HomeMy WebLinkAbout~Master - Forgiveness of loan for Richmond Center RESOLUTION NO. 12-577
RESOLUTION APPROVING REQUEST FROM THE RICHMOND CENTER
FOR FORGIVENESS OF LOAN
FOR THE CITY OF AMES,IOWA
WHEREAS, in late 2008, the County's community mental health provider, the Richmond
Center,received emergency financial assistance from United Way,Story County,and Mary Greeley
Medical Center, and on November 15, 2008, the City Council authorized $45,000 in emergency
assistance to the Richmond Center; and,
WHEREAS,this included$20,000 in reimbursement for nursing services for Ames residents
and a$25,000 forgivable loan for the purchase of equipment and software to upgrade the Richmond
Center's client tracking and billing system; and,
WHEREAS, City staff had concerns about the records that were being submitted by the
Richmond Center for reimbursement, and staff did not have confidence that the agency could
accurately track and bill the City for city clients; and,
WHEREAS,it was believed that the$25,000 for equipment and software could help provide
better tracking and billing; and,
WHEREAS, since 2008,the Center's financial situation has not improved,and its FY 2008
and 2010 audits expressed doubt as to whether the Center could continue as a going concern; and,
WHEREAS, earlier this year, Story County asked the State Auditor's Office to audit the
Richmond Center,and the audit raised several concerns about the Center's financial practices; and,
WHEREAS, between June 2010 and January 2012, Richmond Center employees received
$103,802 in bonuses and gift cards, and the gift cards were not taxed as required by the IRS; and,
WHEREAS, as a result of this audit,46 clients were identified who should have been billed
to Story County or another county, but were billed to the City during 2011-12 ($4,686.42 in
services), and a further 21 clients were billed to the City($1,097.72 in incorrect billing to the City)
after having been billed to the County,despite the County's policy of requiring anyone billed to the
County to be considered a County client for at least 12 months thereafter; and,
WHEREAS,if the City Council believes the terms of the loan have been met,it may forgive
the loan, or if the loan terms have not been met, it may choose to demand repayment; and,
WHEREAS,in addition to direction on the forgivable loan,staff requests direction regarding
the improper 2011/12 billings identified in the state audit and require repayment of$5,784.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that forgiveness of the loan in the amount of$25,000 to the Richmond Center is hereby approved,
and the Center is required to repay the improper billings identified in the state audit during 2011/12,
totaling $5,784.
ADOPTED THIS 23rd day of October, 2012.
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Diane R. Voss, City Clerk Ann H. Campbell, Mayor
Introduced by: Larson
Seconded by: Davis
Voting aye: Davis, Goodman, Larson, Orazem, Szopinski
Voting nay: Wacha Absent: None
Resolution declared adopted and signed by the Mayor this 23' day of October, 2012.