MINUTES OF A REGULAR MEETING OF THE BOARD OF VISITORS
OF VIRGINIA COMMONWEALTH UNIVERSITY
October 17, 1974
A regular meeting of the Board of Visitors of Virginia Commonwealth
University was held on Thursday, October 17, 1974, at 9 a.m. in the President's
Dining Room.
Present were Drs. Blanton and Gwathmey; Messrs. Dabney, Morgan,
Norris, Obenshain, Scott and Seaborn; and Mesdames Satterfield and Thalhimer.
Messrs. McGehee, Sheffield, Shumate and Taylor and Mrs. Stone were absent.
Also present were Drs. Andrako, Brooke, Hall, Neal, Salley, Willett, Wilson
and Woods; Messrs. Holmes, Imirie and Temple; and Mrs. Price.
Dr. Blanton called the meeting to order and welcomed Mr. Morgan and
Dr. Salley.
On motion made and seconded, the minutes of a regular meeting of the
Board of Visitors, held September 12, 1974, a special meeting of the Student
Affairs Committee, held September 25, 1974, a special meeting of the Property
Committee, held September 27, 1974, and a special meeting of the Executive
Committee, held July 25, 1974, were approved unanimously.
Dr. Blanton reported that the Hospital Quality Assurance Committee had
met earlier on October 17, 1974, and a committee had been set up composed of
Dr. Gwathmey, Mr. Imirie and Mr. Seaborn to study the Board's by-laws to
determine if they are in compliance with requirements of the Joint Commission
on Accreditation of Hospitals.
Page 2
A report by the University Interim Administrative Committee and a report
by Dr. Woods on the Cancer Center followed.
At this time, Messrs. Helegus, Rush and Seay from Hayes, Seay, Mattern
and Mattern and Mr. Harkness from TAC joined the meeting to give a presentation
on the Health Sciences Building. Dr. Neal informed the Board of the discussions
the administration has had with the Division of Engineering and Buildings and
other state officials concerning the ground level of this building. The Board
agreed to support the plans for the Health Sciences Building, as presented, and
stated that the administration should feel free to call on the Board for assistance
or support in this matter.
Mr. Milton Farley joined the meeting at this time; he and Mr. Holmes
gave some background and legal information on the class action suit that has
been filed by Bonnie Baker and the Floyd Avenue Tenants Association.
Dr. James Mathis and Dr. Wilson gave a report on the Gay Alliance of
Students. After discussion, on motion made and seconded, the following resolu-
tion was approved, with Messrs. Norris and Scott dissenting:
With deep regard for the severe human problem involved,
it is expressed as the sense of the Board that the Gay
Alliance of Students not be registered.
Mr. Imirie presented, for approval, an agreement between the Virginia
Hospital Laundry, Inc., Virginia Commonwealth University, Medical College
of Virginia Hospitals, and Hopewell Hospital Authority, John Randolph Hospital.
On motion duly made, seconded and approved, the following resolution was
adopted, with Mr. Morgan abstaining:
Page 3
RESOLVED, that the Rector and Secretary of the Board are
hereby authorized and directed to execute and deliver a
Laundry Service Agreement between Virginia Hospital Laundry,
Inc., Virginia Commonwealth University, Medical College of
Virginia Hospitals, and Hopewell Hospital Authority, John
Randolph Hospital, pursuant to which VCU, the Medical
College of Virginia Hospitals, agrees to grant Virginia
Hospital Laundry, Inc., the exclusive right to provide all
of its laundry and linen service requirements for a period of
twenty years, said laundry Service Agreement to be in sub-
stantially the form submitted to this meeting, with such
changes therein as may be approved by such officers, the
execution thereof with said changes to be conclusive evi-
dence of such approval.
A copy of this agreement is attached to the minutes.
