Valley Hi Surplus in Play at Finance Committee Meeting Thursday Morning?

Listed on the agenda of the McHenry County Board’s Finance and Audit Committee for Thursday, March 31st at 8:15 AM is the following under Old Business:

Discussion: Capital Plan Finance Options

There has been talk of borrowing from the huge surplus in the Valley Hi Nursing Home fund–over $42 million at last look.

At the February 24th meeting of the Valley Hi Operating Board County Board member Jim Heisler brought up that possibility.

Valley Hi Nursing Home fund's cash on hand from FY 2006 through FY 2016 (projected).

Valley Hi Nursing Home fund’s cash on hand from FY 2006 through FY 2016 (projected).

According to the meeting minutes, Heisler explained such a loan or loans “would reduce the reserves and allow for a potential future revenue stream as the loan is paid back with interest.”


Valley Hi Surplus in Play at Finance Committee Meeting Thursday Morning? — 9 Comments

  1. Excellent example of why people (taxpayers especially) do NOT trust their elected officials and government in general.

    An article relative to Valley Hi was posted Feb. 16, 2009:
    I suggest you click on the link and read the entire article to ensure context.

    It contains this:

    “With the home losing more than $2 million a year and a report declaring the facility “managerially dysfunctional” the county board voted in October 2007 to hand over its operations to Cary-based Revere Healthcare Ltd”

    And this:

    “We’ve come a long way since 2007, but we’re still (behind),” county board member Lyn Orphal said.
    The county makes up for that shortfall with some of the $6 million it collects each year from a special levy to support Valley Hi approved by voters in 2002. However, officials do not want to dip too deeply into that fund because it must also pay for facility improvements, upgrades and, several decades off, the next new Valley Hi.”

    “Skilled nursing, especially at the indigent level, is not going to make money,” Munaretto said. “We’re not ready to say what (loss) is acceptable yet.”

  2. Borrowing money Illinois case law says is not yours.

    The money is not even being responsibly invested.

    No body discusses the lost time value of money on this booty and what the actual cost to taxpayers for this debacle.

    Valley Hi is representative of just how deficient all of McHenry County government.

    While there may be some well intended people on the Board, they just don’t have the professional or business experience to bring this county where many want it to be from a cost standpoint.

    Again, Illinois case law is clear, any more than 1.5 to 2.0 times the amount of money in reserves to operate a government entity is illegal.

    Government is not a corporation where it accumulates retained earnings because these so called earnings come from taxation.


    Board can do this by suing Valley HI seeking imposition of constructive trust over the excess reserves and appointing a receiver to issue refund checks.

    Maybe this will stand as a lesson to future government Boards who fail to uphold their fiduciary duty to taxpayers.

  3. “However, officials do not want to dip too deeply into that fund because it must also pay for facility improvements, upgrades and, several decades off, the next new Valley Hi.”

    By this logic, schools would never have to issue a referendum to build a new school, they could just overtax and hoard money for future building ‘needs’.

    What order of magnitude should nursing homes, schools, municipal governments, etcetera be allowed to overtax and hoard for future building ‘needs’?

  4. “Skilled nursing, especially at the indigent level, is not going to make money,” Munaretto said.

    “We’re not ready to say what (loss) is acceptable yet.”

    By this logic, no maximum amount of overspending is identified.

    Here is the flaw in that reasoning:

    if overspending is double the price of private facilities, twice as many elderly needy vulnerable McHenry County residents could have been helped by instead using the funds to augment Medicaid payments to private facilities.

    Put another way, that logic is savagely indifferent to the fate of half the vulnerable needy elderly who are denied available resources in the name of protecting unlimited overspending.

  5. Just have to ask . . . who or what groups would these loans be available to ?

    If it is a county government agency shouldn’t they be trying to be fiscally responsible & NOT get into DEBT ?

    It seems this idea was shot down before.

    It just opens up a Pandora’s box that creates more oversight etc..

    Respectfully Mr. Heisler,of all the ideas that have been put forward this ‘loan idea’ SHOULD be towards the BOTTOM.

    Valley Hi should have reserves & taking care of indigents will always go into the red & needs to be considered, but people in this county want to see some of this money come back to them.

    This is not just election year rhetoric, it is about all government in McHenry county being fiscally responsible & accountable with the taxpayer’s money !

    We need to go back to the drawing board,be creative, less polarized, & try to figure this out.

    It may take awhile, but ‘so be it’.

    Also, attacking people, name-calling & folks on the board (or otherwise) can CHOOSE not to take things so personally or hold grudges !

    I do want to be appreciative of everyone’s time,energy, & efforts that have gone into trying to find solutions on this issue & not be a from the shadows critic or attacker.

    This is not going to be easy, but people CAN be respectful to each other & not just say what comes out of an unfiltered brain.

    Thank YOU for the work you have done on this issue to date, Mr Heisler 😁

  6. There really is no problem here.

    The problem arises when attempts are made to protect governmental control over a surplus hoard of money.

    VH has been running at breakeven (or profit, or slight loss recently: 2015).

    There is no rational basis to hoard excess accumulation.

    The County Board may use any taxpayer General Fund money to pay for ANY VALLEY HI NEEDS in the future!

    If VH keeps going as is, there is no problem, it runs at breakeven.

    If VH needs operating capital, or capital improvements, County Board has the authority to raise levy about $3.5 million, or issue GO bonds, in order to fund that in the future, if and when the need arises.

    If Vh goes above $7 million annual operating deficit, it butts against the legal tax rate limit—and those legal tax rate limits were enacted to protect ALL taxpayers from those FEW taxpayers holding the keys to the treasury, whose ‘pain thresholds’ have not yet been exceeded.

  7. About a month ago I commented about the concept of using the Valley Hi surplus as an internal bank generating Inter-Fund loans to finance other major capital expenditure programs in the County.

    I’ve posted it below:

    I’d bet that any governmental entity looking at a significant CapEx program is somewhat reluctant to pull the trigger to spend that money due to publicity and/or referendum requirements and/or costs associated with financing that project.

    If the Valley Hi Fund is to now be viewed as an internal bank granting inter-fund loans to finance various County CapEx projects, that benefit of an inherent check/balance on spending will be removed and make it more likely that the county will just dip into the Valley Hi piggybank to pay for projects.

    And, as long as Valley Hi operations continues as a roughly break-even operation, that $40 million fund balance will never go away.

    The only change will be that the Valley Hi balance sheet will reflect about $40 million in Inter-Fund Receivables instead of $40 million in Cash/Short-term Investments.

    I’m not sure using the Valley Hi Fund as an internal bank is consistent with Brandy Quance, Assistant State’s Attorney’s stated position that

    “The money collected as a result of the Valley Hi tax levy was for the construction, operation, and maintenance of Valley Hi.”

  8. Lets see what our “conservatives” on the Board do with this?

    Besides kicking the can down the road.

  9. Again, the Illinois Supreme Court and a littany of Illinois Appellate Court cases have made it clear, tax reserves in excess of 1.5 times necessary to operate a taxing entity are taxes which were ILLEGALLY assessed and thus not the property of the taxing entity who assessed them rather belong to the taxpayers who were ILLEGALLY assessed.

    People who blog Valley Hi excess tax funds should be used for other government opportunities are the same people who believe when a child steals a candy bar from a store merchant and gives it to a poor person is morally justified. In other words, the same people who believe in distribution of wealth or otherwise stated, a McHenry County Conservative.

    Watchdog, given your expressed views above, it is better you continue watching and continue doing nothing. We, the taxpayers are safer for it. There is only one choice, given the money back to those it was wrongfully taken from. Anything else is “theft”.

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