Valley Hi Surplus Discussed by Public Health Committee

Public Health Committee's budget hearing on Valley Hi.

Public Health Committee’s budget hearing on Valley Hi.

Today I went to the 8:30 AM meeting of the McHenry County Board’s Public Health Committee.

Lots of interesting information surfaced as budgets from various departments were outlined.

During the public comment time, I asked for an explanation of the $30 million Valley Hi has sitting in the bank.

Chairwoman Donna Kurtz referred to the extra money as “reserves.”

I said it reminded me of the illegal county surplus during the late 1960’s.

Then, the County Board was accumulating money to build a new courthouse.

I explained that it was illegal because everyone who paid their taxes under protest got a refund.

I pointed out the the county nursing home spends about $10 million a year and takes in about the same amount.

Ralph Sara, Tom Annarella and Peter Austin at the Public Health Committee budget hearing for Valley HI.

County Administrator Peter Austin, Valley Hi Administrator Tom Annarella and Ralph Sarbaugh, the County’s Finance expert, at the Public Health Committee budget hearing for Valley HI.

Breaking even is what an enterprise fund like Valley Hi should do, so Administrator Tom Annarella is doing a good job financially. (“Tom is controlling costs,” County Administrator Peter Austin later pointed out.)

Annarella said the cash reserves were now $36 million, more than the $30 million figure I mentioned.

Austin said the while $36 million was in the bank, the real cash reserve was $15-20 million.

He argued that there should be a year’s cash reserve equal to one year’s expenditures, plus $5 million for maintenance (a new roof for the seven-year old building, new parking lot, new flooring, new TVs, etc.)

Tonight at 7 PM at Valley Hi on Hartland Road (north of Woodstock to the east of Route 14), the Operating Board will be discussing capital improvements and asset preservation, Annarella said.

Valley Hi

Valley Hi Nursing Home

Annarella pointed to a plan to retrofit the building to save money on energy in lighting, etc., which was expected to cost $170,000 after receipt of a $60,000 grant.

Over a four-year period the savings in energy would pay back the $170,000.

In addition, all of the flooring is to be replaced at a multi-hundred thousand dollar cost. The new surface will be fake wood and stone which will be easier to maintain and can be cleaned with just soap and water.

Replacement of the roof is also contemplated.

“I consider it extreme reserves,” Committee member Paula Yensen said.

Valley Hi Cash on hand 2006-13She explained that there was an “obligation to taxpayers” to utilize the reserves, mentioning whe had hear that Operating Board members were working on a comprehensive plan.

“What do you plan on doing long-term?” Yensen asked.

“We continue to reduce the tax levy,” Annarella replied.

“And we’re planning to decrease it [even more],” Austin added.

He noted that the levy had been decreased from $6 million to $5 million to $4¾ million and that this year $3 million was the target.

Austin fell back on the argument about the “uncertainty in Springfield.”

“We are stepping [the levy] down, rather than leaping off a cliff.”

John Hammerand complained about what he contended was the underinvestment of the extra money, which Kurtz said the Finance Committee had discussed the day before.

Ralph Sarbaugh, the administrative Finance man, explained that he already had the money “laddered.” that is invested so some came due each month. He said the Treasurer’s Office put it out to bid among the banks in the county and went with the highest interest rate.

He indicated that the Treasurer’s requirement for 100% collateralization may be a damper on rates.

Hammerand was not satisfied, citing “$186 million sitting in banks, invested at the same pitiful check book interest.”

He estimated the county was losing three-quarters of a million dollars each year by not investing the Valley Hi money at a higher interest rate.

Donna Kurtz

Donna Kurtz

Kurtz weighed in after Annarella argued that a portion of the $36 million was set aside for specific purposes.

“There’s a significant amount of money that’s not being [used].

“It gives the taxpayer the feeling they’re being overtaxed.”

“We’re a victim of our own success,” Austin remarked.

Kurtz called for another hearing on the budget.

“I don’t think we can approve your budget without knowing [what your plans are for the $36 million].

