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Fulton businessman objects to county plan to drop lease

Fulton businessman objects to county plan to drop lease

February 22nd, 2012 in News

FULTON - The owner of downtown Fulton offices leased to the county is objecting to a recent decision by the Callaway County Commission to purchase a building instead of leasing from him.

David McDaniel said the public defender's office was leasing space in the Palace building near the courthouse before he bought the building in 2004. In 2008, he said, the county juvenile office also began leasing space from him through the County Commission.

McDaniel said the county's plan to buy a building three miles away from the courthouse will be inconvenient for employees of the public defender and juvenile offices.

"They do a lot of their work at the courthouse," he said. "They won't have a place to park when they drive from an office three miles away to the courthouse."

Presiding Commissioner Gary Jungermann said all three commissioners were looking for short-term and long-term ways to save money by evaluating county spending during recent county budget sessions.

The county paid McDaniel $47,000 a year for office space for the two offices; both leases expired at the end of 2011.

McDaniel had proposed a new lease with a $200 a month increase for the public defender's office space and a $100 a month increase in the juvenile office. The leases would have raised the county's cost to $50,600 a year.

At that point, Jungermann said, the commissioners began to look around for an alternative.

The commissioners learned of an 11-year-old, 6,250-square-foot building on 5.5 acres that was for sale for $300,000. The building is owned by Andy Huey of Huey Construction Co., Fulton.

"That's only $48 a square foot," Jungermann said. "It's not possible to build a building anywhere close to that amount. Plus, we have a 5.5 acres in the city and a large concrete parking lot. We are getting the building at a reduced rate, and we are being given the 5.5 acres and the large parking lot.

"The county has space there to build or lease property if we should decide to do so in the future," Jungermann said.

After McDaniel learned the county was considering a building purchase, he offered to lower the rent from $47,000 a year to $36,000, Jungermann said.

At that point, Jungermann said, the commissioners rejected the lower rental offer. They were concerned about whether reasonably priced buildings would be available in later years if they signed a three-year lease for office space.

McDaniel said it will take about 10 years for the county to recover the cost of the building when utility and maintenance costs are included. He pointed out he had been paying all utility costs under the current arrangement.

"There's a lot more costs to maintaining a building. Furnaces and roofs need to be replaced," McDaniel said.

Jungermann said all three commissioners agreed unanimously last Wednesday to buy the property, believing this was a better long-term solution.

Jungermann said the public defender's office in Fulton is shared by Callaway, Audrain and Montgomery counties. Callaway County's share of the cost of providing offices for the public defender is $33,000 a year. The remaining $14,000 is paid by Audrain and Montgomery counties to Callaway County.

Jungermann said the building would be paid for in six to nine years, depending on whether it is figured by only Callaway County's share of the rental payments or the full amount of rent paid by all three counties.

"We believe this is a no-lose situation," Jungermann said. "We would be able to get our money back instead of sending it across the street in rent payments and never get it back. Taxpayer dollars are then gone forever. We think we made a good business decision for the county taxpayers."