More Thoughts on Valley Hi’s over $41 Million Bank Balance

Susan Handelsman, who regularly attends the Valley Hi Nursing Home’s Operating Board meetings, left the following long comment under my story about the consultant’s report last week.

I think it will add to the discussion of what to do with the over $41 million of reserves sitting in bank accounts.

Susan Handelsman’s observations on Valley Hi

Statewide web site picks up on the incredible surplus in McHenry County's Valley Hi Nursing Home account.

A statewide web site picked up on the incredible surplus in McHenry County’s Valley Hi Nursing Home account.

These are arguments I’ve heard presented by the op board:

Medicaid reimbursement from Illinois is problematic and may be cut.

(This rationale is used to justify keeping a reserve of one year operating expenses).

They believe their mission is to serve the most indigent and needy elderly.

This operating board seems sincere and diligent, and the director is extremely intelligent.

VH is a wonderfully run home, and residents seem genuinely content.

There seems to be humane motivation, but there does seem to be sense of entitlement to the $43 million excess accumulation surplus.

Any levy based on a break-even operating budget history is subject to lawsuit (excess accumulation) and claw back by tax objector citizens.

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).

But if VH can record an annual operating loss of a little over a million, they can keep legal levy at $3 million.

In the past years VH has placed the entire levy in a bank account.

The amount has built up rapidly to $43 million dollars.

Interest earnings indicate less than two tenths of one percent.

Furthermore, money in a non insured bank account is subject to total loss above FDIC insured limits.

When I asked former op board member Ken Koehler why vh holds that amount of money in short term at risk account, he said they may need rapid access to funds.

I asked for what would they need rapid access to $36 million?

He said a new roof (building was six years old at the time).

When I said a new roof might only cost a million or less, he said he wasn’t going to argue with me.

Valley Hi Nursing Home

Valley Hi Nursing Home

VH had a report prepared by a County Finance officer.

The report included an anticipated spike in operating losses.

This report indicates rapidly growing operating losses based upon higher salaries and ops & maintenance costs, and more aggressive capital expenditure.

By the projections of this report (including holding an $8 million capital needs reserve, and an $11 million and rising annually operating cost reserve) all excess reserves will be gone in 7 years and the total reserves gone in 3-4 more years.

At that time the (extrapolated) levy is projected to be $7 million for annual operation.

0.10% is the max rate by law [10 cents per $100 of assessed valuation] which can be levied for a county nursing home.

County EAV is $7 billion.

So $7 million hits the max.

The Illinois Medicaid threat of non-reimbursement has been raised for years.

Illinois is threatening cuts of 20% which would devastate all nursing homes.

Federal government reimburses States a minimum of $1 for every qualifying Medicaid dollar spent.

But VH has all the rights of any taxing body, and bailout likelihood from County budget in times of emergency if needed.

By the logic of keeping a $43 million excess accumulation because someday they may need to build a new building, every taxing body could do the same.

Woodstock District 200's North High School.

Woodstock District 200’s North High School is occupied about 57% of its capacity.  (42% by a second measurement.)

Imagine Woodstock D200 (already $140 million in debt from their 2007 building spending spree, Woodstock property tax rate is 4.6%) adding to their levy in the name of saving up for their next new school building.

Imagine every taxing body empowered to tax ever more so they could all save up for new future facilities.

Just because citizens are asking specific questions about use of funds does not imply a criticism of VH, its wonderful employees, or its diligent good-hearted operating board.

An intelligent and productive discourse could ensue if other politicians would cease to generalize and divert the issue with implications that anyone who doesn’t agree to disregard all the financial details must be contemptible monsters.


Comments

More Thoughts on Valley Hi’s over $41 Million Bank Balance — 7 Comments

  1. Just outrageous this money is sitting in some ‘pals’ bank earning nothing, under the guise, they may need easy access to spend.

    At what point are laws put in place to protect taxpayers from such stupidity?

  2. D J Stupidity?

    How about greedy or flat out irresponsibility?

    The sooner voters realize that STAFF run this county, NOT the elected officials, the sooner we can rein in County government costs!

    The same applies to school districts who are DICTATED TO by the Superintendent and professional union negotiators.

    In my opinion Peter Austin leads the County Board (especially the Chairman) around on a leash!

    There are a few Board members who realize the Board is being led but they are in the minority.

    If each Board member exercised due diligence and actually ‘served’ us, there would be no fear of standing up to Local 150 AND Peter Austin.

    I hold the opinion that every vote to settle the Local 150 lawsuit was done out of fear that the truth about the amount of time spent working for you, the taxpayer would come out in the IMRF witch hunt!

    Based on an average 10 hour work day, Mr. Austin is compensated by the taxpayers of the County at a rate well in excess of $117 per hour.

  3. Perhaps they should have hired an attorney with experience dealing with Local 150.

    Nick Provanzano suggested he had someone in mind.

    Yet the board had Jenna and that didn’t yield confidence in fighting local 150.

  4. Seriously, this county has no legitimate reason to dabble in this business.

  5. The reason we are still in the nursing home business is the passage of the Valley Hi referendum in 2002.

  6. 2002 referendum language:

    Shall McHenry County be authorized to levy and collect a tax at a rate not to exceed .1% for the purpose of building, maintaining and operating a county nursing home? YES NO

  7. It would be an interesting mental exercise to find out what bank(s) this, and other governmental monies are placed.

    Two points of interest: Jackie Boy is involved in a local bank with the banks making great sums of money in multiple ways based upon their deposits(type and amount) and banks are mandated by the Federal Government to much higher standards of debt to deposit ratios post 2008 crash which are stress tested leading to the closure/takeover of banks which fail.

    If these governmental monies are moved/disbursed/depleted would this lead to the failure/takeover of the bank(s) involved?

    Would Jackie Boy lose his private unregulated revenue stream were this to come to fruition?

    Would local wealth holders be damaged by these local banks being taken over by more national interests?

    Who benefits and who loses in this particular money game.

    As the Koch Brothers put on naked display, finally, with their support of Clinton over Trump, their interest isn’t in government reform to a constitutional republic as they’ve stated.

    Their concerns were only and ever in organizing a grass roots effort which would place their chosen pawns in positions to protect their business interests at home and abroad. Follow the money.

    It ALWAYS leads to the Truth.

    What does the truth do?

    And all Gods People said….

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