Lack of day care hits parents in Denali Borough
Published Friday, March 14, 2008
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Stumble It!ANDERSON — The Denali Borough Assembly doesn’t want to dive into the child care business, but it also doesn’t want to see preschool and day care disappear from the Healy area.
So when a roomful of mothers showed up in force to press the issue at the Wednesday night Borough Assembly meeting in Anderson, the assembly listened, then agreed to help.
Three assembly members — Baxter Mercer, John Winklmann and Clay Walker — will meet with owners of the Denali Preschool and Learning Center to negotiate a price for the building, which used to be known as “Kid’s Stop.”
If that negotiation is successful, the borough plans to allocate money to purchase the building, then lease it as a day care and preschool. A group of mothers is forming a nonprofit organization to take over running the business.
The Borough Assembly will host a special meeting at 6:30 p.m. March 21 at the Tri-Valley Community Center to discuss negotiations and the purchase of the building. The public is invited to attend and comment at that time.
About 20 mothers drove 80 to 120 miles round trip from Healy and areas south to attend the assembly meeting in Anderson. Their personal appeals were heartfelt, sincere and remarkably steady and controlled, considering the emotion surrounding the situation.
“We’re asking you to step up and save our building,” Rebecca Skrivanik said. “We worked hard to get that building. When we first got it, we wondered, do we have enough kids? Now, when we have kids to sustain it, we’re losing it.”
Jo Ramos praised the women who opened the child care facility since the mid-1980s.
“These are the kind of women who make up the fabric of this borough and this country,” she said. “The founders remain in this borough. It’s time for us to roll up our sleeves and think creatively. This is a treasure. Why in the world would we want to regress? Let’s save the building.”
Clara Saxe said the community did not want to see the lien lifted
“We do not want to see the contents, so lovingly donated, sold for profit,” she said. “We don’t want to see the building sold for profit as a residence.”
Their appeals had the desired effect and the Borough Assembly agreed — reluctantly in a few cases — to support reclaiming the building that had provided day care in the community since 1986.
That’s when a community group initially formed a nonprofit corporation and received a state grant for the building, which became known as Kid’s Stop. It operated, according to one mother, “as a true success story” until two years ago when the board dissolved the corporation and sold the building to Shelly Merrell for the price of the debt — $8,000.
Merrell reportedly signed a contract agreeing to run the facility as a day care for at least three years. Otherwise, the contract stated, the building would revert to the Denali Borough. So far, however, no one seems to have a copy of the signed contract.
The Merrell family decided to leave Healy after less than two years. They were in the midst of selling the building as a private residence when the borough put a lien on the property to halt the sale.
Not all the assembly members were excited about being pulled into day care dilemma, but they unanimously supported helping maintain the building as a child care facility.
“I don’t think the borough should be involved in taking over day care,” Assemblymember Baxter Mercer said. “Outside of this room, the majority of people are not in favor of the borough getting involved in the day care center. But no matter what we do, it depends on what (the Merrells) are willing to work with.”
General consensus seemed to be that the Merrells upgraded the facility in the past two years and deserve to be reimbursed for that cost.
“I don’t see anything wrong with them getting their money out of it,” Assemblymember Josh Hockin said. “I wouldn’t expect them to give it away. I think the borough has to do something. We should make a reasonable offer and lease it out to someone else, on the terms that they only use it as a child care facility.”
Assembly member John Winklmann addressed the Merrells directly, saying, “Maybe you can prove what your equity is and it's something where you sit down and negotiate it out.”
However, Assemblymember Clay Walker said, having a licensed day care and preschool is important to the economic wellbeing and health of the community.
“It also maintains this as an attractive place for young families to move to,” he said.
The Denali Preschool and Learning Center will close March 31.
As an interim measure, the Morning Star Baptist Church has offered to provide space for a preschool so this year’s class can complete the year. There are about 40 children enrolled at the center.
Community Discussion
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Baxter, you are right it is sad that the borough has to step in in this regard. BUT Clay you are also right Healy can't afford to not have pre-school and child care avaliable. What a shame that the contract with the Merrills can't be found, that is really hard to believe! While Kelley and I have moved away we are rooting for all of you in making this work out. This is what I miss the most about the Denali Borough, people who care enough to do something about it!! I know that the right thing will be done here, good job to all of you!!!!!
I don't think it is Denali Borough job to be in day care bussines, if the people of Healy feel like they need a Day Care then they need to come up with the funding on their own, by asking the borough to step in, is going to put the borough on the hook every year for funding, where is the borough going to get the funding, nobody will vote a sale tax in.... what about the rest of the communities in Denali Borough, is the Denali Borough going to offer Day Care there also, I think Day Care is a great idea but also I think the town of Healy needs to step up to the plate by asking borough goverment to do this they are asking the rest of the comunitites to funded their Day Care , then Denali Borough should start a Day Care in all communities then ....
