Palo Alto will have almost $40 million at its disposal to spend on health programs, affordable housing, infrastructure and green initiatives as part of its recently approved agreement with the Stanford University Medical Center.

Tonight, the City Council will consider ways to spend these funds, which Stanford had agreed to provide in order to get the city's permission for a massive expansion of its hospital facilities.

Under a development agreement the council approved last month, Stanford will provide payments in three installments, with the first $15.7 million payment due this summer. Future payments are scheduled for January 2012 and January 2018.

The agreement was designed to give the city flexibility on what kind of projects to spend the money on. The council, for example, could use the $7.7 million earmarked for "infrastructure, sustainable neighborhoods and affordable housing" to subsidize low-income housing or to address the city's gaping infrastructure backlog, currently estimated at about $500 million.

Stanford is scheduled to contribute $4 million for "community health and safety programs"; $23.2 million for "infrastructure, sustainable neighborhoods and affordable housing"; and $12 million for "sustainability programs" relating to climate change.

Palo Alto officials have already committed to spending $2 million from the community-health fund to support Project Safety Net, a project aimed at promoting youth well-being.

The Stanford funds are flowing into the city's coffers at a time when the city remains mired in budgetary uncertainty. Though the council balanced the fiscal year 2012 budget last month without cutting any popular programs, officials predict budget deficits of close to $7 million in each of the next two fiscal years.

Deputy City Manager Steve Emslie wrote in a new report that Stanford's contributions "provide the city with an exceptional opportunity to begin to address its overall infrastructure and sustainable goals." Emslie noted that while the timing of the money will give the council an "immediate opportunity to initiate projects," staff is recommending a "strategic approach" to spending Stanford funds.

To get the strategic discussion rolling, staff has proposed appointing two council members to a joint committee that would also include Stanford officials. The committee would review possible uses for the community-health funds. The council would then make the final decision on how to spend the money. Under the proposal, the council's Finance Committee would also consider various projects and programs that could be funded before the full council finalizes the spending programs.

Stanford's hospital-expansion program includes reconstruction of Stanford Hospital & Clinics, an expansion of Lucile Packard Children's Center and renovations to various Stanford University School of Medicine buildings.

Facebook and a non-profit health care group have announced plans to design an online service that they hope will replace the nation's antiquated paper-based health care system.

The U.S. Health Care Warranty Exchange (USHCWE), a non-profit health care warranty entity, plans to create a new health care system that provides adequate, affordable health coverage without any federal government involvement.

“The project started out five years ago, just with the idea of trying to come up with another health care industry for health coverage that didn’t involve the federal government or private health insurers,” USHCWE Founder Matthew R. Wright said. “As it evolved, we reached out to Facebook and the team that’s in charge there.”

Wright, who hopes to execute the plan by 2014, says health care will be more accessible through the use of technology such as social networking.

“We looked at the benefits of us and [Facebook] teaming up and we found out [that] with the social media network, we can provide health care access just by a click of a button,” he said.

An online health care system would, in part, facilitate users in checking their health care information and appointments.

“It will be easy for people to have their health records, confirm or deny doctors, track what they do, track their health care and have doctors target certain people with certain problems because everything is privately controlled,” he said. “It will be a system [where] people will just sign up for health coverage and have their health coverage streamlined instead of how the system is today and how strict it is.”

By joining Facebook—which may hit one billion users some time this year—in a movement to improve the current health care system, USHCWE hopes to foster a sustainable program despite the inevitable factors of technology.

“If we and the Facebook’s team team up to jump into other markets, it will have a longer lasting effect. Other changes in the technology world won’t make it dissolve as quickly or lose value because it’s helping more people and it’s connecting more people to get what they want too,” Wright said.

Public Relations Consultant Sharon Wright describes the additional benefits of switching the health care system from print to online.

