What happened to those renegotiations between24 the boards on those issues?25 A. I do not recall. I was not part of those

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1 A. I honestly do not know.2 Q. Has UMC ever received any penalties related to3 hospital acquired conditions?4 A. Yes. This year in fiscal 2015, we did receive5 a penalty for hospital acquired condition.6 Q. What is a hospital acquired condition?7 A. As defined by the Center for Medicare and8 Medicaid Services, CMS, depending upon data -- quality9 data that is submitted by any hospital to CMS, if a

10 patient goes into a hospital with a primary diagnosis,11 then upon being at the hospital acquire another12 condition, then that is what's called a hospital13 acquired condition, and upon that, upon certain scores,14 then hospitals could receive a partial payment15 reduction, whether if it's a quarter of a percent or a16 half percent of their Medicare payments for the next17 year.18 Q. And that happened at UMC?19 A. Yes, this year for 2015.20 Q. Was the payment reduction significant?21 A. No, it was -- I classified it as immaterial.22 We receive approximately 25 million annually -- 25 to23 26 million annually from Medicare and it was going to24 be probably less than a couple of hundred thousand25 dollars.



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1 Q. Did UMC appeal the penalty?2 A. No, we did not.3 Q. When will CMS make its next determination on4 that issue with respect to UMC?5 A. There is quality data that is submitted6 annually. I believe that's in the process of being7 submitted -- well, it's already been submitted because8 the payment provisions that will be coming in for now9 fiscal 2016 is based upon data from two years ago.

10 So the data's already been submitted, the11 determination of that will usually come in the fall of12 the calendar year, for example, perhaps August,13 September time frame.14 Q. Are you aware of whether the Children's15 Hospital has ever been so penalized?16 A. I do not believe so, but they do not care for17 Medicare patients, they're primarily Medicaid.18 Q. Mr. Nunez, I'm going to read to you a19 statement and I want you to tell me if you've ever20 heard this before.21 A. Okay.22 Q. (Reading) Of the nearly $45 million Thomason23 received each year in property taxes, 3.9 million will24 be earmarked for operation of the Children's Hospital,25 which also will receive nearly eight million in other

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1 one year no more than one million dollars a year in2 actual unreimbursed pediatric care as it pertained to3 pediatric indigents.4 Q. So you determined that the $3.9 million figure5 was inaccurate after the Children's Hospital was6 approved by the election?7 A. Yes, subsequent I could not find support as to8 how the original $3.9 million -- how that was9 calculated, since I was not involved initially with the

10 '07 feasibility study.11 Q. Did you contact Kurt Salmon about that number?12 A. No, I did not.13 Q. Did you talk to anybody else about it?14 A. Internally within UMC, Mr. Valenti, Ron Acton15 who was at that time probably still on the UMC board,16 Steve DeGroat who was on the UMC board, and we were17 just trying to figure out where did this number come18 from.19 So rather than try to go back and20 recreate '07 data, we just went to, "Let's go back and21 use more recent data to see what the actual costs of --22 unreimbursed costs of providing pediatric indigent care23 was."24 Q. What was Mr. DeGroat's involvement in the25 planning for Children's Hospital?

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1 nonoperating revenues.2 Have you heard that statement before?3 A. I've heard of that statement when I became CFO4 in 2010.5 Q. Do you know where it came from?6 A. It supposedly came from the feasibility study7 done by -- the 2007 feasibility study.8 Q. Do you disagree with the notion that $3.99 million would be earmarked for the operation of the

10 Children's Hospital?11 A. Yes.12 Q. Why?13 A. Because based upon when -- when I came in as14 the role of the chief financial officer and we -- when15 Larry Duncan was on-site as the CEO from Children's16 Hospital, a group of us had elected to update the 200717 feasibility study as it related to the Children's pro18 formas and at that point in time as we were updating19 the Children's pro formas in 2010, when they came20 across this $3.9 million number and I questioned what21 it was, it was told to me it was supposed to represent22 the cost of pediatric indigent care, but that's when we23 went back and I had instructed my finance team,24 particularly the director of decisions support, to run25 three years' worth of data, we could only find in any

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1 A. Can you define the time frame?2 Q. Prior to its opening.3 A. A little bit more specifically.4 Q. Before 2012.5 A. He was not involved in the planning. At the6 detail level, when I'm talking about the planning,7 about the designing of the construction documents, the8 implementation of the clinical systems, the financial9 systems. His involvement prior to was more at the

10 onset with the bond election, the 2006, 2007 time11 frame.12 Q. What has Mr. DeGroat's involvement with the13 Children's Hospital been subsequent to its opening in14 2012?15 A. To my recollection, I don't think he's been16 directly involved.17 Q. Mr. Nunez, are you aware that in recent days18 it's been in the media that UMC has canceled elective19 and nonemergency surgeries?20 A. Yes, I am aware.21 Q. What does that pertain to?22 A. That pertains to the recent Joint Commission23 survey that was performed at University Medical Center24 approximately ten days ago.25 Q. You said Joint Commission. What does that



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1 mean?2 A. They are the accrediting body that works on3 behalf of the Center for Medicare and Medicaid4 Services, CMS, to ensure the hospitals follow quality5 standards.6 Q. Did the Joint Commission determine that UMC7 had not followed those standards or met those8 standards?9 A. Yes, there were some areas where they had come

10 up to that preliminary indication, thus the preliminary11 wording that's being used on their report.12 Q. And what areas were those?13 A. To my recollection, the area was in what's14 called our SPD or sterile processing -- I don't know15 what the "D" stands for -- our SPD area.16 Q. What is UMC going to do about the Joint17 Commission's findings?18 A. Immediately after that Friday -- can I look at19 my calendar?20 THE WITNESS: Do you have a calendar?21 A. I believe it was Friday, February 10th, the22 Joint Commission was here. Immediately, Mr. Valenti23 telephoned a couple of agencies, HHSC as well as CMS24 immediately after Joint Commission had left the25 premises on that Friday afternoon and he had already

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1 finish that due diligence phase, so the final decision2 had not been decided.3 Q. So to answer my question you would say that4 UMC would first have to complete some due diligence5 before it would know if it was qualified to take over6 the Children's Hospital?7 A. Qualified to take over the Children's Hospital8 or to assess as to whether to seek to complete the9 financial due diligence, legal due diligence,

10 compliance due diligence on matters as they pertain to11 El Paso Children's.12 Q. And those three things you just ticked off13 have not yet occurred?14 A. They had started, we were in the process of15 doing that, but that did not get finished.16 Q. Mr. Nunez, if UMC were to take over the17 Children's Hospital, what impact would that have on the18 pediatric specialists' and subspecialists' willingness19 to stay in El Paso?20 A. Are you asking my opinion or --21 Q. Yes, your opinion.22 A. My opinion -- and again this is based upon23 discussions I've had even with some of the Children's24 Hospital personnel -- is that there probably would be25 perhaps some subspecialists that would not want to

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1 updated them in terms of what was happening.2 They, those two agencies, had not yet3 received Joint Commission's report, but he was also4 indicating to them our plan of action was going to be5 meeting with the medical school, Texas Tech, meeting6 with the physicians and putting an aggressive plan of7 action to begin immediately the following Monday by8 hiring outside consultants and help so that we could9 remedy what was the current situation.

10 Q. Did the problems determined by the Joint11 Commission pertain to the Children's Hospital?12 A. Not that I'm aware of, no.13 Q. Are you aware of any assistance that's been14 rendered to UMC by the Children's Hospital since the15 Joint Commission findings have been published?16 A. I read in the newspaper there was some17 assistance by the Children's Hospital -- one of the18 Children's Hospital's departments to UMC.19 Q. Do you believe that UMC is qualified to take20 over the Children's Hospital?21 A. Take over from what perspective? I'm not22 sure.23 Q. Take over control.24 A. Without completion of the due diligence phase25 that UMC had started a couple of months ago, we did not

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1 stay, but it was his feeling and one of the physician's2 feelings that for the most part a lot of them would3 stay.4 Q. Who did you talk to about that issue?5 A. Elias Armendariz, the chief operations officer6 with El Paso Children's, and then also Dr. Jorge Saenz,7 he's one of the PICU doctors at El Paso Children's.8 Q. So it's your testimony that if UMC took over9 the Children's Hospital some pediatric physicians might

10 leave El Paso and some might stay?11 A. Yeah, based upon what they told me. I mean12 they have more of a direct working knowledge of the13 physicians than I do.14 Q. And that would be Mr. Armendariz?15 A. Mr. Armendariz and Dr. Saenz.16 Q. Anybody else you've talked to about that17 issue?18 A. No.19 (Exhibit marked, No. L.)20 Q. (By Mr. Sprouse) Mr. Nunez, you've been21 handed a document, I believe it's marked as Exhibit L.22 Is that correct?23 A. Yes, Exhibit L.24 Q. And it appears to be a memo to the board of25 managers of UMC from John Guggedahl, vice chair. Do



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1 you see that?2 A. Yes, I do.3 Q. Do you know Mr. Guggedahl?4 A. Yes, I do.5 Q. What was he the vice chair of?6 A. He was the vice chair of the board, of the7 board of directors of El Paso Children's, but he was8 also the chair of the finance committee.9 Q. Who was on the finance committee?

10 A. To my recollection, it was Dr. Guggedahl; Mary11 Lou Camerena; there's a board member, I only know him12 by board member last name Ochoa; there's another board13 member, I don't recall what his name was. There was14 probably about five or six board members that were on15 the finance committee as well as myself.16 Q. And this is the finance company of which17 entity?18 A. Of El Paso Children's.19 Q. So you were on the finance committee of El20 Paso Children's Hospital?21 A. Yes, I was.22 Q. Are you still on that committee?23 A. Perhaps technically, yes, but I haven't been24 invited to a meeting since last August.25 Q. What was the function of the finance

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1 Q. Just you?2 A. Yes.3 Q. Have you seen this memo before?4 A. No, I have not.5 Q. Turn to the last page. There's a subsection6 b. There's a reference to the feasibility study and it7 references the assumption that the Children's Hospital8 would receive Disproportionate Share Hospital payments.9 Do you see that?

10 A. Yes, I do.11 Q. I think you had a different term for12 Disproportionate Share Hospital payments. What was13 your term?14 A. I think I was using UPL, Upper Payment Limit.15 Q. Is that the same thing?16 A. The Upper Payment Limit program -- the17 disproportionate share payments do come from the Upper18 Payment Limit calculations.19 Q. Have you heard them referred to as DSH20 payments?21 A. DSH payments, yes.22 Q. There's a statement there that: The DSH23 payments program was changed in 2012, resulting in24 approximately nine million dollars less annually than25 was estimated in the feasibility study. Do you see

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1 committee?2 A. To review the results of operations, of3 financial statements, of El Paso Children's as they4 were being presented.5 Q. Were you representing UMC on that committee?6 A. No, not necessarily. I was representing7 myself as being a board member. Although I was a UMC8 CFO, I was on there as -- to provide assistance or9 input to the El Paso Children's Hospital finance

10 committee.11 Q. You testified that you may still be on the12 committee, but you're not active?13 A. Correct. I'm not sure if I've been officially14 removed, I just know I haven't been invited to a15 meeting since last August.16 Q. You did attend a meeting of the finance17 committee last August?18 A. Up through last August time frame, yes.19 Q. And when did you go on to that committee?20 A. I went on to the committee about the time that21 I became CFO in 2010.22 Q. Of the people that you just mentioned who are23 on the finance committee, which other ones of them are24 associated with UMC?25 A. None of them.

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1 that?2 A. I see that, yes.3 Q. Are you aware of the changes that are4 referenced in that paragraph to the DSH program?5 A. Not specifically aware of the specific rule6 changes, but we were aware as to the impact of the DSH7 payments going to El Paso Children's Hospital. In fact8 that was one of the -- that was one of the items as we9 were -- going back to the 2010 pro formas, when the

10 group of us, Larry, myself and four or five others, we11 were updating the 2007 feasibility studies that pertain12 to Children's, that was one of the items that we had13 changed in the 2010 pro formas noting that it was going14 to be the hospital's third year before they would be15 fully eligible to receive disproportion share payments,16 because the payments that are used in year three are17 based upon year one's data.18 So El Paso Children's first year of19 operations of 2012, they would become eligible for DSH20 payments in 2014. So it's always two years behind.21 So that was one of the items -- as we22 updated the Children's pro formas, that was one of the23 items that we updated on the 2010 pro formas and had24 shared that with the Children's board members at a25 board retreat.



222

1 Q. As you updated the 2010 pro formas, were you2 aware that there would be changes to the DSH program3 made in 2012?4 A. There were -- yes, there were changes being5 made as well as the two year delay. So that's when we6 had -- we had engaged the assistance of Medicaid7 consultants to help us come up with what would be the8 new revised DSH payments as Children's would be9 eligible to receive in 2014.

10 Q. So in 2010 you knew about the changes that are11 referenced in this paragraph?12 A. I knew, again, not of the specific changes,13 but based upon what our consultants had given us as to14 what the dollar impact would be.15 Q. In the next paragraph there's a reference to16 the Upper Payment Limit, which I think you mentioned17 before.18 A. Uh-huh.19 Q. Do you remember that?20 A. Yes.21 Q. And it also says: The UPL program was changed22 in 2012. At the bottom it says: This change resulted23 in a downward variance from the feasibility study24 estimates of approximately $10 million annually.25 Do you see that?

224

1 I don't remember the specific dollars,2 but the movement to the waiver program did,3 unfortunately, hurt El Paso Children's because they4 could not fully participate in the DSRIP pool.5 Q. And when you revised the pro formas in 2010,6 were you aware of those changes?7 A. Not specifically the waiver program because8 that came about in December of 2011.9 Q. Were there any adjustments made upon the

10 agreements based upon those changes?11 A. Which agreements?12 Q. The agreements between UMC and Children's13 Hospital for the lease and other services?14 A. Oh. No, they were not.15 Q. This morning you testified as to changes to16 the cost-based reimbursement for Texas Medicaid. Do17 you remember that?18 A. Yes.19 Q. If you look at the top of this page, there's a20 paragraph that states that those changes resulted in a21 downward variance from the feasibility study of22 approximately $30 million annually. Do you see that?23 A. I see that.24 Q. Have you seen that figure before?25 A. No, I have not.

