Birmingham requests help for day care center
BIRMINGHAM – A delegation from the City of Birmingham requested help from Sen. Charles Grassley over a dispute with the Federal Housing Administration regarding the former day care/pre-school in that city.
The delegation made its plea known to Grassley during a town hall meeting April 4 at the Van Buren County Hospital Community Services Building.
John Morrissey, an attorney representing the city, told Grassley that the city had “no choice” but to default on a federal loan which helped build the facility in 1999.
The building was a joint-venture between the city and school. The school wanted to build a day care and pre-school in Birmingham. Because the school could not enter a long-term lease, the city ended up being responsible for the loan and ultimately, the grants. The city used a small portion for a city office, with the rest of the facility used as the school’s day care and pre-school. There was one major addition after it was built, for the school.
However, more than two years ago, the school notified the city that it was ending its year-to-year lease agreement with the city of Birmingham, due to state budget cuts and a possible $1 million liability from the state because the school was using general funds to operate the day care portion, which lost money, and other factors. The school moved the pre-school to space it had in the old part of the Douds school.
Morrissey said the city originally received $300,000 in federal grants and agreed to a $200,000 loan.
With the addition, “we are sitting on $800,000 of taxpayers’ money” Morrissey said.
The trouble is, the loan is to be paid over a 40 year period and grants the city received were made with the understanding that the Van Buren Community School would be occupying and leasing the property, Morrissey said.
“The school stepped out of the 40-year agreement,” Morrissey told Grassley.
The school board is considering moving the pre-school out of the old Douds center.
It has several options and, at a work session Monday night, did toss around the idea of moving the pre-school back to Birmingham, instead of to Keosauqua in the old superintendent’s office or other space. However, board members said an obstacle is transportation costs.
The city of Birmingham did have some money built in reserve to pay for the loans, but that ran out this year.
Birmingham has tried to find another entity to lease the building, but the only interest has been from Indian Hills to run it as a business incubator. The city has run into the brick wall from the FHA which states that only a non-profit organization can lease the facility. Indian Hills would use a portion of the facility for for-profit businesses.
“The restrictions they put on us have cut the appraised value down to one-quarter of what it cost,” Morrissey said. “Several rules have really hamstrung the city.”
If the city doesn’t come up with the loan payment, the local FHA office has said it would force the city to pay for not only the loans but the grants as well.
Most of the principal is still owed, because so far, payments have mostly covered the interest expense.
“They have told us that unless you can find a non-profit group, the city will have to pay for the grants and loans. That would bury the city,” Morrissey said.
Last week, the city told the local FHA office that enough was enough. According to the minutes, the city council approved “ the payment of only the Birmingham City share excluding the previous Van Buren Community School share to FHA for Day care Building.”
Morrissey said, “at some point, the USDA will have to look at it.”
Grassley said he could assist the city in facilitating meetings with the Rural Development department. “If the law allows for a waiver, I can help with that,” Grassley said.
Meanwhile, Perry Louth, Birmingham city council member, said, “I would like to think we can get the federal government to use common sense, but it doesn’t look like it now.”
Grassley said, “Washington is an island of insanity, surrounded by sanity.”
In other discussion at the town meeting:
• Grassley discussed water quality and environmental issues. He said the nation’s first voluntary nutrient reduction plan, supported by Iowa farmers, “needs to work.”
At its core is a cost-share program that will be matched by farmers or land owners to implement targeted conservation practices ranging from conservation tillage to bio-reactors to cover crops. If it doesn’t, the Federal Government will probably come up with a plan of its own. Recently, the EPA tried to regulate dust and one person with the EPA asked Grassley, “why can’t the county spray dust control twice a day.”
• A resident complained that farm chemicals killed fish in her pond. Grassley responded by wanting more information. “I don’t know what’s sprayed in your neighborhood.” The same resident said she was “not happy about the Monsanto Protection Act.” Grassley said the provision doesn’t mention Monsanto. Grassley said the act gives farmers the right to harvest a crop that the USDA had approved to plant. “Why should the farmer be penalized?” asked Grassley. He also discussed new EPA rules for city storm sewers.
• Immigration is a “fluid” situation, Grassley told the audience.
• Grassley said his caucus will propose gun legislation, but he also supports a threatened filibuster. “Most legislation being proposed in the Senate right now infringes against the law abiding person,” Grassley said. There was a lively discussion on gun control legislation being proposed, which includes a background check, restriction on the number of rounds in a magazine and also restriction on the type of weapon being used. Proponents of gun control stated that the children killed in the Connecticut shooting “had a constitutional right to life that trumped the second amendment.”
Opponents stated that the legislation was unconstitutional and would not affect a criminal’s ability to purchase firearms.
• Grassley also discussed sequestration and stated that about half of the cuts come from the Department of Defense.
• Grassley said the reason for continued aid to Egypt was due to the obligations the U.S. made under the 1970s Camp David accord.
• Afterwards, a tour was given of the new facility, which houses day care, head start and several Van Buren County Hospital offices.