“There’s going to be some internal information—most of it will be computerized,” she said. “We’re trying to eliminate paper access so people that don’t have access to health care files will not be able to inadvertently look into anybody’s private information. That’s another way [Matthew R. Wright’s] going to secure people’s privacy to their medical records.”

The privacy of members’ information will be protected though an online service, providing additional security for the user’s identity.

“It’s also going to reduce fraud,” she said. “Because the records will be computerized, the health care exchange will have an independent fraud unit that will monitor doctors [and] anyone that has access to the members’ information to avoid health care fraud [including] double billing.”

Matthew R. Wright believes the lack of technology used in promoting health care today is causing the system to lag.  

“There’s not enough technology in the current health care market, that’s the problem,” he said. “Technology is our lives, and right now with the current health care system you have to call a million numbers [and] you have to fill out paper forms. The younger generations, the middle generations and the baby boomers just don’t have the time to fill out papers,” he said.

“This is a fast paced life, so if we involve more technology into health care, it will save time, save money, streamline the whole health care process and it will be efficient and better for all Americans,” he said.

Stanford University Medical Center's four-year quest to get Palo Alto's permission for a massive expansion of its facilities glided past the finish line Monday night when an enthusiastic City Council voted to approve what members routinely say is the largest development project in the city's history.

In a series of 8-0 votes (Councilman Larry Klein recused himself) that several members called the most important the council will make in many years, the council paved the way for Project Renewal -- a dramatic expansion of Stanford's hospital facilities that will add 1.3 million square feet of new development to the city.

The $5 billion project includes building a new Stanford Hospital & Clinics building, expanding the Lucile Packard Children's Hospital and making various upgrades and renovations to Stanford School of Medicine buildings and clinics.

The tortuous approval process kicked off in 2007 and included 97 public hearings and more than two years of tense negotiations between the city and Stanford over a development agreement that would allow the hospitals for far exceed local zoning regulations. Though the city and Stanford initially clashed on a number of issues, including revenue guarantees, new housing and transportation impacts, the expansion project picked up momentum, along with the council's support, over the past year.

Councilman Greg Scharff said he was amazed by the way Stanford, the city and the greater community pulled together on the project. He praised the health care benefits Project Renewal will bring to the city. His colleagues agreed and backed Scharff's motion to grant the project environmental clearance.

"It's probably going to be the most important that we'll make as a City Council in a long time," Scharff said shortly before the 8-0 vote to approve the environmental-impact report. "I think this will benefit the community for generations."

Other council members shared his enthusiasm. Vice Mayor Yiaway Yeh called Monday's meeting a "momentous evening," and Councilman Pat Burt praised the dramatic change in tone in the negotiations between Stanford and the city, saying the discussions lay "an excellent foundation for future relationships." Councilwoman Gail Price said the project is "complex," "intense" and "forward thinking" and that she considered it a "pleasure to be a part of this process."

Councilman Greg Schmid put it most succinctly: "It's a night for celebration in Palo Alto."

More than 100 people, including a handful of past and present mayors, dozens of doctors and patients and one legendary San Francisco 49ers quarterback, packed into the Council Chambers at City Hall for the project's final public hearing. Their message to the council was clear and nearly unanimous.

"As a resident of Palo Alto, as someone who for generations now -- for my children and probably their children -- have been beneficiaries of this hospital, I urge you to approve this project tonight in a unanimous fashion," said former 49er Steve Young, a member of Stanford Hospital's board of directors, echoing the comments of almost every other speaker.

East Palo Alto Mayor Carlos Romero also voiced his city's support for Stanford's expansion. Though the East Palo Alto council had concerns about the project's traffic impacts, these concerns were assuaged by last-minute negotiations between East Palo Alto, Palo Alto and Stanford. The hospitals had agreed to provide $200,000 to the city for improvements to University Avenue.

A bitter contract dispute between Stanford and Packard hospitals and their nurses' union has reached a stalemate, with the union accusing the hospitals of "a declaration of war" after the hospitals declared an official impasse and implemented a contract the nurses rejected in March 2010.

