2011-08-04T16:16:32-05:00 2010-09-30 RSM MCGLADREY INC 1 South Wacker Suite 600 Chicago IL 60606 990 2009-10-01 371110690 MEMORIAL HEALTH SYSTEM MEMO 2177883198 701 NORTH FIRST STREET SPRINGFIELD IL 627810001 ROBERT W KAY 2177883198 2011-08-04 1 ZACHARY FORTSCH 3126343400 2009 2016-02-24 21:20:13Z Edgar J Curtis 701 NORTH FIRST STREET SPRINGFIELD IL 627810001 76053222 0 X www.mhsil.com X 1981 IL TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE. 17 11 233 0 560710 -8675 8103 44518054 49572822 -143749 656769 -95666 1730852 44278639 51968546 178253 0 20336962 22641807 0 0 24237076 28618217 44574038 51438277 -295399 530269 136245443 144243267 64858034 63763910 71387409 80479357 To improve the health of the people and communities we serve. 0 0 25564051 10730071 INFORMATION TECHNOLOGYMemorial Health System is proactive in implementing technology that both improves patient safety, quality and clinical effectiveness, and improves Memorial Health System's business processes. Memorial Health System's staff of experienced Information Technology professionals is on the cutting edge of medical technology. They support a vast array of patient care and business applications. During FY10 significant information technology projects included: Data Center stabilization and redundancy, implementation of Computerized Provider Order Entry system at Memorial Medical Center, implementation of Allscripts Electronic Health Record at Memorial Physician Services, implementation of the Pharmacy robot at Memorial Medical Center and establishment of the Health Information Exchange.As Memorial Health System becomes dependent on advanced technology, the stability and reliability of the computer data center is of paramount importance. The Data Center Stabilization project utilized national best practices for construction, placement, cooling and redundancy for power failures. This provides a stable and redundant environment for our clinical computer applications and prevents unplanned system down times.Memorial Health System has been on a journey to fully implement integrated electronic health records since 1995. At each stage of implementation the project has been carefully built and integrated to provide optimum patient safety, reduce medical errors, reduce staff documentation time, reduce errors due to interpreting hand-written orders, and improve communication among caregivers. Previously completed implementation phases of the electronic health record have been in the laboratory, emergency department, pharmacy, radiology, registration, surgery, and respiratory therapy. During FY10, Memorial Medical Center developed CPOE,which provides an electronic physician order system to encourage best practice standardization, reduce manual documentation time and errors associated with interpreting hand written orders, and implemented a robot to assist in filling routine prescriptions in the pharmacy. This reduces medication errors and confusion. Memorial Physician Services implemented the Allscripts Electronic Health Record, automating patient records for the physician practices.Another significant project provided Information Technology support for the activation of over 500 smart infusion IV pumps in patient-care areas at Memorial Medical Center. These pumps sound an alert if a drug that is being administered is programmed outside of the safe and normal dose, thus reducing medication errors. Information Technology created a wireless network that allows the online drug library in the Pharmacy to be updated to all of the pumps simultaneously, ensuring that all pumps have the most recent and accurate information. This eliminates the need to upgrade each pump manually and reduces variation among pumps and the possibility of medication errors. The U.S. Army Medical Research and Material Command helped to underwrite costs of this project for Memorial Medical Center. Memorial Physician Services is the primary care ambulatory practice group of Memorial Health System. After several years of evaluation and planning, Memorial Physician Services has fully implemented the Allscripts Enterprise electronic health record. This system facilitates all physician, nursing and staff documentation and all physician orders in an electronic format. Significant improvements in patient safety, staff efficiency and clinic flow are being realized. 