Rock Island County Finance and Personnel Committee met March 13.
Here is the minutes provided by the Committee:
1) Call to order and roll call
Committee members present: Brian Vyncke, Richard Brunk, Dewayne Cremeens, Scott Noyd, Rod Simmer, Kai Swanson
Committee members absent: Luis Moreno, Don Johnston
Others present: Kenneth Maranda, Kurt Davis, Hayleigh Covella, Bill Long, Larry Wilson, Capt. Steve VenHuizen, Louisa Ewert, April Palmer
2) Public Comments
There were no public comments.
3) Approval of minutes from the February 13, 2018 meeting
Motion to approve: Dewayne Cremeens
2nd: Scott Noyd
Voice vote
Motion carried
4) Reports to the committee
Treasurer-
Ms. Ewert’s supplemental sales tax report was provided in the packet. She reported that last week, the county received December’s sales tax at $355,636.58. Looking back – this report always has a three year comparison – it was down about $20,000 from last year and $24,000 from two years ago. Ms. Ewert said she’s not really sure what’s up with the supplemental sales tax and why it’s down, especially for the month of December. Compared to two years ago, year to date it’s down $128,515. Compared to a year ago, it’s down year to date $91,836.99. That’s a little concerning.
Ms. Ewert provided her monthly report. She asked the committee to make sure to read the cover letter, which shows the interest received for the month of February. That was $32,260. The prior year interest, for comparison, was only $10,187. That goes up as the interest rates continue to rise. The monthly interest rate last month averaged about 1.44%. Today the interest is about 1.5%. That has gone up even from last month. That also affects the current fiscal year. For the accrual ending on February 28th, it was $778,942. The prior year accrual was $693,412. It’s up about $80,000.
Ms. Ewert reported that some funds still have outstanding tax anticipation warrants or internal loans. The General Fund has that Circuit Clerk loan, the forgivable loan, still out there. Hope Creek still owes $1.5 million to the Liability Fund that they borrowed through an intergovernmental agreement. On January 29, Hope Creek borrowed another $750,000 against their tax anticipation warrant, for a total debt of $2.25 million. Ms. Ewert noted that March is a three payroll month and Hope Creek is really struggling. They have outstanding invoices from November. Their current balance is $202,682.34. In order to make Friday’s payroll of $370,000, they are short almost $170,000. They have some vendors breathing down their throats. Performance Food Group’s invoices are backlogged to November. That vendor and a couple other vendors are really putting some heat on them. The problem is that they don’t have enough revenues coming in to pay these bills, let alone get caught up on some of the prior months.
Mr. Maranda noted that with this new Medicaid thing, he saw that might be coming in to help. It was in the paper today that the Governor is signing to get Medicaid into hospitals and care units. Ms. Ewert said hopefully that brings some revenue to Hope Creek. Mr. Maranda reminded he committee that Hope Creek is a couple million dollars behind from the state. He thinks they talked about it at the meeting, but he didn’t make the last one. Mr. Simmer said it really doesn’t matter. The little bit they do send isn’t going to change things. It is what it is. Hope Creek has a few million dollars out in liability issues. It is what it is. It’s on its way down.
Ms. Ewert noted that the Working Cash Intergovernmental Loan Agreement passed last month. Working Cash has about $525,000 that was set up to be loaned to Hope Creek or the General Fund. That is only $525,000, though. If you were to take a payroll out of it, it doesn’t leave much. Plus if they have to borrow for this Friday’s payroll, that $525,000 will be eaten up fairly quickly, and that’s without even paying any bills. Ms. Ewert noted that she is in the process of drafting a hardship letter to the Comptroller’s Office to try and get some money squeezed out. She knows Ms. Palmer had suggested that they contact Representative Halpin, Representative McCombie, and Senator Anderson and try to get some type of emergency money coming in. They’ll be working on that and should have a letter drafted and out by the end of the week.
Mr. Swanson noted that Mr. Maranda gave a ballpark figure, but does Ms. Ewert know offhand the amount in arrears that the state owes Hope Creek. Ms. Ewert said she hasn’t gotten the aging report. Ms. Palmer said no, but she’s got the auditors in right now and they just talked about aging. They are writing off $1.6 million as uncollectable. That is above and beyond what is collectable. That’s everything 210 days old and older at this point. Their methodology is to write off a certain portion of Medicare after a certain number of days, a certain portion of Medicaid after a certain number of days, and then after residents have passed, there is a certain number of days after that. It’s pretty reasonable and can be explained how they generated that $1.6 million they are writing off. Ms. Palmer said she doesn’t know how much the state is behind, exactly. That would be a question for the staff at Hope Creek at this point. She can say that Hope Creek is behind on paying bills by $1.407 million for bills due November through February. Of course, they won’t know until later on this week if any can be paid out of that total. With the numbers Ms. Ewert just gave and with Hope Creek being $170,000 low just to meet payroll Friday, it’s not looking really good to pay out any vendors. As Ms. Ewert alluded to, they did have a meeting with PFG. They are the food providers. They are very nice and understanding people, but Hope Creek is very, very far behind in paying them and they just want to know if there’s any possibility of catch up. Ms. Palmer said she had to sit there and tell them not only that it’s not looking like there’s a possibility of catch up, but it’s looking like they might have to go another month without being paid because Hope Creek is not paying anybody. That’s a really hard thing to sit there and say. Hope Creek is doing everything they can possibly do. The Director, Cassie Baker, has wonderful ideas. The Accounts Receivable staff is fighting with the state minute by minute, every day. It’s very frustrating. They are trying to bring in those revenues.