I agree with Gordon and it is the people of Healy looking for a free lunch.
If they want the day care facility, and if it is viable, then these good mothers should just pool their money, borrow the remainder and get on with it. I will guarantee you they won't however.
The borough has absolutely no business being involved and the free money from the state is what caused the original problem. These folks just want something for free. If I lived in that borough and this occurred these good folks would find themselves in court pronto ... and they very well may anyway. Why should this day care be subsidized for them?
Odd about the contract ... maybe this is a myth and that is why it can not be found.
Erik I disagree with you. These people care only that their free egg is going away and what it will mean the them. It is easy to fix this ... just put up the $$ and get started ..lol. But that is not free and it won't happen.
News-miner: fix your login process.
Neal Laugman here. I've followed this for 2 years and I was at the the meeting where an illegal board of directors made the decision to liquidate the business for it's debts - debts that alledgedly included money owed by one of the so-called board members. This is common knowledge around Healy. The Merrells stated at the Assembly meeting last Wednesday that they had a signed contract, but left it at home. The "board" should have a signed contract, but they apparently have chosen not to produce it. I have a copy of the unsigned contract that both parties signed, and so we all know what is in the contract, and the name of the attorney that brokered the deal. But everyone needs to know that that the Merrell are now making a good-faith effort to fix things.
The grant money was received in 1986, and the building was a community project, with many personal contributions and effort made over the years. Many times grants that are awarded to non-profits require a local match contribution. If you live in Alaska, virtually everyone has received money from the state at one time or another, so I guess that makes us all socialists <g>. I guess when revenue sharing begins to happen again (at least for the next few years), none of the communities in Alaska should take it because it's free government money.
I can be easily reached if anyone needs more of the facts.
BTW - It is usually a very difficult task to convince a true curmudeon that government is not the root of all evil. NJL
Maybe I'm misunderstanding the situation; please correct me if I am wrong. I am under the impression that the community is wanting the building and is asking the Borough to help with that. Not asking the Borough to provide any type of care or service other than keep the building in the community for what it was 1st intended for.
The agreement states that the borough has the rights to the property if not operated as a daycare for three years. I think that it is a great Idea for the Borough to sit down with the current owners and work something out. Pay a agreed upon amount, have the building as borough property that can be leased to a group to provide the service. The borough would have some equity and just the responsibility of reading bids and selecting the best group to provide service
Granted it seems like the contract missing should raise flags, but NO ONE had denied the fact that it was an agreement not even the sellers. This makes me think it is legit.
I also was under the impression that the people that use the day care/ preschool pay for it, no one is asking for that service to be free. Just to be available.
Oh please. I cannot believe my local government is even considering associating itself with child care. The borough cant even fund the projects already mandated; now they wish to be known as baby-sitters??? I dont believe the borough even has any business in the landlord trade or as property negotiators.
Something here isnt right, is there no private property ownership rights left in the Denali Borough? I think a contract should be produced and taken before a judge; the assembly better back off quick or they may end up burned, again.
All very good points but the Borough has no business buying, maintaining and babysitting the property for a select few. If the community is really interested then the community, not the borough, should buy the property, maintain it and run it accordingly. That really is the crux of the issue because this serves a small select group. It is not like a library that is open and available to everyone.
If the business is viable then I think someone would snatch it up instantly. I suspect it is not. or it is one of those things where you work hard and make little. People will not pay the true cost of full time day care as seen in Fairbanks already and several other places. These operators are entitles to the same salary any other professional makes and a decent return on their investment like any other person. That makes it very expensive and the parent needs to pay the bill .... not others which is what is actually being suggested here.
Some contributions probably were provide locally but I suspect, and it is only speculation, that the local contribution was very minor in the overall scheme of things. The original grant should have never occurred again because of the small select user group.
I agree that there probably is a contract or an agreement someplace but that really is not the issue.
James,
I can't give a $ figure for what locals put into the building, but I guarentee you that it was not a "very minor contribution". There were a lot of people that helped build and maintain that building over the years. I have to reiterate that the borough is not getting into the child care business but will be the land owner and lease the building. This is a tough situation I can see the reasoning being used on both arguments. Have to agree with Neal as well it would be awful hard for anyone in Alaska to act like they are too good to take government money for a community good. Ever heard of an earmark??? Nobody is looking for a handout here, but I will totally agree that child care workers are woefully underpaid! Good luck with this!!!