4988170 3948817 BUILDING and FACILITY EXPANSION AND IMPROVEMENTSIn order to increase capacity to meet the ongoing community demand for services, Memorial Health System invested in several significant facility improvements and additions in FY10. All renovations and expansion of services were developed and designed with the assistance of a healthcare design firm, and with strict adherence to public health code for workflow circulation and space dimensions. Each incorporated specific improvements to protect healthcare providers from injury or harm. The top five projects were:Diagnostic Imaging Services - In order to provide improved diagnostic imaging services to meet existing and future community demand, phase 2 of our outpatient remodeling program was completed. By updating equipment and patient care space, MMC is able to provide improved diagnostic imaging services which will enhance a physician's ability to provide an early diagnosis of a multitude of conditions. Estimated cost of completion of this project is $9.9 million.Pharmacy Renovations - To meet one of the National Patient Safety Goals from Joint Commission, MMC completed major pharmacy renovations including the installation of a pharmaceutical dispensing robot. The dispensing robot will improve patient care through the accurate labeling of all medications, containers, and solutions, resulting in a reduction in the risk of medication errors for patients. Total cost of the project was $792,763. New Construction - To increase and improve medical services access in Lincoln, Illinois and in Taylorville, Illinois, new medical office buildings were constructed near the new site of Abraham Lincoln Memorial Hospital and adjacent to Taylorville Memorial Hospital. Each office building will provide space for specialists to provide care and services to underserved residents of the area. Total cost of the Lincoln project was $6.3 million. Total cost of the Taylorville project was $11.8 million.Pain Clinic - The building located at 501 N. 1st Street in Springfield was remodeled to house the MMC Pain Clinic. The project provided additional clinic space and improved access for patients being treated for chronic pain. Cost of the project was $1.4 million. 2417165 34399851 EXECUTIVE LEADERSHIPGuided by the values of Memorial Health System, Senior Leadership is responsible for strategic planning, prioritizing among competing issues and engaging in dialogue and decision-making that will enable Memorial Health System to achieve its mission and vision and accomplish its strategic goals. The organization continues to aspire to be a national leader as it provides safe, top-quality and clinically effective patient care. Memorial Health System is committed to a comprehensive leadership development and training program to assure that leaders possess key individual, team, system and participatory leadership competencies. The Memorial Health System Leadership Development Institute offers a wide variety of courses and development opportunities, directed by the Organizational Learning and Development division. The competency-based leadership development system includes a 360-degree feedback process, succession planning, formal individual development plans, mentoring, coaching, administrative fellowship and internship programs, performance appraisal system and Leadership Development Forum to identify emerging leaders and give them broader exposure to the System Leadership Team. New this year, managers were trained to complete monthly rounding on employees. Clinical managers were trained in rounding on patients. A non-negotiable daily Nurse Manager rounding on patients and family time was established to ensure clinical leaders had the time needed to complete this important task.Memorial Health System's investment in strong, strategic leadership sets the pace for our organization. FY10 was one of the most successful years as reflected in clinical outcomes, where Memorial Health System achieved benchmark-level performance for mortality rates; door-to-balloon times for patients experiencing heart attacks; hand hygiene