Rock Island Today

Rock Island County Hope Creek Care Center Board of Directors met June 18.

Here is the minutes provided by the Board:

1) Call to order and roll call

Members present: Jessey Hullon, Tim Erno, Michael Kelly, Ginny Shelton, Rod Simmer, John Corelis

Members absent: Carol Near

Others present: Ken Maranda, Jim Snider, Hayleigh Covella, Ed Langdon, Drue Mielke, Bill Long, Lynda Vogt, Patty Luecke, Rhonda Westmorland, Bill Gabelmann, Tom Dryg, DeAnne Bloomberg, Bob Hartley

Mr. Maranda introduced the new County Administrator, Mr. Jim Snider. He just came on board today. Mr. Hullon and the rest of the committee welcomed Mr. Snider. Mr. Maranda noted that Mr. Snider is here to listen today, but he’ll pick up and be at the table with them before long.

2) Approval of the minutes from the May 14, 2018 meeting

Motion to approve: Tim Erno

2nd: Ginny Shelton

Voice vote

Motion carried

3) Public comments

There were no public comments.

4) Marketing update

Ms. Luecke noted that Ms. Kettler isn’t here today, but that she provided a packet to hand out to everyone.

Mr. Kelly noted that on the monthly marketing events report, it shows that on the 12th Hope Creek held an IDPH town hall meeting. He asked if Ms. Vogt can comment on that. Ms. Vogt explained that a representative came in from IDPH who is over all the surveyors. She went over the ten top tags that have been cited in Illinois since the inception of the new laws. She was here for two or three hours. Hope Creek invited all the facilities in the area in. It was very well attended. Mr. Simmer asked if Hope Creek fell under those top 10 tags with some of the things they change and do like the bedrails/no bed rails. Ms. Vogt said three of the 10, Hope Creek has been cited on in its last three surveys. The meeting was beneficial for someone who has not been surveyed and giving a heads up what they are looking for. Hope Creek has already been surveyed, so it was just kind of looking back. Mr. Simmer said it would have been nice if someone did that for us.

5) Financials

Mr. Dryg noted that he is going to talk about financials first, and then Mr. Gabelmann will talk about cash flow. These are preliminary drafts dated May 31 because, though the audit is probably done at this point, they haven’t had time to square the report up against it. They are going to continue to make it a draft until they get a few things reconciled with the audit for good measure.

Mr. Dryg noted that page two is the balance sheet. He likes to use that to talk about the current assets, which are at $4,668,000, including cash of $185,000. For the accounts receivable net of the allowance for bad debt, the net amount is $2,960,000. The liabilities and fund balance are on page 3. Current liabilities are $5.7 million, but that includes some short term borrowing of $1,050,000 on the tax anticipation warrant (TAW) that is borrowed against the real estate taxes that are going to come in starting this month.

Mr. Hullon noted that a lot of people don’t quite understand the TAW. He asked if Mr.

Dryg can take three or four minutes and explain what that is and how it functions for Hope Creek. Mr. Dryg explained that a “TAW” is a tax anticipation warrant. With a TAW, Hope Creek is allowed to borrow against its tax receipts. They are allowed to borrow up to 85% of tax receipts. Hope Creek’s tax levy this year is budgeted at just over $2,600,000. For the TAW, 85% of $2.6 million is $2,250,000. Hope Creek could borrow up to $2,250,000 to help pay expenses and then pay that back with the real estate taxes when they come in. Mr. Dryg explained that the taxes come in four installments in Rock Island County. They will come in starting this month and then next month, skip a couple months, then come in for two months. He noted that it’s hard to imagine running a house if you only got paid four times a year. A TAW allows them to manage cash flow and get some money in when they need it in the months they are not collecting taxes, then they pay it back when the taxes come in.

Mr. Simmer asked where Hope Creek is at on TAW borrowing. Mr. Dryg said $1.05 million. Mr. Simmer said they still have $1.15 million or something like that left to borrow, then. Mr. Dryg confirmed.

Mr. Dryg directed the committee to the P&L on page four. For the six months that ended May 31, Hope Creek had revenues of $5.8 million and operating expenses of $6.8 million. Mr. Dryg noted that he doesn’t include taxes in there. It would be nice if Hope Creek didn’t have to rely on taxes to operate the home, so they draw a line there. Year to date, there is a loss from operations of just over $900,000.

The first line on the next page shows income from other sources. The year to date amount is $1,328,000. Mr. Dryg accrues 1/12 of the tax levy each month, which goes in there. The other uses of $748,000 include a transfer to the General Fund that is being accrued for. That’s for the cost study that occurs once every 5-10 years. Different departments in the county reimburse the General Fund for services provided, such as the treasury, Human Resources, and that kind of thing.