223

1 A. Yes, I do.2 Q. Do you agree with that assessment?3 A. As to the dollar amount, I'm not sure, as to4 the dollar amount specifically, but I do agree with the5 statement the UPL program was changed in 2012, although6 it was specifically December of 2011, with the Medicaid7 Section 1115 Waiver Program, yes.8 And how that impacted El Paso Children's9 is that the second pool -- the second payment pool, the

10 DSRIP, Delivery System Reform Incentive Payment pool,11 that unfortunately discriminated against new hospitals12 at that time because there was no data.13 As hospitals were applying for these14 DSRIP projects to be approved by Health and Human15 Services Commission, there was no data or no projects16 that El Paso Children's could actually apply for17 because they were a new hospital. They had no baseline18 metrics to apply for.19 So in this case the DSRIP program -- I20 believe it was one of our Medicaid consultants, either21 their -- Children's Medicaid consultant or our Medicaid22 consultant that made the comment about if Children's23 had been around, if you compare DSRIP revenue per bed24 of a children's hospital, El Paso Children's Hospital25 was very small whereas the others were very large.

225

1 Q. Have you seen any figures that relate to the2 costs of those changes?3 A. The numbers that have been represented to me4 by David Mier, the chief financial officer, as he was5 doing a study as to the change in cost-based6 reimbursement to the -- what's called the APDRGs, I7 remember a figure he had given me, but it was like in8 the two and a half million dollar range.9 Q. Not 30 million?

10 A. Not $30 million.11 Q. But you haven't assessed that yourself?12 A. No, I have not. This was based upon his13 assessment, his consultation with people from the14 Medicaid system.15 Q. Did you say APDRG?16 A. APDRGs.17 Q. What does that stand for?18 A. I'm not sure. I think it's All Patient19 Diagnosis Related Group.20 Q. And how does that fit in this with situation?21 A. Well, this is -- this was a new payment22 methodology for each Medicaid patient. They were going23 from cost-based reimbursement now to this other type of24 reimbursement per each Medicaid claim.25 Q. And that was the APDRG?



226

1 A. That's the APDRG system.2 Q. Which was new?3 A. Which was new, yes.4 Q. And it was new in 2013?5 A. I want to say for the children's hospital6 industry, I believe it began September 1 of 2012, which7 was the state fiscal year 2013.8 MR. SPROUSE: Let's go off the record.9 (A recess was had.)

10 Q. (By Mr. Sprouse) Mr. Nunez, we're back on the11 record. I know that you're the CFO of UMC. Isn't that12 right?13 A. Yes.14 Q. And today you gave answers to my questions as15 the designated corporate representative for UMC. Is16 that right?17 A. Yes.18 Q. And you're also Michael Nunez an individual.19 Right?20 A. Yes.21 Q. Would you as an individual have answered any22 of the questions I've asked today differently?23 A. I'm sorry?24 Q. Would you as Michael Nunez, the individual,25 have answered my questions any differently?

228

1 CHANGES AND SIGNATURE2 PAGE LINE CHANGE REASON FOR CHANGE3456789

101112131415 I, MICHAEL LAWRENCE NUNEZ, have read the foregoing16 deposition and hereby affix my signature that same is17 true and correct, except as noted herein.1819 ___________________________

MICHAEL LAWRENCE NUNEZ20

SUBSCRIBED AND SWORN TO before me this the21

_________ day of __________________, 2015.22

SEAL:23

___________________________24 NOTARY PUBLIC

EXPIRES:___________________25

227

1 A. Oh. No, no.2 MR. SPROUSE: I'll pass the witness.3 MS. BOYDSTON: I have no questions.4 (The deposition concluded at 4:29 p.m.)56789

10111213141516171819202122232425

229

1 CERTIFICATION23 I, the officer before whom the foregoing4 deposition was taken, do hereby certify that I5 personally recorded the testimony of the witness whose6 testimony appears in the foregoing deposition; that7 said deposition is a true record of the testimony given8 by said witness; that I am neither attorney for,9 related to, nor employed by any of the parties to the

10 action in which this deposition is taken, and that I am11 not a relative or employee of any attorney employed by12 the parties hereto, or financially interested in the13 action.141516

Teri C. Finnegan17 Certificate No. 2911

Expires: 12-31-201518 Firm No. 73419202122232425

Nunez, Michael L. 07-20-2015 Page 1 of 49

RASBERRY & ASSOCIATES CERTIFIED COURT REPORTERS420 EAST SANANTONIO SECOND FLOOR EL PASO, TEXAS 79901 (915) 533-1199

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2007 15:5 58:21 59:167:2279:1,2,3,4,8,13,2480:3,4,1282:1,21,22 86:2389:4 211:7,16213:10 221:11

2008 15:5 59:7,2065:4 84:18 86:2489:7,20 90:21,2391:1 93:2 180:23

2009 59:7,20 65:582:6 93:2 180:23

2009-2010 73:212010 16:5 58:22,2559:1,7,20,2560:1,4,21 61:2562:13 64:7,25 65:168:1 73:19 76:2482:6 92:22 93:9,1494:23,25 95:1 97:1598:1 175:18 180:23211:4,19 219:21221:9,13,23222:1,10 224:5

2010-2011 73:21



2011 16:6 69:20104:9 175:18188:11,22 223:6224:8

2012 3:16 49:2159:15 65:1670:15,16,17,1871:6,11 72:25 73:1177:1 78:2 81:2489:23 95:22 100:20104:11110:11,13,18,19112:2 127:11 138:12157:7,24 158:1,5,21166:7,25 169:7,9181:23 182:18,19187:8,11,12,15188:5,22 190:13191:18 192:22,24213:4,14 220:23221:19 222:3,22223:5 226:6

2013 112:9 160:13161:15,16,19 162:25163:15 164:2 166:25167:13 169:11173:13 181:25182:20,21 183:13,14187:16 188:5 190:13191:4,9,18,20192:11,18,20,22,24193:1 226:4,7

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19:19,20 21:7 22:423:2,5,6,7,824:18,21,22,2525:2,10,12,13,1426:1,7,11,12,13,15,19,2227:2,6,9,15,16,2428:1,9,13,25 29:2130:8,10,12,13,15,18,20,22,23 38:840:19 49:12 52:1154:6 62:14,1864:7,23,24 84:1791:23 92:15,17,1893:2,4,10,12,15,16,24 94:7,10,21,2595:12,14,16,23,2496:1,2,5,7,9,14,18,21 97:1,3,4,9,22111:8,9,11144:17,19,20,24145:17,20 153:2,18161:3 174:11 175:1191:25 195:3 203:13208:15 212:15,16217:24218:6,7,11,12,14219:7 221:24,25

boards 111:15202:10,17 205:14206:15207:2,12,13,24

body 19:18 214:2bond 79:22 83:1587:19 88:4,21,24,2589:4,7,10,14,17,2090:18 91:4,5,1892:7,25 117:16122:6 178:9,10185:5 200:17201:22,24 203:5204:18 205:21206:5,6,9,10,21,22,24 207:1,17,20,22213:10

bond-funded 102:9bonds 83:12,17 86:24



87:1,5,10,12,15,1890:2,6,7,11,20,21,22,23 91:1,9,13179:15 202:2,3

bonus 29:15,18 30:5bonuses 31:4book 128:16books 63:24borne 86:25bottom 159:14176:4,5 179:5183:17 187:23199:18 202:5 222:22

Boydston 2:8 3:58:14,19 10:24178:19 198:6 201:11227:3

break 120:8 122:13135:7 198:6

breakout 135:6bricks 87:11,15,1788:9,11 89:11

bring 107:18broke 88:4broken 136:10 148:5Brother 23:7 24:2325:9 96:16

brought 71:8 98:3Bruce 24:7 104:24120:11 173:24

buckets 115:4budget 3:22 16:2121:17,18 29:1240:2,4,2341:4,8,10,18,20,22,25 42:10,13,1943:13,15,19 44:6,2245:1,4,10,14,1646:7,12 47:848:13,18,21 91:18157:19 174:4,15,25175:24 176:18,24

177:23 185:7budgeted 176:21budgets 16:21 45:6,9building 18:8,1731:13 32:3,8,1833:8 34:23 85:7,887:16 88:2389:5,23,24 101:17124:8

buildings 18:11built 18:14,16bullet 176:5burden 55:12,16,1857:2 59:18

business 15:2 178:13bylaws 105:20

Ccalculated 212:9calculations 220:18calendar 175:15210:12 214:19,20

Camerena 93:19218:11

campaign 83:5campaigns 145:4campus 36:2384:11,20,2285:6,12,15,24 86:12102:22 140:12

canceled 213:18candidates 98:2capacity 98:19capital 3:21 16:2121:18 174:3,15177:23 204:17

caption 8:23 154:11cardiac 61:12cards 126:4care 48:6 51:1,4

53:1955:9,12,15,17,2057:2,6,8,1858:3,7,24 59:860:20 61:6,9,1364:9 66:20,23,25123:25 167:23179:24180:4,6,14,25181:13 182:7,11,12188:16 191:9,13,17210:16 211:22212:2,22

career 14:12CarePlus 54:19Carlos 19:25case 1:6 8:23 10:511:10 39:4 74:21,2381:15 121:3 127:8137:12 147:8150:10,14,23 151:12152:1,15 155:5194:15 195:18 204:6223:19

cases 76:19 113:10134:15 152:12

cash 3:7,9 7:2539:6,21,2440:1,7,11,14,22,2542:19,2143:1,5,20,2244:2,9,11,15 45:1147:3,9 49:4,9 71:1972:1 162:13,17165:19 167:25171:16 176:6,9,13177:1,11,24178:7,11,12,16184:13,21,22,24185:2,11,20186:13,15,21,23187:2,5,7189:2,3,6,10,13191:1 202:23203:1,10,19204:1,5,8,12205:5,7,18,23 206:3



Castillo 93:19categories 207:9Cathy 25:23cause 75:25caused 67:19 70:6CE0 95:10ceased 65:7cell 205:4cells 204:11center 2:7 3:3,11,184:1 8:1,13 9:1,1414:21,23 16:17,1919:9,10,11 21:1125:15 36:21 37:169:22 85:21 91:592:9,10 102:5103:12 116:11117:23 144:6 145:1146:4,5 147:1159:11 176:1,2184:17 200:10 209:7213:23 214:3

centers 18:22,25central 19:11centralized 85:14123:13

CEO 8:12 18:1 25:2026:10 27:8 62:2395:1,2,9,1197:12,1498:11,12,1699:12,15,23100:1,4,5 144:25171:12 191:16,24211:15

ceremony 50:4,7certain 7:23 30:342:14 70:2275:3,18,19 78:7,9110:12 111:6 121:5129:5,14 130:12137:4 151:1 161:21162:10 168:19

172:15 191:7,12192:6 194:19 209:13

certainly 47:2464:16 121:23 179:4

Certificate 2:25229:17

certification191:7,15,24 192:1193:19 195:7 196:2197:4,6 229:1

certifications 12:22129:23 196:25

certified 5:212:23,24 13:5,10,13

certify 229:4cetera 16:23 63:1188:15 108:18 118:24120:25 133:6 141:24

CFO 15:2216:1,4,5,7,9,1117:6,7,18,24 42:343:18 47:25 48:3,460:19 94:22 95:296:23 98:22 99:6116:4,24 147:24148:1 151:2 155:18165:23 167:5 211:3219:8,21 226:11

chair 4:225:2,3,4,5,6,730:20 93:16,1794:10 96:5 217:25218:5,6,8

chairman 23:5 24:22challenges 188:3,19189:12,16,19,22190:5,11,17,20,23

change 15:4,9 127:10168:15 175:17206:11 222:22 225:5228:2

changed 15:6 81:24156:17 158:1 163:20166:11,14,24 167:2

198:2,3 201:14220:23 221:13222:21 223:5

changes 2:2467:20,2368:3,7,9,12,13,18,20,21,22,2469:6,12,13 70:4,671:5 72:2473:3,7,10,14,15,2474:4,7,1175:1,6,13,21,2576:4,6,10 77:4 78:182:2,7 109:24 162:3167:23 168:6,18169:3,11 189:4221:3,6222:2,4,10,12224:6,10,15,20225:2 228:1

Chapter 1:5 151:25152:3,7,8,14

charge 20:6 62:4117:18 120:19124:17 127:18205:14

charged 108:5,20,24140:17 203:20

chargemaster128:10,11,15,16,21129:1,3

charges 57:25 128:20140:22

charity 54:1,16,17chart 183:17,18184:11

check 110:21 206:7chief 8:8 9:18 11:1525:20,21,22,24,2540:17 58:19 94:297:20 99:1 100:3104:1,17,23 124:16160:4,11 171:7,8,10173:23 174:21 202:8208:10 211:14 217:5



225:4child 123:25children 61:15children's 1:6,122:2 3:9,19 5:8,108:1 10:1,7,1011:11,17,18 18:1822:14,17 23:2231:2432:2,4,6,9,15,17,18,24,2533:4,6,8,11,12,15,17,19,2434:4,7,15,16,22,2535:6,7,13,16,2336:5,10,12,15,16,1937:2,5,11,18,2438:3,4,5,739:4,21,2440:1,6,10,14,2542:1943:5,8,13,19,22,2344:2,9,11,15,1945:7 46:13,15 47:349:3,7,8,2050:11,13,16,18,19,2151:8,9,13,17,20,2452:2,5,9,16,2353:2,10,11,14,18,2454:2355:3,7,11,14,2556:2,4,7,10,13,18,23 57:1,5,7,1758:6,20 59:14,1761:5,12,1862:1,5,12,18 63:1364:2,4,13,17,2165:3,7,13,16,18,2466:1,6,17,2067:4,19,2168:4,9,14,16,2169:3,4,12,1770:1,3,6,10,11,12,18,23 71:1,9,1872:4,5,14,23 73:174:2076:2,8,11,13,21,23

77:6,8,13 78:6,1079:18 80:1,5,10,2281:4 82:2483:6,13,18,2184:10,21,2585:4,9,11,18,21,2586:14,2087:2,5,9,11,14,1888:9,16,1889:3,5,8,13,16,22,24 90:8,16,17,2091:2,3,5,7,1192:4,13,14,1893:3,12,14,2494:4,10,21,2595:3,13,16,2496:7,9,17,2197:1,4,9,13,2298:11,12,16,20,2199:2,3,23 100:19101:3,18102:7,11,15103:1,11104:2,5,10,15,21105:14,18,23,25106:2,8,15107:5,9,10,19108:6,20,25109:16,24 110:5,16111:2,10,19112:4,13,14113:9,15,20,25114:2,8,10,15,16,19,22,24115:1,16,18,25116:12,15,21117:2,4,8,18 118:1119:5,11,22 121:3122:14,18,23,25123:3,6,8,11,19124:2,5,7125:7,11,21126:10,25127:2,4,5,7,13128:5,7,14129:2,12,18130:9,14,16131:3,5,6,11,15132:23

