Pine Crest Nursing Home: Looking back at 11 years of financials

In response to a request for additional financial information from Lincoln County, Lincoln County Administrative Coordinator Renee Krueger—at the direction of Lincoln County Board Chair Jesse Boyd—provided a number of documents for review. These numbers are being provided to readers to ensure transparency, so that all area residents can see the actual numbers related to the cost of owning and operating Pine Crest Nursing Home.
2024 positive, but year-end numbers from NCHC are not final
Krueger provided a copy of a report from North Central Health Care (NCHC) showing their programs by service line for year ending 2024, a report that indicated Pine Crest Nursing Home (PCNH) operations showed $14,124,504 revenue and $13,561,922 expenses in 2024, for a net positive balance of $562,582 for last year. The People for Pine Crest group has cited this number as a sign that the tides have changed financially for Pine Crest Nursing Home. The positive shift is largely due to increases in Medicare and Medicaid rates.
“While these reflect DRAFT 2024 Year to Date financials, it is important to know that this does not reflect what will be the ‘final’ amounts,” Krueger cautioned. “That will not be available until their 2024 final audit and year-end reconciliation process is complete.”

The news thus far is extremely positive, as 2024 was the first year Pine Crest has shown a positive operating balance at the end of the year in the last 11 years, according to another report Krueger shared. But it may not be enough to save it from a sale.
A positive operating balance at the end of a single year doesn’t negate the other expenses associated with Lincoln County owning the nursing home to date and the potential for future financial obligations.
In addition to covering any operating shortfalls, as Lincoln County has had to do in the past, each year Lincoln County incurs additional expenses to operate Pine Crest, including the contract payment to NCHC for operating PCNH, maintenance operations expense, and salary and fringe benefits for Lincoln County employees responsible for PCNH.
As of her Feb. 3, 2025, response, the latest numbers available to Krueger reflect a total 2024 cost to Lincoln County taxpayers paid by Lincoln County Tax Levy of $901,130. This includes payment of $440,815 to NCHC for services operating PCNH per the Nursing Home Management Agreement, plus Lincoln County payment of maintenance operations of $191,881, and salary and fringe benefits paid for Lincoln County employees of $268,434.

Lincoln County is liable for debt service

The annual cost of debt service for Pine Crest is $631,740, Krueger said. This is debt Lincoln County owes for Pine Crest, but NCHC pays it as one of their operating expenses [reimbursing the County]. However, “The debt service would be an additional expense if NCHC wasn’t able to cover it through operational gains,” Krueger said. “Overall cost of PCNH is whatever NCHC reports as final plus our expenses.”
So while NCHC reported a $562,582 gain for Pine Crest through December 2024, which included the debt service payment this year, the cost to Lincoln County tax payers is still $901,130 for 2024. [All numbers are preliminary prior to finalizing and closing out the year.] But Krueger said residents must remember they are liable for this debt in the years when NCHC shows an operating deficit. Lincoln County needs to cover that payment. [Technically, the County pays the debt service and NCHC reimburses the County for the expense on a monthly basis. This was calculated at the end of the year in past years, but beginning in 2024, they started accounting for this monthly for better accounting and reporting.]

11-year look back

At my request for data going back 11 years, Krueger provided a copy of the Summary of Pine Crest Nursing Home Revenues, Expenses, and Deficits report that was included in the Ad Hoc Committee report on Pine Crest, updated with numbers to bring it current through the end of 2024. [See spreadsheet graphic.]
During this timeframe, PCNH operations have never been totally self-sustaining. And since 2020, more than $4 million in additional payments have been required to cover deficits. 2024 is the first year with a year-end positive operating balance.

Concern about long-term costs of ownership

Some residents are concerned about the long-term costs to taxpayers if Lincoln County continues to own the nursing home.
“As a taxpayer, I am very concerned about Lincoln County continuing to own Pine Crest,” said Jeff Benedict of Merrill. “It is likely, based on past history, that the subsidies needed to keep the facility going will get only larger in the future, which will result in substantial increased property taxes for residents of Lincoln County.”
“Based on the Ad Hoc Committee on Pine Crest Report of Findings and Recommendations dated March 21, 2023, in the 10 years from 2014 thru 2023, Pine Crest had annual deficits for the whole period totaling $9.2 million,” he said. “The total cost to Lincoln County taxpayers for those 10 years was over $9.6 million.”
“Lincoln County is responsible for any operational deficits,” Benedict said. “The budget is dependent on reimbursement rates by Medicare and Medicaid, as well as Supplemental funds from the State of Wisconsin. There is no guarantee that those funds will continue at those levels.”

“Granted that there was a $562,000 profit for 2024,” Benedict said. But, he said, Lincoln County still incurred costs subsidizing Pine Crest. He cited the tax levy for the payment to NCHC, maintenance operations costs, and the maintenance staff annual expenses as outlined previously.

Deferred maintenance or emergency repairs

Then there is the issue of all the deferred maintenance needed on the property and the potential need for emergency repairs to address issues that could occur as the result of deferred maintenance.
“If there are needed maintenance repairs or replacements for Pine Crest, Lincoln County would need to pay those costs,” Benedict said. “There are various estimates of maintenance needs for different time periods. There is a project list with a cost of $8 million for nine years.”
That project list was compiled some time ago and may no longer reflect the actual cost of completing those maintenance projects.