• Discussion: Service Enriched Housing Proposal at Chatham Oaks

• Discussion from the Public

Chairperson Neuzil called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:02 a.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Neuzil explained that there are a number of individuals who want to be a part of the discussion regarding the proposal for service enriched housing at Chatham Oaks. Robert P. Burns spoke in order to represent the group proposing the special needs housing. He said that the critical issues that should be addressed at this meeting are 1) how may the Board of Supervisors maintain control over this proposed project in the short and long term and 2) the issue of the 99-year lease and its implications. Burns said that there are several successful special needs housing projects around the State including Lee County and Jefferson County. He said that the County is not able to become a general partner in this project based on the sources of funding that are available, but they can appoint a board of directors for a new non-profit 501(c)(3) corporation that develops and operates the project over the 50-year compliance period. Lee County’s Board of Directors includes one Board member, their Central Point of Coordination (CPC) Administration, and a member of the public. He said that Chatham Oaks could also be a co-general partner in Johnson County’s case as long as they are a non-profit organization. Burns explained that he has exhibits from Lee County’s 501(c)(3) organization, Great River Progressive Housing Corporation, which include articles of incorporation and corporate bylaws, and details regarding the low-income housing tax credit, which is used as a source of funding for these types of projects. He said that setting up an organization of this type is how the Iowa Code allows the Board of Supervisors to control the project by controlling who is on the board of directors.

Burns explained that the general partner in this development could be a new non-profit organization, an existing organization, or two co-partners. He said that there is also an initial non-profit limited partner that would help organize the development, but once the project is funded, they would be replaced by an investor limited partner who is responsible for development of the project. Burns said that control of the project is still maintained by the general partner. He explained that the limited partner makes all the decisions by the general partner with the advice of the other entities participating in the project, which includes a developer, a consultant, the property manager, a service provider, the architect, the contractor, the construction lender, and the permanent lender. Thompson asked who the articles of incorporation and bylaws apply to. Burns replied that they apply to the general partner. Stutsman asked why the limited partner can be a for-profit entity. Burns replied that the limited partnership would be a for-profit entity, like an insurance company, or a company like Fannie Mae, because the limited partner will contribute the cash for the project. Harney questioned the property tax owed. Burns replied that the organization will have to pay property tax on the facility itself.

Lehman asked what the County actually retains control over because once the Board approves the lease there isn’t a monitoring purpose. Burns said that the County would not have any financial obligations because of the non-profit organization, but the Board controls the organization through appointments to the board of directors in order to control decisions regarding the development. He said that the agreements regarding the lease will be spelled out in writing. Lehman asked whose responsibility the buildings on County ground will be if the project defaults. Burns replied that the only recourse the investor would have in case of default is with the property itself, so the investors have a large interest in having the project cash flow. Burns said that is a legal question. Thompson said that the board of directors of the organization, which was appointed by the Board, will have to make the decision how to make the project profitable or what to do with the property. She said that if there are not enough special needs clients to fill the apartments, the organization may have to decide to open it to another category of clients. Stutsman said that allowing others to rent the apartments would be feasible if they are low income. Burns explained that the financing requires that all residents be low income and in addition, there is a minimum of 25% of the housing filled by special need persons.

Stutsman asked who appoints the program director and the facilities director, and if they then have the authority to run the program within the policies and procedures. Burns replied that the general partner appoints the directors and the directors then run the program. Stutsman asked why the new organization does not have to comply with the open meetings law. Burns replied that although the organization is appointed by the Board, it is not a required by law to have open meetings. He added that they comply with other types of regulations due to the funding streams and although law does not require it, the Board can make it a policy to conduct open meetings. Harney asked about having only 25% special needs housing, when the project is designed for those with special needs. Burns replied that 25% is the minimum required, but the percentage is set by the general partner so it can be 100% special needs housing.

