URBANA – Hampered by delayed payments from the state and federal governments, the administration of the Champaign County Nursing Home is hoping for some relief from local banks.
The nursing home owed various vendors more than $3.1 million as of Sept. 30 and the accounts payable is projected to grow to as much as $4.4 million by Dec. 31 if the late state and federal payments aren’t made, nursing home manager Michael Scavotto told the nursing home board of directors Monday night.
So the administration has asked the county board to issue $850,000 in tax anticipation warrants – money borrowed against property tax revenue anticipated next spring – and at least $765,000 in revenue anticipation notes – money borrowed against various state and federal payments owed the nursing home. That money, along with $2.3 million in intergovernmental agreement money still owed the nursing home by the federal government, could be used to reduce the accounts payable by about $3.9 million.
Dozens of vendors are owed money by the nursing home. The biggest account payable is Health Resources Alliance, the home’s rehabilitation contractor, which is owed $1.4 million.
Issuance of the tax anticipation warrants and revenue anticipation notes goes before the Champaign County Board Thursday night. The county has already received bids on the tax anticipation warrants; they yielded interest rates as low as 1.1 percent. Bids on the revenue anticipation notes are due Wednesday.
“That will give us an idea of how feasible this is,” Scavotto told the nursing home board. “The fact is that the local banks are skeptical of the credit of the state of Illinois. That’s what we’re hearing, and you can’t blame them.”
Scavotto said the nursing home must borrow the money to get through the tough financial times.
“There’s no question in my mind that this is the only avenue that you can take. Your ability to finance is limited. You just can’t waltz into a bank and say give me working capital. You have to go through this process,” he told the nursing home board. “Things with the state are likely to get worse and we’ve got to have a mechanism in place to get us this working capital.”
The state is already more than 120 days behind in its Medicaid payments to the nursing home, Scavotto said.
“I have no forecast on when the state is going to start paying. They said four months and we’re already at four months. Maybe we’re looking at 180 days,” he said.
Scavotto said he doesn’t anticipate any improvement in the payment cycle.
“Next year I think it will get worse,” he said. “I hope that I’m wrong.”
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