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.

+------------+-------------+-------------+-------------+------------+
|            | FY 2003     | FY 2004     | FY 2005     | Increase   |
|            |             |             |             |            |
|            | Actual      | Conference  | Estimate    | or         |
|            |             |             |             | Decrease   |
+------------+-------------+-------------+-------------+------------+
| BA         | \           | \           | \           | +\$0       |
|            | $49,507,000 | $48,897,000 | $48,897,000 |            |
+------------+-------------+-------------+-------------+------------+
| 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 and repairs 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
improvements to facilities for enhanced 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.

Facilities Engineering Plans (FEPs) establish annual M&I workload
targets and helps determine the most prudent use of available resources.
FEPs are prepared by IHS Areas, service units, and Tribal programs to
identify, delineate, and plan facilities-related activities and projects
to be accomplished during the 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. 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 \"Facility
Condition 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
2003 is \$472,164,000. The following table summarizes the BEMAR by
category:

**[BEMAR]{.underline} **[1]{.underline}**/**

**PUBLIC LAW**

Life Safety Compliance \$39,267,000

General Safety 7,982,000

Environmental Compliance.[2]{.underline}/ 20,233,000

Handicapped Compliance 16,913,000

Energy Conservation 10,669,000

Seismic
Mitigation.[3]{.underline}/\...\......\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....[100,332,000]{.underline}

**Sub
Total\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\$195,396,000**

**IMPROVEMENTS**

Patient Care \$27,661,000

Program Deficiencies [102,290,000]{.underline}

**Sub Total \$129,951,000**

**MAINTENANCE & REPAIR** [4]{.underline}**/**

Architectural M&R \$10,525,000

Structural M&R 37,066,000

Mechanical M&R 50,492,000

Electrical M&R 22,531,000

Utilities M&R 4,760,000

Grounds M&R 16,179,000

Painting M&R 2,421,000

Roof M&R 2[,843,000]{.underline}

**Sub Total \$146,817,000**

**GRAND TOTAL** 5/
**\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
\$472,164,000**

**[1]{.underline}/** The FY 2004 M&I allocation will be distributed for
routine maintenance and for projects; 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.

**5/** Decrease from last year due to new facilities coming on line and
the accompanying disposal of old buildings; also, data validation
removed extraneous data values.

### **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 \$20 million 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 10 -- 15 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 \$100 million for all seismic
zones and approximately \$49 million for high and medium seismic zones.

In addition, each year numerous tribal and some Federal buildings are
added to the real property inventory and require 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.

An issue affecting IHS with unprecedented pertinence now and in the
foreseeable future is homeland security, and specifically, bioterrorism.
A recent DHHS initiative regarding this subject requires each OPDIV to
[include]{.underline} emergency preparedness as it relates to
bioterrorism in budgetary planning.

[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.

**[ACCOMPLISHMENTS]{.underline}**

A total of \$49, 507,000 was appropriated in FY 2003 plus approximately
\$5,900,000 in quarters return funds was collected and distributed;
quarters return funds are used only to maintain staff quarters.
Approximately \$28,649,126 was provided to the IHS Areas and Tribes for
daily maintenance activities and local projects to maintain the current
state of health care facilities; approximately \$17,357,874 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 healthcare facilities to meet changing healthcare delivery
needs. A national effort was initiated to execute a new cycle of
Environmental Assessments, with emphasis on direct building and grounds
related deficiencies with sufficient data to program projects to address
pending environmental deficiencies. For environmental compliance,
\$3,000,000 was available, and \$500,000 for demolition. In conjunction
with improved management practices, energy conservation measures and
projects reduced the energy related utility consumption for IHS managed
facilities from \$2,236,000 BTU/SM to \$2,150,000 BTU/SM.

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

**[TOTAL REQUEST]{.underline}** -- The request of \$48,897,000 is the
same as the FY 2004 enacted budget level.