Neuzil asked if the Lee County Board of Directors are actively involved in the management of the project or if they hire someone else to manage the project. Burns replied that the Lee County organization is very active, making all of the developmental decisions. He said that the Lee County Board of Supervisors appointed only one member to the organization because appointing 2 members would have constituted a quorum. Neuzil asked who runs the day to day aspects of the program. Burns explained that the day to day operations are managed by the property manager of the building and a service provider, which in Lee County’s case is one entity. He said that these entities report back to the non-profit organization on a regular basis and the Lee County CPC James Posz, who is also a member of the non-profit organization, also has a great deal of day to day contact with the operations.

Stutsman asked if the County’s only responsibility then is to provide the land through a lease and then purchase services for residents. Mental Health/Developmental Disabilities Director Elaine Sweet replied that the services could be paid for through other funding streams as well. Burns explained that in Lee County, the Board contributed $500,000 towards the building of the project, but in Johnson County the group only desires the lease of the land. Harney said that the $500,000 donation was used for the purchase of land. Burns replied that $100,000 of the $500,000 was used to purchase the land. Thompson asked who the developer will be and what their role is. Burns replied that the developer will be the non-profit organization, but his role as a consultant would be to work with the developer and the limited partnership to make sure the project complies with funding regulations and is within the budget.

Stutsman asked Sweet if this program would fit in with Johnson County’s goals for persons with disabilities. Sweet replied that transitional community based housing is something MH/DD supports and it is consistent with the recent Olmstead Supreme Court decision which says persons have the right to live independently within the community as possible rather than in a residential care facility. She said that this proposal will meet that goal while providing persons choice along with community integration. Sweet said that she’s struggled with this proposal and she has gone on record as being concerned with the location of this project, but given Iowa City land costs, this is the only reasonable option available. She said that it would be preferable for the location to be integrated into the community and on a transportation route, however, MH/DD does support the project and their only concerns are regarding the location. She added that services in this environment would qualify for Federal and State supported Adult Rehab Option Funding and Medicaid Home and Community Based Services Funding. Stutsman asked if the housing would fill if provided. Sweet said that she could not guarantee that it would be full because moving residents from a Chatham Oaks level of housing may affect the per unit cost of the service level at the residential care facility. She said that there are possibilities to adapt Chatham Oaks to provide other services as well to maintain the care facility’s financial viability. She said she thinks the proposal fits, especially with the long term MH/DD service because there is not appropriate affordable housing available in Iowa City. She added that the Section 8 low-income housing waiting list is currently about 2 years long. Stutsman asked if it is beneficial to house individuals in group housing rather than dispersing them throughout the community. Sweet replied that this arrangement would work both as transitional housing for persons working their way into community placement and as long-term residential care.

University of Iowa Hospitals & Clinics Psychiatry Representative Peg Nopoulos explained that she is very familiar with the care of these patients. She said that people that would use this type of housing may have illnesses that would include schizophrenia, bipolar effective disorder, and several others. Nopoulos said that the prevalence of those 2 disorders is approximately 2%, which is 4 times greater than Alzheimer’s, 20 times greater than multiple sclerosis, and 120 times greater than muscular dystrophy. She said that bipolar and schizophrenia are very prevalent and devastating, so these people need community care sometime in their lives. Nopoulos said that previous to the ‘50s and ‘60s movement towards deinstitutionalization, many patients were kept in institutions their whole lives, but after the movement there has been a serious problem because many of these patients do need that level of care so they become homeless and become incarcerated. She said that these illnesses are biological brain diseases, so medication management is important to treatment, however, a supportive environment is even more important than medication. Nopoulos said that the primary difficulty they face in her unit is patients who have nowhere to go when leaving the hospital, who can fill these types of apartments. She said that there is very little availability of these housing programs, so it is increasingly difficult to get patients in the right place. Nopoulos said that these programs are important to the community, but there are also very important on an individual basis because remaining stable is positive in terms of their self-esteem and ability to care for themselves. She said that going to a place where they can succeed, even after being hospitalized multiple times, can be a foundation in these patient’s lives. She stressed that the need is overwhelming and these programs are very important on an individual and community basis.

