Thursday, December 5, 2024
BY JALEN MAKI AND TINA L. SCOTT
TOMAHAWK LEADER EDITOR AND MERRILL FOTO NEWS EDITOR
A proposed referendum related to the funding of Pine Crest Nursing Home in Merrill will not be on election ballots this fall.
During its meeting at the Lincoln County Service Center in Merrill on Tuesday, Aug. 20, 2024, the Lincoln County Board of Supervisors rejected a resolution that sought to place a binding referendum on ballots for the Tuesday, Nov. 5, election.
Under the proposed resolution, if it had been approved by voters, Lincoln County would have been allowed to exceed levy limits by $5 million each year from 2025 to 2029 to fund operations, maintenance, repairs, updates, and debt service at Pine Crest.
The resolution had been approved by the County’s Administrative and Legislative (A&L) and Finance and Insurance Committees by a 7-2 vote in a joint meeting earlier this month.
The rejection of the resolution comes about six weeks after an agreement for Lincoln County to sell the Merrill facility fell through.
In July, Merrill Campus LLC and Senior Management Inc., the organizations which were previously set to purchase Pine Crest from the County, terminated the Asset Purchase Agreement with Lincoln County in response to a lawsuit filed by Lincoln County District 7 Supervisor and People for Pine Crest member Donald J. Dunphy in May.
The lawsuit, which Dunphy said was his “vehicle to keep Pine Crest from being sold,” was dismissed in late July.
The proposed resolution was authored by Board Chair and District 10 Supervisor Jesse Boyd and co-sponsored by District 12 Supervisor Julie DePasse.
According to the resolution, under the current management agreement between Lincoln County and North Central Health Care (NCHC), which manages Pine Crest, Lincoln County is required to provide NCHC with an annual cash stipend of $440,000 to fund four full-time maintenance staff positions and to “bear the financial costs of routine facility maintenance and repair services for Pine Crest Nursing Home.”
The resolution said the sum of these obligations comes out to about $900,000 each year.
“NCHC is currently making the debt payment,” the resolution stated. “However, Lincoln County is ultimately responsible for the debt service for Pine Crest Nursing Home, approximating $630,000 annually through the year 2038.”
For “numerous years,” the resolution said, Pine Crest expenditures have exceeded gross revenues, leading to the use of the facility’s cash reserves and fund balances to cover losses.
“Although this trend appears to have changed, there remains a risk of reoccurrence,” the resolution stated.
The resolution pointed to the State of Wisconsin’s nearly $1.6 million decrease in annual supplemental and Certified Public Expenditure payments for Pine Crest.
In response to operational losses, decreased supplemental funds, and “insufficient reserves,” NCHC requested that Lincoln County provide an additional roughly $1 million to cover the nursing home’s estimated 2022 operating deficit, the resolution said. That allocation ultimately came from the County’s American Rescue Plan Act (ARPA) funds.
The resolution said it is “anticipated that Pine Crest Nursing Home could continue to sustain similar deficits in the foreseeable future” and noted that the facility requires roughly $12 million in maintenance, repairs, and updates over the next decade.
Lincoln County does not maintain replacement reserve funds to cover these costs, according to the resolution.
The County’s share of costs for operating, maintaining, repairing, and updating the nursing home, as well as guaranteeing debt service, is estimated to be $20 million between 2025 and 2029, the resolution said, which led to the proposed $5 million yearly funding request.
The $5 million annual levy would have had an estimated $186 tax impact per $100,000 of the assessed value of private property, according to the resolution.
During the Tuesday Board meeting, lengthy debates on the “right” amount to ask for in a referendum led to lack of resolution on the issue and a failed resolution overall, with some Supervisors maintaining Pine Crest didn’t need funding of $5 million per year but that a lower number was more reflective of the County’s current needs to continue operating the nursing home and that maintenance was primarily what needed to be funded because the nursing home had now become profitable. Some Supervisors maintained that because Lincoln County is ultimately responsible for all of the costs of the maintenance and operation of Pine Crest, putting forth a referendum that only included maintenance items was unrealistic and that increases in State reimbursement reflected in 2023 and 2024 can’t be relied upon for the future.
Two proposed amendments to the original resolution for referendum language for lesser amounts failed. The first brought by Dunphy and seconded by District 9 Supervisor Christine Vorpagel proposed amending the resolution to seek to exceed the tax levy limits by $1.5 million for 10 years to fund capital improvements only with the management agreement with NCHCC to be paid by current levy and the debt service remaining on the addition to the building to be paid by Pine Crest revenues. The amendment was defeated 6-14 on a roll call vote with Supervisors McCrank, Woellner, Dunphy, Vorpagel, Bishop, and Dorava voting yes and Supervisors Anderson-Malm, Zelinski, Thiel, Boyd, Detert, DePasse, Lyskawa, Lemke, Miller, Meunier, Wickham, Cummings, Simon, and Hartwig voting no.
The second amendment brought by District 22 Supervisor Greg Hartwig, seconded by District 21 Supervisor Eugene Simon, proposed amending the resolution to seek to exceed the tax levy limits by $3.98M/year for five years. That amendment was defeated 10-9 on a roll call vote with Supervisors McCrank, Zelinski, Thiel, Vorpagel, DePasse, Bishop, Miller, Dorava, Simon, and Hartwig voting yes and Supervisors Woellner, Dunphy, Boyd, Detert, Lyskawa, Lemke, Meunier, Wickham, and Cummings voting no. Despite having a slight 10-9 majority, the amendment failed because such a resolution and/or amendment required 75% of the full Board’s approval to pass.
The original resolution for a referendum to exceed tax levy limits by $5 million per year for five years (resolution 2024-08-45) that had been brought by Supervisor DePasse and seconded by Simon then also ultimately went to a vote and was also voted down. A roll call vote of 8-11 defeated the measure with Supervisors Zelinski, Thiel, Boyd, Detert, DePasse, Lemke, Miller, and Hartwig (8) voting yes and Supervisors McCrank, Woellner, Dunphy, Vorpagel, Bishop, Lyskawa, Meunier, Wickham, Dorava, Cummings, and Simon (11) voting no.
Now the Board is back to square one and will need to figure out how to proceed. A number of options may be considered, but getting a referendum on the Nov. 5 ballot is no longer one of them. For the short term, Lincoln County Chairman Jesse Boyd said the Board may look to use the remaining ARPA funds to pay for the NCHC contract in 2025. “We had to pay $1.2 million from ARPA ‘extra’ last year because they didn’t get the State Supplemental in 2022,” Boyd said. “If the transfer of ARPA funds to the General Fund happens to pay contract fees with North Central Health Care, over a third of the total ARPA dollars we received will have gone to NCHC. If State Supplemental doesn’t come in and NCHC states they need more money … After this year, there is no more ARPA money left; everything has to be allocated by the end of 2024, and we don’t have money to backfill the losses.” Any such allocation of ARPA funds will need to be approved by the County Board prior to the end of December.
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