County working on Hillcrest ballot language

McCOOK, Neb. -- Red Willow County commissioners worked with the county attorney and the county's budget clerk Monday morning to figure out how to ask voters to help Hillcrest Nursing Home with its budget problems.

Commissioners decided to ask voters to allow the county to increase its restricted funds (its "spending limit") of $4.2 million by 6 percent, thereby raising about $254,000 in taxes a year that commissioners could earmark for Hillcrest.

County attorney Paul Wood will present the final ballot language for a special election Sept. 27, to commissioners at their next weekly meeting, Monday, Aug. 8.

Until cash flow, reimbursement and billing problems surfaced starting about 41⁄2 years ago, Hillcrest was self-supporting. At a couple of low points, Hillcrest had not billed Medicare for reimbursement of about $675,000, and it was owed $608,000 by private-pay residents whose payments were late/unpaid and by residents whose Social Security and/or Medicare/Medicaid benefits weren't covering the cost of services.

Since then, Hillcrest has trimmed its budget, reduced over-staffing, cashed in certificates of deposit, sold bed licenses and raised room rates. To help, the county has transferred money from its inheritance fund to Hillcrest, borrowed $1 million from McCook National Bank and made bond payments on Hillcrest construction projects.

Restricted funds are money that is raised through taxes. To mandate a "spending limit," or "spending lid" for governmental entities that request taxes, the Nebraska's Legislature prohibits adopting a budget which contains restricted funds totaling more than the budgeted restricted funds for the previous year plus the allowable annual growth rate of 2.5 percent.

A taxing entity can, by a super-majority vote of its board, increase that annual allowable growth rate to 3.5 percent. In the case of the Red Willow county commission, the increase to 3.5 percent requires a unanimous vote of the three-member board.

With approval of registered voters, a taxing entity can increase that annual allowable growth rate to a rate beyond the 31⁄2 percent.

At a special election scheduled Tuesday, Sept. 27, the Red Willow County commissioners will ask registered voters to increase the annual allowable growth rate to 6 percent for one year. According to county budget clerk Dan Miller, increasing the restricted funds base by $254,000 for 2016-2017 will increase county's restricted funds base by the same amount for each ensuing fiscal year. Each year, then, commissioners can earmark that $254,000 for Hillcrest operations/maintenance.

Wood told commissioners that a method available to increase the restricted funds base without an election is to seek the approval/signatures of 10 percent of the county's registered voters in attendance at a scheduled town hall meeting.

This 6 percent increase in the county's restricted funds would not mean the same amount of increase in a property owner's tax bill, Miller emphasized. Raising $254,000 means a tax levy increase of 2 cents, he said. The county's tax levy last year was 29.5 cents (per $100 of tax valuation), he said, which is under the state's tax levy lid of 50 cents.

Commissioners are still in the process of writing the county's 2016-17 budget.

Hillcrest Administrator Colinda Nappa told commissioners Monday that portions of the Hillcrest facility need a new roof, the facility needs four new air conditioning units and the boiler, pipe and cooling tower need to be repaired and/or replaced.

Roof repairs are costing about $3,000 to $7,000 a month, she said. Nappa said that a grant is available that would pay half of the estimated new roof cost of $250,000. Once the roof is repaired, Nappa said, she can use the money she's spending on repairs every month for other Hillcrest expenses.