Referendum round two? DeKalb County Board to reconsider nursing home tax on ballot

Tillie Mackey, a resident of the DeKalb County Rehabilitation and Nursing Center for four years, listens to speakers during public comment at the DeKalb County Board meeting Wednesday, April 20, 2022, in the legislative center in Sycamore. One of the items on the agenda was to vote on whether to sell the DeKalb County Rehabilitation and Nursing Center.

SYCAMORE - Four months after proposing – and then declining – to poll voters about a tax levy to aid the struggling DeKalb County Rehabilitation and Nursing Center, the DeKalb County Board this week is expected to reconsider a November ballot referendum.

The board’s Committee of the Whole is expected Wednesday to decide whether to place a referendum up for a full board vote, according to documents released ahead of the meeting. The earliest the board can vote on whether to move forward with a referendum is at its full meeting July 20.

On March 16, the County Board voted, 20-1, to not place a referendum on the June primary ballot.

Now, after more than a year’s debate amid a potential sale of the facility to a private owner – and two offers on the table to sell – DeKalb County voters could weigh in still. Wednesday’s Committee of the Whole meeting is set for 7 p.m. in the Gathertorium of the Legislative Center, 200 N. Main St. in Sycamore.

If supported by the board, a referendum would appear on the Nov. 8 ballot asking voters if they would support a levy to collect up to 0.1% to maintain the nursing home. Aug. 8 is the last day to certify referendum questions on the General Election ballot with the DeKalb County Clerk & Recorder’s Office.

If DeKalb County voters supported a referendum, the proposed levy would generate about $2.44 million per year based on 2021 assessed property values, documents state. A nursing center tax would exist in addition to other taxes collected by the county.

The nursing center faces a budget deficit which exceeds $7 million, records show. The DeKalb County Board has for more than a year grappled with what to do about the future of the nursing home amid financial pressures, management changes and low resident numbers.

The budget shortfall among many challenges the nursing center faces. A multimillion-dollar expansion undertaken in 2018 remains incomplete, after the county in 2020 sold $13 million in bonds.

County nursing home staff have expressed concern that a sale to a private buyer could mean loss of benefits for existing employees and lowered quality of care for residents. County officials, however, maintain the facility’s current state isn’t sustainable financially, and a sale could be needed to help offset budget constraints.

According to county projections, a 0.1% tax levy would mean the struggling nursing center breaks even by 2024. County numbers estimate that window also would mean the facility could incur about $6.6 million in debt by the end of 2026 and pay that off by 2031.

It’s not the first time the DeKalb County Board has attempted to levy resident taxes to bolster the nursing home’s budget. A referendum passed in 1991 authorized the DeKalb County government to levy taxes for the purpose of supporting the rehabilitation and nursing facility annually over 30 years. That tax was never levied, documents show.

As of July 7, the nursing center census sat at 128, documents state. A decade ago, 2012 census recorded 171 residents. In 2018, the facility’s census came in at 181 residents. That declined significantly by 2021, according to records, which recorded 117 census.

Under the proposed tax levy, DeKalb county taxpayers who owned a home valued at $150,000 would pay $44, documents state. Taxpayers with homes valued at $200,000 would likely pay about $60.67, or $77.33 for homes valued at $250,000. Residents with homes valued at $300,000 would be expected to pay $94 for the nursing home tax, according to county financial projections.

Halfway through its fiscal year, county staff said they expect the nursing home to fall short on its budgeted revenue by about $5.3 million in 2022. The 2022 budget was created assuming a 175-resident facility.

Averaging 124.5 residents to date, the facility could instead bring in about $12.78 million, or 74% of its expected budget, according to a memo sent to the board’s Committee of the Whole July 8 by Liam Sullivan, county administrative analyst.

That budget projections were estimated through data gathered by county staff, including Maggie Niemi, administrator for the county nursing home, and Robert Miller, county comptroller, records state.

Ballot won’t bump potential sale

A November ballot referendum does not rule out a potential sale, according to the proposed resolution which could go before the DeKalb County Board as early as July 20.

“The DeKalb County Board has not made any decisions regarding whether or not the county will continue to owner and operate the DCRNC,” according to records. “Rather this resolution and referendum question is intended to ask voters whether or not they are willing to provide public resources, and the result of the referendum will be taken into consideration as the County Board continues to evaluate all options for the DCRNC.”

Two purchase offers have been made for the nursing home, although neither has been approved by the County Board yet. A vote on a potential sale was postponed last month hours after a second offer was made.

Saba Healthcare LLC, listed at 3531 Howard St. in Skokie, about an hour east of DeKalb north of Chicago, has offered the county $8.3 million to purchase the nursing center, according to documents obtained by the Daily Chronicle through the Freedom of Information Act. The offer was sent to county staff June 15 at 5:25 p.m., less than two hours before the county board convened at 7 p.m. that night. The board elected to postpone a sale vote in order to learn more about the second offer.

Among its eight skilled nursing facilities, Saba-owned nursing centers averages a federal standard rating of 1.3 stars, according to county documents. Nursing home star ratings are reported by the U.S. Centers for Medicare and Medicaid Services, which measure federally-regulated standards including health inspections, staffing and quality measures.

Moshe Blonder, of Saba Healthcare, is expected to be present for Wednesday’s Committee of the Whole meeting, documents state.

The Saba Healthcare offer topped an initial offer put forward in early June by $200,000. Evanston-based Illuminate HC LLC, a healthcare facility management company, offered the county $8.1 million to purchase the center. According to the Centers for Medicare and Medicaid Services, Illuminate HC operates 11 long-term care facilities out of Michigan and one out of Toledo, Ohio.

Illuminate’s letter would come with a 45-day due diligence period which would include inspections of the facility, environmental and structural assessments among other procedures. A letter of intent signed with Saba Healthcare would mean a 60-day due diligence period, according to the proposal.

The DeKalb County Board declined to take its annual July recess, instead electing to hold special meetings this month to discuss the future of the nursing facility.

An alternate option has also been put forward by county board members Scott Campbell and Bill Cummings. Financial reports presented this month outline how the facility could right-size its budget issues by 2024 if it remained under county control. According to DeKalb County documents, the proposal includes a five-year look at what it would take to keep the facility under county control, including implementing staffing cuts and regular resident census growth.

For the past 24 years up until Dec. 31, the nursing center was run by St. Louis-based Management Performance Associates, a firm that was under county contract. The firm, hired in August 1007, was responsible for overseeing daily operations and creating the facility’s annual budget for County Board approval. The firm declined to renew its contract in December.

Property brokers Marcus and Millichap was hired for $10,000 in January by the DeKalb County Board as a consultant to help county officials better understand options which lay before them amid the nursing center’s financial woes. The real estate consultant has marketed the facility since late April, when the board elected to begin the sale process.

A sale would need to be approved by a two-thirds majority DeKalb County Board vote.

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