Lehman asked if this type of housing is necessary for individuals to get the chance to rejoin the community. Nopoulos said yes, adding that it provides individuals with more responsibility than the residential care facility, which can help with the transition. She added that there may also be individuals who cannot move beyond this facility. Stutsman asked how the changes in residency regulations within MH/DD Statewide will affect this program and Johnson County. Sweet explained that the services provided would be supported community living, which is one of the services that has been required for the Home and Community Based Waiver and will continue to be a mandated service. She said that the greatest impact will come from legal settlement to residency, which no one currently knows the impact of. She said that currently they are being told that for individuals seeking treatment in other counties funding will come through Johnson County, but will also follow State cases from the State level or other counties. She said that they do not know whether the level of funding provided from the State or other counties would pay for the services Johnson County traditionally provides. Nopoulos said that many of the patients she cares for are not from Johnson County, but she is convinced there is enough demand from Johnson County residents for this facility. Neuzil said that this is a need that was identified in assessments within Johnson County. Sweet said that MH/DD conducted a formal needs assessment last summer, which ranked this type of program as a great need. Stutsman said that she does not want to burden the Johnson County taxpayer with residents who come here because of the services. Nopoulos said that within her multidisciplinary team, their first priority is to place residents near their families because of the support they provide. Harney said he is concerned with the transition of individuals into the County when the services are offered, so the Board must look to balance what taxpayers can afford and what services are needed. Sweet said that to receive MH/DD assistance, individuals must meet the eligibility criteria established in the Services Management Plan to receive funding for the residential or supported community living levels of care.

Thompson asked if each tenant would need a Section 8 housing voucher to reside in these apartments and would that leave apartments empty while individuals apply. Burns said that the financing is based on the fair market rent for a one-bedroom apartment so a tenant would be eligible for Section 8. Thompson clarified that individuals could live in the apartments without Section 8 vouchers. Burns agreed, adding that individuals can pay the fair market rent, which is low for Johnson County or 30% of their income if they were using a Section 8 certificate. Thompson said that the County could pay the difference for individuals who were on the waiting list for a Section 8 voucher so having a voucher wouldn’t restrict occupancy rates.

Neuzil asked Posz to discuss the program and need identified in Lee County and if they are happy with the program. Posz said that Lee County is approximately 1/3 of the size of Johnson County and is not centrally located. He said that Lee County had a commitment to community based living, but they discovered many of their consumers were living in substandard housing. He said that they began County sponsored housing in 1998 by purchasing condominiums from a private developer. Posz said that they then expanded from there, contracting to build additional apartments around the county in 2000, before finally building the housing project specifically for persons with serious and persistent mental illness because they prefer one bedroom apartments, which Lee County had not previously provided. He said that the one bedroom set up is important because those with mental illnesses prefer their own space and are more capable in daily activities. He said that they now have County housing for 54 individuals, the majority of whom are from Lee County and have approximately a 90% occupancy rate. Posz said that since the Board provided funding, they are able to give preference to individuals from Lee County. He said that they did not realize until the housing was in place, how great a need it was, because prior to the housing they did not have a service provider who would work with private residences. Posz explained that Lincoln Ridge is the most service enriched of their housing programs and is designed to serve persons with serious and persistent mental illness who are in need of onsite services, but do not require hospitalization and or pose a serious security risk. He said that within his CPC office, they look at services and housing as complimentary but separate entities so every individual has a service plan developed. He said that support services in the adult rehabilitation program are structured on an hourly basis so services can be assigned to individuals based on their needs. He said that similar to what is being proposed in Johnson County, Lincoln Ridge is required to have 25% of residents defined as disabled, but 100% of the residents currently are, which that may change in the future depending on demand. Posz said that Lee County does not regret their stance on housing at all. He said that residential facilities are required to have a complete menu of services available for all residents, but the apartment services must only meet the needs of the residents at each time. Posz said that Lincoln Ridge allows each resident their own thermostat, which may seem like a small thing but it gives residents control of their environment not offered in most community facilities. He said that the service levels individuals need can also be changed depending on their current status. Posz said that Lee County is very proud of this program.