Ms. Palmer noted that another example she can tell about from doing the grant reporting that’s required for the external auditors is that the Health Department has over $150,000 owed to them just in grant revenue from the state for only November and before. That doesn’t count December, January, and February that the state owes to the Health Department. It’s not just Hope Creek. It’s not anything they’re doing wrong or badly versus anyone else. It’s just a crazy problem. Mr. Swanson said he gets that and thanked Ms. Palmer for highlighting all the good stuff they are doing. He asked if the estimate Mr. Maranda gave, that the Medicaid arrears alone are north of $2 million.Ms. Palmer said she would have to confirm that. She doesn’t have that number. Mr. Maranda said it’s got to be close. Mr. Simmer said no. Mr. Maranda asked if it’s not that high. Mr. Simmer said not for just Medicare. Ms. Palmer noted that it sounds like a better number for overall for the home, including private pay, Medicare, and Medicaid. Mr. Simmer noted that that doesn’t include what they had to write off. That’s the total bills once they figure out the 40% write off.
Mr. Maranda asked how much was turned over to the collection agency. Mr. Simmer said $1.6 million or whatever they wrote off. Ms. Palmer explained that if it gets collected, they still record the revenue. It’s an auditing procedure, a likelihood/guesstimate type of thing. Mr. Maranda said his point was that it’s written off, but it’s turned over to L&M Accounts and they’re going to try to collect it if at all possible. Mr. Simmer said there’s roughly $2 million out to be collected still. Writing off that 40% is because there’s an obligation to pay a Medicare provider or Medicaid provider. That’s just a normal write off.
Ms. Palmer said her suggestion is, as Ms. Ewert was saying, that instead of the vendors coming to Hope Creek, maybe it would help if Hope Creek’s vendors started complaining to and contacting the representatives and senators. Mr. Swanson noted that they were. The week before last down in Springfield, there were members of the Chamber delegation who are owed money because they are vendors. Hopefully that drumbeat will continue and something will happen.
Ms. Ewert suggested that if anyone has any contacts in Springfield or wherever, to contact them. She talked to Dawn Shelton in Rep. Halpin’s office yesterday. Ms. Shelton gave her a few pointers to put in the hardship letter that will alert them of the critical situation.
Mr. Simmer noted, off the top of his head, that Hope Creek is roughly $4 million behind with borrowing, vendors, and payroll this month. Of that, if they get $1.4 million of the $2 million they’re owed, that will still put them $2.6 million behind. They have at least two multimillion dollar lawsuits pending, plus a smaller one that probably won’t be that. And then there’s a new home that was just built on 7th Street in Moline by the old Lutheran for direct competition. Mr. Swanson asked if the new home is accepting Medicaid and noted that most other homes he has talked to have a Medicaid mix of 15% or lower. Mr. Simmer said Hope Creek can’t take any more Medicaid. They were at 52% Medicaid last month and that’s over what they had set as the maximum of 50%. Every time they take a Medicaid patient, they lose at least $20-40 a day. They are already down and cannot afford to take anymore. Mr. Swanson noted that if it disappears, that’s a lot of families that are not going to get served. Mr. Simmer said they will. There’s still going to be someone who will take care of them. They haven’t totally opened up the other one yet, but he’s seen commercials for it. They are going to take all the premiums. It’s a nice place now. Mr. Vyncke asked if it’s more of an assisted living/independent living facility. Mr. Simmer said he doesn’t think they have a memory unit or anything like that. Hope Creek has that and the physical therapy. They’re still going to take the cream off the top. For Medicare stuff, $500 a day beats the $160 for Medicaid. It’s ugly.
Ms. Ewert noted that her last thing to report, for those who keep track of balances, is the General Fund balance as of this morning was $2,080,975.10. The General Fund is good for the next couple of payrolls. Those usually run close to $800,000 apiece.