Mr. Dryg explained that page 8 is the comparison of 2017 to 2018. Revenue is down. Hope Creek closed a wing and that’s reflected in the revenue being down. Expenses are also down, but not quite as much. That’s partly a result of having staffing issues even though they closed that wing. Staffing levels didn’t change by a whole lot because Hope Creek was short staffed to begin with. Under other income and expenses, the last item in that category is transfers out of $347,000. The majority of that, about $56,000/month, is being accrued for that transfer to the General Fund for services provided. In the year before, they were not doing that. In 2017 there was only about $30,000 in there versus $340,000 this year. That is because that obligation to the General Fund that’s budgeted for is being accrued for on a monthly basis this year. That’s a change in the way the county decided to account for that. It showed up in this set of books.

Mr. Hullon asked what interest rate Hope Creek is paying. Mr. Dryg said 2.3%. Mr. Gabelmann noted that the interest number also includes the bond interest. That’s the lion’s share. Mr. Dryg agreed. Mr. Gabelmann said he will talk briefly about the cash flow position that the home is in. As Mr. Dryg mentioned, at the end of the month on May 31, Hope Creek had $185,000 cash in the bank. Mr. Gabelmann noted that there are a couple of highlights from May. May was the second month in a row where $1.1 million was collected on receivables. That is very good. Hope Creek had a couple months that it was running $800,000. Mr. Gabelmann and Mr. Dryg project their cash flow based on average collections of $900,000 and last month was $1.1 million. More exciting news about last month is that over $100,000 was collected in the 210+ day column. That is huge. Mr. Gabelmann said Ms. Luecke did a good job on that. That’s very nice.

Moving forward, on May 31 Hope Creek started out with $185,000. June is the first month with the first tax levy receipts coming in, which will be about $890,000. With this month coming in Hope Creek should end up, according to the projection worksheet, without any repayments on the TAW coming in. As Mr. Dryg mentioned, the TAW is authorized at 85% of the receipts. Typically what happens is 85% of the property tax receivables is used to pay off the TAW due to the tie in with the tax anticipation warrant being an advance against the property tax receipts. If that happens with the $1,050,000 in TAWs that are outstanding as of the end of May, the cash flow schedule shows that by the end of August the full $1 million will be repaid. That’s not showing on the projection right now because it is still a treasury function to decide if they will make that payment back or make further payments on other outstanding obligations. Even if the TAW is paid back in its entirety, at the end of August Hope Creek will be at about a fairly break-even point.

Next month, Hope Creek will come in with $300,000 positive and the month after that, they will be $500,000 positive right before the bond payment is due in October. With that $880,000 bond payment, theoretically Hope Creek won’t be in a different position than it was last year. The TAW got paid down, then there was an advance against the TAW to cover the short-term $1.5 million that came out. Since then, another $1 million has been borrowed against the TAW and $1.5 million against the Liability Fund. Theoretically the TAW gets paid down then borrowed back for the bond payment like the last two years. Theoretically, this is suggesting that Hope Creek is not running too far from break even cash flow with the one exception being the big bond payment coming in.

Realistically, the last two months of billings for services have averaged right at $880,000.The huge collection months the last two months included a significant amount of back receivables that are coming in. If Hope Creek starts billing out at $880,000 a month, all of the sudden the back receivables, the collections from the State of Illinois and collections from private pay are going to start declining from the back-payment they are finally collecting from Ms. Luecke’s efforts in her department to get caught up. Mr. Gabelmann is not uncomfortable saying that the $900,000 expectation for cash receipts on this projection is probably still reasonable. Barring any significant changes, it’s possible this could flow through. He fully anticipates the TAW will get paid down and then borrowed again right before the bond payment. Some of that depends on how much the county wants to get repaid on some of the borrowings they’ve done or, as Mr. Dryg mentioned, for that $56,000/month administrative overhead cost.

Mr. Hullon noted that he doesn’t see an aging report here and asked if that got printed out today. Mr. Gabelmann said he printed one right before he came over here that he can give to Mr. Hullon. This report is off of Point Click Care. It also has the payment schedule on the back which shows the $100,000 going against the 210 days.

Mr. Simmer asked if the loans from the General Fund to Hope Creek have to be paid back at the end of the fiscal year by statute, at least for a day. Mr. Maranda said yes. Mr. Simmer said then they’ll have to borrow back against it. Similar to the TAW, they’ll pay it off and just re-borrow it. Mr. Gabelmann confirmed. Mr. Simmer said they keep going down the same road.

