Three years of careful assessment and planning will come to a head tomorrow evening, as the Lincoln County Board of Supervisors will decide whether or not to approve the borrowing of $9.6 million in general obligation bonds and promissory notes, to fund a proposed expansion and renovation of Pine Crest Nursing Home.
As plans were finalized this past spring, discussions were held at various levels of county government. Rumors soon began to buzz of what exactly the expansion would entail and how the project would be financed.
On the evening of Sunday, Sept. 18, Pine Crest Administrator Lisa Gervais was joined by other members of the facility’s administrative team and Larry Lester from WipFli Financial Consultants, in holding a public information session on the planned proposal.
As Gervais explained, the most important aspect of the meeting was to emphasize a zero burden to county tax payers in the funding of the project.
“The projected $9.6 million dollar cost of this project will not fall on the shoulders of our tax payers. The cost will be covered 100% by the Medical Assistance reimbursement formula,” she said. “We will use the same reimbursement process which was used during the 1992 expansion of our facility.”
According to Gervais, care facilities such as Pine Crest turn in a reimbursement report to Medical Assistance every year. In that report, everything from linen costs to medical supplies and staffing is placed into three categories; Direct Care, Support Services and Capital Spending.
“As a hypothetical example, let’s say we were to receive $135.42 per day in reimbursement from medical assistance,” Gervais explained. “Of that $135.42, $84.82 would be reimbursed for Direct Care costs such as Registered Nurses, Licensed Practical Nurses, Certified Nursing Assistants and medical supplies; $44.95 would be reimbursed for the cost of support staff such as dietary staff and housekeeping; and $5.65 would be placed into a capital bond sinking fund.”
A Capital Bond Sinking Fund, according to Gervais, is similar to a savings account or bond account which is used to pay off debt. The account is always kept separate from other accounts and funding for capital is never drawn out of funding from the other categories.
“Medical Assistance calculates the daily reimbursement allowance into a formula and then informs facilities how much in reimbursement they are eligible for annually,” she adds. “We at Pine Crest will never go over that allowance. We will only take what we are allowed, rather than come back to the tax payers and ask for more funding.”
Included in the project will be the facility-wide conversion of shared rooms to private rooms. In addition, upgrades are planned to the facility’s special care unit such as natural lighting, which serves clients with Alzheimer’s Disease, dementia and other special needs.
Gervais stresses the facility will not be adding more beds, but rather will be converting rooms of existing beds.
The need for a renovation and expansion is based on the evolution of needs from clients of which Pine Crest serves, according to Gervais.
“Needs and preferences have changed over the years for the population we serve,” she adds. “A key preference is private rooms. Granted, some may not mind shared rooms, but for the most part our clients prefer private rooms. To stay competitive in serving our clients, we must adapt to what our clients want and need. We have already had to turn people away being we don’t have private rooms. If we don’t have what they want and need, they will go someplace else that does.”
When asked of the future of Pine Crest Nursing Home if the bonds are rejected Wednesday, Gervais pauses.
“I really don’t know for certain, but one thing I do know is we will continue to lose revenue. We have been losing referrals due to being unable to accommodate client needs as I mentioned before; less referrals means less revenue. If we continue to lose revenue I don’t see any choice but to continue to raise the tax levy.”
When asked of possible privatization or sale of the facility as an end result of bonding being rejected, Gervais once again is hesitant.
“I hope not, but ultimately that is up to the county board. I can tell you this, we want to continue to serve our clients’ needs and this expansion will allow us to do just that.”
If bonding is approved on Wednesday, Gervais assures plans are launch-ready.
Construction would begin yet this fall with an estimated completion date of September 2017 if all goes as planned.
The bonding as explained by Gervais, would be very similar to a loan signed for by the county and the re-payment would be provided by the Medical Assistance reimbursement formula.
Wednesday’s meeting is slated for a 6 p.m. start time at the Lincoln County Service Center.