compliance rates; and surgical site infection rates. Employee engagement is excellent. Memorial Health System-wide employee satisfaction scores are in the top 6% of the nation; Memorial Health System was designated a national Employer of Choice; Memorial Medical Center continued designation as a Nursing Magnet Hospital by the American Nurse Credentialing Center; and Memorial Health System reduced employee vacancy and turnover rates. Financially, Memorial Medical Center provided nearly $100 million in unreimbursed services to the people and communities it serves (including Medicare, Medicaid and unpaid patient accounts). Nearly $18 million in charity care was provided; Memorial Health System's charity care policy provides assistance up to 750% of the federal poverty level. At the same time, Memorial Health System's financial results exceeded the operating budget. Leadership completed a five-year financial plan and achieved A1 and A+ bond ratings from Moody's and Standard and Poors, respectively. 2233777 178253 0 2233777 178253 35203163 1 1 0 1 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 0 0 1 27 0 1 233 1 1 1 0 0 0 0 0 0 0 0 17 11 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 IL X Robert W Kay Senior VP & CFO 2177883198 701 North First Street Springfield IL 627810001 Joseph M Hurwitz 2.00 X X 0 0 0 James P Bruner 1.70 X X 0 0 0 John D Blackburn 1.70 X X 0 0 0 Carol J HANSEN Posegate 0.80 X X 0 0 0 Dwight H O'Keefe III 1.50 X X 0 0 0 Mark H Ferguson 1.60 X 0 0 0 Clifton R Baxter 1.10 X 0 0 0 RICHARD LEVI 0.80 X 0 0 0 William R Enlow 1.00 X 0 0 0 Randall S Germeraad 0.80 X 0 0 0 Nina M Harris 1.00 X 0 0 0 Louis G Lower II 0.80 X 0 0 0 HOWARD A PETERS III 0.70 X 0 0 0 Diane K Rutledge PhD 1.00 X 0 0 0 SERGIO A PECORI 1.10 X 0 0 0 WILLIAM D PUTMAN MD 0.90 X 0 0 0 Edgar J Curtis Ex-Offi 50.00 X X 710058 0 391716 Robert W Kay 50.00 X 436861 0 0 Forrest G Hester 50.00 X 409376 0 62338 MITCHELL L JOHNSON 50.00 X 390104 0 56921 ELAINE L YOUNG 50.00 X 248765 0 39012 DOUGLAS RAHN 50.00 X 0 535970 85956 DAVID GRAHAM MD 50.00 X 426844 0 71761 KEVIN R ENGLAND 50.00 X 318101 0 60902 ANNA N EVANS 50.00 X 296746 0 59018 EDWARD MCDOWALL 50.00 X 228372 0 42044 ROBERT T CLARKE 0.00 X 2385333 0 0 Mark E Weaver MD 0.00 X 576391 0 82702 6426951 535970 952370 34 1 1 0 HAROLD O'SHEA BUILDERS INC 3401 CONSTITUTION DR sPRINGFIELD ID 62711 constrUCTION 11113223 cerner corporation po BOX 412702 kansas city MO 64141 it CONSULTING SERVICES 2337027 MAINLINE INFORMATION SYStems INC PO BOX 402989 aTLANTA GA 30384 it mAINTENANCE 1134987 Preceptor Consulting Corporation 12242 Country Day Circle Fort Meyers FL 33913 IT CONSULTING SERVICES 749182 MICROSOFT LICENSING GP BANK OF AMERICA DEPT 842467 1401 EL DALLAS TX 75202 IT CONSULTING SERVICES 743819 30 8103 8103 8103 MANAGEMENT FEES 900099 34893934 34399851 494083 IT Reimbursed Expenses 900099 10730071 10730071 PROGRAM RELATED RENT 900099 3948817 3948817 49572822 902506 902506 3836 3836 3502377 3941232 -438855 -438855 -438855 19884871 9000 19948293 195151 -63422 -186151 -249573 -249573 Billing Service 561000 2096600 66002 2030598 Misc Revenue 900099 72482 72482 501 Bldg Svcs Chapa 900099 625 625 2169707 51968546 49078739 560710 2320994 178253 178253 2417165 2417165 15848719 8249245 7599474 1270485 661287 609198 2027304 881950 1145354 1078134 574253 503881 362426 362426 324354 324354 387740 387740 142500 142500 3937144 1579591 2357553 287907 287907 1787805 741103 1046702 11502766 11248195 254571 2243297 1417812 825485 161995 59590 102405 229268 158509 70759 739118 739118 6338363 6192303 146060 26754 26754 MINOR PROJECT COSTS 54830 54750 80 REPAIRS & MAINTENANCE 47907 47435 472 MISCELLANEOUS 33444 401 33043 DIETARY SUPPLIES 10599 2203 8396 51438277 35203163 16235114 0 122270 3915834 2004473 1206466 1452398 1594304 1842135 146888795 52388431 94190701 94500364 28349218 36149753 186000 456000 6802920 7715874 136245443 144243267 8042411 7687078 17369 17716 17502850 15301800 21480000 20470000 17815404 20287316 64858034 63763910 X 71387409 80479357 71387409 80479357 136245443 144243267 X 0 1 1 X 1 1 X X X 0 0 0 MEMORIAL MEDICAL CENTER 370661220 3 0 1 1 0 MEMORIAL HOME SERVICES NFP 370714225 9 0 1 1 1400000 ABRAHAM LINCOLN MEMORIAL HOSPITAL 370723793 