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ACTIVITY/MECHANISM BUDGET SUMMARY

Department of Health and Human Services

Indian Health Facilities -- 75-0391-0-1-551

#### Maintenance and Improvement

[Program Authorization]{.underline}: Program authorized by U.S.C. 13,
Snyder Act and P.L. 83-568, Transfer Act U.S.C., 2001.

+-------------+-------------+-------------+-------------+-------------+
|             | 2002        | 2003        | 2004        | Increase    |
|             |             |             |             |             |
|             | Actual      | President's | Estimate    | or Decrease |
|             |             |             |             |             |
|             |             | Budget      |             |             |
+-------------+-------------+-------------+-------------+-------------+
| BA          | \           | \           | \           | \$0         |
|             | $46,331,000 | $47,331,000 | $47,331,000 |             |
+-------------+-------------+-------------+-------------+-------------+
| FTE         | 0           | 0           | 0           | 0           |
+-------------+-------------+-------------+-------------+-------------+

## PURPOSE AND METHOD OF OPERATION

The Indian Health Service (IHS) maintains Federal government owned
buildings and supports maintenance and improvement activities where
tribally owned space is used to provide health care services pursuant to
contract or compact arrangements executed under the provisions of the
Indian Self Determination and Education Assistance Act (P.L. 93-638).
The mission of the Maintenance and Improvement program is to support and
enhance the delivery of health care and preventive services and to
safeguard interests in property. Maintaining reliable and efficient
buildings and avoiding excess future costs due to deferred activities is
increasingly challenging as additional space is added into the inventory
and existing facilities age.

Specific Maintenance and Improvement (M&I) program objectives include:
(1) providing routine maintenance for facilities; (2) achieving
compliance with buildings and grounds accreditation standards of the
Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or
other applicable accreditation bodies; (3) providing improved facilities
for patient care; (4) ensuring that health care facilities meet building
codes and standards; and (5) ensuring compliance with executive orders
and public laws relative to building requirements, e.g., energy
conservation, seismic, environmental, handicapped accessibility, and
security.

The IHS Facilities Engineering Plan (FEP) establishes annual M&I
workload targets and helps determine the most prudent use of available
resources. The FEP is prepared by IHS Areas, service units, and tribal
personnel to identify, delineate, and plan facilities related activities
and projects to be accomplished during an upcoming fiscal year for the
M&I program.

Funds in the M&I account are used primarily to maintain and improve
health care facilities. Staff quarters operation, maintenance, and
improvement costs are primarily funded with rent collections called
Quarters Return (QR) funds. The M&I funds may be used in conjunction
with QR funds at locations with few quarters or where QR funds are
insufficient to ensure appropriate quarters maintenance.

[Status of Facilities]{.underline}:

The physical condition of IHSowned and many tribally-owned facilities is
evaluated through annual general surveys conducted by local facility
personnel and IHS Area engineers. In addition, comprehensive \"Deep
Look\" surveys are conducted every 5 years by a team of engineers and
architects or other specialists.

These surveys, together with routine observations by facilities
personnel, identify deficiencies that are included in the Backlog of
Essential Maintenance, Alterations, and Repair (BEMAR) database. The
identified BEMAR for IHS and reporting tribal facilities as of
November 2002 is \$506,658,000. The following table summarizes the BEMAR
by category:

**[BEMAR 1]{.underline}/**

**PUBLIC LAW**

Life Safety Compliance \$41,324,000

General Safety 7,850,000

Environmental Compliance.[2/]{.underline} 23,070,000

Handicapped Compliance 17,356,000

Energy Conservation 11,771,000

Seismic Mitigation.[3/]{.underline}\...\......\...\...\...\.....
[131,146,000]{.underline}

**Sub
Total\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....\$323,517,000**

**IMPROVEMENTS**

Patient Care \$19,346,000

Program Deficiencies [115,918,000]{.underline}

**Sub Total \$135,264,000**

**MAINTENANCE & REPAIR 4/**

Architectural M&R \$8,557,000

Structural M&R 34,542,000

Mechanical M&R 48,226,000

Electrical M&R 21,695,000

Utilities M&R 4,680,000

Grounds M&R 16,003,000

Painting M&R 2,827,000

Roof M&R 2[,347,000]{.underline}

**Sub Total \$138,877,000**

**GRAND
TOTAL\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\$506,658,000**

[1]{.underline}/ The FY 2003 M&I allocation will be distributed for
routine maintenance and for projects; these projects reduce identified
BEMAR deficiencies.

[2]{.underline}/ Projects include air quality improvement, asbestos
remediation, lead-based paint, and contaminated soil remediation.

[3]{.underline}/ The Earthquake Hazard Reduction Program Act required
IHS to survey and estimate the cost associated with compliance to
seismic construction standards. This survey was completed in the fall of
1998 and added \$149,127,000 in seismic deficiencies. Some Areas have
chosen to exclude low seismic hazard zones, which have subsequently
reduced the number.

