Even though the McHenry County Nursing Home (Valley Hi) had $40.8 million in the bank at the end of July and a budget of only about $10-11 million a year, the County Board is moving toward taxing another $3 million.
Look at the projected and past revenues and expenditures below and see, if you were running this as a private business, whether you would declare a massive dividend or not.
The Valley Hi Operating Board met last night at the Valley Hi Nursing Home in Hartland Township.
During the public comment period, I suggested that having about four times as much money in the bank as one spends each year surely could not be legal.
Discussing the budget, Administrator Peter Austin had five points to make:
- The levy has been cut from $6 million to $5 1/2 million to $4 1/2 million to$3 million.
- A “robust capital and asset preservation program” is being developed.
- A financial model to run different scenarios is available.
- How much is to be levied will be determined by a “stand alone vote at the Finance Committee.”
- The Legislature was approached to get a little more flexibility, to allow no levy for two years, but recapture over five years. “The Speaker’s Office didn’t want to hear of it.
“I’m not sure where we’re going to land this year,” Austin continued.
“We have it in now at the $3 million level.”
Prior to that explanation, McHenry County Board member Ken Koehler, a member of the Operating Committee, argued to a shift away from the break-even model now being pursued.
He pointed out that Valley Hi was conceived under the premise that the indigent and those unable to pay to take care of themselves would be cared for.
“…rehab wasn’t the reason people voted for the referendum.
“As Mr. Skinner has pointed out, we have a surplus, unintended, an extended waiting list, people in need.”
Valley Hi has an extended waiting list?
Due to a shortage of beds or ?
Re: “He pointed out that Valley Hi was conceived under the premise that the indigent and those unable to pay to take care of themselves would be cared for.”
and then we had Obamacare imposed on the nation.
I believe that Valley Hi has not had a shortage of beds or a wait list for present need.
(Valley Hi is an Enterprise Fund in the McHenry County Budget, and the census is described. The past several years’ census reports do not indicate there was ever a patient turned away or that the census was ever 100%).
What I have heard described at a Valley Hi Operating Board meeting within the past year was that there is a waiting list of McHenry County individuals who have the mistaken assumption that signing up on a waiting list would assure them of a bed if and when their time came.
It was made clear by Mr. Annarella that no McHenry County resident has any priority due to being a McHenry County resident (taxpayer), nor from being on a wait list.
Because VH accepts Medicare and Medicaid it must accept any patient from anywhere.
The exact wording of the 2002 Valley Hi referendum:
TO LEVY AND COLLECT A TAX FOR THE PURPOSE OF BUILDING,
MAINTAL.~ING AND OPERATING A COUNTY NURSING HOME
WHEREAS~ the McHenry County Valley Hi Committee has, in consideration of the growing financial needs of the Valley Hi Nursing Home, recommended that the McHenry County Board consider placing the question of an additional property tax
before the voters of McHenry County; and
WHEREAS, it was the recommendation of that Committee that pursuant to 55 ILCS 5/5-21001 of the Counties Code that the Board certify the question of levying such a tax to the proper election officials who shall submit the question to the voters at an election to be held in November of2002; and
WHEREAS, said proposition shall be substantially in the following form:
And the exact wording of a 2003 referendum, entirely separate and taxing funds into a different account than VH:
The difference between Medicaid per diem and cash day rate, at 100% census, would be about a $3 million shortfall on an $11 million budget.
There are no patients being turned away in favor of paying patients according to Mr. Anarrella and borne out by census figures reported in McHenry County annual budgets.
So the alternative is to turn away paying patients in favor of keeping empty beds.
Recently Centegra was allowed to shut down 40 long term care beds at their Woodstock facility.
LTC Bed need is governed by HFSRB.
A Certificate Of Need is required to open a facility or expand bed capacity.
Centegra needed permission to shut down these beds and HFSRB would not have granted permission if there were a shortage of long term care beds.
Great reporting Susan!
No wonder people go to this blog to get the journalistic best!
aw shucks. thank you.
The point of all the above is to illustrate that the surplus could be redistributed to taxpayers who created it, without in any way jeopardizing the mission statement described in the 2002 referendum.
The additional $40 million+ surplus was at last report sitting in an uninsured checking account, at risk of total loss above FDIC limits in a bank failure.
Based on the ‘interest income’ line item in budget report, the interest earned is minimal.
Rapid access needed to the funds ($40+million?) was one rationale presented.
VH recently commissioned a $22,ooo+ consultant ‘community needs assessment’.
This ‘needs’ assessment is expected to show some way VH can spend that big surplus.
This needs assessment scope was described (at the public hearing interview of two consultant bidding finalists)as possibly including adult day care and assisted living.
The argument that VH cannot take the levy down to 0 (from $3 million) due to PTELL is factually inaccurate.
There are provisions for County Board emergency appropriations.
VH operates about breakeven due to Medicaid and Medicare payments.
There is about $11 million annual budget for normal operations.
Yes, the State of Illinois is broke and payments can be late.
But a one year operating budget reserve would ‘only’ be $11 million, and that is at 100% Medicaid census which is statistically highly unlikely (patients come for step down care after hospital admissions, for example, mostly paid by Medicare).
The remainder of the surplus is being hoarded for (expansion? or…?) according to one op board member, contingencies like a new roof for the 8 year old building.
New roof cost estimate?
Board member refused to say, but surplus is $40 million.
The shortfall between 100% Medicaid reimbursements and breakeven at full census (128 beds)would be $3 million annual at most.
There are novel solutions to the ‘problem’.
For one, the area of property could be designated a tif district.
Then it could appropriate tax revenues and property taxes without much regulation or oversight.
These revenues could ensure operational funding for VH going forward for the next 35 years.
Private for-profit enterprises like independent living center, or adult day care, or Hooters could open shop on the VH adjacent farmland.
All incremental property tax would go to the tif to be given to VH.
The tif could initially borrow the $40 million surplus in the VH Enterprise Fund, at a fair interest rate.
This would ensure the taxpayer surplus fund is guaranteed by a future revenue stream of tax dollars, rather than almost entirely at risk in case of a bank failure.
It would ensure the taxpayer surplus is earning a competitive interest rate.
This is not to say that the tif money should become a slushfund for developer giveaways.
If VH truly has a need to expand by the dictates described in the 2002 referendum:
then the expansion may attract private for-profit businesses (willing to open at their own risk) who see a stream of consumers trafficking the area daily.
Let’s not let Valley Hi turn into another perversion of good intentions, let’s use creative thinking to find equitable solutions to the problem.
Times have changed.
We could work together to find solutions that work under conditions of 2015.