Future of Vermilion Manor may go to voters

DANVILLE — Vermilion County voters may be asked in a referendum this fall whether they would support selling the county-owned Vermilion Manor Nursing Home or support a tax increase to keep it financially solvent.

On Tuesday, the Vermilion County Board's nursing home committee will discuss whether the county should ask voters, in a referendum this fall, for a tax increase or the authority to sell the nursing home or both.

The committee will meet at 5:15 p.m. Tuesday at the Vermilion County Courthouse Annex, 6 N. Vermilion St., Danville. 

Vermilion County Board Chairman Jim McMahon said the nursing home committee will discuss the issue and possibly move forward with one or two resolutions requesting that voters be asked one question or two questions on the November ballot. Whatever the committee decides would have to be approved later by the full county board.

"We will be asking the taxpayers to make a decision," said McMahon, who added that putting no question on the ballot is not an option at this point. He said one of those two questions, or both, must be on the ballot, although he personally does not agree with raising taxes.

"I am not recommending that we finance the state's problems," said McMahon, emphasizing that he and the county board have not voted to increase the county's property tax levy since he's been chairman.

The nursing home has its own property tax levy, and the current rate is 10 cents per $100 of assessed valuation, according to McMahon. He said the proposed tax increase that would go on the November ballot would be an increase to 30 cents per $100 of assessed valuation. McMahon said the extra revenue generated by a tax increase would help the facility cover its daily operational expenses but would not provide enough money to address improvements that need to be made to the building and the grounds at the nursing home on Catlin-Tilton Road just west of Tilton.

The nursing home, which relies heavily on Medicaid reimbursements, faced a financial crisis last year when the state's Medicaid funding fell months behind, putting the facility in a major cash crunch that threatened payroll. Now, the facility faces possible cuts in the level of Medicaid reimbursement, and, McMahon said, a proposed increase in the minimum wage to $10.55 per hour would also negatively affect the facility's bottom line.

He said county officials cannot get exact estimates on Medicaid revenue projections, but the best estimates are that Vermilion Manor stands to lose about $600,000 a year in Medicaid revenue. And more than 50 percent of the facility's 220 employees earn less than the proposed minimum wage of $10.55 an hour, which would significantly increase the nursing home's payroll, McMahon said.

For those reasons, some county board members would like to sell the nursing home while others want the county to retain ownership and want to ask the voters for more money to run it.

Last month, the county board heard a presentation about hiring a health-based group to manage the nursing home for the county. McMahon said that would cost the county about $40,000 a month and would be an option only if taxpayers supported increasing the nursing home's property tax levy.

Several years ago, the nursing home was consistently unable to cover its expenses with the revenue it was generating, and the county subsidized the nursing home's operation, diverting at least $750,000 from the county's general fund. McMahon and the nursing home committee made sure that money was paid back to the county, and just last year, the nursing home, which was in the black and doing well in early 2011, finished paying back what it owed.

But by August, its financial situation drastically changed when the slow Medicaid reimbursements began to take a toll.

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