134:6,10,11,18,24135:3,14,17,24136:15,18,21,24137:2,4,7,14,18,25138:7,8,10,19139:2,7,8,10,24140:5,8,14,18,20141:7 142:10,17,23143:11 144:1,16,23145:9 146:17,22,24147:3,4,9,16148:22,24,25149:8,9,11,12,16,23150:2 152:20,23153:5,8,11,16154:1,10,19,23155:2,10,12,17,21156:7,9,14 157:24158:19 159:7,8160:2 161:9,14,17162:6,12,16,24163:5,14164:19,21,24165:7,9,15,23166:2,5,8,16,17,21167:1,3,9169:4,10,20 170:15171:5,8,9,16,18,22172:6,13,21,22,25173:4 175:11,21179:3,13,14,15,19,20 180:5,16,24181:12,18182:2,4,13183:4,7,11,19184:12,19,23,25185:9,11,12,20,22186:8,19,25187:8,9,20189:13,17,25190:3,21,25191:6,11,17,23192:2,3,5,13194:2,9,15,17195:2,17,24196:1,6,25197:16,17,21 198:1200:11 202:8203:21,22 204:20



208:10,18,22210:14,24211:10,15,17,19212:5,25 213:13215:11,14,17,18,20216:6,7,11,17,23217:6,7,9218:7,18,20 219:3,9220:7221:7,12,18,22,24222:8223:8,16,21,22,24224:3,12 226:5

circulated 23:12circumstances 166:12city 18:23 61:16145:5

civil 1:13 6:7claim 147:9,12,15,25148:4,13,18151:9,11,16 225:24

claimed 165:9claims 152:11 153:25154:2,4

clarify 30:12classified 209:21clause 167:18,22168:17,19,21,23

clean 124:25cleaning 124:23clear 56:21 90:6162:15 179:2 184:24190:8

clinic 19:11clinical 66:23,2586:5 118:2 132:12133:5 142:9 143:6144:11 178:5 213:8

clinician 66:22clinics 18:23,2419:1,4,13 150:5

close 59:13 87:20

CMS 69:22 209:8,9210:3 214:4,23

Cobos 82:17Cobre 12:8code 42:18 52:20128:18

codes 127:19,20coequal 20:13coincidently 183:8collateral 3:7 39:640:22 42:21 47:9

collect 51:12collectability186:10

collected 181:8,14collections 72:1college 12:10,1214:10,11

column 184:4 203:15204:2,11 205:5,23

columns 183:25202:22 203:19

combination 49:11combined 34:6,2036:18,21,23

comes 30:4 135:1148:1

coming 17:15 28:764:7,23 69:15 73:1485:16 100:3 143:22165:20 167:6,8195:13 210:8

commenced 70:16commencing 174:25comment 223:22comments 66:14 121:9122:12

Commission 69:2173:23 142:11143:20,23 188:3,12

189:3,21 190:10191:5 195:22213:22,25214:6,22,24215:11,15 223:15

commissioner 19:2520:1 21:10 29:982:17,18

commissioners 16:2319:16,18,20,22,2320:3,6,10,1621:6,15,2422:4,11,24 27:1729:3 79:21 80:1682:12,23 91:24,25174:12 175:1

Commission's 214:17215:3

committee 3:1626:16,1830:9,14,15,17 98:21218:8,9,15,19,22219:1,5,10,12,17,19,20,23

common 35:4,5,7 36:1communicated 196:23communication11:14,17,22 12:2,3

community 146:20commute 5:20companies 16:2557:23 58:271:15,20,25 127:21143:4

company 14:13,17141:2 143:20 218:16

compare 223:23compared 63:10117:21

compensation30:8,14,15,17

complete 45:23117:19 128:3



216:4,8completely 138:13completion 14:11215:24

compliance 25:2426:17 216:10

component 63:13 78:3102:8 117:14

components 102:1103:15 107:17108:24 112:18115:11 188:15

computer 131:19,20133:8

computers 102:14concentrate 118:2concept 117:10118:20

concern 171:22,24concerns 172:13conclude 49:2concluded 227:4condition 67:6121:10,13,18,22,24209:5,6,12,13

conditions 209:3conducted 78:10Congress 2:4connected 32:19,20connection 172:12considered 78:4,5100:5

consistent 168:21,23consists 127:17consolidated 17:5174:10 175:24184:16

constituent 147:25construct

83:12,18,21 89:2constructed 88:1989:14

construction 86:1787:8 88:12,13,16,2289:1590:2,8,13,17,1991:2,6,11 202:1213:7

consult 115:18consultant 223:21,22consultants 195:20215:8 222:7,13223:20

consultation 97:24225:13

consultative 143:16consulted 40:20143:20

consulting 100:4150:7

consumer 60:24contact 21:23 98:15152:18,22 212:11

contacted 195:17,24contained 47:21contains 33:14 101:6contemplated 74:22content 112:19,23contested 111:2context 199:12 203:2contiguous 32:11,13continue 6:22 65:15142:18

continuing 13:11,17continuously 14:7contract 71:15113:4,18,22114:14,21115:8,10,12,13,19

120:2 127:24 128:2134:14 141:17,19143:24 146:12151:22,24 157:25158:23

contracted 3:24 58:1113:24 125:13134:11 135:20 136:2146:4,10 203:24

contracting 62:24contractors 90:3contracts 58:171:9,24 77:11116:6,10,13,17117:21 119:18132:16 134:2,5,9137:5,8,10 203:16

contractual 103:5109:3 148:8

contributions 144:3control 153:7,16215:23

controller15:12,14,15 104:24150:22

copy 201:4,10corner 40:24 47:2159:15 170:16

corporate 3:3 9:1,1015:12,13,15 150:22226:15

corporation 1:6 5:853:10 65:13 159:8,9170:15

correct 16:3 21:524:12 30:2333:2,13,16 35:1836:11,14 37:12 38:144:6,7,24 45:546:20,2148:15,19,22 55:2256:6 57:8,16 58:960:12 61:17 72:673:12 75:17,23 76:5



85:2 88:10 92:696:12 100:22 105:15108:23 114:17116:1,22 118:7119:13,17 122:3,19130:21 132:20134:15 136:12137:11 141:10148:11 156:5 161:7165:2 167:9 169:12175:23 179:10,11185:4 186:2 191:14193:23 194:21199:19,23,25 200:8205:6 217:22 219:13228:17

correctly 104:4154:21 168:4 190:14201:1

correspondence120:21

cost 63:12 64:177:10 107:21,23108:2 109:14,15113:24 114:11182:10 211:22

cost-based 69:4,1670:12 71:5 73:1075:13 76:10 77:578:1 81:22,23 82:3162:4 168:16 224:16225:5,23

costing 107:4 108:3112:24

cost-reimbursed 69:9costs 57:8,12,13,2158:23 59:8,1560:3,13,21 63:776:20,2286:17,22,2487:2,13,1488:12,13,16 89:1590:2,8,19 102:6107:8 108:5,13,21109:3,6,8,12,14110:7 114:7 117:20149:19 179:23 180:3

182:22 183:6212:21,22 225:2

counsel 3:13 5:87:13 8:7,9 9:810:16,20 11:4,1512:4 24:1,3,5,1340:17 46:16 49:1253:9 104:5,25105:10,12,13106:16,18,19 110:22148:21 160:5,13,14163:4 173:5,24179:1 201:10

county 2:7 3:2,11,218:25 15:2,1619:16,18,22,23,2420:3,6,2021:9,15,16 23:1624:10 53:25 80:1582:11,17 90:25105:4,5 145:5159:10 180:15

couple 13:6 22:1523:5 41:5 64:885:22 111:4,10117:24 130:15155:13 192:16193:9,20 209:24214:23 215:25

court 1:1 2:25 5:26:17,24 16:2319:17,18,20,22,2320:4,7,10,11,16,2121:3,6,15,17,19,20,22,24 22:4,9,11,2423:20 27:17 29:3,939:4 40:7 42:1856:16 79:21 80:1681:1182:12,15,19,23 83:491:24,25 120:22149:4 174:12 175:2

cover 108:13covered 14:15 168:3Cox 93:19CPA 13:16,25

14:2,4,5,7,16create 117:10created 92:19,21128:24

creating 117:17creation 93:2credit180:5,17,19,20181:17 182:24,25183:3 187:10

creditor 151:12,13creditors 67:9credits 183:10187:21

criminal 6:10CRO 97:19cross 192:10Cruces 5:19,23 12:1314:22

CSR 1:25current 14:22 24:2125:1 27:2228:2,3,12 51:1552:9 59:21 203:25215:9

currently 19:4,521:9 74:2 114:18186:8 203:6

cut 86:7cutting 50:8cycle 3:15 48:8127:15,16,17,22128:4,6,14 129:6156:25 158:15,23

Cynthia 93:20 95:7

Dd/b/a 2:7 3:3,119:1,14 159:8,10

Dallas 2:10 61:8



Dan 82:17data 54:14,1559:15,20,24 133:4182:2,4,14 209:8,9210:5,9 211:25212:20,21 221:17223:12,15

data's 210:10date 18:16 49:2550:12,14,16 76:2579:2 90:12 109:11111:21 127:12158:4,20170:17,20,23,25193:15,16,17198:20,24 200:4208:14

dated 3:5 4:2 11:5157:6 159:7160:8,13 201:2,20

dates 19:7 110:22161:12,15 173:12

David 20:1 21:1098:22 104:17 171:7225:4

day 5:20 65:10 118:6137:20 196:11197:13 228:21

days 41:6 169:14213:17,24

De 95:5deadline 193:3,6,11deadlines 193:7deal 51:4debt 90:24 91:19,22179:15,17

debtor 1:7 3:13 5:9151:13 154:20155:9,10 170:12,14

Debtor-In-Possession3:12

debtor's 3:2 8:24178:22

December 69:20109:11 188:11,22223:6 224:8

decide 197:13 208:16decided 82:23197:1,3,14 216:2

decision 59:6 84:997:21 98:10 106:7196:17,21 198:5216:1

decisions 211:24declared 154:20156:10,15

decrease 176:20,22decreased 60:14decreases 69:9dedicated 37:24138:22 142:13145:23

default 161:21,23defer 205:6 206:1deferment 205:9,25206:2,3

deferments 204:1deferred 202:9,17203:12 208:8,14,15

define 53:21,2260:17 106:17 125:23132:9 155:4 213:1

defined 51:5 62:6170:14 209:7

definitely 124:16138:18

definition 52:13142:4 155:23 178:11

degree 12:15,17,20degrees 12:19,21DeGroat 23:6 24:2225:5 28:9 212:16

DeGroat's 212:24

213:12delay 222:5delayed 188:4,22190:12

delays 189:7delivery 34:2 188:16223:10

Deloitte150:7,12,18,20,23,25 151:3,5

demonstration 192:21department 29:831:19 48:6,7 51:156:11,20,23102:24,25 103:18107:25 118:18123:21 127:16,17128:17 129:20139:12,20 140:25143:1,2 178:5

departments 48:9,11118:21,22,23,24142:9,10 215:18

depending 73:20133:14 193:8 209:8

deposed 6:3deposition 1:11 6:17:10 8:5,10 227:4228:16 229:4,6,7,10

describe 13:15 16:821:13 103:16 159:5163:12 174:9

described 35:4 74:2589:11 146:18

description 3:1127:18

design 34:7 88:15designated 9:1037:19,21 38:2155:18 180:8 203:15226:15

designed 123:15



designing 213:7desperate 154:18despite 71:20 197:23destroy 11:15,18detail 182:8,22213:6

detailed 41:20,2142:7 128:13 180:24182:6

determination 84:13181:3,9 203:13210:3,11

determinations182:15

determine 43:8 58:13214:6

determined 29:745:21 84:15 115:20140:22 204:9 205:13212:4 215:10

determines 29:5develop 45:18developed 44:2565:20 67:10 152:14

developing 65:1976:23

development 3:1626:17 88:15

devices 102:13,14131:20,21

diagnosis 209:10225:19

diagnostic 103:3,6dialogue 72:22110:2,8

Diamond 14:19dietary 118:10125:9,10,18,20

difference 108:4203:6,24 204:5205:17

differences 202:25different 14:25 61:266:15 67:22 86:10105:2 109:4 115:4117:19 122:9 131:13146:1 148:3204:15,16 220:11

differently226:22,25

difficult 139:15dignitaries 50:8diligence 11:19215:24 216:1,4,9,10

direct 159:14 217:12direction 122:9directly 24:1127:6,8 29:11 34:2535:1,2,11,13 54:1355:25 56:2 105:2114:16 116:10134:12 144:4 213:16

director 17:9 59:662:24 120:17 135:4139:10 211:24

directors 52:1192:15,17 93:3 97:22144:19 153:2,25218:7

disagree 121:21211:8

disbursements 41:14discharged 56:1285:17

discrete 137:17discriminated 223:11discuss 22:17 42:25discussed 74:1986:19

discussing 107:15discussion 48:2582:5 163:17,19164:14 165:14

201:25discussions 123:18152:17 169:17 171:1197:25 208:1 216:23

disproportion 221:15disproportionate220:8,12,17

dispute 45:3 48:20disputed 111:2disseminated 26:22disseminates 120:25dissolution 73:25distinction 136:13distributed 191:20District 1:1,2 2:73:3,11,21 8:25 9:1415:2,17 159:10168:2

division 1:3 17:23dock 123:12,13,16doctors 64:10,1266:3,7 67:1 217:7

document 3:23 8:229:5 11:3 39:2,1340:3 44:19 46:2447:14,17,20 100:24101:6 151:11154:8,14 156:24157:4,10159:1,3,19,24160:1,17 161:11163:9,13,17164:7,11,14,18166:12,21 167:11169:18,24170:2,4,9,13,19172:10,14,17,23,24174:2,7,16,20 175:3176:16,17 177:10,19186:22198:15,16,19,23,25199:8,14200:1,3,5,7