3 0 1 1 0 TAYLORVILLE MEMORIAL HOSPITAL 370661250 3 0 1 1 0 MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS 370646367 7 0 1 1 0 SPRINGFIELD RESIDENTIAL SERVICES 371298589 9 0 1 1 0 6 1400000 RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 387740 387740 0 Part II-B, Line 1i: Explanation of Other Lobbying Activities: MEMORIAL HEALTH SYSTEM ENGAGES LOBBYISTS TO ASSIST IT IN SECURING FEDERAL GRANTS AND MONITORING STATE REGULATIONS IN SUPPORT OF FURTHERING THE MEMORIAL HEALTH SYSTEM MISSION, WHICH IS "TO IMPROVE THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE". THIS INCLUDES ASSISTING MEMORIAL HEALTH SYSTEM IN DEVELOPING PRESENTATIONS TO THE ILLINOIS CONGRESSIONAL DELEGATION REQUESTING APPROPRIATIONS FOR PRIORITY PROJECTS INVOLVING LOCAL PATIENT SAFETY, QUALITY IMPROVEMENT AND IMPROVED LOCAL ACCESS TO MEDICAL CARE. THE LOBBYISTS ALSO ASSIST MEMORIAL IN COMMUNICATING THE IMPORTANCE OF ADEQUATE MEDICAID FUNDING IN SUPPORT OF THE SUBSTANTIAL SERVICES MEMORIAL'S AFFILIATES PROVIDE TO THOSE IN POVERTY AND IN MONITORING LEGISLATIVE AND REGULATORY DEVELOPMENTS THAT WOULD AFFECT MEMORIAL HEALTH SYSTEM'S ABILITY TO CONTINUE DELIVERING ITS ALREADY SUBSTANTIAL COMMUNITY BENEFIT. 251493 17769672 18021165 35915103 36768431 13588242 59095292 0 1279709 46472437 37961093 9791053 768159 7663791 839096 7592854 94500364 UNAMORTIZED BOND DISCOUNTS AND ISSUE COSTS 468025 DUE FROM AFFILIATES 1153496 LIFE INSURANCE - VARIOUS AGREEMENTS 6094353 7715874 DEFERRED COMPENSATION 10197478 WORKERS' COMPENSATION 301169 RESERVE FOR POST EMPLOYMENT BENEFITS 1688127 DUE TO AFFILIATES 49205 SWAP LIABILITY 4327921 SERP 3723416 20287316 Part X: Description of Uncertain Tax Positions Under FIN 48: Effective October 1, 2008, Memorial Health System adopted guidance provided by the Recognition Subsection of the Income Taxes Topic of the FASB Accounting Standards Codification. This subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Adoption of this guidance did not have a material impact on the consolidated balance sheets, consolidated statements of operations and changes in net assets, and consolidated statements of cash flows. 1 Central Illinois Foodbank 2000 East Moffat Street Springfield IL 62702 371106465 501(c)(3) 6414 Provide support to organization that provides food to the Springfield area community. Greater Springfield Chamber of Commerce 1011 S Second Street Springfield IL 62704 370710280 501(c)(6) 50000 Participate in a public and private economic growth partnership led by the Chamber of Commerce. Boys and Girls Club of Springfield 300 S Fifteenth Street Springfield IL 62703 370752849 501(c)(3) 5000 Provide support for health and hygiene related projects. Southern Illinois University School of Medicine PO BOX 19602 springfield IL 62702 376005961 501(a)(1) 6000 Provide support for a health education event. United Way of Central Illinois Inc 1999 West Wabash Avenue Suite 107 Springfield IL 62704 370716060 501(c)(3) 103339 Provide support to the United Way Community Fund which provides essential services, including health care, food, shelter, and victim services, to residents of Central Illinois. 4 1 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: MHS provides grants primarily to locally managed 501(c)(3) organizations who support or share our vision and mission. The organization usually has employees who are volunteer board members of the organization. X 1 1 X X X X 1 1 0 0 0 0 0 1 0 Edgar J Curtis Ex-Officio 564365 0 139581 0 6112 0 361273 0 30443 0 1101774 0 0 0 Robert W Kay 347709 0 77533 0 11619 0 192700 0 39297 0 668858 0 0 0 Forrest G Hester 254426 0 153798 0 1152 0 33621 0 28717 0 471714 0 0 0 MITCHELL L JOHNSON 238306 0 147187 0 4611 0 26004 0 30917 0 447025 0 0 0 ELAINE L YOUNG 169659 0 79058 0 48 0 26914 0 12098 0 287777 0 0 0 DOUGLAS RAHN 0 347657 0 182183 0 6130 0 56212 0 29744 0 621926 0 0 DAVID GRAHAM MD 308023 0 118821 0 0 0 41465 0 30296 0 498605 0 0 0 KEVIN R ENGLAND 220924 0 96739 0 438 0 19541 0 41361 0 379003 0 0 0 ANNA N EVANS 218849 0 77897 0 0 0 45979 0 13039 0 355764 0 0 0 EDWARD MCDOWALL 160193 0 67627 0 552 0 23846 0 18198 0 270416 0 0 0 ROBERT T CLARKE 0 0 0 0 2385333 0 0 0 0 0 2385333 0 0 0 Mark E Weaver MD 395835 0 88686 0 91870 0 77341 0 