Mr. Gabelmann explained that during May, there was only $750,000 on the TAW. There was a $260,000 interest payment due on May 31, so Hope Creek borrowed $300,000 and did utilize a little to pay down the vendors. Vendor payments in May were right over the $300,000 range. There were at $335,000 in vendor payments back in May. Mr. Gabelmann noted that the projections are suggesting that as liabilities are coming in, they are going to get paid out in that respect. There is a possibility of making up a little bit of back pay if there’s a real push. It’s holding right now, which is a solid thing. Hope Creek is going to be in a position like it has been the last several years when the payment is due. As mentioned, they are going to have a pay down situation where they re-borrow like the last several years. It’s still a struggle.

Mr. Gabelmann noted that Ms. Baker mentioned that agency costs were down to $35,000 in May. Everybody always watches that. That’s $35,000 less than the prior two months.

Mr. Simmer noted that in the projections, he sees Mr. Gabelmann and Mr. Dryg went out to 05/31/2019. He thinks that as far as last month, it was $240,000 in the red. By next year for the same date, Mr. Gabelmann is projecting twice, or almost twice, as much. Mr. Gabelmann explained that it’s so far out. If the $900,000 maintains and if some of those back receivables continue…but if Hope Creek spends $900,000 and collects $950,000, that’s another $600,000. Mr. Simmer said it all helps, but it’s also going to dwindle. Mr. Simmer asked if they decided what kind of numbers they are going to write off. Mr. Hullon said that’s Item 6.

Mr. Hullon noted that they are still sitting with over $2 million in 210+ days. He thinks Mr. Dryg carries a little over $1 million, so there is still a disconnect of about $1 million. His question, obviously, is at what point in time is it going to reflect accurate numbers. He has been talking about this since day one. He knows that accounting is a little bit different than his private enterprise, but they keep reminding each other that there is still a gap of $1 million that is not really there. It’s what he has been calling “dead money” that has been making it look good when it’s not, frankly. They all agree on that. Mr. Hullon asked if they are always going to have it that way. Mr. Gabelmann explained that when Ms. Luecke goes through and cleans up Point Click Care, it will reduce what it shows as the gross amount outstanding in the reports. At that point in time, Mr. Dryg will reduce what they call the “reserve.” In fact, on the financial statements every month, $20,000/month is automatically thrown in there. If Hope Creek billed out $880,000 last month, $20,000 is probably not going to come in no matter what. That is a guesstimate based on historical. There is a big reserve already sitting on the books. The disconnect Mr. Hullon is talking about is the difference between the net amount on the books already versus cleaning up the reports. He will let Ms. Luecke address how long that will take. It’s not something she can just go in and click on and it’s gone. Ms. Luecke said she wishes it was that simple. Mr. Hullon noted that he has met with Ms. Luecke a couple times already this month and she has done a good job the last couple months on collections.

6) Update on Uncollectible Accounts Resolution

Mr. Hullon asked Ms. Luecke to explain how she came up with the amounts in the resolution and what she talked to him about. Ms. Luecke explained that they basically want to write off anything that is uncollectible that they know for sure is uncollectible. For Medicare, it’s something where they have one year’s timely filing. Now the State of Illinois has 180 days for timely filing. That gets sticky because Hope Creek has to wait for them to approve the application. They have to wait for them to get admitted into the state’s system and then Hope Creek can start billing. That’s where a lot of this collection has come from. They are working with the state on trying to get money. That’s where a lot of the old stuff is coming from. For the bad debts that they have sent to the collection agency that the collection agency says are not collectible, they need to get those off books so it is more realistic. Mr. Hullon asked what dollar amount Ms. Luecke came up with. Ms. Luecke said about $2 million on the Point Click Care side.

Mr. Hullon noted that the resolution is going to come to the full County Board tomorrow night. He told the County Board members who are present that he looks for their endorsement for a “yea” on this so the fine folks at Hope Creek can cure this and they can let them get their work done here. It has taken almost two years to get this in front of the County Board members. He is asking for a “yea” vote on this. Mr. Langdon said the resolution has his support.

Mr. Mielke noted that he’s looking at the resolution itself where it says “untimely filing.” He asked, “Untimely on what end?” Ms. Luecke explained that with the state of Illinois, Hope Creek has 180 days to file. Even if you file and submit it, if something is wrong with it, like a diagnosis code needs to be changed, they don’t pick up from there. Medicare does. For Medicaid, you have 180 days from that day. They are working with two systems and have to make sure the person is in their system before they can even file. It’s kind of confusing. Mr. Mielke asked if the state is saying no matter what, no matter what issue or coding issue comes up, that’s it. Ms. Luecke confirmed. She explained that Medicare is different. For Medicare you have a full year. If you submit and something is wrong with the claim and you need to correct it, they go from that new date. Mr. Mielke asked if that’s something that affects all homes in the state. Ms. Luecke said yes, it’s definitely going to.