[4]{.underline}/ Staff quarters operation, maintenance, and improvement
costs are funded through rents collected, called Quarters Return (QR)
funds. The M&I funds may be used in conjunction with QR funds at
locations where QR funds are insufficient to ensure appropriate quarters
maintenance.

### **DISTRIBUTION OF M&I FUNDS**

[Current Distribution Method]{.underline}

The IHS M&I funds are distributed to four subprograms, routine
maintenance, M&I projects, environmental compliance, and demolition:

> **Routine Maintenance Funds** - Amounts are calculated using the IHS
> M&I distribution formula, which is based on the University of Oklahoma
> methodology to calculate routine maintenance costs. Routine M&I funds
> can be used to pay non-personnel costs for the following activities in
> IHS and tribally-owned health care facilities: emergency repairs,
> preventive maintenance activities, maintenance supplies and materials,
> building service equipment replacement, upkeep activities, training,
> and local projects.
>
> **M&I Project Funds** - IHS Area Facilities Engineers develop priority
> lists of larger projects to reduce the BEMAR, although some tribes
> take their individual shares. Generally M&I projects in this
> subprogram require levels of expertise not available at the local
> facility. Such projects accomplish major repairs and improvements of
> primary mechanical, electrical, and other building systems as well as
> public law compliance and program-related alterations. Program-related
> alteration projects include changes to existing facilities for more
> efficient utilization, for new patient care equipment, and to
> accommodate new treatment methodologies.
>
> **Environmental Compliance Funds** - Many IHS and tribal facilities
> were constructed before the existence of current environmental laws
> and regulations. Since IHS is required to comply with current Federal,
> State, and local environmental regulations, the use of environmental
> assessments to identify and evaluate potential environmental hazards
> is important. These assessments form the basis of the IHS facilities
> environmental remediation activities. The IHS has identified
> approximately \$23,070,000 in environmental compliance tasks and
> included them in the BEMAR database. Tribally owned health care
> facilities receive assessments upon request by the tribe.

### 

> **Demolition Funds --** The IHS has a number of buildings that are
> vacant or obsolete and no longer needed. The number currently is
> estimated at 15-20 buildings. Many of these buildings are safety and
> security hazards. Demolition of these buildings reduces hazards and
> liability.

**[FUTURE FACILITIES ISSUES]{.underline}**

Several issues have future impact on the ability for IHS to continue to
maintain and operate health care facilities. The number of new
requirements associated with programs for seismic safety of facilities
has increased significantly, although low seismic zones are generally no
longer included. The IHS provided a seismic report to the Federal
Emergency Management Agency (FEMA) in December 1998. Modifications to
IHS Federally-owned and leased facilities needed to comply with seismic
construction requirements total more than \$149 million for all seismic
zones and approximately \$110 million for high and medium seismic zones.

In addition, numerous tribal and some Federal buildings are added each
year to the inventory that requires maintenance and improvement funding.
These additional buildings further dilute the amount of funds available
at each site. Environmental issues, as noted previously, continue to
expand and new issues such as lead paint removal have a substantial
impact on renovation of older IHS facilities.

[Steady State Condition]{.underline} --

This amount would not render a net reduction in existing BEMAR and would
not include improvements and alterations nor include staff and utilities
operating costs.

Funding levels for the past 5 years are as follows:

+-------------+----------------------+---------------------------------+
| ### Year    | [                    |                                 |
|             | Funding]{.underline} |                                 |
+-------------+----------------------+---------------------------------+
| 1999        | \$40,625,000         | President's Budget              |
|             |                      |                                 |
| 2000        | \$43,433,000         |                                 |
|             |                      |                                 |
| 2001        | \$46,331,000         |                                 |
|             |                      |                                 |
| 2002        | \$46,331,000         |                                 |
|             |                      |                                 |
| 2003        | \$47,331,000         |                                 |
+-------------+----------------------+---------------------------------+

**[ACCOMPLISHMENTS]{.underline}**

A total of \$46,331,000 was appropriated in FY2002 plus approximately
\$5,700,000 in quarters return funds was collected and distributed;
quarters return funds are used only to maintain staff quarters. For
routine maintenance and projects, approximately \$27,686,000 was
provided to the IHS Areas and tribes for daily maintenance activities
and projects to maintain the current state of health care facilities;
approximately \$14,145,000 was provided to the IHS Areas and tribes for
projects to reduce the Backlog of Essential Maintenance, Alterations,
and Repair (BEMAR) deficiencies and to improve health facilities to meet
changing medical delivery needs. In addition, for environmental
compliance and demolition of obsolete structures, approximately
\$3,500,000 was provided. In addition, \$1,000,000 was provided for the
Ambulatory Expansion Projects in Portland.

**[RATIONALE FOR BUDGET REQUEST]{.underline}**

**[TOTAL REQUEST]{.underline}** -- The request of \$47,331,000 is the
same as the FY 2003 President's Budget of \$47,331,000.