BIRHC Letter to the Community (Re: Agreement with Dr. White)
Posted: Tue Jan 20, 2004 3:01 am
Letter to the Community
January 20, 2004
Dear Community Members,
On behalf of the BIRHC Board we are writing to present the facts concerning the efforts our board has made over the last 18 months to reach a written lease agreement with Dr. Wendy White. We have been advised by legal council and our accountant that by subsidizing a private business we could be jeopardizing our non-profit status. We would also be violating our "duty of care" as directors if we did not insist on a written agreement prior to Dr. White's occupancy of space in the new building. Most of the efforts listed below are documented in the minutes of the BIRHC meetings over the past year. These minutes are available at the BI District Library.
Summer 2002- Don Spencer has informal discussions with Dr. White concerning the need to have a written contract between her and the BIRHC.
Fall 2002- Dr. White is invited to attend architects' meeting to give input on design and amount of space she would need in the new facility
Fall 2002-Approximately 900 square feet including some common areas are designated as dental. This is 11% of total facility. Total cost of facility is estimated at $1.3 million. Dr. White is assessed nothing for the cost of constructing space specific to dental use. (so what exactly constitutes subsidizing? You can't charge both fair-market rent and construction costâ?¦ If she is not responsible for the cost of the space, is the contract only for utilities? Maintenance? Not to mention the $5000 meter controversy which seems like a later inconsistency with this early assurance)
January 2003- BIRHC Board meeting minutes reflect board discussed possible topics to be included in agreement with Dr. White. Paul Nelson DDS and Connie Wojan are appointed to meet with Dr. White.
February 18, 2003- Dr. Nelson and Connie Wojan meet with Dr. White. Dr. White gives her input on topics to be addressed in agreement. Dr. White states that she will ask her brother, who is an attorney, to write a draft contract. Both parties set May 25, 2003 as goal to finalize an agreement. Results of this meeting are discussed that night at February 18, 2003 BIRHC regular meeting.
Early March 2003- Dr. White calls Connie Wojan and informs her that her brother has not and cannot write a contract. Connie Wojan states that the board will research possible sample agreements.
July 29, 2003- Construction Committee of BIRHC Board meets with Dr. White and makes two proposals concerning how her rent /utility payments in the new building might be set. Dr. White rejects both proposals.
August 5, 2003- BIRHC plans to begin discussion of topics to be covered in agreement with Dr. White at its special meeting on that date. Dr. White insists that topics be removed from the agenda, as she cannot be present at the meeting. Dr. White's contract is removed from the agenda.
August 6, 2003 -At the St. James Township meeting during public comment, Dr. White publicly discusses her dissatisfaction with the board proposals and individual board members but offers no alternatives.
October 21, 2003- At its monthly meeting the BIRHC Board appoints new board members Eula Thomas and Angel Welke to negotiate on behalf of the board with Dr. White. Dr. Paul Nelson states that because of his dental experience, he will advise Dr. White in the negotiation process.
November 1st, 2003- First open negotiation meeting is held. Dr. White states she is not willing to pay any rent or utilities in the new space. Dr. White states she is unwilling to discuss any other possible agreement topics until her first conditions are met.
November 11- 20. 2003- On November 11th Negotiations Committee member Angel Welke sends a FedEx containing a summary of discussions at the November 1st meeting to Dr. White and asks for a response. Angel confirms that package was picked up. After no response from Dr. White Angel leaves 5 phone messages between November 16th and November 20th asking for response. To date Dr. White has never spoken to Angel Welke.
November 22, 2003- At its monthly meeting, BIRHC Board discusses two written opinions one from the health center accountant, the other from Mr. Ralph Rumsey, an attorney who is an expert in non-profit law. Both opinions state that the 501(c) 3 status of the BIRHC could be jeopardized if a for profit professional occupied space in the new building without paying market rate rent. Further, Mr. Rumsey's opinion stated that individual board members and Dr. White herself could be personally liable and subject to IRS penalties if below market rate rent were charged without documentation that she was providing significant pro bono services. (Market Rate Rent would mean that Dr. White would be paying for the cost of the building, thus a reversal of what she was told before the design process started.)
