Office ofthe President
December 13, 2011
Members, Board of Trustees:
LEASE/PURCHASE OF MEDICAL EQ QUIPMENT
Recommendation: that the Board of Trustees approve the $10 million UK HealthCare Enterprise
Medical Equipment Lease Pool for 2011-12 and declare official intent to reimburse capital
expenditures for the Healthcare Enterprise Medical Equipment from a future debt obligation, to
be located within the various facilities of UK HealthCare, including but not limited to Chandler
Medical Center and Good Samaritan Hospital.
Background: At the September 11, 2007 meeting, the Board delegated to the Executive Vice
President for Finance and Administration the responsibility for managing University debt related
to the lease/purchase of equipment and infonnation technology items costing less than $200,000.
However, acquisitions of major equipment and infonnation technology items costing $200,000
or more where the method of procurement involves debt in the fonn of capitalized lease
obligations will be submitted to the Board for approval.
U.S. Department of Treasury regulations related to use of proceeds of tax-exempt bonds or notes
require that the borrower make a Declaration of Official Intent to reimburse itself for capital
expenditures made prior to the issuance of the debt (also known as a "Reimbursement
Resolution”) if the issuer intends to reimburse itself from tax-exempt debt proceeds.
The University’s Debt Committee reviews these acquisitions to assess the impact on the
university’s debt capacity. The Debt Committee has detennined that acquisition of these items is
consistent with the University’s Debt Policy.
The medical equipment pool will allow funding flexibility with regard to various capital medical
equipment purchases initiated by the HealthCare Enterprise during the 2011-12 fiscal year. This
pool is required for cash-flow management purposes as UK HealthCare proceeds with several
cash-intensive projects such as the construction and eventual build-out of the Patient Care
Facility, various ambulatory care initiatives, and other major projects/initiatives. The medical
equipment that may be purchased includes but is not limited to: surgical, radiologic, patient
monitoring/bedding, laboratory analyzers/instruments, infonnation technology, and other
procedure specific equipment. The pool will be funded by the UK HealthCare Clinical
Action taken: IZI Approved EI Disapproved EI Other