Item Description:
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Amend the 2025 Capital Budget to increase CP1007546 HHS Asset Preservation 2021-2025 for capital medical equipment purchases. Require HHS to purchase critical medical equipment in collaboration with the Hennepin County Purchasing and Contract Services Department and Hennepin County Office of Budget and Finance
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Resolution:
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BE IT RESOLVED, that the capital budget for the Hennepin Healthcare System, Inc. (HHS) Asset Preservation project (CP 1007546) be increased from $93.5 million to $108.5 million to fund the purchase of critical medical equipment, with the $15 million increase funded with a $12 million transfer from the New In-Patient Bed Tower project (CP 1009702) and a $3 million transfer from the Mental Health and Addiction Medicine Facility project (CP 1011346); and
BE IT FURTHER RESOLVED, that HHS must purchase this equipment in collaboration with and with the approval of the Hennepin County Purchasing and Contract Services Department and Hennepin County Office of Budget and Finance; and
BE IT FURTHER RESOLVED, that HHS is authorized to use the $15 million solely to purchase critical medical equipment and for no other purpose, following review and approval by Hennepin County Purchasing and Contract Services Department and submission of invoices for said equipment to Hennepin County Office of Budget and Finance, the Controller is authorized to transfer and disburse funds as directed.
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Background:
Minn. Stat. § 383B.916 permits the County to finance capital improvements or equipment for Hennepin Healthcare System (HHS), which is a subsidiary of the County. On April 16, 2025, the interim CEO and CFO for HHS together made a formal request to the County for financial support to purchase capital medical equipment for HHS.
County Administration recommends that these equipment needs be funded through an amendment to HHS's existing Asset Preservation capital project. If approved, this capital budget amendment would be funded with the proceeds of County debt, as is the case with other HHS asset preservation and space improvement projects already included in the adopted 2025-2029 Capital Improvement Program. Through capital project 1007546 HHS Asset Preservation, the County funds asset preservation projects that include life safety / code compliance, mechanical and other building systems, electrical, building envelope and exterior site projects. The various building infrastructure, systems and equipment at HHS must be continually repaired, renewed, and upgraded to maintain spaces to continue to provide high quality patient care and safe environments for all patients, visitors, and staff of HHS.
Current Request: This board action requests that capital project 1009702 HHS New In-patient Bed Tower project be reduced from $28 million to $16 million and capital project 1011346 Mental Health & Addiction Medicine Facility project be reduced from $15 million to $12 million, for a total reallocation of $15 million be added to capital project 1007546 HHS Asset Preservation. $15 million solely to purchase critical medical equipment and for no other purpose.
recommendation
Recommendation from County Administrator: Recommend Approval