Perry Township Board Meeting Minutes: March 31, 2015

The meeting is called to order at 4:15 pm

Members Present: Barb Sturbaum, Susie Hamilton, Jack Davis, Dan Combs

Non-Members Present: Patrick Murray, Guy Loftman, Kevin Robling, Novella Shuck, Lauren Slavin

Agenda

1. Martha's House

Martha's House

Dan opens the meeting with a discussion on Martha’s House’s recent legal issues, and turns the issue over to Guy, who has studied the legal paperwork involved. Guy states that the article in the Herald Times was concerning, but upon reading the documentation regarding the lean against Martha’s House, it greatly alleviated his concerns, because the lean is against the organization, not the building or land, or anything tied to Perry Township for that matter. It did not even reference the Rogers Street address, instead mailing everything to a PO Box.

Martha’s House was caught under US Code 6721 “Failure to File Correct Information returns”. Such person will pay a penalty of $100/return that they failed to file (and they were only fined for 2011). Their unpaid balance, however, is $15538.77. What is missing? Guy states he knows enough to know that Martha’s House never operated at a profit.

Dan states he had a conversation with Bob Miller about that number, who told him that number is the penalty of $100 in addition to the $15,000 in federal withholding tax that wasn’t sent in. Guy states that this was one of his greatest fears regarding that money, as it means they could issue another penalty, a failure to pay withholding tax, which is a really big deal in personal liability. If that’s what Bob says happened, that’s probably what happened, so that is a serious problem for Martha’s House. Especially as this is all about 2011. If they got into the habit of not sending this tax in, they are looking at potential problems for 2012, 2013, etc. If this is compounding, that is really concerning.

Dan received an email from Patrick Murray (Martha’s House board member) today, who states that according to him, these taxes are just for 2011, and the 990s are being filed. Failure to file their 990s is what caused them to lose their tax status in the first place. They are speaking with a woman from the IRS who is discussing with them options for setting up a payment schedule for repaying the $15,000+. Dan states that what he is hearing from Martha’s House is that the taxes were only not paid the one year, when Bobbi was still involved there, the year before the board took over and outsourced the payroll, etc. to an accountant. Jack asks if the paperwork stating “failure to submit correct form” means they filed the wrong form, and Guy states they failed to submit any form.

Dan asks Guy if the township suffers any risk in these events because of our contract with Martha’s House. Guy states that according to Indiana code, we are allowed to contract with corporations (nonprofit is not specified). We are therefore not limited to contracting to nonprofit corporations. Otherwise, we would have had to terminate our relationship with Martha’s House. Assuming Martha’s House is still in good standing with the Secretary of State, they are still a corporation that we can work with, and this is an easy status to check if we are concerned.

Throughout this tax process, Martha’s House is still allowed to operate the shelter as long as they can. No one will come and take away the bunks, etc. There should also be no direct impact on Perry Township’s interests at all, aside from the fact that we would prefer that Martha’s House continue to function. If Martha’s House owes $15,000, then it’s possible that there could be a freeze put on their bank account. As is noted though, Martha’s House has never really had the ability to pay their bills. That hasn’t changed. And now they are in negotiations with this other organization, New Beginnings, to take over the building.

Dan states that he has also received some very recent correspondence from Bob with Martha’s House, which states that as of 7/1/15, he and Patrick are leaving the Martha’s House board. They have not had time yet to speak more in depth about how this will affect Martha’s House as it winds down operations.

The Martha’s House board is meeting in the immediate future to determine if they want to pursue maintaining the shelter until the detox center New Beginnings takes over. They have not made that determination yet. Patrick has stated the possibility that he may even stay on the board to lead it into the transition period. The Martha’s House board has told us that they have several presentations made to groups to cover their budget and cover this tax money.

There are three scenarios that can happen if Martha’s House were to provide us a letter saying they’re out in 30 days:

1. We would have the option to keep their employees and pay them as temporary employees,
2. We could pay a service charge to Martha’s House to maintain the shelter, or
3. We could come in with a bridge.

All of those are options we need to figure out the cost for.

New Beginnings has met with Bruce Irvin and he has stated that they are looking at September now for opening the center, as they have to first apply for a change to medical zoning from the Board of Zoning Appeals. They are also approaching the Jack Hopkins Fund for seed money. Also they have expressed interest in converting the back area to a kitchen, which is what Dan thinks may hold up the opening of the center. Dan thinks it is easily possible the detox center will not happen until November. If push comes to shove, the New Beginnings group might even come into the building early to run the regular shelter first, in order to get their feet wet, and they do need to have a procedure manual, rules, chores, etc. established.

New Beginnings plans to use the 501c3 of Wheeler Mission in Indianapolis. Wheeler Mission has largely stayed out of the shelter business in Bloomington, but they do have a huge facility in Monroe County near where the landfill used to be. Everyone still seems very excited about the process.

