A friend of McHenry County Blog has been looking at the McHenry County nursing home’s finances.
Here is the conclusion:
The building is paid off, the home is running at near breakeven, and there is an excess $40 million accumulated which I understand a NEW building (to do with some public need to be determined by operating board prior to July 15th County Board pitch) will be pitched to County Board July 15.
Prior to sending that, I received the detail that you see below. Perhaps the information will encourage you to attend the Tuesday, July 15th meeting of the County Board at 7 PM.
1. Verified there is indeed minimum $36 million dollars cash sitting around, due to years of excess taxes (over and above Valley Hi operating costs) being levied on homeowners.
2. Verified the latest operating budget is around $10.5 million but that $10.2 million was received income from Medicare, Medicaid, and Private Payers.
$5 million plus of Taxpayer revenue is nearly all surplus, building up in a pool of money that earns .002% interest income. Valley Hi operates at near breakeven.
In 2011, Valley Hi operated at a profit ($9,980,585 operating revenues, $9,244,992 operating income). Yet even in 2011 a $5.9 million levy was burdened to property taxpayers. Property tax levy does not seem to relate to operating costs of Valley Hi.
Looking at proposals for new spending (like new gravel room build-out, or artwork spending) it might be concluded that unnecessary spending has risen to meet justification for surplus funds.
Surplus tax money is earning around 2 tenths of one percent interest. THAT IS RELEVANT TO TAXPAYERS WHO PAY 20% CREDIT CARD DEBT INTEREST RATES, or homeowners who bought homes a few years ago when local tax rates were more in line with National average property tax rate of 1.14% of home value compared with current rate of 3.67% of home value in Seneca Township, McHenry County Illinois, while the County accrues funds yielding virtually zero returns.
3. Business standards hold that reserve surplus should be based upon historic accounts receivables; this implies that an adequate operating reserve fund for Valley Hi would be $2.5 million. Even if a 12 month reserve were somehow deemed necessary it would amount to $10 million. The additional $30 million liquid assets Valley Hi owns is inexplicable, especially in view of McHenry County homeowners’ tax rates of 3.67% of home value–and McHenry County homeowners’ property values falling throughout recession recovery while all over America, home values have recovered.
This surplus money–$35 Million, as a result of property taxation in excess of funds needed–could be returned to taxpayers WITHOUT ANY IMPACT ON VALLEY HI OPERATIONS.
There has been NO PUBLIC NEED ILLUSTRATED for accruing this surplus: there has been no suggestion that beds in other nursing homes in the county are scarce. There has been no suggestion that County taxpayer subsidies are necessary to preserve quality of life of Valley Hi residents: even if the County Home were sold to private interests to alleviate crushing taxpayer burdens, there is no suggestion that Valley Hi residents would notice any difference in standard of living or care.
4. Per statements at Valley Hi operating Board Meeting: resident applications CANNOT be restricted to only McHenry County residents. Any expansion of Valley Hi would necessarily be subsidizing non-County residents who apply.
5. The language of original 2002 referendum often quoted by Board as justification for taxation and spending:
PROPOSITION TO LEVY A TAX
FOR SOCIAL SERVICES FOR SENIOR CITIZENS
Shall the County of McHenry Illinois be authorized to levy and collect a tax of not to exceed .025% for the purpose of providing social services to senior citizens ?
(a) The approximate amount of taxes extendible for the provision of social services for senior citizens under the maximum tax rate now in force in said County is the sum of $0.00.
(b.) The approximate amount of taxes extendible for providing social Service under the proposed rate is the sum of $ 1, 447,604.
the tax levy for Valley Hi is listed on 2013 CAFR: 2004-2013. Range of Valley Hi levyis low of .057%- a high of .07% For 2013 the levy for Valley Hi was .066%. I do not understand how this corresponds to the referendum language authorizing .025%
Note this .066% Valley Hi levy is over and above the levy listed one line above for Senior Services. (55 ILCS 5/5-1026) (from Ch. 34, par. 5-1026)
If Valley Hi has been accumulating a building fund, didn’t that have to be specifically authorized in a referendum per the above statute?
6. Valley Hi operating Board seems to be preparing a public pitch July 15th to County Board for public-private partnership expansion plan.