After Don Spencer announced the move into the new facility would be "the first of February," the board made several tentative proposals to Dr. White concerning appropriate monthly rent/utility payments. The final suggestion was $50 per month. In response to this suggestion Dr, White stated "I will have to think about it."
November 23, 2003-January 9, 2004- No communication from Dr. White.
January 10, 2004- Dr. White enters Peaine Hall just before meeting is called to order and then leaves without addressing any member of the board. Dr. White's contract is again discussed. Eula Thomas presents a list of considerations to which she says Dr. White has agreed. The proposal of $50 per month for the first six months of occupancy and $100 per month for the next six months is again discussed. Dr. White is not present to comment. Eula Thomas states she believes Dr. White would agree to these figures. Board votes unanimously to approve these rent/utility figures with the proviso that they will be reviewed by legal counsel prior to presentation to Dr. White. Board votes unanimously that Dr. White will have to sign a contract and that contract will have to be approved by the board before she occupies the new building. Board authorizes Eula Thomas and Don Spencer to jointly write a contract. Dr. White returns to Peaine Hall at the time of Public Comment and makes no request to address the Board.
January 16, 2004-Eula Thomas and Don Spencer finish writing contract.
January 16, 2004- Connie Wojan gathers information on six different commercial rentals on Beaver Island . Average rate per month per square foot is $0.80. This makes the 900 square feet that Dr. White would occupy at the new health center worth $720 per month at Beaver Island commercial market rates.
January 17, 2004- Board receives unsolicited pro bono written opinion from an attorney which states rent figures approved by the board for Dr. White are too far below market rate to be acceptable to the IRS.
January 21, 2004-Attorney recommended by Mary Beth Kur is contacted and agrees to review contract written by Eula Thomas and Don Spencer.
If community members have any questions on the efforts of the BIRHC Board to reach an agreement with Dr. White please contact Connie Wojan. The board hopes that Dr. White will sign a mutually acceptable lease agreement and move to the new facility.
Sincerely,
Connie Wojan
January 20, 2004
Dear Community Members,
On behalf of the BIRHC Board we are writing to present the facts concerning the efforts our board has made over the last 18 months to reach a written lease agreement with Dr. Wendy White. We have been advised by legal council and our accountant that by subsidizing a private business we could be jeopardizing our non-profit status. We would also be violating our "duty of care" as directors if we did not insist on a written agreement prior to Dr. White's occupancy of space in the new building. Most of the efforts listed below are documented in the minutes of the BIRHC meetings over the past year. These minutes are available at the BI District Library.
Summer 2002- Don Spencer has informal discussions with Dr. White concerning the need to have a written contract between her and the BIRHC.
Fall 2002- Dr. White is invited to attend architects' meeting to give input on design and amount of space she would need in the new facility
Fall 2002-Approximately 900 square feet including some common areas are designated as dental. This is 11% of total facility. Total cost of facility is estimated at $1.3 million. Dr. White is assessed nothing for the cost of constructing space specific to dental use. (so what exactly constitutes subsidizing? You can't charge both fair-market rent and construction costâ?¦ If she is not responsible for the cost of the space, is the contract only for utilities? Maintenance? Not to mention the $5000 meter controversy which seems like a later inconsistency with this early assurance)
January 2003- BIRHC Board meeting minutes reflect board discussed possible topics to be included in agreement with Dr. White. Paul Nelson DDS and Connie Wojan are appointed to meet with Dr. White.
February 18, 2003- Dr. Nelson and Connie Wojan meet with Dr. White. Dr. White gives her input on topics to be addressed in agreement. Dr. White states that she will ask her brother, who is an attorney, to write a draft contract. Both parties set May 25, 2003 as goal to finalize an agreement. Results of this meeting are discussed that night at February 18, 2003 BIRHC regular meeting.
Early March 2003- Dr. White calls Connie Wojan and informs her that her brother has not and cannot write a contract. Connie Wojan states that the board will research possible sample agreements.