5361 0 659093 0 0 0 Part I, Line 4a Mark Weaver, M.D., terminated employement with MHS effective September 30, 2009. As a result, he received severance pay in 2009 of $76,747.20. The terms and conditions of his severance included important covenants and restrictions of substantial value to MHS, including a general release and waiver of any and all claims as well as confidentiality requirements. Part I, Line 4b The organization provides certain supplemental retirement benefits to the following officers and key employees: Edgar J. Curtis, $353,433, Robert W. Kay, $184,860, Douglas L. Rahn, $48,372, Forrest G. Hester, $25,781, Mitchell L. Johnson, $18,515, Elaine L. Young, $21,527, Kevin R. England, $12,884, Anna N. Evans, $38,780, Mark E. Weaver, M.D., $69,501, and David Graham, M.D., $33,625. These benefits are provided through a nonqualified deferred compensation plan, under which the benefits being earned are subject to a "substantial risk of forfeiture." The supplemental retirement benefits are structured to provide a retention incentive that has been determined by the Leadership Compensation Committee of the Board of Directors of Memorial Health System to be of substantial value to the organization. To become entitled to the benefits provided, each covered employee must meet substantial requirements relating to further employment. Until those requirements are satisfied, if ever, the employee is not entitled to these amounts. If the employee were to have terminated employment voluntarily in the year to which this return applies and not met these substantial requirements, these supplemental retirement benefits would have been forfeited. These supplemental retirement benefits are part of a retirement program that provides retirement income for all years of service that the employee provides to the organization. Accordingly, any retirement benefits should be viewed as applying to the entire length of the employee's service. The Leadership Compensation Committee of the MHS Board approves all retirement benefits, together with all other forms of compensation and benefits for these and other senior leaders, in a manner intended to qualify for the "rebuttable presumption of reasonableness" under federal income tax law. Part I, Line 7 Members of senior management receive incentive compensation under the annual incentive compensation plans sponsored by Memorial Health System. These amounts are included in Schedule J, Part II, Column (B)(ii). The plans are designed to condition a portion of compensation on performance against pre-determined organizational goals approved in advance by the Executive Committee of the Board of Directors of Memorial Health System. The Leadership Compensation Committee of the Board has reviewed the reasonableness of all such payments, and has concluded, as the result of a process that is designed to qualify for the rebuttable presumption of reasonableness under Federal tax law, that all such amounts are reasonable and do not exceed fair market value for the services provided. ILLINOIS HEALTH FACILITIES AUTHORITY 362780046 45200P2U4 2003-12-17 31000000 See Schedule O 0 0 Illinois Finance Authority 861091967 45200FJ59 2009-12-22 147401639 See Schedule O 0 0 31091579 11406560 439744 19245275 2004 1 0 1 1 147496704 50936634 1350000 95210070 0 0 1 1 0 1 1 1 0 0.00000 0.01600 0.01600 0 0 1 1 1 0 0.00200 0.01200 0.01400 0 1 1 1 Piper Jaffray & Co 12.000000000000 0 NA 0 0 0 0 0 NA 0 NA 0 0 Springfield Electric Randall S. Germeraad,owns >5% interest 145400 routine parts purchases at FMV. 0 Springfield Clinic LLP William D. Putman, M.D., Board Member and Employee 1157231 Fees for the services provided. 