201:3,10 203:2206:8,17,20 207:4217:21

documented 180:19,20documents 7:1911:9,12,15,18,23,24213:7

dollar 58:12 60:877:9 222:14 223:3,4225:8

dollars 52:259:11,19 60:9,10180:11,21 182:1183:9 187:1 191:9192:14 209:25 212:1220:24 224:1

donation 146:24147:4

donations 144:11145:2,24 146:16

done 17:21 30:241:7,21,24 44:550:18 53:15 58:1780:9 97:24 112:12119:10,21 125:16128:13 130:20132:19 156:1,2177:7 180:22193:9,10 197:22211:7

doors 49:20double-A 185:5downward 222:23224:21

Dr 62:15,16 93:1795:5,6 217:6,15218:10

draft 164:19176:17,19,23177:2,7,21178:15,18 184:10,11185:1,18 187:3199:3 201:13

drafting 106:25

107:2 160:19drafts 111:18,22199:3

draw 65:25DSH 220:19,21,22221:4,6,19 222:2,8

DSRIP 188:17,18223:10,14,19,23224:4

due 11:19 67:6149:17 187:20188:21 205:12208:13 215:24216:1,4,9,10

Duncan 58:19 62:2,463:9 64:23,24 93:897:14,21 98:4104:4,16 160:3171:8 191:16,20195:4 211:15

during 11:19,2091:17 105:10,18,22106:19 117:15161:18

duties 15:13,1516:9,10 145:16

duty 11:9 96:13139:13

Dziesinski 97:1698:8,11,16,23 99:12112:13 171:12195:2,10 198:21199:21 202:7

Eearlier 84:24 87:492:3 110:20 141:22146:18 162:3 176:19

early 61:25 62:1365:4 76:24 99:5,6174:24 193:16

earmarked 210:24211:9

easier 85:15

east 19:10 85:8economies 118:25Eddie 173:23education13:11,17,20142:7,8,16

Edward 8:8 24:725:22 104:1,22105:5 160:12

effect 69:25effective 163:15effort 62:3,1163:5,14,17 64:4,1779:20 150:18

efforts 62:10,2165:2,14,15 86:18

eight 18:24 70:13192:14,18 210:25

eighth 31:9eight-month 104:9eight-twelfths181:21

eight-week 200:21either 125:11135:19,25 136:6187:10 223:20

El 1:3,6,12,15 2:2,73:2,3,9,11,18,19,214:1 5:8,20,238:1,25 9:1,13,1411:16,18 14:2315:1,16,20 16:1817:3,6 18:6,7 22:1732:16 34:6 36:437:2,18 38:4 40:2543:22,23 44:11,1847:3 50:11,15,18,2153:9,23,25 55:1456:2,10,13,1757:7,17 58:2061:12,19,25 62:5,1864:20 65:12,18,2366:13,16 71:8,18



72:23 74:1976:1,21,23 77:878:5 80:22 83:1285:18 90:24 91:593:3,12 94:3 95:396:9 97:4,9,12,2298:12,20 101:3,18102:7,10,15 103:11104:5,21 105:25107:10,19 110:5111:10 112:13,14113:24114:2,10,16,22116:12,14 117:18118:1 121:19,20123:5 124:5 127:6128:6,13 129:18130:13 134:10139:10 142:10144:7,16 145:1146:5,22 147:2149:10 153:11159:7,8,9,11163:5,14 164:19167:3,9 170:14171:8,9,16,18172:21,22 173:4176:1180:5,15,16,24181:11 182:2183:7,18,19184:17,23185:9,10,12 186:8191:6,17,23192:3,13 194:9,15195:2,17 196:5197:15,17 198:1200:10 202:8208:10,25 216:11,19217:6,7,10218:7,18,19 219:3,9221:7,18223:8,16,24 224:3

elected 196:1 211:16election 20:5 79:2283:4,8,9,10,1186:23 89:4 92:25212:6 213:10

elective 213:18electric 140:2electricity 141:2,5elevator 85:22elevators 32:2235:1,7,8,10,12,14,20

Elias 112:13 200:15202:7 203:3 206:25208:9 217:5

eligible 29:15 30:5194:18 221:15,19222:9

else 7:16 8:2,430:18 31:1333:8,17,23 40:1843:11 62:11 63:292:16 96:2099:10,11 105:9150:20,23 212:13217:16

elsewhere 61:13e-mail 2:5,11 136:15138:22,24 139:8,14

e-mails 138:19 139:3emergency 31:1855:20,22 56:3123:20,21,25 124:1

employ 3:13 154:10employed 24:11229:9,11

employee 105:25167:10 229:11

employees 37:3,4,5107:6 119:2,4125:4,5 126:5,12,13127:5 128:14 129:18130:2146:4,6,7,10,15

employing 54:24employment 9:2394:22

enable 45:23engaged 9:24 222:6engineering 202:12ensure 15:16 214:4ensuring 127:19143:4

entail 120:18enter 113:14entered 39:3 70:1971:10 76:7 100:18110:11 166:6,15

entering 72:19 73:476:12 77:6

entire 22:24 38:14entirety 79:14157:25

entitled 191:8entity 51:2492:4,11,12 105:2178:13 179:10191:22,23 194:1196:3,15 218:17

entrance 36:7,9,13124:1

entrances 34:835:22,24 36:2,3124:4

environmental 86:6118:10 141:21142:2,6

EPCH 157:1 159:16167:25 168:1184:1,4 199:9

EPCH/Status 3:15equipment 87:16,2189:18,21101:12,21,22,25102:2,3,4,9 103:16130:22,24131:2,5,10,14,17,18,23,25 132:3,5133:8 144:12 145:7



148:7 178:4,7200:17 202:2 203:5204:17 205:20206:5,9,22,24207:20,21

equivalent 17:8,17Erickson 14:19Escobar 19:24 20:2021:1,9 82:18,21

essentially 154:20establish 128:19established 29:2153:3 54:10 57:25128:19 163:25

estimate 74:8,10estimated 59:8 74:1575:10,11,12 76:3220:25

estimates 74:12,1675:2 107:21,24222:24

et 16:23 63:10 88:15108:18 118:24120:25 133:6 141:24

evaluate 30:9evaluated 41:17evaluates 30:7,13evaluation 30:2event 38:22 85:16138:21 146:13203:23 204:1

exact 17:16exactly 203:23exam 13:7,8 178:25examination 2:22 3:25:4 8:25 178:21,23

example 51:2377:4,14 86:18102:24 108:15 112:6113:17,21 118:14119:10 141:1143:17,19 178:9

205:16 210:12examples 114:4exams 13:7,9exceed 27:23 59:12excellent 66:24except 228:17exchange 173:1exclusive 151:22,24exclusively 137:18exclusivity151:19,23,25

Excuse 147:21executed110:1,14,16,20161:12

execution 161:2173:19

executive 3:14,2222:16,19 23:1,2124:2,14 25:2558:19,20 94:8,14100:3 104:17 156:25160:4,12 171:9174:4,10

executives 29:5exemption 105:19exhaustive 112:11exhibit 3:1 8:20,2211:1,3 38:25 39:240:22 44:2246:22,24 47:9 48:14154:6,8 155:6156:22,24 158:24159:1 163:7,9166:13,21 167:18169:18,22,24173:7,9,15,16,19,20,25 174:2 183:17198:11,13,15 200:25207:4 217:19,21,23

existence 93:10,13ex-officio 93:20

94:3,5,6,20,2495:2,4,7,14,15,2096:6,8,18,20 97:10144:25

expect 186:12expectation 72:1377:17,18 149:6,9,22150:1 166:7,17180:10 185:19208:18

expected 60:2 148:23176:14 180:2

expended 204:18expense 117:25 156:1202:22 203:1,9,15204:5,11,21 205:18206:2

expenses 67:12,14126:17 155:25

Expires 228:24229:17

explain 26:9 188:10198:18 202:25

extent 55:13 65:17

Ffacilities 38:10124:17 131:24132:1,4,6

facility 18:14 37:1372:8 77:15 89:1101:12,15 123:15,24141:3 148:6 202:1

facsimile 199:19fact 50:19 74:794:18 186:19 188:23200:24 221:7

factors 67:18fair 45:3 70:2 132:2133:7 136:12 176:25

fall 210:11fallen 167:3



familiar 10:1 100:24120:14 150:7,12168:6 170:5,7198:20,22 199:6

family 99:21fault 68:9 189:16feasibility 58:2159:2 67:2278:9,16,19,23,2579:4,5,8,13,2480:4,12,1881:3,16,1982:1,8,12211:6,7,17 212:10220:6,25 221:11222:23 224:21

February 49:20 65:1671:11 76:25 100:20104:10 110:18,19160:13 161:15162:25 163:15166:25 169:11214:21

federal 1:13 52:1953:25 54:9,11,21,22167:24 168:7,25169:2 194:11,12

fee108:8,11,13,19,22109:19,20,21 149:20

feeling 80:21 217:1feelings 217:2fees 88:15 148:12,17felt 195:6Fernandez 24:24fewer 158:2 189:6figure 60:8 147:17180:7 184:5,8186:21 204:16 205:5212:4,17 224:24225:7

figures 203:20204:15 225:1

file 151:9 152:11193:20

filed 67:4,5 92:24147:14 151:11 152:7154:9 155:8170:20,23,24 173:16196:25

filing 45:11 46:13105:19 154:17 171:2172:1,10,14,24173:19 196:16197:20

fill 100:4 139:11filled 96:2final 3:8 30:4 39:774:9 84:19111:2,6,16,18176:18,21,23177:10,13,17,18,22181:1 191:3,19192:11 193:8 198:5201:7,13,15,20202:6,18203:10,13,25 204:7206:8,17 207:8208:2 216:1

finalization 110:24finalize 181:1finally 111:12finance 13:9 17:926:16 48:8 59:5102:24 112:2,3118:15 174:18211:23218:8,9,15,16,19,25219:9,16,23

finances 17:20122:19 178:22

financial 9:18 12:2513:3,20 15:16,19,2016:12,16 17:2,521:21 25:21 26:1529:24 46:16 48:767:6 81:4,12,1486:5 94:2 99:1

104:18 112:5 113:1121:10,13,18,22,24126:16,17 127:6132:13 133:5 136:18138:1,10 148:2150:15 153:10157:13 171:7 174:22211:14 213:8 216:9219:3 225:4

financially 68:581:2 155:21 156:7229:12

financials 178:25financing 3:20 166:2169:25 170:5,7

findings 214:17215:15

fine 6:21 8:18 9:16finish 6:25 216:1finished 167:20216:15

Finnegan 1:25 229:16firm 11:4 14:17,18105:17,21 150:8229:18

firms 106:23first 15:20 16:1817:3,6 29:20 31:1632:14 37:1938:16,22 44:2245:10 46:12 48:2258:19 70:13 89:297:14 120:10 155:6156:11 170:3176:1,4181:20,21,22 182:18184:9,17 188:2195:14 198:19200:24 205:1,2216:4 221:18

fiscal 3:14,21 70:17156:25 161:19 174:3175:4,5,6,7,8,12,22176:14,18 177:5,9184:12,14,25



185:2,21 186:20187:1 192:11 200:22202:19 204:10,23205:15,22 206:3207:15 209:4 210:9226:7

fit 225:20Fitch's 122:6five 28:7 32:11,1433:20 36:22 38:2,960:9,14 89:2108:7,10,12,19109:20,21 169:15218:14 221:10

fix 138:25floor 1:15 31:9,1633:6 35:2 37:1938:17,18,19,22,23,24

floors 31:19,2032:10,11,14,16,2533:19 35:9,11,12,1336:22 37:21 85:2289:2,7 124:23132:12 141:23 142:9143:6

Flores 104:23 107:3150:21

flow 43:22 45:1151:24 71:19 165:19167:25 171:16

flowed 91:8FMAP 194:11follow-up 120:9forbearance 163:19164:15,20,25 165:4

forecast 3:10 40:2541:11 43:22,2445:12 47:3

forecasts 47:11foregoing 228:15229:3,6

foreseeably 171:17

forgot 8:15form 83:15 139:11160:4,12

forma 77:20,21formally 56:12formas 58:2260:1,2,4 68:2 73:1974:6 77:19211:18,19221:9,13,22,23222:1 224:5

formed 47:20 48:17former 96:5 188:12formerly 56:24 96:10formula 135:10forth 54:12 70:2272:15,17 77:9,14110:3,8,25 143:3149:13,14

forthcoming 73:1574:11

forward 42:20 82:24166:3 169:7,8

Foundation 16:1917:4,17,20144:7,9,10,17,19,21,24145:1,2,8,11,14,18,21146:2,5,7,10,11,12,16,25 147:2,6 176:2184:18

foundations 146:20frame 15:5 19:1228:14 65:5 72:173:20 82:6 84:1886:16 106:1 175:18210:13 213:1,11219:18