Following a discussion on the financial feasibility of replacement and
renovation of facilities at MCV, on motion made, seconded and approved, the
following resolution was adopted, with Mr. Morgan abstaining:
It is hereby resolved that, in accordance with the
recommendation of Booz, Allen and Hamilton, Inc. ,
Management Consultants, contained in their studies
of the financial feasibility of replacement and reno-
vation of facilities at the Medical College of Virginia
Hospitals dated November 21, 1972, and October 2,
1974, the University shall undertake a program of
development of financial management for the Medical
College of Virginia Hospitals. It is further resolved
that, effective immediately, the University shall
implement the foregoing by undertaking a definition
of the goals and objectives of such programs.
Dr. Andrako presented the Patent Policy and Procedures document. On
motion made and seconded, the Patent Policy and Procedures document was
unanimously approved.
The report of Hospital Accounts was, on motion made and seconded,
approved unanimously.
Page 4
On motion made and seconded, the Faculty Appointments and Changes
in Status were approved unanimously.
Dr. Blanton reported that Messrs. Holmes, Imirie, McGehee, Scott
and Temple had met to discuss the type of financial report that should be made
to the Board on a regular basis. This report would deal with the financial
situation of the entire University.
Dr. Blanton apologized to Dr. Willett for not having time for his report
on the progress of the presidential search.
The meeting adjourned at 1 p.m.
Secretary
Chairman
THIS AGREEMENT dated this 17th day of October, 1974,
by and between VIRGINIA HOSPITAL LAUNDRY, INC., a Virginia non-
stock, non-profit corporation, herein called "Hospital Laundry",
and the HOPEWELL HOSPITAL AUTHORITY, JOHN RANDOLPH HOSPITAL, a
political subdivision of the Commonwealth of Virginia, and
VIRGINIA COMMONWEALTH UNIVERSITY, MEDICAL COLLEGE OF VIRGINIA
HOSPITALS, an agency of the Commonwealth of Virginia, herein
called "Participating Hospitals":
m
W I T N E S S E T H:
WHEREAS, Participating Hospitals desire to obtain
reliable and economical laundry, linen and uniform services for
their hospital facilities; and
WHEREAS, Hospital Laundry has been organized as a
non-stock, non-profit corporation solely to provide reliable
and economical laundry, linen and uniform services to the Participating Hospitals on a non-profit cooperative basis pursuan
to the provisions of Sections 1381 et seq. of the Internal Revenue
Cede of 1954, as amended; and
WHEREAS, Hospital Laundry plans to acquire a laundry
facility to carry out its obligations under this agreement with
the Participating Hospitals and the Participating Hospitals are
willing to enter into this agreement in order to assure themselves
2.
adequate and essential laundry and linen service; and
WHEREAS, Hospital Laundry intends to enter into a
lease agreement with the Industrial Development Authority of
the City of Richmond, Virginia (the Authority) pursuant to
which the Authority will agree to issue its notes and/or bonds
to provide funds to finance the cost of acquiring, constructing
and equipping the Project and Hospital Laundry will agree to
pay rentals in an amount sufficient to enable the Authority to
meets its debt service obligations on such notes and/or bonds;
and
WHEREAS, the Authority has required this agreement to
demonstrate the financial viability of Hospital Laundry and its
ability to meet its lease rental obligations to the Authority;
NOW, THEREFORE, in consideration of the premises and
of the covenants and agreements hereinafter stated, the parties
hereto have agreed and do hereby agree as follows:
1. Definitions. The following words and terms as
used herein shall have the following meanings:
"Authority" shall mean the Industrial Development
Authority of the City of Richmond, Virginia.
"Board of Directors" or "Board" shall mean the
Board of Directors of Virginia Hospital Laundry, Inc.
"Cost of Providing Services" shall mean only those
3.
items of expense incurred by Hospital Laundry directly related
to providing the laundry, linen and uniform services under this
agreement, including (1) operating, inventory and salary expenses,
(2) necessary maintenance, repair and rehabilitation costs, (3)
the lease rentals and any other obligations or commitments
incurred by Hospital Laundry in connection with the financing
for the Project (whether on a tax-exempt or taxable basis and
whether short-term or long-term), and (4) the establishment of
a reserve as provided in Section 4 hereof, but shall not include
any profit to Hospital Laundry for providing such services.
"Events of Default" shall mean, with respect to
any Participating Hospital, any of the events enumerated in
Section 12.