Mr. Vyncke noted that Sam’s Club closing was probably a pretty big hit as far as sales tax. He asked if Ms. Ewert has any idea of a ballpark for that. He noted that Moline said they were the third highest sales tax revenue generator for Moline. He can only imagine for Rock Island County that it has to be one of the bigger ones. Ms. Ewert said it definitely was one of the bigger ones, but she doesn’t have a figure. They closed in January, so she thinks there will be one big spike with all the closeout stuff. After that it should be a truer amount. In dollar amounts, she’s not sure. Mr. Vyncke noted that it was more of a point to make than anything else. Ms. Ewert said she was disappointed with December’s sales tax right off the bat.
Mr. Simmer said it’s Amazon. Mr. Vyncke asked if the county collects money from those purchases. He thinks he paid 8.5% tax on something he just ordered. That’s what Moline’s sales tax is and he lives in Moline. He thinks they are supposed to be collecting and distributing. Mr. Vyncke asked if the county ever gets anything. Mr. Simmer said he never sees anything when he orders. Mr. Vyncke said he doesn’t order much and doesn’t know what the rules are. Ms. Ewert noted that Rock Island County loses a lot of sales tax to Iowa with the way the county is shaped. Everybody is a hop, skip, and a jump away. Mr. Vyncke agreed that it’s hard with any tax increases Rock Island County makes. It’s not like Rock Island County is an island community in the middle of the state where no one is going to drive across the border and shop somewhere else. It’s very easy to do here.
Auditor-
Ms. Palmer said she pretty much said you what she was going to say. She does have the auditors in. They just started yesterday getting the audit going and so far, so good. They did come for a week in the middle of February and that went well. It looks hopeful for being a smooth, seamless year again.
She is going to have some downturn in fund balances to report, unfortunately. Hope Creek is a big one. She was just doing the closeout books yesterday morning and over the weekend before the auditors came and was just so saddened by the numbers and how things are looking. She brought the numbers for Hope Creek and the Health Department and urges everyone to talk to the state and get the county’s money. Dr. Simmer is right. If they had the $2.2 million in the bank, it would just put Hope Creek at ground zero. That would sure help out some other funds as well, though, so it’s not a moot point for sure.
5) Consider Election Judge payments
Motion to approve: Richard Brunk
2nd: Scott Noyd
Voice vote
Motion carried
6) Consider approval of Post-Issuance Tax Compliance Report
Motion to approve: Kai Swanson
2nd: Rod Simmer
Voice vote
Motion carried
7) Consider delinquent tax resolutions
a. Permanent Parcel (07) 1873 1704217020; Taxpayer ID 071731400; South Moline Township
b. Permanent Parcel (07) 1874; Taxpayer ID 071731500; South Moline Township
c. Permanent Parcel (07) 1875; Taxpayer ID 071731600; South Moline Township
Motion to approve: Richard Brunk
2nd: Kai Swanson
Voice vote
Motion carried
8) Consider transfers of appropriations
Motion to approve: Rod Simmer
2nd: Scott Noyd
Voice vote
Motion carried
9) Consider appropriation resolutions for funds
Motion to approve: Kai Swanson
2nd: Rod Simmer
Voice vote
Motion carried
10)Consider claims at $1,287,026.94 and TDs at $1,485,691.36
Motion to approve: Richard Brunk
2nd: Scott Noyd
Voice vote
Motion carried
11) Consider Board member per diem/mileage report
Motion to approve: Rod Simmer
2nd: Kai Swanson
Voice vote
Motion carried
12) Committee member opportunity for brief comments (no decisions will be made)
Mr. Maranda noted that Hope Creek has a wage opener that was due December 1, 2017. Mr. Maranda and Mr. Davis will be chitchatting with them about the dilemma they just heard at the table today. He thought he’d throw that out there. It’s in the contract. He’ll keep the County Board updated on where that conversation is going. Mr. Simmer suggested figuring out how much it would take to stop the bleeding and seeing if they’ll make concessions with a sunset or something. They have to give to get something at this point. Mr. Maranda said Mr. Simmer is absolutely correct that it’s reaching a critical point. That’s on the table out there. Mr. Vyncke said he’s sure they’re all aware of it too. Mr. Simmer said some have their heads in the sand, but most understand. Mr. Vyncke noted that it doesn’t make it an easier pill to swallow. It’s unfortunate that they just can’t dig out. Mr. Simmer noted that last time they took a concession to try to help the county out and it still hasn’t been enough. They are kicking that can down the road.
13) Adjourn
Motion to adjourn: Rod Simmer
2nd: Scott Noyd
Voice vote
Motion carried
Meeting adjourned at 8:56 a.m. by Vice Chair Brian Vyncke.
http://www.rockislandcounty.org/CountyBoard.aspx?id=41261#F%20and%20P
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