Friday 196:11214:18,21,25

front 46:25 143:21

FTEs 108:2 109:2FTE's 107:6Fulbright 2:9 7:1710:21 24:15

fulfill 98:23,25full 5:13 38:2257:24 79:15 168:2187:14

fully 89:2590:1,7,17 221:15224:4

function 17:825:13,14 57:19125:13 137:16,17142:21 143:8 145:8150:13 218:25

functions 26:7102:21 112:6 126:22127:6,25 128:1,3130:6 132:11 137:6142:14

fund 89:17 144:11funded 86:14 90:20200:17 201:22,24203:5 205:21206:5,6,9,10,21,22,24 207:1,17,21,22

funding 167:23168:7,13,25 179:19

funds 88:5,8,21 89:291:6,8 155:14 178:9194:8

future 41:14153:8,17

FY 175:6

Ggap 100:13 173:18Garcia 25:21garner 83:6gas 140:2 141:11general 13:7 15:3



34:9,18,24 80:2183:7 90:3 101:6124:23 138:20141:23 151:20172:18

generally 15:1816:13,14 53:5,1755:1,2,5 56:9 58:560:21 67:16 69:379:18 81:7,8 136:9147:11 149:5 152:4158:9 162:19 168:10194:25

generation 167:25169:5,6

gentleman 8:6 97:17gentleman's 15:25gets 114:10 141:5151:5 201:25

getting 14:9 165:19174:14

Gibson 25:23gift 31:16given 6:5 171:21174:11 222:13 225:7229:7

glance 79:14goal 153:4,7,15goals 29:20,22,2530:1

gone 22:16 56:5,2460:5 85:22 187:9

Gonzalez 23:7 24:2325:9 96:16,17

govern 101:7governance 52:11governed 24:17,1852:7 92:13,14

government 194:12governmental 194:6,7grant 145:4146:13,19

Granting 39:6grants 145:3grave 171:24green 200:13,19202:11,15 204:11205:17,21 206:9

group 80:9 201:17211:16 221:10225:19

groups 80:8 113:3guess 38:17 60:780:24 85:23 101:2110:21 153:18155:12 174:21

guessing 198:4guest 202:13Guggedahl 62:15217:25 218:3,10

Guggendahl 4:2 93:17guidelines54:1,3,4,5,8,10,12,13,21,22

HHaggerty 20:2 82:18half 181:22 209:16225:8

hall 80:7 85:19hallway 32:22hand 26:7,8handed 8:22 11:239:1 46:24 48:13154:8 156:23 159:1163:8 169:23 174:2198:15 217:21

handling 120:20Hanson 30:2096:4,8,13

Hanson's 30:22happen 42:24 74:794:18 182:17,20

193:22happened 22:13 69:270:13 192:15 193:13207:23 209:18

hard 62:16haven't 46:1979:15,16 96:21218:23 219:14225:11

having 48:13 96:13162:13 178:16 189:8

head 13:23 17:22139:21

headed 122:8heading 157:12187:24

health 15:20 16:1817:3 18:22,2519:9,10 69:20 73:22167:23 176:2188:2,11 189:3,20190:10 191:5 195:21223:14

healthcare 12:24,2513:3,7,2060:9,10,13,2361:10,11168:7,13,25

hear 66:12 147:19heard 39:1566:15,21,23 78:17120:10 147:17 195:1210:20 211:2,3220:19

hearing 3:8 6:1839:7 42:16,21,2443:3 73:22

hearsay 195:13held 39:21 96:10help 107:25 112:22140:1 148:24149:2,23 150:2153:12 197:10 215:8



222:7helping 105:18122:14

Herbers 97:19100:10,14

hereby 228:16 229:4herein 228:17here's 74:17 107:20112:25 113:1 115:1182:12

hereto 229:12he's 8:12 10:2024:11 28:16 104:25120:15,19 213:15217:7

HF 13:2HFMA 13:1,3,5,23HHS 190:5HHSC 188:3,19189:8,12 190:10191:3 192:11,12,21193:7 195:24196:3,7 214:23

high 12:7,8higher 189:10highlighted200:13,19

hire 97:21hired 15:21 64:876:25 99:6 105:16106:2 150:10,11

hiring 129:22 139:11215:8

hold 9:17 21:18honestly 209:1hospital 1:6,122:2,73:2,9,11,19,215:8,10 8:25 9:1310:1,7,10 11:1115:2,3,17 17:218:18 22:14,18

23:22 27:5 31:21,2432:2,17,2433:4,12,1534:17,22,2535:7,16,2336:5,10,13,16,1937:6,11,18,24 38:539:4,2240:1,7,11,14,2542:19 43:19,22 45:746:13,15 47:349:3,7,2050:11,13,16,18,19,21,2551:1,8,9,13,17,20,25 52:3,5,9,16,2353:2,10,11,15,1854:2355:4,8,11,14,19,2556:3,4,7,12,2457:1,5,17 58:659:14,18 61:5,1862:12 63:1364:2,4,13,17,1965:3,7,13,16,18,2466:2,5,6,17,2067:4,19,2168:4,10,16,21 69:1270:1,3,6,10,11,13,18,23 71:1872:4,5,1476:8,11,13 77:7,1378:11 79:1980:1,5,10,23 81:482:24 83:6,13,18,2184:10,22,2585:11,18,2586:14,2087:2,6,9,11,14,1888:9,17,2289:5,8,13,16,22,2490:8,16,17,2091:2,3,7,1192:4,13,14,1893:14,24 94:4,21,2595:3,13,1696:7,18,2197:1,9,13,2398:11,17,20,22

99:2,3,24 100:19,20101:18 104:3,10,15105:14,23106:2,8,15107:5,9,11108:6,20,25109:17,24 110:17111:2,20 112:4113:9,15,20114:8,15,16,19,22,24 115:2,16,18,25116:15,22117:2,4,8,19 118:1119:5,11,22 121:3122:15,23123:4,8,11,19124:2,7,23,25125:7,21 126:10,25127:2,4,5,13,18128:5,17 129:2,12130:9,17131:3,6,11,16132:24134:7,10,11,18,24135:3,14,17,24136:15,18,21,24137:2,5,7,14,18,25138:10,19139:2,7,8,25140:5,8,14,18,20141:7,23 142:17,23143:12,22 144:1,23145:9 146:17,24147:3,5,10,16148:22,24,25149:8,12,16,23150:2 152:20,24153:5,8,16154:1,10,19,24155:2,10,12,17,21156:7,9,15 157:24158:19 159:8,10160:2 161:14,17162:12,16,25163:5,14 164:21,25165:8,9,15,23166:5,8,16,17,21167:1,10169:4,10,20 170:15



171:5,8 172:6,25173:4 175:11179:3,13,14,16,19,20 180:6,17,24181:12,18182:2,5,13183:4,8,11,19184:12,20,25185:20,22 186:19,25187:8,10,20189:11,14,15,17190:1,3,21,25191:6,12 192:2,5193:17194:2,6,7,9,17195:24 196:4,5197:1,21 200:11203:21,22 204:20208:18,22,25209:3,5,6,9,10,11,12 210:15,24211:10,16 212:5,25213:13215:11,14,17,20216:6,7,17,24 217:9218:20 219:9220:7,8,12 221:7223:17,24 224:13226:5

hospitals 68:1469:5,17 188:21,25194:14 209:14 214:4223:11,13

hospital's 43:544:2,9,15 49:953:24 71:1 73:1122:18 162:7 166:2171:22 172:13175:21 215:18221:14

hours 13:17,22,2343:16 44:23

housekeeping124:18,20 125:2,6141:25 142:2

houses 18:17 133:4Houston 61:8

Howell 120:11HR 118:22 139:10human 29:8 69:2173:22 86:8 102:25113:1 118:17129:19,20,21130:6,8,17,18188:2,12 189:3,20190:10 191:5 195:21223:14

hundred 209:24hurt 224:3

II'd 49:17 177:12,17idea 64:12 151:10162:22 195:1

ideas 165:18identified 48:12170:12 186:22

identify 7:16IGT 191:22 193:16,17194:1,13 195:16196:15 197:11,17,22198:1 208:19,23

IGTs 196:18II 3:7III 2:3 3:8I'll 6:25 7:4 9:711:8 29:11 39:2,2540:10 41:1047:2,7,10 57:1160:18 69:3 79:480:7 87:10 90:6103:21 155:7 157:6159:14,18 160:7167:18,22 169:24170:16,19 179:2183:14 192:20 201:9227:2

I'm 12:23,24 14:119:8,15 20:8,1223:23 24:22 26:6

28:7 29:1 38:1740:9 41:23 42:1452:1,4 58:22 60:765:9,11 66:21 86:1790:5 95:21 102:2108:7 113:16 120:9124:9,19 127:3129:14,16,25 130:12131:17 132:8134:13,25 135:16137:4 140:6 144:2145:13 147:11150:11 152:13,16154:2,25155:5,11,12 156:13160:18 167:2 168:19170:22 174:21177:16 187:22 190:7192:10 195:9198:4,12 203:14207:21 210:18 213:6215:12,21 219:13223:3 225:18 226:23

image 103:3imaging 86:9 103:6112:10 118:10

immaterial 209:21immediately 154:17214:18,22,24 215:7

impact 69:11 73:674:9,17,25 75:1376:4 183:22 189:1216:17 221:6 222:14

impacted 68:4 167:24169:4,11190:3,17,20,24223:8

implementation 69:2213:8

implemented 71:675:21

implementing188:4,20 190:11

imposed 180:3improving 122:8



inability 171:22inaccurate 212:5Incentive 188:17223:10

include 16:18,2038:20 78:1 86:688:14 91:20,21112:21 120:21138:17 149:18184:17

included 108:16122:18 123:3,7178:11,20 179:16182:7

includes 77:23,24207:19

including 10:7 73:4166:6

income 52:19 54:1incomplete 45:19incorporation 92:24105:20

increase 60:3,21,25186:21,23 187:4

increased 60:13,15incur 57:20 58:4incurred 63:876:21,23 87:13108:14 109:8

incurring57:8,12,13,14 58:7

independent52:5,6,10,14,2455:24 57:6

index 60:24indicate 205:25indicates 201:17indicating 215:4indication 214:10indicators 142:12indigent 53:18,21,22

54:2,1755:8,12,15,21 56:2257:2,18 58:3,7,2459:8 179:23180:3,6,14 181:12182:10 211:22212:22

indigents 182:9212:3

indirectly 29:1151:21,22 144:5191:1

individual 42:8102:23 194:14226:18,21,24

individually 42:6industry 60:23 226:6infants 85:20information 11:10,1317:3 26:21 30:2531:2,4,645:20,23,2546:2,6,12,17,2048:5,18,21 102:13117:17 120:23128:23 132:15 133:5136:18,21 137:21138:1,3,7,8,11,17139:12,20 164:7170:20

informational 86:4101:13 102:12103:15 117:15 135:4

informed 171:15infrastructure117:11

in-house 125:16,17132:19

initial 64:18 93:4105:18,23 107:21122:15

initially 45:1965:18 69:14 105:17110:4 164:18 195:15

212:9input 72:21 219:9inquiry 197:8inside 12:4inspection 143:21,22instead 9:13institution 52:8instructed 211:23instrumental 122:14insurance 57:22 58:171:15,19,25 127:21143:4

intend 40:13 151:9intended 53:15intensive 64:9intent 196:15 197:25206:25

interest 91:22172:21,22 179:17

interested 43:444:1,12 229:12

intergovernmental191:22 197:15

interim 3:7 16:539:5 40:22 47:899:21 100:5 157:20171:12

internal 11:2224:3,5 52:20

Internally 212:14interrupt 6:24interviews 98:2investigation 154:3invited 97:6 218:24219:14

invoice 114:9,23134:20,23 135:1141:5,9

invoiced 114:19



133:22invoices 90:14,16114:22,25 133:24135:6,8 151:2,5,7

involve 134:5involved 21:7,861:23,2562:20,22,23 78:2079:9 82:21 98:2104:24 108:18116:24 152:17160:19,21 165:22212:9 213:5,16

involvement 212:24213:9,12

IRS 105:20isn't 52:14 58:882:24 92:4 100:20101:9 118:6 119:12140:15 160:23165:24 226:11

issue 66:8 83:1487:19 88:24 138:21204:18 207:15 210:4217:4,17

issues 165:19,20207:24

it'd 107:7item 83:4 108:7201:19,23 205:2

items 22:9 44:1694:8 108:1 121:5136:10 178:3 200:12201:15202:4,6,9,11,14,15,16,17 203:12 204:8206:10 207:3,16,17208:7221:8,12,21,23

it's 8:24 9:3 11:316:17 29:23 32:6,934:18,20 36:1,2139:5 45:3 46:1947:24 49:19 52:1160:15 65:11 66:4

74:2 85:8,19 90:14125:16 128:16,22130:1,16 132:11,12133:7 138:13,15,16141:22 147:14 148:5154:8,9 157:6 159:7161:5 163:13,25164:24 167:6 169:25170:14 174:10175:22 176:17178:2,3,22 187:14190:16 193:11,21198:17205:1,2,17,21206:13 209:15 210:7213:18 217:8,21221:20 225:18

I've 11:2 14:2222:23 39:1 48:1366:21,23 78:17121:11 156:11,23163:8 167:12 169:23170:3 195:1 198:11211:3 216:23 219:13226:22

JJackson 2:4 3:13 5:7154:11

James 18:1 160:11Janina 135:4 139:23January 16:6 97:18109:11

Jennifer 2:3 3:5178:24

Jesus 62:25Jill 104:5,20 105:13106:17 160:6

Jim 24:23 25:7,2027:5,8 28:23 30:1784:17 97:18 104:22

job 6:25 137:23Joe 25:21John 4:1 62:15

217:25joint 34:6 64:3,1765:14 142:11143:19,23 213:22,25214:6,16,22,24215:3,10,15

Jorge 217:6Joy 23:8 24:24judge 19:24 20:2021:1,4,9 39:1182:17,21

judges 20:22July 1:14 3:6 4:211:5 40:2,4,8,11,1442:17,22 43:2 64:25199:4

June 3:10 16:5 43:24174:24 193:18

[email protected] 2:6

KKemp 105:21,22106:2,5,7,11,21,22

kinds 131:13knew 63:18 68:2143:21 180:21222:10,12

knowledge 20:14 42:744:17 46:14 51:1960:19 78:25 95:1799:20 106:6,12,24131:4 138:20 139:6152:25 217:12

known 13:1 18:2369:18 74:3 87:1391:21 97:19188:13,17,18

Kristen 93:19Kurt 78:15,18 79:3212:11

LLa 95:5



lab 109:4 118:10label 199:8labeled 46:24 204:8labor 34:2labor/delivery 33:22laboratory 31:1786:9 103:7 112:10

lack 200:8language 110:24laptops 102:14131:20

large 223:25Larry 58:19 62:1,463:9 64:6,23 97:14104:4,16 171:8191:16,20 195:4211:15 221:10

Las 5:19,23 12:1314:21

last 30:16 60:1462:16 96:25 97:2121:5,7 130:14139:23 171:1197:1,13 201:15218:12,24219:15,17,18 220:5

late 70:15,16,1871:6 72:25 73:1178:2 81:24 171:3,25172:1 174:24

later 89:4 97:15112:9 192:16205:10,13207:10,11,13

latest 121:9 143:3161:3 176:23

laundry 113:21,23114:8,9,12,15,17,20,24115:1,3,4,8,14,19

law 11:4 105:17,21106:23

Lawrence 1:11 2:215:1,15 160:3228:15,19

lawsuit 6:8 10:7lawsuits 6:10 10:4layout 124:9lead 10:20leaders 80:8leadership 27:8,1428:23 52:12 61:2562:1,2 65:19,2074:20 76:2,24 77:9

learn 73:17learning 172:5lease 72:9,15 73:577:3,6,15101:9,12,13,15,20,22 102:12 103:17131:8 148:6,7 166:6200:13,20 201:24202:13 203:4 204:19205:7,8,15,20207:20 224:13

leased 102:7,10,15129:8 130:24 131:2

leases 101:11 130:23149:18 183:20

lease-type 185:10186:1

least 112:19 199:12leave 94:16 217:10led 62:4 67:13 86:1990:16 172:10

left-hand 47:2legal 7:13 8:7,810:16 11:15 12:425:23 40:17 49:1251:15 52:10 53:9104:1,5,20,23,25105:7 110:22,24120:1 148:21160:4,13,14 163:3

