BIRHC Letter to the Community (Re: Agreement with Dr. White)

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BIRHC Letter to the Community (Re: Agreement with Dr. White)

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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
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Mass mailing by Connie Wojan

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Subject: Mass mailing by Connie Wojan
Name: Wendy White, D.D.S.
Date Posted: Jan 22, 04 - 11:43 AM
Email: kwhite1998@yahoo.com
Message: Dear community members,

I feel compelled to respond to the mass mailing that Connie Wojan sent out yesterday due to the numerous errors in reporting of the "facts" leading upto the present, i. e. the lack of a lease agreement between myself, and the BIRHC as of this date, January 22, 2004.

The reason I haven't signed a lease agreement yet is because one hasn't been offered to me for signing. The reason they haven't made an official offer is because evidently, the board is "thinking about" or "reconsidering" the amount that they want to ask me to pay after getting an "unsolicited opinion" from yet another attorney. (That attorney , by the way, happens to be none other than Paul Glendon, husband of Anne Glendon, secretary of the BIRHC board.) Paul reiterates the fact that the IRS could come down on them and me if they don't charge me the fair market rate for my rented space. My attorney has informed me that non-profit organizations, especially rural health centers in under-served remote areas get around this law all the time. You present your case to the IRS and they make a ruling. Rural health organizations have a history of victories in cases such as this, and are granted exceptions from the rule when they show that the professional services would otherwise not be made available without the subsidization. Will the board pursue an official ruling by the IRS? No, they have already stated in their meeting minutes from November that this is a process they don't care to endeavor due to the money and time involved to do so. (Incidentally, I have mailed copies of a sample ruling for the board's perusal; if anyone would like a copy, call me.) The statement in the letter from Paul to Connie that the rent figures approved by the board are "too far below market rate to be acceptable to the IRS" makes it sound as if an official ruling by the IRS has already been made. I assure you, it has not.

Next, to the smear campaign, er, I mean the flyer that Connie mailed to all post office box holders on Beaver Island. (Paid for , by the way not by just any private donor, but a BIRHC board member, no less. At least it wasn't paid for by your tax dollars, anyway.) There are so many misstatements, so much slanted information, that I have to respond to much of it, but will try to be as succinct as possible. Connie repeatedly tries to paint a picture of my being difficult, uncooperative, or just plain absent or unresponsive to their efforts to get this thing resolved. She failed to mention the times that they stalled or put me off during the process. Hopefully, the following will clarify a few key points:

On February 18, 2003, I did meet with Connie and Paul Nelson and did indeed offer my attorney's services, pro bono to get the ball rolling. When I later called Connie (early March) and informed her that I would have to rescind that offer, she stated that Don Spencer had a template lease agreement that we could use as a starting point and they took the ball. Nothing was done after that point until after the infamous July 15th BIRHC board meeting, when I was summoned to a construction committee meeting and asked to pay $5,000.00 for the installation of a separate electrical meter to measure my electricity use down to the penny. Of course I rejected this proposal. (How stupid do they think I am?) Notice that Connie doesn't mention in her flyer that the proposals made to me had only to do with paying for an electrical meter, which is a part of the CONSTRUCTION, which is not a cost that a tenant should incur.

On August 5, 2003, the BIRHC board,unbeknownst to me, was planning to discuss my business at their meeting without informing me that I was on the agenda or offering me a copy of the document that Arlene Brennan was copying for distribution at that meeting. I had planned to leave the island that day and did not think it prudent to discuss my business without me present. I spent the better part of the afternoon calling committee members urging them to "please wait until I am present to discuss my business" and reluctantly, they obliged. When I phoned Connie to tell her that 4 out of 5 of the committee members agreed, she evidently did not trust my word, and said that SHE would have to verify that they really had agreed.

On August 6, 2003, I attended the St. James Township board meeting to urge our township representatives to intervene on behalf of the community or they might be in danger of losing their dentist (me). I wasn't sure if there was something written in an agreement between the townships and the BIRHC board, or if they simply might be able to have some influence, but I basically went to them for support and asked that they be aware of recent developments in our negotiations since the July 15th meeting. Connie states that I offered no alternatives to their proposals of having me pay for my own electrical meter. That is true. It WAS non-negotiable.

October 21, 2003: At its monthly meeting, president Connie Wojan decrees that a new committee will be formed to negotiate with Dr. White. Although she did not express it, I believe, and I think Connie would confer, that she needed to remove herself from the committee (consisting of her and Paul Nelson) due to the fact that her husband made remarks to people in the community that "The board is going to charge Wendy so much rent that she won't be able to move into the new facility". Paul Nelson felt it important that he stay on the committee since he is a retired dentist, and I agreed that I wanted him on that committee. He was told that he could not be on both my side and on the negotiating committee, so he chose to sit on my side acting as an advisor. Connie thought it would be most fair to form a new committee consisting of 2 new board members (perhaps someone with a bit of objectivity) and so Eula Thomas and Angel Welke stepped up to the plate.