Stanford Hospital & Clinics and Lucile Packard Children's Hospital and the union, the Committee for Recognition of Nursing Achievement (CRONA), have had dozens of negotiations to try to iron out sticking points in the contract, which affects 2,700 nurses and expired March 31, 2010.

The hospitals made a "last, best and final" offer that was rejected by the union last spring. The hospitals then pulled out of negotiations. A federal mediator brought the two sides back together late last year, with both sides announcing a tentative contract in December. Nurses voted to reject the contract on Dec. 13, 2010, by 54 percent to 46 percent.

Stanford and Packard's joint Feb. 7 announcement would implement select provisions from the March 31 contract offer. Hospitals spokeswoman Sarah Staley said once an impasse is declared, the hospital can choose which provisions it will implement.

The hospitals will give nurses a 4 percent pay increase but will not make it retroactive to March 31, as was previously offered in the tentative agreement. A $3,000 bonus was to be given to nurses if a 10-day notice of intent to strike was not issued. The hospitals have withdrawn that offer, although the nurses have not issued a strike notice.

A key point of contention in the negotiations, the Professional Nurse Development Plan (PNDP), which was arguably the deal breaker in the tentative-contract vote, will be immediately implemented by the hospitals. That has outraged union leaders.

"We are very disappointed, but not surprised, that the hospitals have chosen to treat the nurses, once again, with disrespect and vindictiveness," CRONA President Lorie Johnson stated in a letter to the nurses.

"Everyone should understand that this is a declaration of war by the hospitals against CRONA and the nurses, and a blatant attempt to try and force us to accept a bad contract. The hospitals need to understand that such behavior on their part will simply worsen relations and not be to their benefit.

"As in the past, we urge all nurses to stand in unity and not allow the arrogance of a big business such as SHC and LPCH divide us," Johnson wrote.

Staley said the provisions being chosen are part of the December tentative agreement.

"It' very important to note that. These were what we agreed to. It is our sincere hope that everyone would continue to focus on excellent patient care and move forward," she said.

Greg Souza, vice president of human resources for Lucile Packard Children's Hospital, said the hospitals are disappointed that after more than a year of contract negotiations "it will not be possible to reach mutually acceptable contract settlements at this time.

"We feel strongly that our offers advance nursing practice and programs and provide our patients with the very best in patient care," he said.

A corporate-philanthropy program that aims to raise as much as $150 million for the proposed Stanford Hospitals & Clinics expansion project has launched with six founding companies, Stanford Hospital announced Tuesday (Feb. 1).

The new Stanford Hospital Corporate Partners Program -- which includes Hewlett-Packard, Apple, eBay, Intel, Intuit and Oracle -- is expected to bring in the funds over the next 10 years. The corporate contributions would be in addition to $400 million the hospital hopes to raise in private donations.

The new $2 billion hospital is expected to be completed by 2018, with construction beginning as early as this year pending approval from the City of Palo Alto. It is part of a larger $3 billion expansion that includes Lucile Packard Children's Hospital, the Stanford University Medical Center and Stanford clinics.

"This is really unprecedented support from truly our world's most innovative companies," said Amir Dan Rubin, Stanford Hospital president and CEO. "It's unique to Stanford Hospital & Clinics and to Silicon Valley. You can't find these companies anyplace else.

"Stanford is known for a lot of innovations in health care," he added, pointing to development of the cyberknife and the first heart transplant, among many others.

Rubin pointed to how health-care delivery is changing, thanks to technology.

"There may be a lot of things we can do without people showing up here. You can get your prescriptions online and have interactions online. We can leverage expertise and give advice remotely."

Staff at both tech companies and Stanford "can learn a lot from one another," said Ron Johnson, Apple senior vice president of retail and a member of the Stanford Hospital board.