173:5,23,24 216:9Legate 93:16legislature 68:873:20 82:5

Leon 19:25less 13:24 14:2,465:20 67:12,14,1970:7 75:9 112:16113:12 155:25 158:6177:14 189:6 191:1209:24 220:24

lesser 70:8let's 6:22 24:440:21 48:4,24 77:388:1 101:15 120:5151:23 153:22 198:7212:20 226:8

letter 3:5 11:3,6,9letters 159:15letting 6:25Lety 104:23 107:3150:21

level 59:21 107:5111:8,9 113:9117:25 167:24168:7,14 169:1,2,4180:25 182:6,8,22213:6

levels 111:11 203:13208:16

license 13:16,2414:3,4 34:871:13,24 123:23129:11

licensed50:13,16,20,23 51:652:24 66:1 80:22

licenses 71:14134:1,10

licensure 71:13lien 39:21,23likely 73:23



limit 69:19,24 73:2574:25 75:2,4 164:4188:13 220:14,16,18222:16

Limited 3:12line 49:2 158:14205:2 228:2

lines 201:21lingering 90:14list 157:16 158:18listed 158:3 182:8litigation 10:211:11

little 78:20 109:4144:8 213:3

live 5:18,19Liz 2:8 3:5 7:1724:16

[email protected]:11

LLP 2:4,9 3:13 5:7loading 123:12,13,16lobby34:3,5,6,9,14,16,18,24 35:1,4 124:24141:24

located 31:9,2532:24 84:10 85:11

location 85:14locations 18:20long 17:13 28:6,9139:17 175:21

longer 30:22,23 61:796:14

longest 20:18,1927:25 28:1

look-back 109:12Lorena 25:24loss 58:4 68:15,18

185:25 186:3losses 58:8lost 192:5lot 50:8 80:8110:2,8 128:12163:17,19 188:20196:13 197:24 217:2

lots 133:4Lou 10:17 24:16,2293:19 218:11

Louis 3:5Lyon 95:6

MM.D 4:2maintain 13:22128:11

maintained 128:23143:5

maintaining129:22,23

maintenance 127:18128:9 141:23 157:17

majority 65:25 93:21110:15 112:5

manage 198:12managed 52:7management 13:1,3,2126:22,24 48:6 52:1254:6 71:9 86:9111:9 113:2 118:24142:25143:1,10,14,25156:1 157:17200:10,11

managements 72:22111:5,8 113:3

management's 15:8managers 4:1 15:819:19,21 21:7 22:423:2 24:18,2525:10,12,13,14

26:1,7,11,12,13,20,2327:2,7,9,15,16,2428:10,14,25 29:2130:10,12 40:1949:12 54:7 144:18153:19 174:11 175:1217:25

manages 17:20manner 26:5 146:18Manuel 95:5March 11:20 97:1598:6

margin 84:6,8Maria 25:20 124:17mark 71:22 97:19marked 8:20,2211:1,3 38:25 39:246:22 154:6,8156:22,24 158:24159:1 163:7,9169:22,24 173:25174:2 198:13,15217:19,21

Martinez 23:8 24:24Marvin 2:3 5:6 8:14178:19

Mary 93:19 218:10master 88:25 100:23101:5

match 194:12,13materialize 69:15materials 48:588:14,15 113:2

matter 10:21 11:16150:17

matters 6:5 11:1313:8 22:17 133:6216:10

Matthew 8:7may 40:445:7,11,12,13



51:2,23 86:7,2490:12,13 93:22110:19,20 115:10140:11,16 146:12151:22 158:12170:17 171:3,5,6,25172:1,6 174:24176:16 192:13196:16,18 197:12199:2 201:18 219:11

maybe 43:16 60:5100:15 206:11

meals 125:10mean 26:24 32:1336:25 37:13 50:2451:10,22 52:6,1856:18 57:14 66:2588:11 94:5 95:10109:6,14 112:22118:12 142:3 144:15145:15 155:22161:23 177:25 186:3194:4 205:9 214:1217:11

meaning 186:5,11194:5

means 51:6 52:1494:6 175:6 178:6

meant 56:19 86:21206:14

meantime 205:14mechanically21:14,16

media 50:9,10 66:13120:21 147:20,22,23213:18

medians 63:10,24Medicaid 58:2 67:2368:3 69:10,19,22,2371:13,20,24 72:2573:24 78:2 143:4162:4 168:14 187:24188:5 190:12 194:16195:5,19 209:8210:17 214:3 222:6

223:6,20,21 224:16225:14,22,24

Medicaid's 194:6medical 2:73:3,11,18 4:18:1,12 9:1,1414:21,23 16:17,1921:11 25:15 37:160:24 87:16,2189:21 91:4 92:8,10101:12,19,21,22,25102:2,3,5,9 103:12107:7 116:11 117:23144:6 145:1,6146:4,5 147:1 148:7159:10 176:1,2184:17 194:11200:10 205:20206:9,24 207:21213:23 215:5

Medicare 69:2271:12,24 74:1 143:4209:7,16,23 210:17214:3

Medrano 62:2563:20,21

meet 16:14,22 23:21meeting 30:1694:13,16 95:2497:1,9 161:3,18171:15 215:5 218:24219:15,16

meetings 21:19,2522:3,16,2523:5,9,13 24:1426:12,13,14 61:2462:19,25 66:14 80:782:14 94:7 95:2397:3,5

meets 53:25Melinda 17:11member 23:8 94:3,2095:5,7,14,1596:6,8,18,20 97:10116:15 144:25

218:11,12,13 219:7members 20:13,15,2121:4 24:21 25:126:19 27:7,18 62:1484:17 93:21 94:2495:3 96:1,2 173:4218:14 221:24

memo 4:1 217:24220:3

Memorial 14:21196:11

memories 7:25mention 155:16mentioned 8:11 10:1311:22 16:25 27:135:22 38:21 81:1296:21 101:19 103:13111:23 116:20 118:3119:9 140:3 171:14219:22 222:16

message 195:20met 10:22 30:3 214:7meter 140:10metered 140:7,12meters 140:11methodology 225:22metrics 30:3 135:7223:18

Mexico 5:1912:9,13,14,20,2414:22

MGMA 63:10,24Michael 1:11 2:215:1,15 226:18,24228:15,19

mid-2000 28:14mid-April 172:8middle 154:12Mielke 120:13,14121:2,12

Mier 98:22 104:17



171:7 225:4Miguel 24:24million59:10,11,13,1960:8,9,1087:19,20,21 88:589:20 147:16148:4,15 161:19164:5 176:10,21,22177:3,15 178:17180:9,11,21 182:1183:9,21184:5,8,14,18185:3,11 186:12,16187:1,2,12,17192:14,17,18 203:8204:19 205:22 206:3209:22,23210:22,23,25211:9,20 212:1,4,8220:24 222:24224:22 225:8,9,10

mind 8:14 87:24156:17

minimum 13:21minutes 5:24 23:9miscellaneous157:18,21

mismanaged 154:24155:3,4,21 156:7

mismanagement 154:19155:11,14,23 169:19

missed 161:23,25162:1

mix-up 28:2model81:9,12,13,14,16,18,20

moment 116:19Monday 1:14 215:7monetary 58:10,13money 57:6,10,1989:14,17 90:5,7

141:8 167:5 187:9194:13

money's 167:8 205:9Monica 23:7 24:24monies 146:20 195:16204:17

month 126:18monthly 26:11 126:16148:1,2

months 22:15 69:2570:13 71:21 72:279:12 109:10,13161:16 169:8,15171:2 181:22 192:16195:4 215:25

morning 5:6 115:24144:9 224:15

mortar 87:11,15,1788:9,11 89:12

Moss 155:17mother/baby 33:21Mott 39:11movement 224:[email protected] 2:5multiple 18:11myself 25:21 41:1963:3 94:11,13104:22 112:12198:21 200:15 202:9206:25 208:11218:15 219:7 221:10

Nnarrow 84:8Narvaez 23:7 24:24Nashville 99:22Navedo 25:24nearly 210:22,25necessarily 122:25128:1,22 219:6

necessary 13:12

126:16 182:14Neff 14:17N-E-F-F 14:17negotiated 101:18104:6,8 115:13117:21 200:15 202:7204:7

negotiating 77:11104:14,19

negotiation 106:16107:12 123:1,5160:21

negotiations 104:12105:10 106:19119:15 164:11,12203:21

neighborhood18:22,25 19:9,10

neither 229:8net 157:19 176:21,22news 147:20,22newsletter 120:23newspaper 80:20121:9,15 215:16

Nick 23:7 24:23 25:996:16

NICU-related 85:20nine 18:24 220:24NM 1:25non-bond 179:20nonbond-funded 102:3noncardiac 61:14non-Children's 88:22None 219:25nonemergency 213:19nonmedical 107:7nonoperating 211:1nonprofit52:16,17,21,25



159:9nonresponsive 153:14nontaxing 51:8,9,1052:24 92:4

nontrauma 57:18non-UMC 133:19nor 139:6 155:15197:16 229:9

normally 31:3 54:10northwest 36:22Norton 2:9 7:1710:13,15,20 24:15151:7

NOTARY 228:24note 41:10 47:291:18 155:7 157:6160:7 170:16

noted 228:17nothing 90:11 184:12notice 3:2 8:24 9:7noting 221:13notion 121:21 211:8November 3:16 86:23157:7,24 158:5,21169:15

Nunez 1:11 2:215:1,6,15,18,22 6:128:21 11:2,8 12:716:8 17:24 19:1621:12 32:23 39:1,2040:6,21 43:4,1844:21 46:23 47:1948:3 49:19 65:6,2267:3 72:3 77:1284:9 86:13 88:393:23 97:12 100:17106:25 111:1 115:24116:18 120:7 122:13130:22 136:5 138:9145:11 147:8153:15,24 154:7,23155:5 156:13,23158:25 159:12

162:23 163:8 165:22169:23 173:7 174:1183:16 198:10,14210:18 213:17216:16 217:20226:10,18,24228:15,19

nurse 142:7,16nurses 66:25nursing 25:22 29:2431:20 142:8 171:10

Ooath 6:13 195:8object 40:13 153:13objected 164:21objection 3:12 154:9179:4

objections 8:16obligation 140:19obligations 3:1857:14 70:23 71:2149:12,19 162:24163:14,21 164:22165:6,8 166:9,18,22179:20 180:17 183:3

observations 165:21obtain 45:22 80:5obtained 11:19 31:671:12,13 191:25

occupied 89:24occupy 123:9occur 22:7,8 67:2082:5

occurred 171:2216:13

Ochoa 218:12Ocon 171:10October 92:2 112:2127:11 138:12 158:1164:1 169:15 175:9

offered 194:12office 24:10 105:4,6120:20,24 201:4207:9 208:5

officer 9:1825:21,22,23,2458:20 94:3 97:2099:1 100:3104:1,17,18,23124:16 160:4,12171:7,9,10 174:22202:8 208:11 211:14217:5 225:4 229:3

officers 153:25offices 31:833:3,5,15

officially 64:2189:6 219:13

off-site133:14,15,16

Oh 9:4 18:15 150:6224:14 227:1

okay 5:16 6:21 8:169:4 11:8 15:2126:10 73:13 86:21103:23 107:18,20112:24 120:16136:14 148:14155:11,24 158:11167:21 171:6173:8,17 190:8201:11 210:21

ones 56:10,19 109:2111:13 112:1 133:16140:3 202:4 205:18219:23

one's 188:17 221:17ongoing 65:10,11onset 213:10on-site 98:3133:12,13 211:15

open 19:6,12 22:1931:3,7 38:10 120:23150:5 175:22 206:4



207:15opened 19:13 49:2050:2 53:12 56:459:14 64:14 65:1666:20 70:10,11 72:289:22 90:9 97:13161:17 165:23175:19,20 187:9

opening 19:7 49:2355:7,10 59:1661:18,20,21 64:267:21 70:1 76:2578:10 86:19 87:1490:13 100:20 104:10110:13,16 117:2213:2,13

operating 3:21 16:2121:17 174:3,15177:23

operation 70:14210:24 211:9

operational 87:12operations 15:2016:16 25:15,20 27:529:23 32:15 71:1177:22 124:16 178:8184:16 202:8 208:11217:5 219:2 221:19

opinion 43:18 47:2050:17 51:7 52:1566:4,10,11 84:2385:13 121:17 152:6153:6 156:14216:20,21,22

opinions 44:25 45:1848:18

opportunities 98:7opposed 114:2 122:6Oral 1:11order 3:7 39:3,5,2540:23 47:9

organization 52:17114:3 117:20 131:20140:13 152:7 156:3

171:11 203:12organizations 77:1086:12 102:22 110:25111:6,12 117:11118:17 123:14125:12 128:10,12131:18 135:6144:12,13,15 146:21163:20 164:23

organization's113:22

original 189:9 212:8originally 175:15others 113:13 221:10223:25

otherwise 48:1outcome 83:10,11outline 101:2 102:20outlined 200:22outside 22:1 35:24105:12 106:16,17,18108:14 137:5 143:15215:8

outstanding 90:2169:14

overall 29:12 30:1244:4 51:1 69:1077:21 101:2,4,7117:25 128:9 174:21180:13 181:7

overflow 37:20 38:20overlap 144:20oversee 15:19 25:1427:4,5

oversees 20:10 27:2140:24

owed 90:6,11 151:13163:24 165:9 167:6180:18 183:3 186:8205:10

P

p.m 1:14 227:4page 2:20,24 3:139:10 43:21 47:10154:12 159:22,23163:25 164:4 167:17176:5 179:5 183:16184:9 185:6 187:23198:19,22,23199:5,7 200:2,24202:19 204:25 220:5224:19 228:2

pages 40:21paid 27:9,13 29:6,1357:22,24 87:1089:15,2590:1,4,7,17,2491:14 148:10 149:15184:12 186:25 187:4193:15 202:1,3205:10

paragraph 154:16,17155:7 168:8,20221:4 222:11,15224:20

paraphrased 154:11park 37:6,11,15parking36:16,18,20,21,2337:14,19,20,22,2538:2,9,12,14,18

partial 209:14partially 190:22participate 23:1894:6 104:12 164:10224:4

participated 24:162:19 99:8 116:3

participation 106:10particular 41:578:19

particularly 85:14211:24

parties 7:13 101:7



113:15 114:5 128:2130:24 132:17133:22 134:5 136:7152:18,22 206:25229:9,12

partition 34:10partly 191:2partner 152:23partnering 152:19party 6:7 137:5,10Paso 1:3,6,12,152:2,73:2,3,9,11,18,19,214:1 5:8,20,238:1,25 9:1,13,1411:16,18 14:2315:1,16,20 16:1817:3,6 18:6,7 22:1732:16 34:6 36:437:2,18 38:4 40:2543:22,23 44:11,1847:3 50:11,15,18,2153:9,23,25 55:1456:2,10,13,1757:7,17 58:2061:12,19 62:1,5,1864:20 65:12,18,2366:13,16 71:8,1872:23 74:1976:1,21,23 77:878:5 80:22 83:1285:18 90:24 91:593:3,12 94:3 95:396:9 97:4,9,12,2298:12,20 101:3,18102:7,11,15 103:11104:5,21 105:25107:10,19 110:5111:10 112:13,14113:24114:2,10,16,22116:12,14 117:18118:1 121:19,20123:5 124:5 127:6128:7,13 129:18130:13 134:10139:10 142:10