0 Form 990, Part VI, Section A, line 2 Mark H. Ferguson and William R. Enlow, both Memorial Health System Board Members, are partners at the same law firm, Sorling, Northrup, Hanna, Cullen & Cochran, Ltd. Form 990, Part VI, Section A, line 6 The Corporation contains 108 individual members who electe the board of directors. Form 990, Part VI, Section A, line 7a The individual members of the Corporation have the power and authority to elect the Corporation's board of directors, as well as the power and authority to remove member elected directors. Form 990, Part VI, Section A, line 7b Individual members of the Corporation have no voting rights with respect to the management, control or operation of the affairs and properties of the Corporation. Only the board of directors can make decisions in that regard. Form 990, Part VI, Section B, line 11 IRS form 990, including all schedules and attachments, are provided to the board of directors for review. Form 990, Part VI, Section B, line 12c All officers, directors and key employees of the Corporation are required to review the Conflict of Interest Policy and complete a specific disclosure statement which is attached to the policy. Memorial Health System monitors and enforces its Conflict of Interest Policy by identifying any potential conflicts at the time each meeting agenda is prepared. Any officer or director who has a conflict is notified of such conflict, as well as their obligation to abstain from the discussion and vote on any conflicted issues(s). Such abstention(s), if required, are documented in the minutes of each meeting. Board members are also required to update their Conflict of Interest disclosure statements promptly in the event of any change in personal or business activities that would require such disclosure. Form 990, Part VI, Section B, line 15 The Memorial Health System board of directors has appointed a Leadership Compensation Committee made up of independent members of the Board of Directors, and has delegated to it the responsibility of administering, overseeing and approving all forms of compensation and benefits provided to executive leadership, including the Chief Executive Officer and the Chief Financial Officer. The board has adopted a Leadership Compensation Philosophy Statement describing the role and responsibilities of the Committee. This philosophy expressly states the Committee's intent, on behalf of the Corporation, to take all the steps necessary to qualify for the rebuttable presumption of reasonableness under the federal income tax law intermediate sanctions rules. The Committee analyzes every element of compensation (including current, incentive and deferred compensation) and benefits (including qualified and non-qualified benefits). The Committee conducts its review and approval process at least annually, and approves compensation and benefits only to the extent that the Committee has concluded that the compensation and benefits constitute no more than reasonable compensation for each executive. In connection with the most recent review and approval process, the Committee received professional advice from an independent consultant and outside legal counsel. The Committee consists entirely of disinterested members of the board or disinterested Committee members who under state corporate law may serve on such a committee. The Committee works with its compensation consultant to prepare and review in advance comprehensive data showing the compensation provided by similarly situated organizations for functionally similar positions. The Committee also prepares a timely and thorough written record of its procedural criteria necessary to qualify for the rebuttable presumption of reasonableness under the federal income tax law intermediate sanctions rules. Form 990, Part VI, Section C, line 19 The governing documents of Memorial Health System, such as Articles of Incorporation and any Amendments thereto, are available to the general public through the Illinois Secretary of State's Office. These governing documents, as well as the bylaws, conflict of interest policy and financial statements, are available upon request from the Corporation. Schedule K Supplental Information Schedule K: One Schedule K was completed at the parent level only. However, each affiliate is still showing its allocation of the liability on the balance sheet. Schedule K Part I, Column (f) continuations: The purpose of the 2003 issue was to refund the 1993 Series issued on 8/5/93 in the amount of $11,406,560. Proceeds were also used to pay issuance expenses and to purchase equipment and software for Memorial Health System. Proceeds were also used for construction and building improvements and to construct and equip an outpatient psychiatric facility. The purpose of the 2009 