Peter Austin unveiled graphic results of Valley Hi Administrator Tom Annarella’s modeling efforts Tuesday.
All versions assumed that the levy would be cut from $3 million to $2.250 million.
The first version, seen below, shows the Valley Hi bank account maintaining about $40 million in the bank for the next five years.
To put this in perspective, McHenry County government pulled $79 million out of taxpayers pockets this year.
“Five years out we begin to see some collapse in the blue [that is, the bank balance].”
Nick Provenzano seemed to think thatfive to ten years was too long to wait to draw down the $40 million balance.
“We can’t assure increases in Medicare and Medicaid,” Austin replied.
Deputy Administrator Scott Hartman pointed out that Valley Hi does not “break even on Medicaid beds.”
Yvonne Barnes sought the underlying assumptions of the model.
“Why is it taking five years to show it starting to go down?” she asked.
“It’s [the chart] is pretty, but tit doesn’t tell me anything?”
Hartman, who worked on the spreadsheet with Annarella, explained that labor costs are projected to increase 3.5% per year and interest rates are project to rise.
Nest, Austin pointed to scenario 4 2:
The third version assumes all the patients are on Medicaid:
The fourth projection assumes that the levy is lowered to $1 million, which would save taxpayers $2 million per year:
[In all of these projections, enough money to pay all of Valley Hi’s bills must be held in reserve. The fear seems to be that both the Federal and state governments will pay nothing. Meanwhile, the County tries to keep a minimum of four month’s money in its General Fund.
[Cut the red part of each illustration in half and figure out the implications.]
Chuck Wheeler, who proposed cutting the levy from $3 to 2.25 million, though the projections illustrated “a fundamental problem we have in government.
“We look at what government is going to get, rather than what our budget is.
“We need to think of how we can do more with less.”
He said he didn’t think it was proper to look at a 30 year scenario, suggesting at one point that the number of Medicaid beds could be cut to stay within the money available.
Referring to what a business or family would do, Wheeler said, “If revenue were not there, we would look at ways to raise our revenue to lower our costs.”
Provenzano wondered what was happening in the marketplace.
He was told that a study was ongoing, the results of which would be ready next year.
Valley Hi Administrator Annarella explained that private nursing homes were taking fewer and fewer Medicaid patients.
Provenzano observed that the County “will have continuing pressure from the private sector for us to increase Medicaid [beds.]”
Annarella said, “There’s a looming Medicaid rate cut.”
Austin brought up the nursing home next to Huntley’s Centegra Hospital, into which Centegra is expected to push the more profitable Medicare patients it releases.
Centegra is no longer sending Medicare patients to Valley Hi.
“It would be no incentive for Centegra to send patients anywhere other than their [new facility],” Austin said.
Provenzano said, “We’re going to have to look at when enough is enough.
“Maybe we need to get out of this business and let the state take care of it.”
Andrew Gasser asked finance expert Ralph Sarbaugh how abatement of Valley Hi taxes would work.
He begged off until the next County Board meeting.
Gasser also asked for different assumptions to be run, specifically for a $1 million and a $1.5 million levy.
He said he had knocked on 1,500 doors and said “people are really interested in this.
“They do not know that we are taking people from outside McHenry County,” he continued.
“We have only one,” Austin replied.
“Typically, they have family here.”
“The only reason we’re having this discussion is because I crashed to Finance Committee meeting,” Mike Walkup said.
“We’re kicking the can down the road again and it’s a $3 million can.”
He wondered about the advisability of having “a nursing home out in the middle of a cornfield.”
“We’re where we are because we happen to own some land.
“It’s the tail wagging the dog.”
Amending the Tax Cap law was brought up with Austin answering that he had worked with State Rep. Mike Tryon, but the “leadership in the House didn’t want any crack in that Tax Cap law.”
“Majority leadership in the House,” Walkup corrected, suggesting that the County use a member of the Majority, referring to Democrat Jack Franks.
John Hammerand observed that the County had kept the levy used to pay off the new nursing home long after its bonds were repaid.
He didn’t think operating funds were much of the referendum approved.
Referring to the voters who approved the referendum, he said, “I don’t think they intended the levy that paid for the nursing home to go on forever.”
Pointing to the fact that there are only twenty-nine county nursing homes in Illinois [102 counties], Hammerand suggested it was “an extra fringe.”
“People should know what it’s costing.”
He also questioned the 3.5% annual projected increase in labor costs.
“That should be a topic of discussion.”
Mary McCann pointed out that two McHenry County nursing homes are for sale and, then, repeated the argument she made in committee that the topic should have been discussed in February, not in November.
She also said the cost to each taxpayer was quite low.
Provenzano said he agreed until he learned that previous Valley Hi levy reductions had just been “redirected to other parts of the budget.”