144:7,16 145:1146:5,22 147:2149:10 153:11159:7,8,9,11163:5,14 164:19167:3,9 170:14171:8,9,16,18172:21,22 173:4176:1180:5,15,16,24181:11 182:2183:7,18,19184:17,23185:9,10,12 186:8191:6,17,23192:3,13 194:9,15195:2,17 196:5197:15,17 198:1200:10 202:8208:10,25 216:11,19217:6,7,10218:7,18,20 219:3,9221:7,18223:8,16,24 224:3

Paso's 3:11pass 13:6 227:2passage 13:9 83:1286:23 117:16

passed 29:22 84:6,7109:16 193:12

pass-through 113:24114:11

past 61:15 118:5patient 48:7 53:1457:23 66:19 85:16109:5 124:24 136:21138:17 141:24142:12 157:19182:8,21 209:10225:18,22

patients 37:10,17,1838:4 53:12 55:21,2556:5,8,22,23 57:358:4 61:7 67:168:23 69:7 84:25124:7,8 125:11

182:10 210:17Patnode 2:13 7:18Patty 178:24Paul 171:9pay 43:14 57:15 67:871:1 72:14 77:1487:12,18 88:8,2189:10 92:7 123:4,6126:4 129:10 140:19149:9 162:12,13,17166:8,18,22 167:1171:22 172:6,13180:3,5 183:20190:4,25 208:19,23

payable 157:16 158:9paying 140:14,16150:25 165:8

payment 43:969:19,24 70:2272:17 73:25 87:2161:18 163:24171:19 180:16188:13,17,24 189:7191:3,18,19 192:12203:10 205:7 206:3208:14 209:14,20210:8 220:14,16,18222:16 223:9,10225:21

payments 7:25161:24,25 162:1,7164:1 165:10,12167:4 168:2,15182:11 184:21,22,25186:13,20188:5,21,24 190:12191:3,18 192:23193:8,10 204:2,23209:16220:8,12,17,20,21,23 221:7,15,16,20222:8

payroll 125:23126:1,3,6,9 136:24157:16 158:12



pediatric 50:2551:1,2,4 53:12,1955:8,12,15,21,2456:22 57:3,6,1858:7,24 59:8 60:2061:6,7,19,2364:3,8,18 65:8,2266:16 84:25 85:16102:5 123:25 179:24180:4,25 181:13182:7,9 183:6211:22 212:2,3,22216:18 217:9

pediatrics 66:5penalized 210:15penalties 209:2penalty 209:5 210:1pending 22:8 68:273:24 202:5

people 8:5 27:147:19 48:11 49:1150:7 54:20 62:22146:9 219:22 225:13

per 107:4 108:1122:5 167:7 203:6,7223:23 225:24

percent 54:20,2161:2 74:16,17,1875:4,16,17 90:19108:8,10,12,19109:20,22 185:25186:3,14 204:13209:15,16

percentage 30:475:3,6,18,19,2484:2

Perez 19:25perform 105:7 130:5132:11 143:7,25

performance 30:7,9performed 41:20102:6 155:16 213:23

performing 63:12

142:21performs 17:8 145:8perhaps 19:12 40:1943:16 60:6 74:15149:20 210:12216:25 218:23

period 11:20 14:1440:5 43:1,24 45:1258:14,15 71:16,18100:15 104:9 109:9113:4 164:1169:6,18 200:22

permanent 16:7permits 39:25person 20:10,1923:6,7 30:2034:15,22 42:8104:20 140:24150:21

personally 46:3,6229:5

personnel 48:12119:1 129:23 133:6138:22 144:24 192:4216:24

persons 42:6person's 17:11perspective 20:1744:4 120:1,2 122:1153:12 186:6,9192:12 204:20,21215:21

pertain 213:21215:11 216:10221:11

pertained 101:4212:2

pertaining 22:17207:17

pertains 213:22petition 154:18phase 11:20 105:23

168:1 215:24 216:1phased 69:20Phil 15:25 96:2398:1

philanthropic 144:3146:19

physical 88:12,13124:9

physically 32:19,20physician 62:2463:22 64:22 66:14

physicians37:15,16,20,2338:3,10,15,16 51:362:14 66:12 85:14215:6 217:9,13

physician's 93:17217:1

pick 120:8picture 93:8PICU 64:10,11,12217:7

piece 112:2pieces 145:6placed 23:24172:20,21

places 161:8plan 62:8 123:3152:3,6,9,14 163:24215:4,6

planned 19:1,5148:22

planning 3:15 26:1679:25 87:1,9 105:23115:25116:1,3,21,25119:10 122:15 123:7165:22 212:25213:5,6

Plans 15:20 16:1917:3 176:2

plant 86:6



plants 118:9platform 86:4 131:19platforms 117:17pleading 154:8155:6,8 156:20

pleadings 147:14please 6:22 49:656:15 139:22 159:5163:12 167:19179:25

pledge 3:17 159:2,6161:7,9 173:9

plus 108:21109:19,20 194:13

point 16:1 47:1165:6 80:6 82:2384:9 97:25 104:16105:24 116:16 163:6166:11,20 170:25195:19 208:21211:18

pointed 201:21points 59:24 176:5policies 53:23,2455:6 129:21

pool 188:16,17223:9,10 224:4

portion 32:1034:16,17,23 88:2289:5,23 90:15 91:2293:12 103:19 112:3113:1,2 119:6 124:8141:8 167:22179:12,17,18,22201:16 202:12,13

portions 134:8167:12 200:20 203:4

position 49:3,895:21,25 96:1 98:24140:18 176:21,22

possible 47:22,24possibly 162:8

169:13,16 171:20172:15

post 45:10 86:22potential 8:15 76:3153:25

potentially 74:15poverty 54:11,21,22power 86:6 118:9141:2

Prada 135:5 139:23P-R-A-D-A 139:23precinct 21:11preclude 59:21predecessor 96:2298:1

preliminary 214:10premises 124:25214:25

preopening76:7,13,17,2277:1,2

preparation 7:1916:20 23:18,25174:19

prepare 16:22 163:3prepared 157:9174:16,17,23,24185:18

prepares 23:15,17120:22

preparing 147:24151:16

prescribed 22:12present 2:13 21:2122:24,25 23:2 24:1326:10

presented 22:10,1244:16 48:1680:12,15 81:1083:14 111:19,22198:17 200:3 208:4

219:4presently 95:6 168:1presents 21:20preservation11:23,24

preserve 8:1511:9,12

president 95:4160:3,11

presume 10:24 53:9131:13 160:5 165:7175:6 178:12

presumed 197:20pretty 84:7previous 109:13116:5 171:1 180:22

previously 28:1345:10 86:7 118:21191:15

price 60:24primarily 16:11 17:161:12 109:2 113:8121:1 146:14 210:17

primary 43:12 113:25209:10

principles 16:14printout 206:12prior 17:14 23:1330:19 49:2 55:7,1061:20 64:2,6,20,2369:2 70:1 71:972:19 73:3 78:1081:1 87:14 100:1,19110:16 117:2 127:12169:8 171:15 191:16204:18 213:2,9

private 159:9 194:9privy 123:17pro 58:22 60:1,2,468:2 73:19 74:677:19,20,21211:17,19



221:9,13,22,23222:1 224:5

probably 18:2419:7,12 28:738:1,17 48:949:13,14 60:5 61:271:17 84:18 87:2097:2 104:8 112:9121:11 161:2,20174:24 176:17,19188:23 189:10201:18 209:24212:15 216:24218:14

problem 138:25problems 215:10procedure 1:13128:18

procedures 128:13,17129:22

proceeding 10:1644:14

proceeds 91:4,1093:1 178:10

process 141:1 146:21157:19 161:18 210:6216:14

processes 126:15156:1 157:18

processing 214:14professional12:22,25 13:17

program 54:1769:18,19,24,2574:1,2188:4,13,14,15,17,20 189:9 190:12191:8 194:11,16220:16,23 221:4222:2,21 223:5,7,19224:2,7

programs 54:2,16,19144:12 194:7 195:6

project 89:1projected 41:1369:14 167:24 176:10177:8,11 186:23187:1,5,7 192:10,17

projection 177:2,5projections 41:1758:25 59:3,472:18,21 171:16

projects 223:14,15promoted 99:15pronounce 93:18proof 151:9,11,16properties 133:17property 51:11,1291:23 92:1 179:6210:23

proposed 3:21 5:749:9 174:3

Prorated 181:24,25Protection 3:8 39:6provide 51:2 53:1855:20 62:6 101:17103:10 110:4 123:2125:6,10,24126:9,24 127:12128:4,6,11,17 130:8132:23 133:19142:8,16 150:15151:24 153:10157:13 158:15163:4,6 182:6,13219:8

provided 3:15 9:857:21 61:11 103:17128:8 130:11,13134:6 135:2,3149:10,16 157:1158:10,12,19164:6,19 179:23181:17 182:9,23183:6,10 203:17205:5

provider 188:24provides 41:1,1143:10,14 55:1558:3,6 113:18125:18,20 131:5141:2 143:11 193:17

providing 46:1655:8,12,1757:2,5,7,18 58:2459:8 61:6 71:20113:19 118:2,16,19119:1 157:23 158:2171:23 180:14182:11 212:22

provision 132:17provisions 210:8public 12:23 14:1220:5 22:20 30:2431:4 80:13,18 81:1183:5,7 87:5120:17,18,20 228:24

published 128:22215:15

publishes 128:21pull 124:7pulled 59:6 171:14pulls 123:24purchase 89:21103:2,10 178:4

purchased 102:1,4,10purchasing 103:11purpose 39:18 43:279:23 100:8101:1,16,24 102:19103:8,9108:10,12,18 113:19124:1,4 125:1 139:3144:9,10 160:17163:16 170:9 174:13178:3,5 180:8,12181:10

purposes 145:6pursuant 1:13 40:1



109:17 131:8pursue 98:6pushed 111:8,9putting 186:9 195:16196:4 197:15,16215:6

Qqualified 215:19216:5,7

quality 66:19 86:8118:24 142:12,25143:1,3,10,14,25209:8 210:5 214:4

quarter 209:15quarterly21:19,20,21,24

question 7:2,5 23:1142:11 60:18 64:1675:24 80:24 113:16116:6 131:14 135:22148:17,19 153:19155:1 166:24 173:6179:25 190:6,23206:8,23 216:3

questioned 211:20questions 7:7 49:2120:10 121:4 179:2196:14 226:14,22,25227:3

quick 87:24quite 179:3 195:4quote 117:22 163:18

RR.E 15:2radiology 31:17109:4

raise 179:9raised 90:7raising 144:11range 76:3 225:8

ranges 63:10ranging 142:11ranting 3:7rate 16:22 21:1867:23 91:23 179:17181:7

rates 101:18 114:1115:21

rather 117:10118:13,15,22 212:19

rating 122:7 185:5Ray 97:16 112:12171:12 195:2 198:21200:15 202:7 203:3207:1 208:5,9

