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Trustees vote to close Care Center's 8-plex

The Akron Hometowner of Akron, Iowa

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The Senior Village North Apartments, commonly called the 8-plex, will be closed in six weeks.

The final agonizing decision was made Jan. 1 after the Akron Care Center Board of Trustees received a four-page engineer's report detailing numerous renovations needed before the board could even take the next step to apply for state assisted living licensure.

That list was only a preliminary list as the report would need to be submitted to the state engineer for further review. Completing the preliminary list of items was estimated at a minimum of $100,000.

At a special board meeting on Dec. 31, the four board members present listened as Administrator Gail Olson officially presented all the facts regarding the 8-plex operations.

Currently, only four of the eight apartments in the facility are rented. Last Spring, the board had hoped by adding services to the facility, including 24-hour care with three meals a day, the facility would have had no vacancies for the first time in several years. However, that did not happen.

Olson noted several apartment complexes in Akron have vacancies. In these hard economic times, many children are taking care of their parents in their own homes.

"I have seen no interest (in the 8-plex apartments)," said Olson, who has been advertising vacancies.

"Older people are happy where they are or things are working out where they are with families."

"We're definitely priced right," she said, comparing the rates with other assisted living facilities across the state. However, the 8-plex can only accept private-paying residents as the facility does not meet state building codes for assisted living to accept residents with HUD housing assistance or long-term care insurance. Even though it was built in 2003, it was not built in accordance with the 2000 state building code regulations.

The licensure renovations and lack of interest in the facility left the board with three options:

Complete renovations for licensure with no guarantee of filling the vacancies. Currently, the facility operates at a $5,000 loss each month.

Eliminating the 24-hour care with meals and operating it as an independent senior living facility - the same as the 6-plex.

In checking with City Attorney David Stuart, there were no issues with changing the facility from its current level of care to independent living or closing the facility, said Olson, adding that to continue operating the facility, all the toilets will need to be replaced due to equipment mechanical failure.

The board's consensus was that lowering the rental rate to the 6-plex's $560 per month per apartment would not provide enough revenue for the $2,823.26 monthly loan payment, approximately $700 monthly utility bills, and continued maintenance costs of the facility.

In addition, it was noted that the 8-plex apartments do not have stoves - just microwaves. To add stoves, would cost about $5,000.

The bottom line was that with so many other apartment complexes with vacancies in Akron, there was no guarantee that spending the $5,000 would make any difference financially for the 8-plex.

Close the facility. By closing the doors, there would be only the loan payment to worry about. This would cut the monthly $5,000 loss nearly in half.

The board also discussed selling the facility but the consensus was that no one would purchase it for its loan debt, which is $357,016.90 as of Dec. 31, 2009.

According to Olson, one of the 8-plex residents could move to the Senior Village South Apartments, also known as the 6-plex, but the other three residents would need to be relocated to another 24-hour care facility such as the Akron Care Center or an assisted living facility elsewhere.

The consensus of the board was to offer all four residents moving assistance.

Seven employees, including three who are full-time, will lose their jobs, and will receive unemployment benefits, said Olson.

Dec. 31 Discussion

About a year ago, the current Board of Trustees discussed closing the 6-plex and moving all its residents to the 8-plex, said Board Member Casey Meinen. However, the $300,000 6-plex is paid for and with five of the six apartments rented, it had a net income of $400 last month.

"At least we're making money," said Olson. "Sometimes more than that."

"Even if we're not making money, it's not costing us anything," said Board Member Dan Rexwinkel. "It's paid for."

Why would we move everybody (to the 8-plex) when we would still be operating it in the red? asked Meinen. "It's even sadder. The 8-plex is a million-dollar building."

"It's a beautiful building," said Olson. "The people are happy over there and the help is good."

"That is not a place people want to be for whatever reason," said Board President Brad Brit-ton adding the 8-plex has a stigma. He wasn't sure if it was because the level and cost of services had changed several times during its short operation. "I really think it is something that is going to continue to have this cloud that hovers over it - even if we stick $100,000 into it (for licensure). I think people are still going to have this horrible attitude about the facility."

Olson reported that she has only had one person inquire about when it would be a licensed assisted living facility.

"I do believe a good assisted living will go here - just not under the pretense of this building," said Britton.

When asked what she recomork."mended, Olson hesitated.

"I'd leave the 6-plex alone for now," said Olson. "It's not costing us. It's not a problem."

However, the 8-plex is a real drain, costing the Care Center about $50,000 to $60,000 a year, she said. "I suppose if you could quickly get it certified and filled."