What we (the board) need to decide is what steps to take on Martha’s House. We have $5,000 left in Community Service from our budget last year. We reserved that money in case this organization needed to use seed money, before they were tied to Martha’s House. Supposedly, New Beginnings will be working on a $700,000 budget, but they claim they won’t be coming to the Township for money and that their budget/income worked out. Wheeler Mission is new to the detox business, so we are hoping the people leading this group know what they are doing.

As Guy ceases his legal operations at the beginning of June, Kevin will be writing the legal contracts for New Beginnings. Barb notes that we don’t have money to operate the shelter until November if it came to that, and Dan states that we do have township surplus funds (that are not in the assistance fund). We could add an appropriation from that. New Beginnings would first need to be present at a board meeting, giving us a timeline though, and Martha’s House needs to figure out funding stream too. At our next meeting, we can start on the additional appropriation.

Susie asked about prior talks about the Martha’s House organization and the detox center organization coexisting. Dan states that he would like that, but does not think it would be possible to have “two captains steering one ship” there. There should be 20+ shelter beds remaining that the New Beginning detox center would manage alongside their primary operations. Additionally, the current shelter employees will go through a hiring process with New Beginnings as well. The City of Bloomington does also have a 5-year lien on the property for the sprinkler system. The detox center and shelter should not be shook up about this financially however, even if operations were closed for two months. Our board does need Martha’s House here at a board meeting to ask them how they are going to operate through the summer. New Beginnings also needs to give us a presentation and to ask us for the $5,000 officially.

Dan states that it is in our interest to not let the shelter close, as it would mean we would have to place people in hotels like Southern Winds, which aside from not being a great place, is also expensive. He states that he has given Bob questions about what we the Township need to know regarding the possibility of providing a subsidy or ending their contract.

Perry Township spent several thousand dollars to get the 501c3 framework in place for Martha’s House, and we could use it again if we got the framework back. My Sister’s Closet had lost their 501c3 when we gave them their space, and it took them 1.5 years to get it back. If we could get Martha’s House’s status back, we could have a blank organization that we could use if a new organization came up that needed it. If the Martha’s House board resigns, Perry Township’s board could serve as a passive board. Barb asks about New Beginning’s original plan to use Martha’s House’s 501c3. Dan states that was the plan before the lean happened, and if Martha’s House gets that paid off, New Beginnings can still do that as well. Dan also states that it would be nice if Martha’s House can hand their 501c3 back to us since the Township spent approximately $5,000 getting it. We even got that status in only 46 days because we had Baron Hill hand-carry the application to the IRS. At this point, Wheeler Mission will be the 501c3 that New Beginnings uses to get off the ground. Kevin asks if there is a way to expand the new Mount Salem Cemetery 501c3 to cover this if we had to. Guy states that as long as your organization is filing your 990, you will never get in any trouble for holding a shell.

The board decides to schedule a meeting within the next 30 days or so to discuss the detox center. We need both groups (Martha’s House and New Beginnings) in here so that they can discuss with us what they want to do and their timeline. This will also give us time to advertise for an additional appropriation, so that if we have to spend money, we can access it. The next board meeting is set for April 28th at 5:30pm. The agenda will consist of:

• Additional appropriation- shelter line item
• Martha's House presentation
• New Beginning's presentation
• New Beginning's $5,000 grant in community service- Presentation for that

Kevin can start writing the contract for leasing the Martha’s House building to the detox facility.

Dan states that if we end up having to take care of Martha’s House, all bets are off on how it is currently run. For instance, we would determine a client’s origin and seek reimbursement from the other townships for their residents. Once New Beginnings opens, they will have some walk-in trade but most of their business will be court ordered. The petition to change the zoning for the building is being worked up by New Beginnings now. Kevin states that receiving BZA approval for the zoning change is not a given at this point. If BZA doesn’t grant the zoning change, we need to hear of multiple eventualities. Our closeout fund can be used to either close out the building or transfer the services to another organization. Sharon is currently looking at the eventuality of running the shelter as a Perry Township subsidiary.

Plans were made to contact Bruce Ervin and Patrick tomorrow 4/1/15. Kevin also requested that we get Martha’s House’s budget as well, and Dan states that may be possible but if not, we should be able to at least get their bank statements for the last 12 months.

Dan also mentioned that after Friday’s story in the Herald Times, he received an email from Shalom Community Center asking if this (the loss of Martha’s House’s tax status) was an opportunity for them the take over the shelter. Dan states the problem with Shalom taking over any shelter is that they are in favor of low-thresholds of entry, and the community will not support this. Shalom will not agree to a high-barrier shelter or case management service requirements. There are also objections to residency guidelines and rules about intoxicated people on premises. We as a Township are committed to NOT turning intoxicated people out into neighborhood and have promised the community as much.

Guy made it clear at the end of the meeting that though both he and Kevin were present today, his services should no longer be required by the Township after this.

Barb adjourned the meeting at 5:22pm.