November 1, 2003: The negotiations committee meets to start the negotiations process. This should be a working session but felt like an interrogation by board member Welke. She started by boldly asking some very probing questions about my fees and the number of patient visits I have in an average week or month. (I didn't realize it at the time, but she was in effect, mounting an offensive for her next move, what I call "the gathering of misinformation" which later backfired on her when it became apparent at the closed session that her "fuzzy math" was nothing more than an ignorant attempt at impressing her fellow board members. You see, Ms. Welke concocted charts comparing my patient fees to dentist's fees in Charlevoix, Petoskey and Bay City, trying to show that my fees were so out of line with the averages, that if only I charged you folks what it was really worth, I'd have money hand over fist to pay for my rent and utilities. She also compared the cost of rental spaces in those same areas, i.e., once again comparing apples and oranges. This did not look to me like a new board member trying to look at a situation objectively. It looked more like somebody's already got her in their back pocket. Why would I want to beat a dead horse? To anyone who was at the negotiations committee meeting, it was obvious that this woman had an agenda, and it wasn't to help resolve the lease agreement issues. It is true that I chose to stop working with Ms. Welke. But it is an outright LIE that I NEVER phoned her back after I received her Fed Ex. I have phone records to prove it.

November 22, 2003: After much discussion and deliberation over the laws that a 501(c)3 status dictates, the board proposed that I pay them $50.00/mo. for the first 6 months and $100.00/mo. for the next 6 months at which time we would return to the table and renegotiate the amounts based on REAL costs, not imaginary figures. There was also discussion about removing the common areas from being considered in the total square footage I would occupy, which was only fair. (By the way, I still cannot get a straight answer on what that number is, but I can assure you IT IS NOT 900sq.ft. as reported in Connies letter. Last I knew it was closer to 760 sq.ft. (Why can't we get a clear number, folks?) In any case, (AND THIS IS VERY IMPORTANT, SO LISTEN UP), near the end of the discussion which Don Spencer led, Don stated that I could think over their offer, as stated above, and the following discussion ensued:
Connie: But we need to get this stuff in writing, ASAP. We are slated to move Feb.1st.
DON: It's OK, we can wait until the next meeting.
CONNIE: But Don, the next meeting isn't until January. Remember, we're not having a December meeting because of the holidays. Our next meeting won't be until mid-January.
DON: That's OK. We'll have plenty of time.

November 23,2003-January 9,2004: Connie states that there was no communication with Dr. White. No communication between whom? I communicated with Eula Thomas and Paul Nelson and we hashed out details of the agreement feeling confident that we would present at the next meeting the terms proposed at the Nov.22nd meeting, and that it would be agreed upon, since I was agreeing to their proposal after all. Was there some other communication that was supposed to take place that I didn't know about? Connie makes it sound as if I was non-communication, as if there was a 2-month lull in activity because of me. No, there was a 2-month wait because THEY put it off.

January 10, 2004: I arrive at the Peaine Township hall to pick up an agenda and once again, they've put me near the end of their 3-4 hour meetings under the heading Old Business. I conferred with Eula Thomas before the meeting (Connie again misstates that I left without addressing any member of the board, which again is a lie), and then I left. SORRY FOLKS. ALTHOUGH IT WAS NOT MY INTENT TO MISS MY PORTION OF THE MEETING, MY PATIENTS COME FIRST. I THOUGHT I WOULD MAKE IT BACK IN TIME, BUT DIDN'T. However, I was comfortable and confident to have Eula speak (and Paul) speak on my behalf, so my absence was not as earth-shattering as Connie has led you to believe. A UNANIMOUS BOARD VOTE ENSUED, setting the rent amounts indicated in the paragraph below.

January 16, 2004: I received a letter from Connie Wojan, dated January 12, 2004 which stated that a UNANIMOUS BOARD VOTE SET MY RENTAL RATES AT $50.00/mo. for the first six months of occupancy followed by $100.00/mo. for the following 6-mo. period. She also stated that because they didn't have a contract for me to sign yet (because their attorney and the entire board had to approve it first), and since the next regular meeting isn't until Feb. 28th, that I "would not be allowed to move with them at the end of the month". I find it odd that they are willing to hold special meetings for everything under the sun but they don't consider getting my lease agreement signed, sealed and delivered a priority. Later that day I visited with our two townships supervisors to find out what the ramifications of being left behind in the old building would be. I was told that they WOULD NOT throw me out in the street, but that there are laws governing the townships as well, and that they too cannot subsidize a private business without serious consequences so I WILL most likely be asked to PAY TO STAY. What I would like to know is why am I being penalized, in effect for being left behind because they have been dragging their feet? Another point in fact: Connie felt it necessary last summer/fall at the September board meeting to update the public on the history of our negotiations up to that point in time. She read it at the meeting and posted it on the beaverislandtour.com website. She admitted at that time (though not in her mass mailing) that when the ball was back in their court (when they said that Don Spencer would come up with a first draft), they admittedly put it on the back burner because "there were other priorities that had to be addressed" regarding other unrelated matters of the BIRHC. So again, should I (and possibly my patients) be penalized because of their inefficiency?

Finally, it is my sincere belief that they are once again putting me off. Perhaps if they stall long enough, they can convince (coerce) other board members into changing the agreed upon terms before they hand me that final draft.

If community members have any questions on my efforts to reach an agreement with the BIRHC board, please contact me. Please don't rely on the misinformation presented on the forums by others, or in the streets, or from the BIRHC board if you want facts, free of sins of omission or commission. Am I really supposed to believe, after this latest "fiasco", that the board "hopes" that I will sign a mutually acceptable lease agreement and move to the new facility? What do you think?

Sincerely,


Dr. Wendy White
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