An exchange of words and information has continued over the past several days between Platte County commissioners and officials from the Platte County Health Department.
At least one commissioner has been accusatory with his words.
“When it comes to fiscal responsibility and transparency, the health department has not been acting in the best interests of Platte County taxpayers,” Scott Fricker, presiding commissioner, said at a commission session Tuesday morning.
Fricker took the health department to task for employing the use of lease/purchase agreements, saying it avoids having to ask voters for approval.
Fricker pointed out a meeting of the health department’s board of trustees was set for Tuesday night and that he would be there to speak the concerns he had expressed during Tuesday’s commission meeting. The Tuesday night meeting of health board of trustees was after deadline for this edition of The Landmark.
The recent discussions between the county and health department began over wording on a deed to the property for the health department’s facility on Marshall Road in Platte City. The health department is selling the building and has a contract with a potential buyer. In the closing process, it was discovered the original deed in 1959 listed the owner as “the County of Platte, a political subdivision of the State of Missouri, and its successors, for the use and control of the Board of Health Center Trustees of Platte County, Missouri.”
The purchase price of the property was $6,000, according to the deed.
Clarification of the deed was sought by the health department, which has paid for all improvements done on the property for more than 60 years. County commissioners, on a 2-1 vote, tabled the matter of clarifying the deed. Commissioners Scott Fricker and Dagmar Wood voted to table, while Joe Vanover, second district commissioner, voted against tabling.
In the spring of 2020, the health department board of trustees approve the purchase of a $1.9 million building that will become the new site of the department’s headquarters, consolidating staff at the department’s two current buildings (Parkville and Platte City) into one location.
The department’s board of trustees finalized the purchase of a building at 7925 NW 110th Street, Kansas City in Platte County, in mi-April of 2020. The location is just off N. Ambassador Drive east of I-29. The health board approved using existing reserve funds for the purchase. Health department officials announced at the time that the plan is to sell the department’s existing locations.
Last Wednesday, Fricker answered a letter that had been sent to the commission by Andrew Warlen, director of the Platte County Health Department (see last week’s Landmark for details).
In his letter to Warlen, Fricker asked 10 questions and asked for copies of lease/purchase agreements and purchase contracts, etc.
Then on Friday, Warlen answered Fricker’s letter. The Landmark obtained a copy of Warden’s letter via Sunshine request.
- How have you been financing the KC property renovations?
Construction expense (General Contractor expense) is being paid for through funds acquired through a lease purchase agreement. Construction began in May 2022. To date, all other expenses have been paid for through grants, contracts, or operating funds. - Were there any lease/purchase agreements in place when that response was written?
No lease/purchase agreement was in effect at the time of Mary Jo Vernon’s response to the Commission in December 2020. - Which properties currently have or have had lease/purchase agreements?
The Parkville Health Department building previously had a lease/purchase agreement.
All terms of that agreement were met and that agreement is terminated. The Kansas City building currently has a lease/purchase agreement to fund improvements. - Why did you use lease purchase agreements instead of a standard construction loan?
Governmental entities have various avenues to fund improvements. The lease/purchase instrument is one allowable way to fund improvements and was the best fit for the Health Department’s needs. - If amounts are owed under lease purchase agreements, why didn’t they show up as liabilities on your 2022 balance sheet?
Health Department staff does not maintain a balance sheet. Our accountant prepares a Statement of Net Position for the annual audit. The 2022 audit has not yet been completed. The liability is anticipated in our Statement of Net Position which will be included in the 2022 audit. - Your 2022 Income Statement shows $216,212 in Rent. How can that be if you own all three properties free and clear?
It appears that you may be referring to the rent expense we incurred in 2021. This rent was not for any of the three Health Department buildings. The rent was for warehouse space in Riverside, Missouri used to conduct mass vaccination operations for COVID-19, two storage units, and a parking space for our response trailer. - How much cash are you required or recommended to keep in your Reserve Fund?
No legal or internal policy requirement exists. - Were any Reserve Funds used to purchase or renovate the KC property?
Yes. - Why did the Health Department hire a residential real estate agent to sell the two commercial office buildings? What was the selection process and how was that justified?
The Health Department Director requested proposals from three Platte County-based real estate agencies and received three email responses. This information was shared with the Board of Trustees. After careful consideration, the Board authorized the Director to negotiate acceptable contract terms with the individual licensed real estate agent and architect described below. - How is it that the listing agent for the Parkville and Platte City properties is also the architect on the KC property? Please explain this relationship and how it came to be.
The listing agent holds a Missouri License for real estate sales and brokerage. This same individual is a Missouri Licensed Architect who also owns an Architectural firm located in Platte County, Missouri. The Platte County Health Department Board of Trustees became acquainted with this individual during the Board’s prior exploration of a separate project at the Parkville building.
Warlen’s response included copies of many documents, including lease/purchase agreement on the health department’s Parkville facility.
“The current lease/purchase agreement for the Kansas City building is pending, not complete and therefore a closed record and unavailable at this time,” wrote the health director.
Other documents that Fricker requested were provided, except for what the county commissioner referred to as “current financial projections to complete the three-property transaction.”
“This document does not exist,” Warlen remarked.
The health director closed his letter to Fricker by saying “I greatly appreciate your commitment in your Feb. 15, 2023 letter to sign the warranty deed upon receipt of this response and your expressed concern regarding the resulting postponement of the resolution of this issue. The contract for sale of the 212 Marshall Road property was negotiated and signed in a strong real estate market and it would be a disservice to taxpayers if the Platte County Health Center Board of Trustees were to lose the contract due to any further delay requiring the property be sold for a lesser price.”