Ohio Administrative Code|Rule 5123-1-04 | Community capital assistance funds - development of licensed residential facilities.

                                                
(A) Purpose
This rule sets forth a process for the department
		  to make available community capital assistance funds for boards of county
		  commissioners, county boards of developmental disabilities, and nonprofit
		  corporations to develop licensed residential facilities for individuals who are
		  transitioning from developmental centers or converted facilities and who are
		  enrolled in a home and community-based services waiver administered by the
		  department.
(B) Definitions
(1) "Applicant" means any of the
			 following who submit an application to the department for state community
			 capital assistance funds:
(a) A board of county
				commissioners;
(b) A county board of
				developmental disabilities; or
(c) A nonprofit corporation
				incorporated pursuant to Chapter 1702. of the Revised Code, granted 501(c)(3)
				status by the internal revenue service, and specifically chartered to provide a
				developmental disability service when such service fulfills a public purpose as
				provided by section 154.20 of the Revised Code. When the applicant is a
				nonprofit corporation, the applicant shall submit with the application, in
				addition to all other documents required by this rule, a copy of its articles
				of incorporation, code of regulations, and a current list of all directors,
				officers, and members.
(i) The articles of incorporation shall contain,
				  in addition to provisions otherwise required by law, a specific statement of
				  purpose that the corporation will provide a developmental disability
				  service.
(ii) The code of regulations shall contain the
				  following provisions in addition to those specifically required by
				  law:
(a) A provision stating
					 that services will neither be rendered nor denied on the basis of race, color,
					 religion, national origin, disability, age, or unless programmatically
					 justifiable, sex;
(b) A provision that upon
					 dissolution of the corporation, if such dissolution occurs within the length of
					 the project agreement, the department or its successor shall be a party to any
					 judicial proceeding or dissolution agreement and that the department or its
					 successor may be a distributee under such order or agreement to the extent of
					 its participation and to the extent provided by law or the project agreement
					 which originally set forth disbursal of funds to the corporation;
(c) A provision that no
					 persons related by blood, marriage, or adoption (to a degree of first cousin)
					 shall constitute a majority of the board of directors; and
(d) A provision requiring
					 disclosure of potential conflicts of interest of a director, procedures for
					 determining whether there is a conflict of interest, and establishing a course
					 of action if a conflict of interest is identified.
(2) "Appraisal" means a written report
			 completed by a certified or licensed appraiser which includes a floor plan
			 sketch of the residential facility; front, back, and street scene photographs
			 of the residential facility; three interior photographs of the residential
			 facility; a street map that shows the location of the residential facility and
			 the comparable sales; front photographs of comparable sales; a statement of
			 assumptions and limiting conditions; and the appraiser's certification.
			 The appraisal shall be completed on the appropriate "Fannie Mae"
			 form.
(3) "Community capital assistance
			 funds" means tax-exempt capital bond funds that are used for the purchase
			 or construction of community-based housing projects. Based on available
			 funding, the department shall distribute community capital assistance funds to
			 applicants using a formula developed by the department. The department may
			 participate at a percentage level of the cost of the residential
			 facility.
(4) "Construction" means the
			 construction of new buildings or renovation of existing buildings as provided
			 by section 154.01 of the Revised Code.
(5) "Controlling board" means the board
			 established by section 127.11 of the Revised Code.
(6) "Converted facility" means an
			 intermediate care facility for individuals with intellectual disabilities or a
			 former intermediate care facility for individuals with intellectual
			 disabilities that converted some or all of its beds to providing home and
			 community-based services funded by the individual options waiver pursuant to
			 section 5124.60 of the Revised Code.
(7) "Department" means the Ohio
			 department of developmental disabilities.
(8) "Developmental center" means a
			 state-operated intermediate care facility for individuals with intellectual
			 disabilities.
(9) "Home and community-based services" has the same
			 meaning as in section 5123.01 of the Revised Code.
(10) "Individuals" means persons with developmental
			 disabilities.
(11) "Intermediate care facility for individuals with
			 intellectual disabilities" has the same meaning as in section 5124.01 of
			 the Revised Code.
(12) "Manufactured home" has the same meaning as in
			 division (C) of section 4781.01 of the Revised Code.
(13) "Mortgage" means a consensual interest in real
			 property, including fixtures, that secures payment or performance of an
			 obligation between the department and the applicant memorialized in a mortgage
			 deed and recorded in the county in which the real property is
			 located.
(14) "Promissory note" means a written instrument that
			 the department enters into with an applicant that evidences a promise to pay a
			 monetary obligation, establishes a schedule for forgiveness of a monetary
			 obligation through installments or otherwise, or a combination thereof, and
			 which may be used to support a mortgage on real property.