Residents were divided Monday night on the environmental impacts of the Stanford Medical Center Facilities Renewal and Replacement project during the City Council meeting. More than 20 Palo Altans stepped up to the podium to praise and criticize the hefty Draft Environmental Impact Report's assessments of the huge project.

Long-time Palo Alto sustainable-living advocate Walt Hays praised the Draft EIR for its commitment to sustainability.

"This is one of the strongest statements of self-sustainability I have ever seen," Hays said. "It goes way beyond government standards."

Representatives from Stanford said that, with mitigation, the project on average will have a 25 percent smaller carbon footprint than other local businesses. The new buildings will have more efficient ventilation, green landscaping using drought-tolerant plants and water-conservation fixtures in the restrooms.

Mayor Pat Burt also praised the project for its sustainability features, but, like many Palo Altans, criticized it for neglecting important traffic issues.

Each resident who spoke on transportation and traffic cited a lack of research on methods to alleviate traffic -- some heatedly.

The heated discussion led Councilman Greg Schmid to ask the projects team to come back with "a traffic model that is clear and concise."

The huge rebuilding and expansion of Stanford's hospitals and medical facilities in Palo Alto would dramatically clash with the city's long-term development plans and could spawn a new zoning district specifically tailored for the new hospitals, according to a study the Planning and Transportation Commission discussed Wednesday night.

The project, often touted as the "largest in city's history," would add 1.3 million square feet of new development to Palo Alto and would significantly exceed the city's height limits and density requirements.

To address the inconsistency, Stanford proposed that the city create a new "hospital zone" for the project, according to the Draft Environmental Impact Report.

But several planning commissioners expressed concern Wednesday about Stanford's proposal for the new zone and the project's inconsistency with Palo Alto's Comprehensive Plan, the city's land-use bible that guides and explicitly limits nonresidential development.

The commission is in the midst of revising and upgrading the plan a multi-year effort that would push the document's horizon to 2020.

Palo Alto could require Stanford University to provide an explicit guarantee that Stanford's proposed expansions of its hospital facilities would not burden the cash-strapped city with any ongoing costs, members of the City Council said Monday night.

The city and the university are in the midst of negotiations over a development agreement that would allow Stanford to rebuild Stanford Hospital and Clinics and the Lucile Packard Children's Hospital, bringing 1.3 million square feet of new development to Palo Alto.

The project hit an important milestone last week, when the city released a Draft Environmental Impact Report for the project, which lists the project's impacts and recommends mitigations.

But as Monday's discussion of "Project Renewal" indicated, the two sides still don't see eye to eye on potential impacts of the new hospitals, including fiscal impacts. An analysis by the city's consultant, Applied Development Economics, found that the project would cost the city about $1.1 million in annual ongoing costs. Stanford's consultant, CBRE Consulting, concluded that the taxes and fees generated by the project would exceed the costs of municipal services by about $7.6 million.

Council members Greg Schmid and Nancy Shepherd both said making sure the project is "revenue neutral" should be a major focus of the ongoing negotiations. The city is facing a projected deficit of $7.3 million in fiscal year 2011 and is in the midst of cutting programs and renegotiating employee contracts to cut costs.

Stanford University Medical Center's sweeping proposal to rebuild and expand its hospital facilities threatens to bring -- along with improved medical care -- a wide range of traffic, noise and pollution impacts to Palo Alto, some of which cannot be avoided or mitigated, a detailed environmental report released Wednesday indicates.

The $3.5 billion "Project Renewal," which city officials routinely call the "largest project in the city's history," would unfold over the next 15 years. It would bring about 1.3 million square feet of new development and more than 2,200 new employees to Palo Alto by 2015.

The project includes reconstruction of Stanford Hospital and Clinics, an expansion of Lucile Packard Children's Hospital, renovation of Hoover Pavilion and replacement of School of Medicine facilities.

The completion of the report is a "significant milestone" in the rebuilding project, dubbed "Project Renewal," executives of both hospitals said in a joint letter released Wednesday afternoon shortly before the city released the report.