Rexwinkel suggested dropping the monthly rent by $100 for new residents who would agree now to move in once it was licensed.

"Give them a month free," suggested Olson. "I don't know."

"We just don't have the time," said Rexwinkel.

"Personally, I think we're dealing with a generation who lived through the Great Depression, two World Wars, and watched their kids go to Vietnam," said Meinen. "They are not going to leave their houses and spend money...they are very thrifty."

"It's just the fact," said Meinen, explaining about one person he knew who wouldn't leave his house to spend his life savings on anything until he doesn't know he's spending it. "The greatest generation will be next and they will be more apt to take and use convenience items, spend money on convenience. These people aren't going to do it."

Britton proposed changing the 8-plex to an independent living facility but Rexwinkel noted that wouldn't even make the monthly loan payment.

"The 6-plex isn't full," said Meinen, recommending to close and sell the 8-plex.

"It's not sellable," said Britton.

"I don't think so either," said Meinen. "Not for what we've got in it. You'd have to take pennies on the dollar."

But adding another independent apartment complex in Akron didn't make sense either, he added.

"You're damned if you do and damned if you don't," said Rexwinkel. "If you put $100,000 into it, you're not guaranteed it will fill it."

"Both facilities haven't been full in years," said Meinen, adding $100,000 would fix the Care Center's elevator and cover installation of its sprinkler system.

"(Assisted living) in Akron is an extravagance - even though assisted living facilities are growing across the state," said Olson, adding it would be different if it had been attached to the Care Center facility.

"The 8-plex is a nightmare," said Meinen. "It doesn't work from a business standpoint."

"I don't think anybody wants to see anybody's life turned upside down, which is what it's going to do," he added, "but we can't keep bleeding."

"We are making sound business decisions," said Board Member Tami Small. "We have all looked at the numbers. This business isn't working."

"No, it's not," said Olson.

Rewinkel noted the board has tried three different levels of care with the Senior Village Apartments: independent living at the 6-plex; 8 hours per day assistance with one meal and 24-hour care with three meals at the 8-plex.

"It hasn't worked," said Rexwinkel. "I keep thinking if I was the owner of XYZ Corporation and I was losing $5,000 a month on a building, what would I do?"

"The Care Center is the business keeping the three facilities afloat," he added.

"This is a business decision," said Meinen. "No one wants to see those people displaced. It's unfortunate."

"I agree with Casey to close it up," said Rexwinkel, "or otherwise we'll be back here in six months, facing the same problems."

"We can always reopen it if a whole bunch of people sign up," said Olson.

"You have to listen to your customers," said Meinen. "If you make Italian food and the customers don't like Italian food... Customers have told you what they want. They don't want assisted living."

"They want cheap housing," said Olson. "The public hasn't been receptive to any of the different plans that have been offered at the 8-plex."

Britton made a motion to make the final decision at 4:30 p.m., Jan. 1 because the Dec. 31 meeting agenda said the board would only discuss the future of Village North. Small seconded Britton's motion, and the vote was unanimous, 4-0, with Board Member Iola Frerichs absent.

"We do not want to close the building," said Britton. "We do not want to take away 24-hour services. At the same time we do not want to lose over $5,000 a month which means the smartest business decision, even though it is not desirable, is to close the facility."

"I feel very sad about this decision," said Small.

"We'll make it as easy a transition as possible for the current residents," said Meinen.

On Jan. 1, Britton made the motion to close the 8-plex and give a six-weeks notice to the residents. On Feb. 15, the business will be closed until further notice and the Akron Care Center Inc. will not offer 24-hour care.

Meinen seconded the motion, and the vote was unanimous, 4-0 with the absence of Board Member Iola Frerichs.

"I hope this serves as a motivator to the community to use these facilities," said Meinen.

After the meeting, Board Member Dan Rexwinkel made the following statement to The Akron Hometowner:

"Over the past year, we've tried several different service options for the Village North Complex, none of which drew any interest from the community nor did they work financially. Every month, it keeps reducing the bottom line of our main care facility, the Akron Care Center.

With the amount of money needed to bring the Village North Complex up to certified assisted living status, I feel that the money could be better spent in the development of a new care center or updating our current facility to meet federal and state regulations till such a facility can be built.

Even with updating the Village North Complex, there are no guarantees that this service will work either.

It's my goal, and the community's from our recent town hall meeting, that a new care center is needed, and if one is eventually built, these services may be able to return.

Until that time, financially, it just doesn't work."

Copyright 2010 The Akron Hometowner, Akron, Iowa. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

Original Publication Date: January 6, 2010

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