(15) "Renovation" means work done to a building to
			 restore it to an acceptable condition and to make it functional for the
			 purposes set forth in an application for community capital assistance funds,
			 including architectural and structural changes and the modernization of
			 mechanical and electrical systems. Renovation does not include work that
			 consists primarily of maintenance repairs and replacement due to normal use,
			 wear and tear, or deterioration.
(16) "Residential facility" has the same meaning as in
			 section 5123.19 of the Revised Code.
(C) Use of community capital assistance funds
(1) Community capital assistance funds may be
			 used for the purchase or construction of a residential facility of four or
			 fewer beds for individuals who were residents of a developmental center or a
			 converted facility immediately prior to enrollment in a home and
			 community-based services waiver administered by the department when the
			 department determines that:
(a) Viable alternative
				housing options in the community where the individuals desire to live are not
				otherwise available; and
(b) The residential
				facility purchased or constructed with community capital assistance funds will
				be compliant with federal guidelines for home and community-based services
				settings.
(2) A residential facility purchased or
			 constructed with community capital assistance funds shall be used as residences
			 for individuals for at least one hundred eighty months.
(3) The department shall maintain a mortgage
			 interest in the residential facility that at least equals the amount of
			 community capital assistance funds used to purchase or construct the
			 residential facility. The term of the mortgage shall be one hundred eighty
			 months.
(4) Community capital assistance funds shall not
			 be used to:
(a) Purchase equipment,
				furniture, and household items other than those fixed items customarily
				included in a purchase agreement or a construction contract;
(b) Purchase mobile homes;
				or
(c) Purchase or construct a
				residential facility when the purchase price or construction cost exceeds, by
				more than ten percent, the residential facility's appraised
				value.
(D) Community capital assistance funds application and
		  evaluation
(1) The applicant shall secure approval for
			 development of residential facilities pursuant to rule 5123:2-3-08 of the
			 Administrative Code.
(2) Prior to purchasing a residential facility or
			 initiating a residential facility construction project, the applicant shall
			 submit an application for community capital assistance funds to the department
			 in a form and manner prescribed by the department.
(3) The department shall evaluate applications
			 with regard to compliance with federal guidelines for home and community-based
			 services settings, programmatic suitability, economic feasibility, and ability
			 or potential to meet applicable building and fire codes, licensure, and
			 department or other governmental requirements and with consideration of the
			 following criteria for residential facility construction project
			 sites:
(a) Location, including
				sociological and demographic considerations of area and access to site and
				extent to which the site is integrated in a residential
				neighborhood;
(b) Cost of property,
				including comparison of similar property in the area;
(c) Zoning, transportation,
				and utilities including gas, electric, water, and sewage;
(d) Configuration,
				topography, and suitability for construction; and
(e) Environmental
				assessment that includes, but is not limited to, asbestos, polyvinyl chlorides,
				and chemical contaminants that may be present on the site.
(4) The director of the department or his or her
			 designee shall have final discretion to determine if the purchase or
			 construction project is suitable for the intended purpose.
(5) The department shall notify the applicant in
			 writing whether the application is approved or disapproved. If an application
			 is approved, the notification shall indicate the amount of community capital
			 assistance funds approved, subject to favorable fund release action by the
			 controlling board. The amount of community capital assistance funds awarded
			 shall not exceed ninety per cent of the purchase price or construction
			 cost.
(E) Applicant assurances and obligations after approval of the
		  application
(1) The applicant shall enter into an agreement
			 and mortgage with the department which shall include:
(a) An assurance that the
				applicant shall operate and maintain the residential facility in accordance
				with the agreement for one hundred eighty months. If the facility is used for
				an alternative purpose, the applicant shall pay to the department on a pro rata
				basis in accordance with paragraph (H)(1) of this rule any state funds
				reimbursed to the applicant or shall permit the department to operate or
				transfer the operation of the residential facility, including the assignment of
				any contracts or other interests, to another approved organization for the
				balance of the agreement.
(b) An assurance that the
				applicant shall keep the residential facility in good order and condition
				by:
(i) Making all necessary or appropriate repairs
				  and replacements;
(ii) Complying with all laws, rules, insurance
				  policies, and regulations;
(iii) Obtaining and maintaining any governmental
				  licenses and permits required for the use, maintenance, repair, and operation
				  of the residential facility;
(iv) Paying all costs, claims, damages, fees, and
				  charges arising out of the possession, use, operation, or maintenance of the
				  residential facility; and
(v) Remaining free of all liens, encumbrances,
				  restrictions, and conditions which prevent or interfere with its use as a
				  residential facility except such as may be imposed by zoning ordinances and
				  regulations.
(c) The use and ownership
				of the residential facility if the agreement is terminated.
(d) The use and ownership
				of the residential facility if the licensee is dissolved.
(e) The use and ownership
				of the residential facility if the licensee files for bankruptcy.
