Commissioners delay full payments on Hillcrest bonds

Tuesday, August 25, 2015

McCOOK, Nebraska -- Red Willow County Commissioners decided Monday morning that although they will start a levy to pay off the $2,145,000 20-year bond approved by voters for expansion/remodeling at the county-owned Hillcrest Nursing Home, tax payers won't pay the full principal and interest payments due this coming year.

Because taxes paid on a levy come in a year later, commissioners knew they would have to dip into the county's inheritance fund if they agreed to help Hillcrest pay any portion of the bond principal payment of $100,000 and interest of $31,763.75 due Oct. 1, 2015, and the interest payment of $31,288.75 due April 1, 2016.

Taking that much ($163,052.50) out of the inheritance fund -- along with funds proposed to help balance the new 2015-16 budget -- would leave only about $40,000 in the inheritance fund, something unacceptable to commissioner Earl McNutt. "I don't want to leave inheritance with less than $100,000," McNutt said.

County treasurer Marleen Garcia told commissioners that she can close out a fund that has accumulated back taxes paid on a Hillcrest construction bond paid off four years ago. That fund's total of $8,271 can be applied to the principal and interest payments due this fiscal year, Garcia said.

Commissioners agreed that the county can pay $100,000 toward the payments (taken from inheritance), and add the $8,271 from the fund to be closed. That leaves Hillcrest responsible for paying about $56,000 on its principal and interest payments due this year.

After this first year of trying to figure out where the principal and interest payments will come from a new yearly levy will pay the Hillcrest construction bond payments each year through October 2031.

County attorney Paul Wood said it has been difficult for Hillcrest to make its construction bond payments in addition to repaying a five-year $1 million loan. Both the bond and the loan are ultimately the county's responsibility, Wood said.

Hillcrest director Colinda Nappa told commissioners the nursing home can make its $222,927 loan payment.

Nappa told commissioners that the nursing home is owed $607,000 to $608,000 by private-pay residents whose payments are late/unpaid and by residents whose Social Security and/or Medicare/Medicaid benefits aren't covering the cost of services.

Nappa cited several instances in which residents owe thousands and thousands of dollars, and have not paid or are unable to pay. The total owed the nursing home is nearing $608,000.

Nappa said that although nonpayment of bills is a reason to discharge a resident, once the nursing home has accepted the resident, it cannot discharge a resident unless he/she has a safe place to go.

Nappa said that Hillcrest is selective -- and by necessity is becoming even more so -- about its acceptance of residents. First, she said, they determine whether the nursing home staff can meet the clinical needs of the resident, and then -- now, delving even more deeply into a resident's resources -- can he/she pay for services provided. Nappa said, "Some people we can't accept. We just can't afford him or her."

Nappa said residency has grown recently from 85 to 91.

Commission Chairman Vesta Dack said that Nappa and the nursing home's office manager Renee Wright are doing a good job. "And the home is an asset to the county," Dack said.

McNutt said he and Hillcrest board of directors and staff are trying to "climb out of this hole," saying that the home has struggled financially for about three years. Hillcrest board member Jim Howard said that Nappa inherited "a windfall of problems to begin with" from previous management. Both Howard and fellow board member Randy Dean said that Nappa is improving the situation at Hillcrest, and that without the bond and the loan payments, it would be doing well.

Now, along with federal changes in healthcare regulation and changes in the reimbursement of services by Medicare/Medicaid, the nonpayment of services appears to be digging the hole deeper. "And this is an ongoing problem," Dack said, getting worse with each month that a resident cannot or does not pay his/her bill.

In other action, commissioners:

Will conduct their 2015-16 budget hearing Monday, Sept. 14. To reduce the budget's restricted funds authority by $160,000, commissioners are proposing to make $105,000 adjustments in the county health, fair and roads budgets and transfer $50,000 from inheritance. They plan no hearings with public officials.

Made a reminder that all mobile homes moving on county road and/or through the county must have a permit.

Heard from county treasurer Marleen Garcia that $45,815 was collected in 39 distress warrants. Six warrants valued at $4,959 were returned by the sheriff's department uncollected and will be reissued.

Tabled a date to open bids for a new telephone system until specs are written and distributed to bidders.

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