Tom Kacich: Nursing home's projected 'broke' point is near

Tom Kacich: Nursing home's projected 'broke' point is near

Hear more from Kacich Thursday at 7:40 on WDWS.

They're only cash-flow projections, Champaign County Treasurer Dan Welch cautions, but they're all that county officials have to work off of right now.

And they show that sometime this summer — perhaps as soon as June — the Champaign County Nursing Home will run out of money.

And then what does the county board do?

County voters earlier this month rejected a property-tax increase for the nursing home and gave the county board the authority to sell or dispose of the institution.

Most Democrats on the board — who have a 12-10 majority — are reluctant to act quickly. They note that voters in Champaign-Urbana precincts — the voters they represent — support the nursing home. The Democrats say they don't want to sell the nursing home "until every single measure possible is taken to preserve it as a public institution."

But Welch's cash projections, based on numbers given him by the private company that manages the nursing home, are cold-water-in-the-face scary.

"I told the board that my job is to try to protect the general corporate fund (the county's all-purpose fund), so I don't really know intimately the cash flow of the nursing home. But I thought it might be instructive if I learned as much as I could about it and make cash-flow projections like I do for the general corporate," Welch said. "What I did was, take that template and plugged in all of the nursing home numbers I could find."

He said he knows the nursing home's biweekly payroll is between $220,000 and $240,000. And he was told that monthly expenditures would be between $480,000 a month and $550,000 a month.

Monthly revenue, said Gary Winschel, the chief financial officer of Management Performance Associates, would be around $875,000.

Under Welch's projections, the nursing home would be slightly in the red by June, with losses swiftly escalating to nearly $400,000 by September and to more than $700,000 by December.

"Generally speaking when you get to the end of December, and if nothing changed, like going down to a census of 50 or something like that, they'd be $768,000 to the negative," Welch said.

What's out there to prevent a financial collapse? Not much more than hope.

The state owes the nursing home about $1.1 million in so-called intergovernmental transfers. Only because of an unexpected IGT payment last month does the state not owe the same $1.3 million it has owed since 2011.

Welch said that Winschel urged him to budget $100,000 a quarter into IGT payments to the nursing home, "although that could never happen. But I plugged it in anyway."

(County Auditor John Farney said, "They got $180,000 in March which got them through the month without a loan, but it's the state. I wouldn't count on them for anything.")

Aside from an IGT windfall, or another loan from the county's general corporate fund, there's no financial help coming for the beleaguered nursing home.

"I say, what's wrong with looking at this from the worst perspective? Let's not kid ourselves that it's just going to take this little tweak or that little tweak, and everything will be OK. I don't see that," Welch said. "I wish someone would show me that if that were the case."

And Welch said he doesn't want the nursing home's financial problems to bleed over into the general fund, which is already owed about a million dollars by the nursing home.

Farney said Welch's cash flow projections worry him.

"Looking at Dan's cash projections through the end of the year, it's going to be even more of a challenge for the home to continue to pay their obligations to outside vendors," he said. "In looking at the cash flow, I at one point was hopeful we could make it through the summer, but I'm not as hopeful now.

"Revenues appear to be less than expected. I'm sure that has to do with the census being down. There are just fewer people in the home. That adds to the challenges," he said.

There's a philosophical debate on the county board now, Welch said, of "mission versus money."

"It's the age-old story. You hear the heartfelt stories of people who have loved ones there and, gosh, how could you not feel for those folks? And then there's people who just don't care about that mission. They don't want their taxes to go up. That's the classic mission versus money. It's a tough one."

And it's made tougher by ever-dwindling cash reserves.

Judge candidates

Randy Rosenbaum, the former Champaign County public defender who was appointed a circuit judge last September, is running for the position in 2018.

And he's doing his best to ward off any potential Republican opponents. Rosenbaum last week made a $40,000 personal loan to his campaign.

Rosenbaum is running for the circuit judgeship — covering Champaign, DeWitt, Douglas, Macon, Moultrie and Piatt counties — that was vacated last year by Judge Harry Clem.

Also filing as a candidate for judge in the same circuit is Democrat Chad Beckett of Urbana. He reported having no campaign funds on hand at the time he created his campaign committee on April 14.

The other Mike Madigan

Retiring Urbana Alderman Mike Madigan, a Republican who ran last fall in the state Senate district that includes Champaign, Urbana and Danville, zeroed out his campaign fund in the last quarter by covering bills with a $3,621 personal loan.

That means that Madigan has a total outstanding loan of $13,621 left over from his race against Sen. Scott Bennett, D-Champaign.

Tom Kacich is a News-Gazette reporter and columnist. His column appears on Wednesdays and Sundays. He can be reached at 351-5221 or at kacich@news-gazette.com.

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scott_tapley wrote on April 19, 2017 at 1:04 pm

There is no reason that the County Board members who want to consider "every single measure possible to preserve it as a public institution" can't consider those options while an RFP (request or proposal) process for selling CCNH moves forward.  Waiting until CCNH and Champaign County's general corporate fund both run out of money before starting the process of looking for a buyer would not be practical or prudent.

Bids can be requested from brokers, interested buyers and/or potential non-profit consortiums simulteous to the Board's consideration of other measures.  If "other measures" are deemed successful and a sale is no longer necessary to prevent bankruptcy or a shutdown, an RFP process could easily be halted.

But given the immediate financial crisis, delaying the RFP process for selling CCNH is reckless.

CommonSenseless wrote on April 19, 2017 at 3:04 pm

Maybe all the Liberal buffoons could petition the Clinton Foundation for support...