Repository: UIHistories Project: Board of Trustees Minutes - 1986 [PAGE 446]

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1985]

UNIVERSITY OF ILLINOIS

435

( T h e student advisory vote was: Aye, Mr. Becker, Mr. L a m m ; no, none.) Amendment of Purchase Agreement and Lease-Purchase of Magnetic Resonance Imager System, Chicago

(27) On October 20, 1983, the board approved a contract with the General Electric Company for the acquisition ($1.75 million) and installation ($1.5 million) of a Magnetic Resonance Imager ( M R I ) System. On September 20, 1984, the board approved an increase in installation costs of not more than $250,000. The system has been installed and is currently being tested. No payments have been made to General Electric under the current purchase agreement. The chancellor at Chicago now recommends that the equipment acquisition portion of the agreement ($1.75 million payable upon acceptance of the system by the University), be amended and financed through a lease-purchase arrangement. Lease-purchase proposals received from six companies were reviewed and evaluated by the hospital. The proposal submitted by General Electric Company is the most economical for the University. This proposal calls for monthly payments by the University of $34,610 beginning December 1, 1985, through November 30, 1990. The University will acquire title to the equipment at the end of the five-year period. The attached table compares the cash expenditures by fiscal year if the purchase is done in one year and if, as recommended, it is done through a leasepurchase arrangement with General Electric. (The table is filed with the secretary of the board for record.) There is a modest savings in the lease-purchase method over the five-year period, when discounted at 8 percent and when Medicare capital pass-through reimbursement is included. In addition, with the full impact of changed patientcare reimbursement systems expected to be felt in this fiscal year, the five-year payment plan provides greater flexibility to the hospital in managing its working capital. Funds for the lease-purchase payments required for FY 1986 are available in the Hospital Income Fund and will be included in the hospital's operating budget to be submitted to the board in future years. The agreement is subject to the availability of funds. Installation costs will be paid from the Hospital Income Fund. The vice president for business and finance concurs with the chancellor's recommendation. I recommend approval.

O n motion of Mrs. Gravenhorst, this recommendation was approved by the following vote: Aye, Mrs. Day, Mr. Forsyth, Mrs. Gravenhorst, Mr. H a h n , Mr. Howard, Mr. Logan, Mr. Madden, Mrs. Shepherd; no, none; absent, Miss Smith, Governor Thompson. ( T h e student advisory vote was: Aye, Mr. Becker, Mr. L a m m ; no, none.) Purchases

(28) The president submitted, with his concurrence, a list of purchases recommended by the directors of purchases and the vice president for business and finance. The purchases were presented in two categories: purchases from appropriated funds (i.e., from State appropriations to the University); and purchases from institutional funds. The latter term designates funds received by the University under contracts with the United States government, private corporations, and other