“Any taxpayer with a calculator is going to say,

‘Why don’t you give us a tax holiday?”

Austin brought the Property Tax Cap into the discussion, but did not explain the implications to a “tax holiday.”

He talked of a “vision beyond about what might be,” specifically mentioned gazebos and some other improvements I could not keep up with.

John Hammerand

John Hammerand

Hammerand’s response:

“In the next several years they don’t plan to spend $36 million.

“That’s more than the building cost,”

Mike Walkup, who serves as a liaison between the County Board and the Valley Hi Operating Board noted, “If we do a tax holiday, then we can’t go back.”

Austin again referred to the Tax Cap.

“If you tell me what’s going to happened [with regard to future state reimbursements}…”

“We need to have a lot of reserves out there.”

Later Kurtz agreed: “Every time we lower the levy, we’re stuck at that level.

Hammerand re-surfaced an idea he made during the referendum campaign to fund Valley Hi—vouchers for indigent residents so they could purchase nursing home care at the nursing home of their choice.

Kurtz added that there were “multiple options including the sale of the nursing home.”

Kurtz asked how the cash reserves would be utilized “during the next 3-5 years.”

Anna May Miller asked for other projects, observing,

“We don’t want to go back out [for approval of another referendum].”

“That is exactly the point,” Walkup agreed.

“We don’t want to go back.”

“Why not?” asked Hammerand.

“If it’s a new project, why not go back?”

“I’m not sure some of what I’ve heard meets [what was requested in the referendum].”

“”I still see it in the same frame of providing care to fragile seniors,” Miller said.

While most of the discussion was on the cash reserves, there was some on the operating budget before the Committee.

Annarella pointed out that 94-96% of the bed are filled, if one includes those being held for patients temporarily in the hospital.

The state average, he said, is 78%.

He also explained that a lot of nursing homes “have decided to get out of the Medicaid beds.“

Alden in McHenry, for example, had cut such beds in half.

“That’s part of the mission,” Kurtz observed, “so we can provide care for the indigent.”

“It’s really the only reason,”

Austin stressed.

“The county nursing home becomes the safety net for McHenry County,” Annarella said.

Hammerand noted that under today’s rules, admittance cannot be limited to McHenry County residents.

“When we call it a county nursing home, it isn’t anymore.

“It’s a state nursing home.”


Valley Hi Surplus Discussed by Public Health Committee — 4 Comments

  1. Cal, when Valley Hi was being planned, I suggested a roof of a commercial nature like you see on Pizza
    Hut; they last forever.

    I was told then that we would use an asphalt shingle with a 30 year guarantee.

    Boy the years really slip by!

    NO talk of the Guarantee NOW!!!

    Wonder Why ???

    Thirty-six million for floor coverings and shingles.


  2. Yensen comment: “She explained that there was an “obligation to taxpayers” to utilize the reserves, mentioning whe had hear that Operating Board members were working on a comprehensive plan.”

    Typical Democrat comment – inferring that SPENDING THE MONEY is an OBLIGATION to the taxpayer!

    How about returning the money to the taxpayer?

    How about not collecting anything for one year – tax holiday?

    By forcing Valley Hi to take residents from outside the County the State has negated the reason for Valley Hi.

    I say – sell Valley Hi!

    The indigent are looked after quite well with the phenomenal number of other state and federal programs.

    Austin’s comment: ““We’re a victim of our own success,”” is a typical comment from a public sector employee.

    He considers it a success when he can “pull the wool over the eyes” of the taxpayer but this time he and others involved in an escalating ‘reserve’ got caught!

  3. “Kurt added that there were ‘multiple options including the sale of the nursing home.'”

    – Part of Jack Franks’ alleged plan to reduce the county board budget 10% could be selling Valley Hi.

    But Mr. Franks refuses to reveal his alleged plan until after the November 8, 2016 election for which he is running as Democrat for McHenry County Board Chair.

    It’s an alleged plan because he hasn’t revealed an actual plan.

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