Harney asked what percentage of Lee County’s residents receive services. Posz replied that 100% of residents currently receive services; however, some may only receive a few hours per day. Harney asked if they have any problems maintaining 24-hour services. Posz replied that only a few of their sites are designated as Home and Community Based Service sites, which provide 24-hour services through various HCBS providers. He said that the hourly rates incorporate downtime, so although they have a fairly high hourly rate, they only pay for the hours of service actually used. Harney asked if Lee County requires individuals to reside in these apartments to receive services. Posz replied that they do not. Lehman asked if Lee County’s service provider, ResCare, follows an approved MH/DD plan and if they work with other service providers to follow those plans. Posz agreed, saying that residents have many options for service providers and medical care, but the onsite services are all provided by ResCare. He said that ResCare separates their property management responsibilities from their service providers so the person a resident deals with regarding rent or apartment problems is not their counselor. He said that the property managers also have a great deal of responsibilities in ensuring the program is in compliance with the funding regulations. Posz added that Great River Progressive Housing Board, which is Lee County’s non-profit organization, can change either their property manager or service provider if they so choose because they have no ownership in Lincoln Ridge.

Lehman asked if deciding which provider to work with was difficult to determine. Posz explained that in Lee County’s case, their care facility was very obsolete, so they chose to close the care facility and transfer the service provider to the new project. Harney asked if Ridgeway is affiliated with Lincoln Ridge. Posz replied that Ridgeway bought out the former care facility, but is not affiliated with Lincoln Ridge; however Ridgeway is the largest vocational provider in the County, so they do provide services to Lincoln Ridge residents. Lehman asked how the project began in Lee County. Posz explained that Lee County has a stakeholder committee similar to the MH/DD Planning Council, which the Lee County Supervisors were heavily involved in. He said that the Lee County Economic Development Office was designated as the temporary limited partner for this project until the financing came in.

Sweet asked what impact the project had on the MH/DD Fund balance and the Targeted Case Management caseload. Posz replied that Lincoln Ridge had no impact on the fund balance because there was enough savings in services to cover the debt service to pay for the $500,000 the County contributed. He said that since the project coincided with closing the care facility, the savings offset the cost of opening Lincoln Ridge. Posz said that Johnson County will not have to take on debt service for this project. Burns said that Lee County was able to take on more tax credits than Johnson County can, so Johnson County will have to rely on home funds from the Federal Government, passed through the Iowa Department of Economic Development and the City of Iowa City. He said that the interest rates through these sources are so favorable that they are very near grants. Posz said that in Lee County’s case, most of the residents who move into Lincoln Ridge already had case management, so in Johnson County’s case, if the people who MH/DD currently serves are the residents who would live in this facility, there will be no additional need. Posz said that by the time Lincoln Ridge opened they knew which individuals would be involved in the program. He said that care facility staff brought residents who would be living in Lincoln Ridge to the site during the construction, which they really appreciated. Posz said that Burns had many cost-effective ways to make the buildings attractive and homelike, which makes it more appealing to families and guardians of those with special needs. Lehman asked if residents see this as the end of their journeys and if they are willing to transition out of this housing. Posz replied that there is no maximum time limit, but they do have turnover. He added that residents usually receive Section 8 certificates, which they can bring with them if they transition out. He said that having a time limit is a concern to families, who will then be concerned with their family members losing their housing. He said that there are also assisted living apartments in the area also built by Burns where many of their residents move.