"Executive Committee" shall mean the Executive
Committee of Virginia Hospital Laundry, Inc.
"Linen Standardization Committee" shall mean the
Executive Committee so long as the Executive Committee shall be
comprised of one member from each Participating Hospital. There-
after, the Linen Standardization Committee shall consist of one
representative of each Participating Hospital as designated by
its board of directors.
"Project" shall mean the acquisition, construction
and equipping of a laundry facility, including land, a suitable
4.
building and all costs related thereto, with adequate capacity
to handle the needs of the Participating Hospitals.
"Specialty Items" shall mean all items used by
the Participating Hospitals requiring laundry service other than
Standard Items.
"Standard Items" shall mean those linens (including,
without limiting the generality of the foregoing, general patient,
operating room, delivery room and central sterile room linen),
uniforms and other items appropriate for standardization which
conform to the guidelines for standardization from time to time
established by the Linen Standardization Committee and which
appear on a Standard Linen List which shall be established,
maintained and revised from time to time by the Linen Standardi-
zation Committee.
2. Services; Exclusive Right.
A. Subject to the terms and conditions set forth
herein, Hospital Laundry shall provide for the Participating
Hospitals complete laundry and linen services for all Standard
Items and Specialty Items used by the Participating Hospitals,
as, when and to the extent reasonably requested by the Participating
Hospitals and in accordance with standards established from time
to time by the Board of Directors, such services to include, with-
out limiting the generality of the foregoing, linen supply, pick-up,
5.
laundering, conditioning, ironing, folding, press work, flat
work and delivery.
B. Each Participating Hospital agrees that for
the term of this agreement Hospital Laundry shall have the sole
exclusive right to provide all of its laundry service require-
ments for Standard Items and Specialty Items, and acknowledges
that Hospital Laundry is undertaking its lease obligations to
the Authority and other obligations in connection with the
financing of the Project in reliance upon this commitment. In
the event that the needs of a Participating Hospital signifi-
cantly increases so that Hospital Laundry is, for lack of
sufficient laundry service capacity, unable to provide laundry
services to the extent necessary to meet these additional re-
quirements, it is understood and agreed that it may be necessary
for such Participating Hospital to obtain additional laundry
services elsewhere to such extent.
C. Should any Participating Hospital determine
to make use of disposable diapers, sheets, uniforms or other
items now contemplated to be covered by this agreement, Hospital
Laundry shall have the exclusive right to supply such items pro-
vided Hospital Laundry shall be willing and able to do so at a
delivered price not greater and at a quality not less than that
which such Participating Hospital could obtain on a delivered
6.
basis elsewhere.
3. Price and Payment for Services. Except as herein-
after provided, each Participating Hospital shall pay to Hospital
Laundry for the services provided hereunder, when and as provided,
according to the schedule of prices as determined from time to
time by the Board of Directors. The schedule shall be revised
semiannually, or more often as necessary, to provide sufficient
income to Hospital Laundry to pay the entire Cost of Providing
Services. The schedule may include categories based on the rea-
sonable differentiation in type of service or linen provided, but no
differentiation shall be made during the term of this agreement
which is based on volume of service or supplies or within a
category or on distance of the Participating Hospital from
Hospital Laundry's plant. Each Participating Hospital also
agrees to maintain with Hospital Laundry a deposit equivalent
to one (1) month's estimated fee for services provided to it
by Hospital Laundry.
Hospital Laundry shall submit to each Participating
Hospital a statement for services rendered as soon as practicable
after the close of each month. Payment shall be made by the
Participating Hospital within twenty (20) days after the statement
date in cash to Hospital Laundry at such address as Hospital
Laundry shall from time to time designate. In the event any
7.
amount is not paid when due, it shall bear a default and delin-
quency charge from such due date until paid at the rate of 9%
simple interest per annum. In the event any amount is not paid
in accordance with the terms hereof, the Participating Hospital
shall pay all cost of collection, including reasonable attorneys'
fees, and Hospital Laundry shall have the right to apply moneys
deposited with Hospital Laundry by the Participating Hospital to
the payment of such amount.