RE 1:5react 80:18reaction 82:11reading 154:25156:18 167:20210:22

ready 48:20really 27:2 116:1reappointed 28:11reappointment 28:18reason 7:6 43:12113:25 154:1 162:18176:20 228:2

reasonably 90:15reasons 162:11,16recall 8:3 30:2134:2 75:8 81:582:16,20 83:384:2,4,5,7,12 92:2093:5,16,21,22 98:1104:4 105:11,25111:1,18,21 121:16122:15 163:23201:12,19 207:25218:13

receipt 71:14

receipts 41:14185:12,19,20189:2,6,13 191:2

receivable 157:19169:14

receive 46:151:17,20 61:9,1371:23 122:23 123:1143:14 144:3 149:7172:25 180:11,14185:19 186:13191:9,13,17209:4,14,22 210:25220:8 221:15 222:9

received 11:1712:1,3 182:11192:13 209:2 210:23215:3

receiving 71:19,2372:1

recent 22:15 59:2478:24 109:9 122:5,6143:19 196:12,13212:21 213:17,22

recently 23:8 24:1628:11 167:15,16

recess 88:2 120:6153:23 198:9 226:9

recognize 160:14163:10 174:7 198:16199:11 203:5

recollection 12:623:4 30:16 34:135:15 79:24 80:6,2082:22 164:24 168:24181:20 213:15214:13 218:10

recommended 54:5record 5:14 7:1510:14 16:8 48:24,2549:1 56:21 88:1,4120:5 153:22198:8,11 199:7226:8,11 229:7



recorded 229:5records 15:16 16:1231:3,7 120:23 126:3129:23 180:24

record's 162:15184:24 190:8

recoup 141:8recreate 212:20recruit 64:18recruited 62:7 63:23recruiting 62:364:22

recruitment 61:2462:10,21,2363:7,14,17 64:3,665:2,8,14,15 86:1899:8

recurring 26:11reduced 130:14reduction 74:1675:3,24 209:15,20

REDW 14:18refer 5:9 18:2419:11 21:3 28:2269:3 77:2 103:5,21130:2 155:5 192:20

reference 47:12176:6 177:24 179:6201:22 220:6 222:15

referenced 77:25129:5 168:8 180:1184:9 189:5,12,22190:17 198:25 221:4222:11

references 175:3220:7

referencing 199:8referred 20:21 21:1146:25 147:5 220:19

referring 36:6 182:5195:10

refers 168:10,18188:8 203:16

reflect 203:20Reform 188:16 223:10refresh 7:24,25regarding 13:7regards 131:12region 61:6,7region's 53:12registration 31:17regularly 26:13reimbursement 67:2468:3 69:4,10,1670:12 73:24 76:1178:2 81:22,23168:15,16 224:16225:6,23,24

reimbursements 71:572:25 73:10 75:1477:5 82:3 162:4

relate 11:10,1326:1,5 43:19 87:8121:6 200:24 225:1

related 11:2345:7,20 46:13 88:16133:18 179:23 180:3182:10 191:3 192:24193:1 197:20 200:11207:1 209:2 211:17225:19 229:9

relates 11:16 42:1843:23 179:9

relation 22:13 79:7200:2

relations 120:17,18relationship 21:13101:3,7 161:13171:4

relative 229:11relevancy 8:15relieved 55:11,16,18

57:1 59:18remain 59:20 118:11remainder 171:19172:7

remaining 25:1033:9,10 87:21

remedy 215:9remember 13:22 50:662:15 74:12,13 93:696:24 111:13 164:17167:14 186:16 200:1201:1 222:19224:1,17 225:7

remove 94:10,13removed 158:7 219:14rendered 215:14renegotiated 202:15205:15

renegotiation 203:9renegotiations200:9,19 207:23

renew 179:4renewal 13:19rent 77:14 200:14201:24,25 203:4,8206:6,21 207:19,20208:17,19,23

rental 101:17repaid 90:22,23repeat 7:4 135:23rephrase 7:4 10:926:3 42:11 49:676:9 149:1 166:14190:5

replaced 69:24 74:195:25 96:15

replacing 195:4report 27:8 48:979:2 148:2 196:3214:11 215:3

reported 1:24



121:15,17reporter 2:25 5:26:17,24 56:16149:2,4

reporting 112:5126:16,17 127:6157:17,18,19,20

reports 17:23 19:2026:10 27:648:5,6,7,8 155:16

represent 9:7 11:839:3,25 40:10 47:7106:8 107:20 149:19159:18 169:25170:19 200:9 204:3211:21

representation104:21 185:23

representative 3:49:2,10 155:19226:15

represented 106:15147:14 166:20190:24 225:3

representing 105:9219:5,6

represents 102:4200:6,7

request 1:1222:10,11 31:3,738:7 40:1146:2,6,12 94:7109:25 112:16 201:9

requested 107:19109:10

requesting 107:6,11110:6 113:12

requests 120:23require 13:5required 161:18191:7 193:4

requirements 13:1214:4 34:8 123:23

reserve 176:14177:11 178:11,13,16184:1,4 185:25186:4,14,15,21187:2

reserved 38:6reserves 176:6,10177:2,25 184:13185:2 187:5 207:9

resident 53:25residents 180:15183:7

resign 99:19resigned 95:2198:5,22 99:16,17

resolution 202:18203:9 207:10,11

resolved 206:14207:2,3,5,6,12,13

resources 29:886:1,4,6,8,11102:25 113:1118:18,25 119:11129:19,20,21130:6,8,18

respect 49:4 77:3119:14 149:7 168:25177:1 210:4

respective 26:629:23 206:14

responded 195:15response 56:14153:14

responsibilities16:10 120:21 121:1127:17

responsibility 65:12137:24

responsible42:9,12,15 44:8,10129:21 135:5 139:13143:2 174:19 189:19203:3

rest 38:10 171:17restate 149:1restricted 138:3178:1,2

restriction 178:10restrictions 178:6restroom 87:25restructuring 97:20result 68:15,1869:16 75:7 168:1

resulted 222:22224:20

resulting 220:23results 69:15 219:2retired 100:2retirement 100:4retreat 221:25returned 120:8revenue 3:14 48:851:12,18,21,2352:20 57:2368:15,18 70:7,873:1 76:1177:20,23,24,25 91:1127:15,16,19,22128:4,6,14 129:6150:2 156:25158:15,22 167:24169:4,6 179:6,12,18180:1,11,13184:19,21 186:6,12187:10,20 189:1,2192:6 204:21 208:22223:23

revenues 67:11,13,1969:14 70:3 75:2589:10 126:17 148:23149:7,22 155:25165:20 166:2 181:8191:13 194:18208:19 211:1

review 7:19,22 8:2



202:6 219:2reviewed 7:23revised 113:5 222:8224:5

revisions 113:7,8201:8

ribbon 50:8Richard 95:6right-hand 159:14170:16

rise 166:12Rivera 15:25 96:23road 73:16Rogoff 14:19role 16:24 17:1326:6 79:7 87:196:10,2298:10,13,2599:20,21 100:1,7106:25 107:12,14211:14

roles 9:21roll 17:4 29:25rolling 13:19Ron 212:14room 8:5 31:1855:20,22 56:3

rooms 124:24 141:24Rosa 95:5Rose 2:9 7:1710:13,15,20 24:15151:7

Rosemary 93:19Ross 2:10roughly 59:18 70:9rows 206:18,21RPR 1:25rule 3:2 8:24 221:5rules 1:13 74:9

run 87:24 136:15,19211:24

Ryan 120:13,14,19121:12

SSadhana 62:17Saenz 217:6,15safe 46:19 48:1790:14

sake 6:23salaried 108:2salaries 30:24salary 29:1363:10,24 64:1

Salmon 78:15,18 79:4212:11

Sam 93:16San 1:15sat 113:3saves 57:9,19saving 57:6saw 44:23scale 118:25scapegoat 154:18scenario 74:21,23scenarios 74:19schedule 72:17 164:1189:9

scheduled 26:1342:17 167:4

schedules 91:19Scheduling 3:8 39:7school 12:7,8 215:5scope 157:12178:21,23

scored 30:3scores 209:13

SEAL 228:22search 98:21season 91:18second 1:15 28:16,1837:21 38:18,2347:10 102:8 167:17183:16 188:18198:23 223:9

secretary 25:3,893:18 170:1

section 69:23 74:1188:14 201:16 223:7

sections 200:18security 3:17159:2,6 161:8,9172:20,22 173:9202:13

seeing 37:17seek 144:10 145:3216:8

seeking 146:19seen 9:5 11:6 39:1341:4 43:1545:7,14,15 46:1947:14,16,2048:13,23 79:13121:8 151:2,7 152:9154:14 156:11 157:4159:2 160:23 161:1170:2,3 220:3224:24 225:1

segregated 134:9selected 27:15,1728:23 98:23,25

selection 84:1998:13 100:8 106:10

selections 28:2429:2

selects 28:21send 139:11senior 15:8 27:7,1428:22 52:12 113:2



seniority 20:15,17sense 52:7 151:14sent 11:14 92:1sentence 154:25155:7 156:18 185:16188:2 189:5190:7,17

separate 34:8 35:2436:2,3,16 85:788:24 114:14118:22,23 123:22124:4,6 138:13141:17

separately50:13,15,19,23 51:652:24 66:1 80:22114:19 117:19140:7,12

September 43:2570:17 97:1699:13,18 112:9164:2 169:7,8,15175:9,10 182:18,21198:20,22,24199:1,2,24 200:4201:2,20206:11,12,19,20210:13 226:6

series 70:19 72:488:25 89:7,20 90:18

serve 38:4 53:11145:17,20

served 28:13,1593:23

server 133:3,4135:15,17,19,24,25136:2 137:15138:16,24

servers 133:10,20136:6,7,10,11,16,19,22,25 137:3,22138:1,11,15

service 57:23 79:1980:23 90:24 91:19113:12,18 114:12

118:17 158:10179:15,17 183:20185:10,25 200:12,20202:13

serviced 179:15services 3:15,2433:20,21 34:243:9,14 48:7 51:2,353:14 57:2261:10,11 69:21,2371:20 73:23 86:6,9101:4,19102:5,16,17,21103:1,3,6,10,11,13,17,19 105:7,8107:5,10,16,19,21108:15 109:1,3,10110:4,5112:3,10,15,16,17,25 113:10,13,19115:19 116:16117:10,12,13118:2,3,5,10,13,19,21 119:2,3,6,15122:24 123:1,2124:18,20125:9,10,18,20,23126:1,7,9,14,15,19,24 127:13,21128:4,6130:8,10,11,13132:9,10,17,20,23134:3,6,17 135:2,3138:23 139:24 140:4141:21 142:2,6143:11,14,25 148:8149:10,16,18,21151:24157:1,12,13,23158:2,7,11,15,18,23171:23 182:9 186:11188:3,12 189:3,21190:10 191:5 195:21209:8 214:4 223:15224:13

serving 183:7session 22:16 24:14

94:8,14sessions 22:1923:1,21 24:2 174:25

sets 35:14 54:3135:10

seven 18:24 19:1924:19,21 25:1 27:131:19 48:9 104:8181:22

several 103:20140:11 171:1

Sexton 97:18 99:23100:11,13

Sexton's 100:7shaded 202:5share 37:24 85:25117:12 118:25119:11 123:16131:18 220:8,12,17221:15

shared 86:5,11102:21 103:1 117:9118:3,5,12,13119:1,3131:21,24,25132:4,5 221:24

sheets 126:4shop 31:16short 100:15shortly 92:25 99:14showed 45:11 59:4shows 47:11 177:2178:15 205:22

shut 19:13sides 111:7sign 58:12 191:6,12192:6 196:1 208:3

signage 36:6signature 2:24 39:11159:23 160:7,15199:17,20,21228:1,16



signatures 161:12198:21

signed 103:24,25104:2 160:1,10161:4 173:13,15191:16 192:1197:5,7 199:24200:5,7 203:7,18,25207:3

significant 74:14167:23 189:23,25209:20

signing 195:6 200:1similar 47:8 54:2468:13,22 69:6,8201:5,6

simply 114:2 122:10single 110:8 171:19sir 60:12 203:14site 84:19situation 67:10215:9 225:20

six 27:23 28:8,1531:19 32:10,1633:11 38:2 48:971:21 72:2 75:1679:11 89:7 104:8218:14

six-month 71:18sixth 32:24 35:2sixth-month 71:22six-year 28:17slim 84:8slot 96:2small 198:6 223:25Smith 105:21,22106:2,5,7,11,21,22

software 128:2129:5,8,13

solely 38:2 91:6116:12

solicit 145:2 146:16soliciting 145:24somebody 146:23196:7

somehow 115:6someone 147:3someone's 121:17sometime 93:1somewhat 33:7 198:11sorry 14:1 24:23124:19 127:3129:16,25 145:13154:25 155:1 170:22226:23

sort 35:4Sosa 8:8 12:524:6,7,9 25:22104:1,22 105:5160:12 173:23

Sosa's 160:15sounds 120:14source 89:1 204:22sources 43:1,5,1944:2,9,11,15 66:15

space 33:9,10 34:2036:1 37:8,9,11,1372:8 123:8 133:20

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specifics 53:4 84:5115:11 158:22

speculate 156:21spell 62:17spoken 7:9sponsor 195:25197:2,4,22

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spreadsheets 208:6Springer 2:9Sprouse 2:3,22 5:5,78:18,21 11:2 39:1



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stable 122:5,7,8,10staff 17:21,22 25:2566:25 125:1,18,20126:6,9,19,24127:12,22 129:24130:1 132:21 133:1145:23

Staffing 122:21stages 122:15stand 132:14 225:17standard 122:6standards 15:1816:14,15 54:9,2463:10 142:11 143:3214:5,7,8

standing 169:14standpoint 63:780:23

standpoints 155:13stands 214:15start 24:4 167:25started 14:11,2469:15 71:23,2573:18 79:11 94:2215:25 216:14

starts 175:9start-up86:13,15,22,2487:9,13

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states 40:25 224:20State's 170:1STATES 1:1status 105:19stay 13:13 61:15216:19 217:1,3,10

stayed 113:13step 30:12 83:2,3stepped 97:10steps 117:7,9sterile 214:14Steve 23:6 24:2125:5 212:16

stop 95:20Stout 20:1 21:10strictly 87:15 114:3118:1

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submitted 45:10152:6 182:4 193:4,9194:23 209:9210:5,7,10

SUBSCRIBED 228:20subsection 220:5subsequent 14:1867:21 74:11 78:22183:12 187:13,15212:7 213:13

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successful 81:883:11



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surgeries 213:19surgical 31:18surpass 59:9surprise 73:8,9surprised 74:4

survey 213:23sworn 5:2 6:15228:20

system 128:23 131:19138:22 188:16223:10 225:14 226:1

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taxes 51:11 52:19179:10 210:23

taxing 92:10,12179:10

taxpayers 90:25TBA 45:21TBD 45:21team 25:19 59:565:19,20 76:24118:16 174:18211:23

teams 118:15Tech 62:2 95:4,8197:16 215:5

technically 106:18218:23

technologies 102:13technology 48:5 86:4101:13 102:12103:15 117:15,17128:23 132:15 135:4139:12,20

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testified 5:2 20:921:12 32:23 33:744:21 72:24 84:2487:4 91:13 92:3100:10,17 105:1108:5 118:4 144:8162:3 164:6 166:15168:18 181:19194:17,22 219:11



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Timothy 2:9title 9:17 15:10,1220:24,25 43:2195:12 137:23

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Transformation187:24

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212:14,15,16 213:18214:6,16215:14,18,19,25216:4,16 217:8,25219:5,7,24 224:12226:11,15

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Uncertainties 185:7unchanged 118:11uncomfortable 195:6uncompensated 188:16191:9,13,17

undepreciated 102:6underneath 101:5understand 5:256:12,19 7:1 10:426:6 39:20 49:3,860:7 77:12 112:22113:16 132:16 141:1156:13 172:3 197:10

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