(f) A provision that upon
				dissolution of the licensee, the department or its successor shall be a party
				to any judicial proceeding or dissolution agreement and that the department or
				its successor may be a distributee under such order or agreement based upon the
				amount of funds provided to the applicant under this rule and to the extent
				provided by law.
(g) A requirement that any
				proceeds from the sale of the residential facility shall be used to acquire a
				replacement residential facility in accordance with paragraph (G) of this
				rule.
(2) For purchase of a residential facility, the
			 applicant shall provide:
(a) An appraisal that is no
				more than six months old;
(b) A signed purchase
				contract showing the intent to purchase and the purchase price;
(c) A copy of the current
				title insurance policy that is no more than sixty days old; and
(d) Any other documents
				specified by the department.
(3) For a residential facility construction
			 project, the applicant shall:
(a) Provide:
(i) An appraisal that is no more than six months
				  old that appraises what the value of the real estate will be once the
				  residential facility construction project is completed;
(ii) A signed purchase contract showing the
				  intent to purchase the vacant real estate, which shall include the purchase
				  price, or if the real estate is already in the name of the applicant, a copy of
				  the current recorded deed;
(iii) A copy of the current title insurance
				  policy that is no more than sixty days old, a map outlining the residential
				  facility construction project site, and a deed;
(iv) A "bid tabulation," which means a
				  list in tabular form of all of the project bidders' names, addresses, and
				  dollar bid amount (with alternates as applicable) that are compiled, signed,
				  and dated by the applicant's representatives officiating at the bid
				  opening;
(v) A signed construction contract for the
				  residential facility; and
(vi) Any other documents specified by the
				  department.
(b) Enter into an agreement
				with the department that assures the completion of the residential facility
				construction project in accordance with standards set forth by the department
				and applicable federal, state, and local statutes.
(c) Agree to provide and
				maintain adequate comprehensive general insurance.
(d) Ensure that the
				residential facility design and construction conforms to all applicable
				building codes, standards, zoning, and licensing requirements.
(e) Ensure that all
				contractors agree to comply with applicable federal, state, and local laws in
				the conduct of the work hereunder and accept full responsibility for payment of
				all unemployment compensation, insurance premiums, income tax deductions,
				social security deductions, and any and all other taxes or payroll deductions
				required for all employees engaged by contractors in the performance of the
				work authorized by this agreement.
(f) Hold the department
				harmless for any liability resulting from liens issued against the project by
				contractors, subcontractors, material suppliers, or laborers.
(g) Begin the construction
				project within one year from the date of department approval. The director of
				the department or his or her designee has the discretion to withdraw funds at
				any time if the project is not proceeding in a timely manner.
(F) Distribution of community capital assistance
		  funds
(1) The department shall pay the applicant for
			 approved costs for an amount up to but not exceeding the maximum state share of
			 the purchase or construction project cost stated in the approved application.
			 No additional funds will be approved over the maximum state share of the
			 purchase or construction project cost once the funds are awarded.
(2) For purchase of a residential
			 facility:
(a) The department shall
				issue a check for all or a portion of the funds awarded to an applicant after
				determining that all requirements of this rule have been met. The department
				may present the check at the closing.
(b) Within sixty calendar
				days of closing, the applicant shall provide the department with copies of the
				final closing statement, the promissory note, the recorded deed (with
				restrictions noted as necessary), and the recorded mortgage.
(3) For a residential facility construction
			 project:
(a) The department shall
				issue a check for all or a portion of the funds awarded to an applicant after
				determining that all requirements of this rule have been met.
(b) Within sixty calendar
				days of completion, the applicant shall provide the department with a copy of
				the occupancy permit which has been issued for the residential facility
				construction project.
(G) Acquisition of a replacement residential
		  facility
(1) To sell a residential facility purchased or
			 constructed with community capital assistance funds under this rule and obtain
			 a replacement residential facility, the applicant shall:
(a) Comply with sections
				5123.37 to 5123.375 of the Revised Code;
(b) Secure approval for
				development of residential facilities pursuant to rule 5123:2-3-08 of the
				Administrative Code;
(c) Provide the department
				with an appraisal that is no more than six months old, promissory note,
				mortgage, and recorded deed for the replacement residential facility;
				and
(d) Comply with all other
				requirements of this rule.
(2) The net sale proceeds shall equal the amount
			 of funds owed to the department on a pro rata basis in accordance with
			 paragraph (H)(1) of this rule.
(H) Failure to comply with this rule
(1) The applicant shall repay community capital
			 assistance funds if any provisions of this rule are violated. The repayment
			 shall be calculated by multiplying the amount of funds provided under this rule
			 by the ratio of one hundred eighty minus the number of months used as a
			 residential facility (as determined by the department) to the total term of one
			 hundred eighty months, that is: funds provided x [(180 - number of months used
			 as residential facility)/180] = repayment.
(2) Failure to comply with this rule may result
			 in the denial of future requests for community capital assistance
			 funds.