To: Board of Supervisors
From: Dr. Grant Colfax, Health Services Director
Report Title: Amendment/Extension #23-861-2 with Alvarez & Marsal Healthcare Industry Group, LLC
☐Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Health Services Director, or designee, to execute on behalf of the County Contract Amendment/Extension #23-861-2 with Alvarez & Marsal Healthcare Industry Group, LLC, a limited liability company, to amend Contract #23-861 (as amended by Contract Extension #23-861-1), effective January 1, 2026, to increase the payment limit by $1,918,136, from $6,139,200 to a new amount not to exceed $8,057,336 and extend the termination date from January 31, 2026 to June 30, 2026 to continue providing interim Chief Financial Officer (CFO) services, including management of all day-to-day financial operations of the Contra Costa Health Services (CCHS).
FISCAL IMPACT:
Approval of this Contract Amendment/Extension will result in an additional amount not to exceed $1,918,136 funded 100% by Hospital Enterprise Fund I. (Rate increase)
BACKGROUND:
At the end of 2024 the CCHS CFO/Chief Operating Officer (COO) retired. Despite a national executive search conducted by a leading healthcare executive recruiting firm, CCHS efforts to hire a new CFO were unsuccessful. This challenge may stem from two primary factors, 1) the compensation package may be insufficient to attract an experienced executive capable of managing a complex health system that includes both a hospital and a health plan; 2) the current structure of responsibilities under the CFO, also operating as the COO, does not align with industry norms, making it difficult to find a successor with credentials to meet the needs of the County.
As such, findings from an A&M organizational assessment recommended uncoupling the CFO/COO roles and bringing in an interim CFO along with a team of executive finance personnel resources to manage daily financial operations and drive the organizational transformation efforts required of CCHS. This includes CFO oversight and management of the Contra Costa Regional Medical Center (CCRMC) and Contra Costa Health Plan (CCHP).
On September 10, 2024, the Board of Supervisors approved Contract #23-861 with Alvarez & Marsal Healthcare Industry Group, LLC, in an amount not to exceed $6,139,200 to provide interim CFO services, including management of all day-to-day financial operations for the Health Services Department, for the period October 1, 2024 through September 30, 2025. This contract contains special provisions related to indemnification and liability, as follows:
a. The County shall indemnify the Alvarez & Marsal employees acting as officers (Brian Buchanan and Anna Matzinger) to the same extent as the most favorable indemnification it extends to county employees.
b. The County agrees to indemnify and hold harmless each Alvarez & Marsal, its affiliates and their respective shareholders, members, managers, employees, agents, representatives and subcontractors against any and all losses, claims, damages, liabilities, penalties, obligations and expenses, including the costs for counsel or others in investigating, preparing or defending any action or claim, whether or not in connection with litigation in which any Indemnified Party is a party, or enforcing the contract (including these indemnity provisions). This indemnification obligation applies to actions or claims incurred, caused by, relating to, based upon or arising out of (directly or indirectly) Alvarez & Marsal’s performance or nonperformance under the Contract, except for such actions or claims that result primarily and directly from Alvarez & Marsal’s gross negligence or willful misconduct, as determined by a final court judgment.
c. The County acknowledges that Alvarez & Marsal may utilize the services of third-party service providers to assist in performing certain services. Under this contract, the County agrees that no Contractor affiliate, subcontractor, nor their respective partners, principals or employees who perform work under the contract will have any liability to County in connection with the services or this contract.
d. The contract limits Alvarez & Marsal’s total liability to the fees Alvarez & Marsal receives under the contract. Alvarez & Marsal will also not be liable for any special, consequential, incidental or exemplary damages or loss, or any lost profits, savings, or business opportunity.
e. The contract also requires the county to maintain public officials errors and omissions liability insurance for Contractor’s personnel performing CFO Duties and Deputy CFO Duties services. Such insurance coverage will be primary coverage to any insurance available to these personnel by Alvarez & Marsal.
f. Lastly, under the contract’s Business Associate Addendum (BAA), Alvarez & Marsal has no obligation to save, hold harmless, or indemnify the County in the event there is a privacy breach or unauthorized access, use, or disclosure of protected health information by Alvarez & Marsal. The County will be responsible for any penalty or fine assessed against County arising from Alvarez & Marsal’s failure to comply with the BAA.
On September 16, 2025, the Board of Supervisors approved Contract Extension #23-861-1 with Alvarez & Marsal Healthcare Industry Group, LLC, to continue to provide temporary CFO/COO roles and continue the recruitment efforts for a permanent CFO through January 31, 2026.
Approval of Contract Amendment/Extension #23-861-2 will allow the Contractor to continue providing temporary CFO/COO role and continue the recruitment efforts for a permanent CFO through June 30, 2026.
CONSEQUENCE OF NEGATIVE ACTION:
If this Contract Amendment/Extension is not approved, CCH will not have finance operations of a CFO/COO. Additionally, CCH will not be able to strengthen and enhance its finance functions to more efficiently support its operations, meet its future challenges and advance the organization’s mission to deliver high- quality healthcare services.