Hillcrest woes add up to an increase in county budget
McCOOK, Nebraska -- The $812,200 increase in Red Willow County's tax request for 2012-13 can be attributed almost entirely to the cost of keeping prisoners and to the Hillcrest Nursing Home financial bailout.
County commissioners approved the county's new $24.1 budget during their weekly meeting Monday morning, and budget assistant Dan Miller explained the $811,921 increase in the tax request.
The total tax request went from $2,903,095 in 2011-12 to $3,715,016 for 2012-13.
The county's new budget requests taxes to pay for Hillcrest bond payments due Nov. 1 on a 1994 construction project, and the last bond payment on that project due in October/November 2013.
Miller said that by the county levying for and paying with taxes the two bond payments remaining on the 1994 Hillcrest construction project, the county is "buying Hillcrest some time" to recover from budget problems that have plagued it since late winter.
Cash flow problems at the county-owned nursing home appear to have started when a billing clerk was fired in February and no requests for Medicare/Medicaid reimbursement were made for the next three months -- putting Hillcrest behind in revenues by about $675,000 in June.
When nursing home administrator Peggy Rogers resigned in May, trustees discovered that nothing was being set aside to make bond/interest payments and that the sale of nursing home bed licenses (which would have generated $250,000) had fallen through. The nursing home has had difficulties paying operating expenses, payroll, construction payments, bond payments and bond interest payments since then.
Miller said that from its own revenues in 2013, Hillcrest will make the payments due on the $1 million that the county borrowed to help the nursing home recover from its cash flow fiasco.
The budget also includes a tax request for $576,264 for jail expenses -- which includes the cost of prisoner transport and jail bed rental until the county's new jail is built and operational.
That figure is a $254,510 increase over jail expenses in 2011-2012 because it also includes the county's assumption of the operation of and staffing of the former City of McCook 96-hour prisoner holding facility when the city moves into its new jail-less city offices later this year.
The figure also includes wages for the new jail supervisor Gerry Hunter and five new jailers who have been training this summer and who will staff the city's former holding facility and then the county's new jail when it's completed.
The county's costs for jail bed rent and prisoner transportation will go away once the new jail is built.
Because solutions to Hillcrest's money problems can be handled within the county's budget and its levy limit, and because the solutions are not long-term, the new 24-bed jail and law enforcement center will be built, according to commission chairman Earl McNutt.
McNutt said, during budget discussions, "We are moving forward with the jail" and later in the morning, "We're proceeding with the jail. It's part of the increase in the levy."
The levy for Hillcrest (about 2 cents) and the increase in jail operations (about 4 cents) amount to about 6 cents -- close to the total increase in the tax levy for 2012-13 -- up $0.062383, from $0.380743 to $0.443126.
Miller said that the jail and Hillcrest items total about $807,000 of the entire $812,000 increase in the county's tax request. Without those two items, the county's tax request and levy most likely would have gone down, he said.
Miller told commissioners that, in a "budget message" attached to the finished and approved budget to be submitted to the state by Sept. 20, he explains that the use of inheritance tax funds "is crucial to the implementation of the budget and allows for reduction of property taxes" to fund the preliminary costs of jail construction, the partial funding of the county's self-insurance fund and general fund expenditures.
Using inheritance funds saved the county close to 6 cents in its tax levy, Miller said, as the budget dips into the inheritance fund for about $501,000.