4. Patronage Dividend. Annually, the Board of Hospital
Laundry shall determine the actual unit cost (based on the total
Cost of Providing Services but also taking into consideration an
allowance for any Federal income tax savings realized by Hospital
Laundry by reason of depreciation on a straight line basis) for
the preceding year and shall allocate and distribute any earnings
be determined in the discretion of the Board sufficient to pro-
in excess thereof: first, to the establishment of a reserve to
vide at the expiration of the term hereof (or earlier termination
as to any Participating Hospital) for the reimbursement of linen
and uniforms in accordance with paragraph 5 and, second, to the
distribution of a patronage dividend to the Participating Hospitals
based on the dollar volume of services provided to the Partici-
pating Hospitals by Hospital Laundry pursuant to Sections 1381-83
of the Internal Revenue Code.
8.
Within sixty (60) days following the end of each fiscal
year of Hospital Laundry, the books and records of Hospital Laun-
dry shall be audited by an independent certified public accountant
so that the allocation and distributions provided for herein can
be made. Any patronage dividends required to be paid by Hospital
Laundry to the Participating Hospitals shall be made within ten
(10) days after receipt of such audit.
5. Provision of Linen and Uniforms by Participating
Hospitals.
A. Each Participating Hospital shall make available
to Hospital Laundry, at the time such Participating Hospital is
notified in writing that Hospital Laundry is prepared to supply
it with the services provided for herein, sufficient linen and
uniforms which it then owns, supplemented to any extent necessary,
to provide linen and uniforms in total to Hospital Laundry on the
following basis:
1. Each Participating Hospital shall provide
nine full sets of operating room, delivery room and central
sterile room linen and seven full sets of all other Standard
Items (or acceptable substitutes) ; each "set" shell be equivalent
to the Participating Hospital's total 24-hour requirements for
linen; and
2. Sufficient sets of Specialty Items as
9.
shall be determined by the Board of Directors to provide service
to the Participating Hospital for one full week.
B. If, during the term of this agreement, the
needs of a Participating Hospital for laundry services should
increase and the Board shall determine Hospital Laundry can
supply such need, the Participating Hospital shall provide to
Hospital Laundry sufficient additional linen and uniforms to
fulfill the requirements of subparagraph A above based on the
increased daily and weekly linen requirements.
C. At the time the linens are made available
hereunder, all linens and uniforms shall be valued by an appointee
of the Board of Hospital Laundry and an appointee of the relevant
Participating Hospital. At the expiration of the term hereof
(or earlier termination as to any Participating Hospital) Hospital
Laundry shall return to each Participating Hospital the amount
of such value, without interest, in linens and/or money, any
returned linens to be valued under the same procedure.
D. During the term of this agreement and once the
Linens and uniforms have been supplied to Hospital Laundry by the
Participating Hospitals as provided above, all required Standard
Items and Specialty Items shall then be supplied by Hospital
Laundry, except that in the case of Specialty Items the Board
of Directors may determine that such items shall be supplied by
10.
the Participating Hospitals in which event Hospital Laundry shall
provide laundering service only for such items.
6. Laundry Facility; Establishment and Maintenance.
Hospital Laundry shall forthwith proceed to establish and main-
tain the Project with sufficient capacity to supply the estimated
requirements of the Participating Hospitals for laundry services.
Said facility will be established, operated and maintained, and
all laundry will be processed and transported in compliance with
standards established from time to time by the Board of Directors
and with all applicable Federal, state and local laws, ordinances,
regulations, rules and all requirements of the Authority as lessor
of the Project. Hospital Laundry will provide pickup and delivery
service to meet the needs of each Participating Hospital at least
five days a week to each Participating Hospital, unless a Partici-
pating Hospital agrees to a less frequent schedule.
7. Washing Formula or Laundry Procedure. Hospital
-Laundry will use or require the use of washing formulas and procedures which are acceptable to and in accordance with the standard
established from time to time by the Board of Directors and with
the requirements established by the Department of Health, Bureau
of Environmental Health and any other governmental agency, Federal,
state or local, with authority to establish standards with respect
to such procedures in the State of Virginia.
