No banks bid on notes for nursing home

No banks bid on notes for nursing home

URBANA — A plan to infuse the cash-starved Champaign County Nursing Home with at least $800,985 has fallen short, and County Treasurer Dan Welch said he thinks county board members now need to get more regular updates on the facility's precarious financial shape.

Welch said he and County Administrator Deb Busey should meet regularly with a group of board members to keep them abreast of revenue, expenses and unpaid bills.

As of Sept. 30 the nursing home owed various vendors and providers $3.1 million, and there are estimates the accounts payable could reach $4.4 million by the end of the year. The nursing home's biggest problem is millions of dollars in payments owed it by the state and federal governments.

County officials had hoped to issue more than $800,985 in revenue anticipation notes — essentially cash advanced by banks on the basis of money owed the county by the state of Illinois — but no banks bid on the notes. The deadline was noon Wednesday.

Welch said he wasn't surprised by the lack of interest. He had sent inquiries to 29 banks in Champaign County.

"I was a little pessimistic about it," he said. "Anybody who reads the paper knows the state's in this situation. There are just so many unknowns.

"Plus, I haven't been able to find anyone who has (issued revenue anticipation notes) before. I don't think banks have any experience. I guess the one thing that surprised me was that I didn't even get any questions about it, such as how does this work? When there were no questions, I kinda got a clue that I wasn't going to get many bids."

The lack of interest by the banks blows an $800,000 hole in a plan by nursing home managers to help the facility through its cash shortfall. Also included in that plan was $850,000 in tax anticipation warrants — which have been issued — and the payment of $2.35 million in long overdue intergovernmental transfers from the federal government. That money still hasn't been paid, Welch said Wednesday.

The nursing home's financial condition merits closer oversight by the county board, Welch said.

"I think we need more than something that says that we're in the black this month. That tells me something, but it doesn't tell me enough," the veteran treasurer said. "What I really want to know is what about this backlog of bills? How far are our payables back? What is the potential liability to Champaign County if this whole thing falls apart?

"I don't know that it ever would, but I don't want to be the guy who sat back and did nothing. I'd rather get that information out there, shine as much light on it as we possibly can in a public forum and let everybody know what we're talking about here. Let's not take any chances of getting down the line here where we've got such a liability over there that we could never even cover it ourselves."

The nursing home already owes the county's general fund $333,142 from a loan made in 2008.

"Let's make sure we all understand what our potential liability is here," he said. "It will all fall back on us. And if it does fall apart, it will be on us to get it paid off."

Welch's suggestion was endorsed by two county board leaders.

"Sure, it's a great idea," said Alan Nudo, head of the Republican caucus on the board. "We need to have Dan more involved in discussions about the budget that we can communicate to our caucuses."

"On the surface I'd say it's a fine idea," said C. Pius Weibel, chairman of the board.

The lack of interest by banks in the revenue anticipation notes, and the $800,985 they would have provided, doesn't leave county officials any good option for filling the revenue hole, Busey acknowledged.

"At this point we're hoping very much that we can receive some of those Medicaid payments from July, August and September. And I know that (the nursing home management company) has been working to get us on an expedited schedule," she said. "And it's just day to day, hoping that our revenues coming in will cover our core payroll."

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parkmymeterelsewhere wrote on December 01, 2011 at 12:12 pm

It is time to re-appropriate monies from the 1.1 million, ill-conceived Olympian Drive Project to the desperately-needed nursing home.  To all members of the board and the voters of Champaign County:  do it now before our seniors are out in the street.