Neuzil asked Burns to explain the financing options. Burns showed the Board floor plans and a rendering of a building in Keokuk. He said that the separation between housing and services are reflected in residents being considered tenants not patients. He explained that each apartment’s entrance opens onto a common room, so it is observable from the office space. He said that this facility is not a lock down facility, but staff does monitor the common space in case there is a need. He said that the common room includes a community kitchen, work counter, computer table, public restroom, laundry, and TV area. Burns explained that the primary source of funding is Federal Low Income Housing Tax Credits allocated by the Iowa Finance Authority. He said that they would also obtain home loans from Iowa City and the Iowa Department of Economic Development, but since both sources are from the same Federal funding, the State will not allocate money to a city that receives their own money unless the city also contributes. He said that the City’s application process begins at the end of this year and then if the State feels it is a worthy project, they will match $3 to every dollar the City donates. Burns said that the fourth funding option is a private loan if needed.

Burns said that the Federal tax credit allows tax credits equaling 80% of each dollar allocated to the project by the investor, useable over a 10-year period. He said that 50 to 60% of the development costs would come from this funding source. He explained that these investors are typically financial institutions like commercial banks, insurance companies or quasi-public lending institutions. Stutsman asked who acquires these investments. Burns replied that the developer is responsible, but in reality it is the consultant who acquires investors. He said that they have a large investment in the project, so they have incentive to make sure the project succeeds. Burns said that these investors rely on consulting expertise, which his company has gained in doing Section 42 developments since its inception in 1986. Thompson clarified that the Farm Bureau is a frequent investor in these types of projects. Burns agreed. He said that the investor would also make a joint application for the home loans, which would have interest rates from 0% to 1% long term, accruing interest only on the payment. He said that the State limits the loans to $800,000 per project or $50,000 per unit and in order to receive the $800,000 loan, Iowa City would have to allocate $266,000. He said that this is possible based on Iowa City’s past donations. Burns added that in order to qualify for this financing, the apartments will need to be set at the fair market rent for Iowa City. He said that the State funding streams could comprise around 30%. Burns said that the City has its own policies regarding its loans, because the funds go back into the community and the final decision is made by the City Council of Iowa City. He said that the City process begins in December with an application to the Housing and Community Development Commission and is awarded in May 2005. Burns said that the County would then apply for tax credits in November 2005, hopefully beginning construction in 2006, which would give residents the chance to apply for Section 8 housing certificates. Even if the County would have to apply for a private mortgage, they would have an extremely low loan to value so the risk would be very low, Burns explained. He said that the real risk is whether there will be tenants to rent the apartments, but if there are tenants the project will cash flow.

Burns said that there is also a construction loan that must be in place during the construction of the project, then upon completion the equity from the investor will be in place. Stutsman asked what the size of the project will be. Burns replied that it will be around $2 million. Lehman clarified that the construction loan would be from a local lender and then after the project is built, the long-term financing would take its place. Burns agreed, saying that the construction loan will be paid from the equity from the investor. Stutsman asked if this project would be in competition with the Housing Trust Fund of Johnson County. Burns replied that the Housing Trust Fund could be another source of financing that could be the fourth source if needed.

Burns explained that the Iowa Finance Authority requires a 99-year lease in lieu of a warranty dead for this type of financing. He said that after the 99-year lease, Johnson County maintains ownership of the land and would then take possession of any improvements including the buildings. He said that the tax credit programs requires a 50 year compliance period, but the investor’s participation is only required for the first 15 years so traditionally the investor will typically donate the property to the non-profit. That may change, but it would not impact the use of the property, which is under the control of the general partner, he said. Burns advised that if the Board is willing to move forward with the project, they must decide shortly on the concept of the lease and forming the new non-profit organization in order to be ready for the application in December.

Recessed at 10:45 a.m.; reconvened at 10:57 a.m.

