30:9-23.20 Powers, duties of authority.

6. a. (1) A municipal authority shall exercise its powers and duties to manage and operate a hospital owned by it through a contract or contracts with a manager, which may be entered into without public advertising for bid as otherwise required pursuant to the provisions of section 3 of P.L.1971, c.198 (C.40A:11-3); provided, however, that the primary responsibility of operating the hospital shall remain that of the authority.

(2) A county authority may exercise its powers and duties to manage, operate, and maintain a county hospital through a contract or contracts with a manager, which contract or contracts shall be entered into by competitive contracting pursuant to the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.).

b. (1) The initial duration of a contract entered into pursuant to paragraph (1) of subsection a. of this section shall not exceed five years. A contract entered into pursuant to paragraph (1) of subsection a. of this section may be renewed for an additional period, not to exceed five years. A contract entered into pursuant to paragraph (1) of subsection a. of this section more than ten years from the date of the initial contract shall be negotiated as a new contract and not as a renewal contract.

(2) The initial duration of a contract entered into pursuant to paragraph (2) of subsection a. of this section shall not exceed the term provided for in subsection (47) of section 15 of P.L.1971, c.198 (C.40A:11-15).

c. A contract, or a renewal thereof, with a manager to manage and operate a hospital shall be effective only with the prior written consent of the Local Finance Board, which shall consult with the Commissioner of Health and Senior Services. The Local Finance Board shall establish an application procedure, submission requirements, and set minimum standards and content that shall be included in any contract with an entity to manage and operate a hospital.

A contract with a manager shall provide that, in addition to such other matters as determined to be necessary by the authority or as otherwise required by law or regulation:

(1) The authority or its agents, and the city or county or the agents of the city or county, shall have independent access to the books and records of the hospital at all times;

(2) The Governor of the State of New Jersey shall appoint an individual to serve on the board of directors of the manager during the term of the contract, including renewals; and

(3) Other than for routine, day-to-day business activities, the authority shall have the final determination regarding the acquisition and disposition of assets, or the incurring of debt or expenses.

d. When contracting with a manager, the individuals that the manager proposes to designate as the hospital's chief executive officer and chief financial officer, by whatever title, and any change thereof, and all contracts or other arrangements setting forth terms and conditions of employment for those positions shall be subject to the approval of the authority.

e. An authority shall take the following actions pursuant to any requirements that may be established by the Local Finance Board:

(1) adopt a management plan for the hospital, including monitoring and review methods of financial activities;

(2) set minimum requirements for meetings of the authority, and minimum attendance requirements for members;

(3) establish a formal mechanism for communication among the members of the authority's board, hospital administrators and medical staff;

(4) form a finance committee, which shall be responsible for the oversight of the finances of the authority, and delineate the duties and obligations of the finance committee; and

(5) include minimum provisions that shall be included in a contract with a manager. Such provisions shall include the submission of an annual budget of the hospital and of the manager by the manager for the approval of the authority. The approval of these items shall be conditioned upon the approval of the authority's annual budget pursuant to the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.). The budget and any supporting documents as may be required by the Division of Local Government Services shall be submitted to the division as part of the submission of the authority's annual budget.

L.2006, c.46, s.6; amended 2016, c.55, s.5.