I agree this should not be a matter that the Borough should have to deal with. With that said it was two years ago that that decision was made by the signing of the agreement with the clause concerning the borough involvement. This late in the game it really just needs to be fixed and because of what happened two years ago the borough is in the position to do so. The injustice was done when the facility was sold in the first place. Let’s get this resolved, yes with the boroughs help, and next time don't let it get to this point.
First, this discussion should limit use of the word "local", or accept that this is, indeed, an issue for the city of Healy and should not be brought up in borough-wide politics.
Second, before the borough buys a day-care building, shouldnt it first buy its own office building? What kind of landlord pays rent?
Third, if Mr. Laugman is correct and the original sale of the building was illegal, shouldnt that matter be corrected before anyone (not just the borough) makes an offer to broker a deal or purchase the building outright?
I feel sorry for all the people involved here, but still I am amazed this issue is even being seriously considered.
To address the "so-called" legality of the sale... Everyone seems to get hung up on the term "useful life". FYI useful life is an IRS term referring to depreciation, and a building put into operation as a business, nonprofit or otherwise before 1987 falls under the descriptions in IRS publication 534, which defines the useful life of this proprety as 19 years. Hmmm, this means that in 2006, this asset was valued at $0.00, in other words,it was not an asset anymore. According to the by-laws of the now defunct Kid Stop, "All remaining assest shall go to a non-profit for ... or the Denali borough ... )" In this case, there were no remaining assets, only $8,000 in Debt. The non-profit sold off this "asset" valued at $0.00 according to the IRS to pay off it's debts - NOT ILLEGAL. This particular asset was not DEDICATED, actually none of the non-profit's assets were DEDICATED. For this asset (the building) to be dedicated, it would have had to say in the by-laws that this building located at lot X, Block Y, of XYZ subdivision, Healy, AK is DEDICATED to a non-porfit, or the Denali Borough, or the town of Healy (of course, they could not do this one, as the town of Healy legally does not exist), for the purposes of education, science, etc....
Now, if someone really wanted to take this mess to court.... Suppose that the court declared this sale "illegal", then the IRS would decide that because the assets were not disposed of properly, the non-profit corporation really was not one. Next, they decide to audit the tax records for the entire time that this non-profit was operational, and for tax purposes (because this gives them the most money) they decide that this nonprofit should have filed as a "C" corporpation. Every board member will now owe money on anything that the IRS decides was a profit plus penalties and interest on both the business income and what they decide whould have been the board members income (it does not matter that there are no records, the IRS has some really nifty formulas that they use if you "lose" your records.). Also, every person that donated anything to this non-profit and declared the donation as a write-off will now have their personal income tax returns "adjusted" with those penaties and interest.
YOU DON'T WANT TO GO THERE!!!!!
By the way, the current owner has not done ANYTHING illegal, and I think it is a real shame that the community that she helped out by stepping in when NO ONE ELSE was willing to do so, is being persecuted by a few (but very vocal) members of this community.
Very good points, Denalisews. If the sale is indeed legal, any judge worth his gavel would find that all parties to the sale acted in good faith; therefore ownership of the building (and the right to sell it) rests with the current owners. Myself, I wish them luck with this, and all future endeavors.
As for the problem of day-care in Healy, I suggest the families involved use the extra time afforded them by the Baptist Church to find another way to resolve this dilemma.
I, Rebecca Skrivanek, would like to extend a hearty Thank you to all who came to the meeting to speak. Our constituents were able to see what their community expected of them. Also a strong thanks to those women who are willing to step in and form a new Board of Directors. We "old folks" were going to start over with it, and we don't even have young children any more.
However, it's not over yet. Meetings of negotiations are being held now and a new price will be considered at the special meeting on March 21. We need to be present there as well.
As far as you nay-sayers go, the people are not asking their Borough for anything more than to save their building. It was taken illegally almost two years ago and we are wanting the building to be a non-profit childcare center again, as it has always been. The Denali Borough won't have to assume childcare powers, just rent a building.
In defense of Shelly Merrell, she did turn a bedraggled business, which had been run to the ground by the last Board, into a thriving one. But, none the less, she took on a commitment to abide by a contract for at least a three year stint. During one of Kid's Stop's final Board meetings someone asked the Merrells about their commitment to the area, being he was in the Military. Mr. Merrell stated that he would be here forever, but, now they're moving to the southern states, and no, he hasn't been transfered. There are also other stipulations in the contract which protect the building from being sold as a private residence.
Its legal, its illegal; Its yours, its theirs; yes, no...
This is a no-brainer and I stand by my original statement; produce a contract and all interested or involved parties go before a judge.
Leave the borough out of it.
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