County board to consider bank loan for nursing home cash flow
URBANA — Champaign County Board members are going to be asked this month to approve borrowing $900,000 for the county nursing home to help it with its cash flow.
If they approve the maneuver, board members will be taking advantage of a new state law that permits counties to borrow money from a bank provided that the loan is repaid within two years. The law permitting the borrowing, signed by Gov. Pat Quinn on Aug. 23, eliminates the need for counties to issue tax anticipation warrants or revenue anticipation notes.
The loan will be backed with the proceeds from next year's property tax payments to the nursing home, county Administrator Deb Busey said.
"We're putting in the ordinance that the revenue from the nursing home property taxes in 2014 will be used to repay the loan, and that the loan should be repaid by Oct. 31, 2014, so that it's for less than a year," she said. "Under the new law the (county) general fund holds responsibility if the loan is not repaid. But the county board in this ordinance will say that the nursing home will use its 2014 property tax revenues to do this."
Last year, the county considered issuing revenue anticipation notes for the nursing home during a period when it was concerned about timely state payments. But the county couldn't find any local banks interested in the process because the bonds were to be backed by the financially shaky state reimbursements.
This time the board is being asked to take the action over concerns that federal Medicare and Medicaid payments will be held up, and over annual concerns about cash flow at the end of the county's fiscal year.
"The concern," said Busey, "is that the federal government is shut down and that if it continues, then what is the impact? That's why getting this approval in October is important so that if we need it in November we can get it."
Nursing home manager Scott Gima said he's worried about the possibility that the federal funds will be delayed.
"I'm just paranoid and I'd rather be safe than sorry," he said. "All of our associations have told us that through October, Medicare and Medicaid payments will continue. After that it's a big black hole. No one is saying what potentially could happen. But they're not saying that everything is OK."