Chatham Oaks Director Mary Donovan said that before the strategic plan Chatham Oaks is currently working on began, she and Sweet began discussing the future of Chatham Oaks and the possibility of the apartments. She said that they want to show consistency for individuals, especially when hospital stays are short and they’re possibly not ready for residential care. Donovan said that is why Chatham Oaks has 24 hour nursing care, counseling, and social workers, which has raised their rates higher than other residential care facilities. She said that Sweet recommended Chatham Oaks look into a Persons with Mental Illness (PMI) care facility. Donovan explained that a PMI unit would allow Chatham Oaks to charge hirer rates because the individuals would need the higher levels of staff. Sweet said that Johnson County is fortunate to have Chatham Oaks because it provides an excellent level of care, over and above what one would traditionally find in a residential care facility. She said that MH/DD wants Chatham Oaks to maintain financial viability for the long-term. Sweet said that there are no guarantees this type of housing unit would be filled. She said that any time MH/DD funds an individual it is based on a detailed assessment process that determines an individual’s needs and develops and individualized service plan to meet those needs. She said that a lot of community based services are now in place that weren’t a few years ago, so residential care facilities are not experiencing the same volume they did in the past. She said that does not negate the need for many individuals and since Johnson County does not have a PMI unit, MH/DD must send those individuals out of county. She said that CPCs across the State are finding this level of care difficult to obtain. Sweet said that she doesn’t know how the changes in State defined residency will affect the residential care facilities.

Harney asked what PMI units entail. Sweet replied that PMI units are even a higher level of care than a residential level of care. Donovan explained that PMI should stay in the hospital for treatment but due to discharge policies, Chatham Oaks is trying to take those individuals but currently does not have the staff to care for many of them. She added that Chatham Oaks is also not licensed for that level of care. Harney asked what will happen to the individuals currently in Chatham Oaks if they change to a PMI facility. Donovan replied that only a portion of the facility would be licensed for PMI patients and the rest would remain as is. Sweet explained that a PMI unit is generally a 6 to 15 bed unit, while Chatham Oaks is currently licensed for 114 beds. She said that adding this unit and the apartment living creates exciting opportunities for persons to transition through their level of care. Donovan added that the same staff would also then follow those individuals through their transition and would be familiar with the behaviors and problems of the individuals. Stutsman asked if a PMI unit would require structural changes to Chatham Oaks. Donovan replied that there may have to be but she is uncertain. Sweet said that the mentally ill can receive several different levels of care from inpatient hospital care or mental health institute, the PMI level, the residential care facility level, residential apartments and supported community living. She said that the supported community living is the last step for those individuals that are capable of true community integration. By adding the apartment and PMI unit, Chatham Oaks can then provide all but the highest inpatient level of services. Donovan said that their community living program has not increased greatly in the past few years, but Sweet has encouraged Chatham Oaks to pursue it further as well.

Thompson asked how many beds are in the community for people with mental illness. Sweet replied that most clients rent apartments in the community and receive supportive services. Thompson asked who provides those services. Sweet explained that MH/DD has a number of providers including Systems Unlimited, Goodwill Industries, Reach for Your Potential, Successful Living, Lifeskills, Mayor’s Youth Employment, Hillcrest, Community Mental Health Center, and the ARC. She added that some providers serve all populations, but some are more specialized. She said that Successful Living, Systems Unlimited, Hillcrest, and Reach For Your Potential own some housing and provide services. Harney asked how long the Chatham Oaks lease lasts. Donovan replied that it is renewable after a 3-year period. Stutsman said that the County would have to pay for structural changes for the PMI unit. She said that she would certainly support a PMI unit, but it is something to consider. Thompson suggested the Board tour the Lee County facility. Donovan asked for time to look into the PMI chapter.

Gene Spaziani said that the lay people proposing this project are very excited and want to thank the Board for considering the issue early on in order to meet the needed deadlines if the project moves forward. He asked the Board for an indication of the Board’s willingness to pursue this further.

Dr. Lowell Lumin said that their group has been working on this project a long time and they’re thankful the Board is beginning early. He said that their group feels the need is there and today other individuals have also presented their views on the need and success of past projects. He said that it is really important for individuals to have this next stage of care so they are not as limited in what they have. He said that it is very difficult for these persons to get good housing in the community and then they do not eat well or take care of the apartments, then apartment owners further limit the number of apartments available for this group in the community.

