MEMORANDUM

TO: Pete Sprague, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale Bagley, Mayor

Bonnie Golden, Grants Manager

FROM: Craig Chapman, Acting Finance Director

DATE: October 2, 2003

SUBJECT: Ordinance 2003-19-23, an ordinance approving the purchase of a new MRI system for the Central Peninsula General Hospital at a cost not to exceed $1.3 million

The hospital administration has determined that patients will benefit by upgrading the hospital's five-year-old MRI machine with a new MRI that would reduce claustrophobia while expanding imaging capabilities, such as cardiac imaging, enhanced brain imaging, and new breast imaging. The cost of a new MRI machine is estimated at $1,300,000.

The CPGH Inc., board has authorized the use of $500,000 from the plant, replacement, and expansion fund, and the Central Kenai Peninsula Hospital Service Area board has authorized the redirection of $320,000 of the following previously authorized capital purchases: UPS Power Supply for MRI, $48,000; Peripheral Vascular Coil, $52,000; and Replacement of Mammography Unit, $220,000. The administration estimates CPGH will receive $180,000 for trade-in on its old MRI. In addition, Central Peninsula General Hospital has received a Denali Commission grant in the amount of $300,000, to be used to offset the cost of a new MRI.

The Denali Commission grant requires a 100% cost share, or a minimum of $300,000. The appropriation of CPGH funds to the project exceeds the cost share needed for this project.

All expenditures for this project will be charged to account number 600.81111.04MRI.48515.

Attachments:

Ordinance, award letter, Service Area Board Minutes, CPGH, Inc., Resolution