issue was to pay issuance costs, construct and equip a replacement hospital facility for Abraham Lincoln Memorial Hospital, renovate and remodel Taylorville Memorial Hospital, renovate, remodel, and equip Memorial Medical Center, construct a parking garage adjacent to Memorial Medical Center, construct and equip a wound care center, renovate a pain clinic, construct and equip a consolidated imaging services area, purchase various parcels of real property in Springfield, IL and Taylorville, IL, construct and equip a space for physical therapy within the new YMCA in Springfield, IL, and routine capital expenditures. Schedule K Part II, Line 5: For the 2003 issuance, $329,438 was used for issuance costs and $110,306 relates to credit enhancement. For the 2009 issuance, the entire amount of $1,350,000 was used for issuance costs. Schedule K Part II, Line 8: For the 2009 issuance, as of September 30, 2010 the projects are not substantially complete. Schedule K Part II, Line 11: For the 2009 issuance, the balance of what has not been spent is in reserve funds. Schedule K Part III, Line 3c: Memorial Health System's internal counsel routinely reviews management and service contracts and research agreements relating to financed property. Schedule K Part III, Line 5: Issuance costs are included in these percentages. Schedule K Part III, Line 7: Memorial Health System adopted a post-issuance compliance policy in fiscal year 2011. Schedule K Part IV, Line 1: The Arbitrage Rebate filing is only required every 5 year; the 2009 issuance has not yet met this requirement. Schedule K Part IV, Line 5: Bond draws are not final as of September 30, 2010 for the 2009 issuance. Schedule R, Part V, Line 2 Fair Market value for rental income received Memorial Health System collected rental income from affiliates during the fiscal year ended September 30, 2010. The values listed in Schedule R, Part V, Line 2 were determined using fair market value. MEMORIAL MEDICAL CENTER 701 NORTH FIRST ST SPRINGFIELD IL 627810001 370661220 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A)(iii) N/A MEMORIAL HEALTH VENTURES 701 NORTH FIRST ST SPRINGFIELD IL 627810001 363492266 HEALTHCARE ACTIVITIES IL 501(C)(3) 509(A)(3) TYPE II N/A ABRAHAM LINCOLN MEMORIAL HOSPITAL 315 EIGHTH ST LINCOLN IL 62656 370723793 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A)(iii) N/A TAYLORVILLE MEMORIAL HOSPITAL 201 EAST PLEASANT TAYLORVILLE IL 62568 370661250 HOSPITAL SERVICES IL 501(C)(3) 170(B)(1)(A)(iii) N/A MEMORIAL HOME SERVICES 720 NORTH BOND SPRINGFIELD IL 627024915 370714225 HOME HEALTH, HOSPICE, AND CONTINUOUS CARE SERVICES IL 501(C)(3) 509(A)(2) N/A MEMORIAL PHYSICIAN SERVICES 701 NORTH FIRST ST SPRINGFIELD IL 627810001 371181194 HEALTH CLINICS IL 501(C)(3) 509(A)(3) TYPE II N/A MEMORIAL MEDICAL CENTER FOUNDATION 1 MEMORIAL PLAZA SPRINGFIELD IL 62781 371110301 GRANTS TO HOSPITALS, OTHER CHARITABLE ORGANIZATIONS, AND SCHOLARSHIPS IL 501(C)(3) 170(B)(1)(A)(V) N/A TAYLORVILLE MEMORIAL HOSPITAL FOUNDATION 201 EAST PLEASANT TAYLORVILLE IL 62568 371337485 GRANTS TO OTHER CHARITABLE ORGANIZATIONS AND HOSPITALS IL 501(C)(3) 509(A)(3)TYPE III-FI N/A MENTAL HEALTH CENTERS OF CENTRAL ILLINOIS 710 NORTH EIGHTH ST SPRINGFIELD IL 627026395 370646367 TRAINING, PSYCHIATRIC, AND RESIDENT SERVICES FOR MENTALLY ILL AND DISABLED IL 501(C)(3) 170(B)(1)(A)(VI) N/A ABRAHAM LINCOLN HOSPITAL FOUNDATION 315 EIGHTH ST LINCOLN IL 62656 363492268 GRANTS TO OTHER CHARITABLE ORGANIZATIONS AND HOSPITALS IL 501(C)(3) 170(B)(1)(A)(VI) N/A MEMORIAL HOME SERVICES OF CENTRAL ILLINOIS INC 701 NORTH FIRST STREET SPRINGFIELD IL 62781 371190216 PROVIDE DURABLE MEDICAL EQUIPMENT AND SUPPLIES TO PATIENTS IL N/A C HEALTHCARE NETWORK ASSOCIATES OF SANGAMON 720 NORTH BOND ST SPRINGFIELD IL 62702 364156479 HEALTHCARE ACTIVITIES IL N/A C HEALTHCARE NETWORK ASSOCIATES OF LINCOLN 720 NORTH BOND ST SPRINGFIELD IL 62702 371331904 HEALTHCARE ACTIVITIES IL N/A C HEALTHCARE NETWORK ASSOCIATES OF CENTRAL ILLINOIS 720 NORTH BOND ST SPRINGFIELD IL 62702 371331905 HEALTHCARE ACTIVITIES IL N/A C 1 1 1 0 0 1 1 0 1 1 1 1 1 1 1 1 0 1 Memorial Health Ventures A 439210 Memorial Home Services A 113526 Memorial Medical Center A 2153717 Memorial Physician Services A 1029951