Rosemary Friedrich thanked the Board for their consideration of this proposal. She said that citizens in the community and those who care for the mentally ill have a great deal of support for this project. She said that she hopes this project will continue to become a reality.

Donovan thanked the Board as well because it has been a goal at Chatham Oaks for this type of service. She said that she was visiting with Dick Myers during the breaks, who thought this proposal took place a long time ago, which it did. She added that they had trouble getting grant funding the last time this type of proposal was made. Donovan said that working with the individuals, especially the young mentally ill population, there is a great need throughout Chatham Oaks for this type of service. She said that it is such a devastating disease, so Chatham Oaks wants to do everything they can to help these individuals get back on their feet.

Harney asked if it is really beneficial for each apartment to open onto the common area instead of a corridor. Burns replied that it is beneficial because the common area is available as a patio area that allows individuals to interact socially and gives staff ability to monitor individuals. He added that it also deinstitutionalizes the corridor normally found in residential living. Harney replied that he can see the privacy a corridor would provide as being beneficial. Burns replied that the privacy aspect is within their own apartment, because they have their own living quarters. Thompson explained that this population tends to isolate themselves if they can, but having to enter through the common room encourages social skills necessary to live in the community. Harney suggested a 50-year lease that is renewable. Burns said that the 99-year lease is a threshold item for the Iowa Finance Authority, but the rules are adopted every year so the Board could write the entity to request the lease match the compliance period in an attempt to reduce the lease’s term. He offered to help the Board with that process if they are interested. He said that the way it is written now it would have to be a 99-year lease. Stutsman said that the County will be able to write their own lease, but they would have to comply with certain restrictions. Burns said that the articles of incorporation are and who is appointed to the Board of Directors is up to the Board of Supervisors.

Sweet asked why Lee County has a 15 year commitment without the 99-year lease and asked if it is possible for Johnson County to own the building to negate the 99-year lease. Burns said that at the end of the 15-year compliance period, the investor’s exit strategy has been to donate their interest to the non-profit corporation, not the County. Sweet asked why there is a 99-year lease required. Burns replied that the Iowa Finance Authority requires that in lieu of a warranty deed. Harney said that Lee County provided funding to purchase the land rather than building on County property. Thompson asked if they could provide in the lease the County the first option to buy the buildings from the limited partnership should they decide not to donate the property. Burns replied that he would have to get a legal opinion. Thompson said that it would provide the sense of clarity they’re concerned about. Neuzil said that if the Board controls the non-profit, they will have some say in how the buildings are used. Thompson said it is not uncommon for partnership agreements to have a clause providing purchase of the business first be an option for the partner. Burns replied that is something the County could do, because the investor will not sell the property to someone else. Stutsman said that the Iowa Finance Authority and Section 8 housing have vested interest in this project as well. Burns said that even if the limited partner changes hands, these properties will still be required to operate as low income housing until the 50-year compliance mark.

Lehman said that the process moving forward would be time consuming in preparing the property and holding public hearings. Neuzil said that if there is a majority of the Board willing to move forward, the process should be to have a couple Board members form a subcommittee to create a timeline with the proposing group and County Attorney’s Office to take the necessary steps to meet the deadline this year. Stutsman said that many of her questions have been answered today, including whether or not the project would fit into MH/DD’s continuum of services. She added that although the location is not perfect, growth will continue in that area so it will become more ideal in the future. Thompson said that this project has been a long time coming and the Board should move ahead soon. Harney said that he still has concerns, but the Board should move ahead. Neuzil said that he also wants to move ahead in order to help individuals with low income and special needs. He said that the Board has identified the need, the location, a strong partner with Chatham Oaks, and has the financial resources identified, so it is now time to put the leadership together to move the project forward. Burns offered to work with Executive Assistant Mike Sullivan to put together the next steps for the Board. The Board decided to place the item on a future informal agenda.

Adjourned at 11:33 a.m.

Attest: Tom Slockett, Auditor

By Casie Kadlec, Recording Secretary