July 29, 2003- Construction Committee of BIRHC Board meets with Dr. White and makes two proposals concerning how her rent /utility payments in the new building might be set. Dr. White rejects both proposals.
August 5, 2003- BIRHC plans to begin discussion of topics to be covered in agreement with Dr. White at its special meeting on that date. Dr. White insists that topics be removed from the agenda, as she cannot be present at the meeting. Dr. White's contract is removed from the agenda.
August 6, 2003 -At the St. James Township meeting during public comment, Dr. White publicly discusses her dissatisfaction with the board proposals and individual board members but offers no alternatives.
October 21, 2003- At its monthly meeting the BIRHC Board appoints new board members Eula Thomas and Angel Welke to negotiate on behalf of the board with Dr. White. Dr. Paul Nelson states that because of his dental experience, he will advise Dr. White in the negotiation process.
November 1st, 2003- First open negotiation meeting is held. Dr. White states she is not willing to pay any rent or utilities in the new space. Dr. White states she is unwilling to discuss any other possible agreement topics until her first conditions are met.
November 11- 20. 2003- On November 11th Negotiations Committee member Angel Welke sends a FedEx containing a summary of discussions at the November 1st meeting to Dr. White and asks for a response. Angel confirms that package was picked up. After no response from Dr. White Angel leaves 5 phone messages between November 16th and November 20th asking for response. To date Dr. White has never spoken to Angel Welke.
November 22, 2003- At its monthly meeting, BIRHC Board discusses two written opinions one from the health center accountant, the other from Mr. Ralph Rumsey, an attorney who is an expert in non-profit law. Both opinions state that the 501(c) 3 status of the BIRHC could be jeopardized if a for profit professional occupied space in the new building without paying market rate rent. Further, Mr. Rumsey's opinion stated that individual board members and Dr. White herself could be personally liable and subject to IRS penalties if below market rate rent were charged without documentation that she was providing significant pro bono services. (Market Rate Rent would mean that Dr. White would be paying for the cost of the building, thus a reversal of what she was told before the design process started.)
After Don Spencer announced the move into the new facility would be "the first of February," the board made several tentative proposals to Dr. White concerning appropriate monthly rent/utility payments. The final suggestion was $50 per month. In response to this suggestion Dr, White stated "I will have to think about it."
November 23, 2003-January 9, 2004- No communication from Dr. White.
January 10, 2004- Dr. White enters Peaine Hall just before meeting is called to order and then leaves without addressing any member of the board. Dr. White's contract is again discussed. Eula Thomas presents a list of considerations to which she says Dr. White has agreed. The proposal of $50 per month for the first six months of occupancy and $100 per month for the next six months is again discussed. Dr. White is not present to comment. Eula Thomas states she believes Dr. White would agree to these figures. Board votes unanimously to approve these rent/utility figures with the proviso that they will be reviewed by legal counsel prior to presentation to Dr. White. Board votes unanimously that Dr. White will have to sign a contract and that contract will have to be approved by the board before she occupies the new building. Board authorizes Eula Thomas and Don Spencer to jointly write a contract. Dr. White returns to Peaine Hall at the time of Public Comment and makes no request to address the Board.
January 16, 2004-Eula Thomas and Don Spencer finish writing contract.
January 16, 2004- Connie Wojan gathers information on six different commercial rentals on Beaver Island . Average rate per month per square foot is $0.80. This makes the 900 square feet that Dr. White would occupy at the new health center worth $720 per month at Beaver Island commercial market rates.
January 17, 2004- Board receives unsolicited pro bono written opinion from an attorney which states rent figures approved by the board for Dr. White are too far below market rate to be acceptable to the IRS.
January 21, 2004-Attorney recommended by Mary Beth Kur is contacted and agrees to review contract written by Eula Thomas and Don Spencer.
If community members have any questions on the efforts of the BIRHC Board to reach an agreement with Dr. White please contact Connie Wojan. The board hopes that Dr. White will sign a mutually acceptable lease agreement and move to the new facility.
Sincerely,
Connie Wojan