VIP exec: $224K returned to Cape County's SB40 Board in 1996

Wednesday, June 30, 2010

Money set aside for a Jackson group home for the developmentally disabled was returned to the Cape Girardeau County Board for Developmentally Disabled, VIP Industries chief executive Hilary Schmittzehe said Tuesday.

Board members sifting through old records had found documents showing that on Aug. 30, 1996, the board turned over $222.419.40 to Regency Management Inc., one of the major not-for-profits that is affiliated with VIP. Because no group home was ever built in Jackson, board members, several of whom are new to their roles on the board, wondered whether the money had ever been used.

In an interview Tuesday, Schmittzehe said he asked the local A.G. Edwards Inc. office, which handled the transactions and set up the accounts, to trace the funds. The records showed that on Dec. 31, 1996, Regency Management returned $224,465 to the developmental disabilities board.

"That closes it for me," Schmittzehe said.

Regency Management operates three apartment houses, one each in Cape Girardeau, Jackson and Marble Hill, Mo. It also operates a nine-bed group home in Cape Girardeau known as Regency Terrace.

The Jackson group home was slated to be built on part of a 3.67-acre tract on K Land Drive owned by the Cape Girardeau Community Sheltered Workshop Inc., the legal entity doing business as VIP Industries. The home was never built because the demand was low and the needed state funding wasn't available, Schmittzehe said.

"We couldn't fill the one in Cape, and the state would not fund the group homes any more at that time," he said. "The one in Cape is now full, but we can manage" clients "just as well in apartments as we can manage with group homes."

The county board, commonly called the SB40 Board, supports the sheltered workshop operated by VIP, residential services for the clients and transportation and other services provided through the various not-for-profit entities under Schmittzehe's control. Because of resignations and leadership changes on the board, tension has developed as board members sought to understand and redefine their relationship with VIP, the board's sole contractor.

Board president Dory Johnson said she is relieved the money was returned but needs to verify Schmittzehe's statements. The uncertainty about the money confirms that the board must delve deeply into the past to understand what it has and has not funded on behalf of VIP, she said.

"We still need a new system so these questions won't be coming up another 14 or 19 years from now," she said.

The board raised questions about the money after discovering that property purchased with board funds is recorded as being owned by VIP. A deed for some of the property, showing the intent to transfer it to the county in 1989, was found in an envelope among records held by the Cape Girardeau County Commission.

Sifting through minutes

New board member Bryan Noack, who is also director of service coordination for Perry County's SB40 Board, has been sifting through old board minutes to determine what, if any, additional questions need to be answered about past business dealings.

"Maybe we did jump the gun a little bit on that," Noack said of the money issue from 1996.

Noack, Johnson and Schmittzehe all said better communication was needed to solve problems.

"We are just going to have to communicate," Schmittzehe said.

For example, he has said the money issue could have been settled Friday when Johnson and other board members went to A.G. Edwards seeking information. If they had asked, he said, he or another top staff member would have been available. Instead, A.G. Edwards told board members they could not have information about the account.

But for Johnson and Noack, the lack of communication starts with Schmittzehe. They noted that he attended the board meeting last week when the money issue was first raised.

"In a meeting, where there is a specific discussion of an issue, it is the perfect opportunity to speak up and say, 'Let's get this straightened out,'" Johnson said, noting that Schmittzehe instead remained silent.

The board is drafting a letter asking for a meeting between officers of the board, officers of VIP and attorneys, Johnson said.


Pertinent addresses:

K Land Drive, Jackson, MO

5616 U.S. 61, Jackson, MO

1330 Southern Expressway, Cape Girardeau, MO

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