Mr. Hullon asked if the dollar amount was $100. Ms. Luecke said for private pay, yes. Mr. Kelly asked if the resolution in the packet is the resolution going to County Board. Mr. Hullon said yes. It will be presented to the full County Board tomorrow. Mr. Hullon asked Mr. Maranda if they are voting on it. Mr. Maranda said yes.

Mr. Hullon asked who is delivering the Admissions Report. Ms. Stiles said she is. Monthly admissions are running just about the same. Steadily the last four months it has been at 17. In May it was 19.

Ms. Stiles reported that Medicare and Managed Care remain the highest. There were two private pay long-term; one private pay hospice; one private pay respite; one VA respite; one VA skilled; one VA Hospice; and two public aid long-term. The non-admission list shows the people Ms. Stiles did not accept and whatever reason. There were 47 referrals. Six had no active public aid numbers; four were out of Hope Creek’s insurance; two had different contracts, like with Meridian or Coventry for which Hope Creek doesn’t have contracts; three had no insurance after the first 20 days. Ms. Stiles noted that the couple of nurses know what she is talking about there. After 20 days, residents have to have a second coinsurance. Those ones didn’t get accepted. Three were medically complex. One needed a bariatric bed, which she didn’t write in here, for a long term patient. Hope Creek has a skilled bariatric bed available at all times, but she didn’t have one available for a long-term patient. One was alcohol-related; one was for mental health; two were for aggressive behaviors; four needed sitters; and two had sexual behaviors. One went home. One went to another skilled nursing facility and she knows Mr. Hullon going to ask what that’s about. The other facility was closer to this person’s family in Rock Island, so the person wanted to go to a facility in Rock Island. They were given three choices. Hope Creek was one choice, but they chose the one closest. Two people were staying where they are at. Eleven were Medicaid long-term.

Ms. Stiles noted that for referrals, UnityPoint remains the highest with 25. Genesis was down to seven. Heartland Skilled Nursing Facility referred three. Two came from Winning Wheels, and she believes both were VA. Manor Care referred one. OSF in Peoria referred two. Iowa City VA sent nine. Nine people came from home. Kindred Home Hospital referred two. Amber Ridge Skilled Nursing referred one. St Anthony’s referred two. Cottage in Galesburg, which is a mental health facility, referred two. Heritage Woods, an assisted living facility, sent the two that were the long-term Medicaid patients. One came from Hammond Henry. One came from McDowell County Behavioral. Illini Restorative Care, Genesis East, and Hillcrest each sent one.

Mr. Simmer asked how many total beds are filled. Ms. Stiles said she thinks the number today was 160. They have been holding pretty consistent at 160. Ms. Baker tells her that at 160, they are able to keep their head above water.

Mr. Simmer asked for a breakdown by payer. Ms. Stiles noted that of the 160 patients today, she thinks 80 or 81 are Medicaid. Mr. Hullon said they are at 80% capacity with a little over 50% Medicaid, then. Ms. Vogt reported that there are 27 private pay, seven Medicare, 84 Medicaid, one managed care, 10 VA, 30 hospice total, and two bed holds. Today’s total is 159. With the bed holds, it’s 161 but she doesn’t usually count those.

Mr. Erno noted that Ms. Vogt said there were 10 VA. He asked if that’s it. Ms. Vogt said she can’t get it to open on her phone, but she thinks another 10 in hospice are VA. Mr. Simmer said that’s okay. He understands that hospice breaks down into different ones.

Mr. Hullon asked if Ms. Stiles has a replacement yet. Ms. Stiles said she started training her replacement today. Mr. Hullon asked who the lucky candidate is. Ms. Stiles said her name is Tammy. She is a nurse from UnityPoint, so she knows the inside. This is her first time at a long-term skilled facility, but she has inside knowledge. She’s going to be good, especially with UnityPoint being Hope Creek’s major breadwinner. UnityPoint provided 44% of Hope Creek’s income last year and she comes from UnityPoint.

7) Update on IDPH

There was nothing to report.

8) Board of Directors member opportunity for brief comments (no decisions will be made)

Mr. Hullon asked if the new member, Mr. Corelis, has any comments to start them off with. Mr. Corelis noted that there’s an awful lot of detail, but he’s used to it.

Mr. Erno thanked Mr. Simmer and Mr. Hullon for standing up in the paper and standing up for Hope Creek. He noted that the bad press Hope Creek gets hurts them with the residents. The home is based off the residents and the residents in the county. If they see anything bad or negative, Hope Creek is never going to get more people. The facility can’t run without residents. That’s what it’s based on.

Mr. Simmer said his biggest thing is that this is their home and he wants to make sure their home will always be their home. He doesn’t want them to think they are going to be kicked out. There is always a place for them here.

Mr. Hullon asked everyone present to always remember, and he’s not trying to put anyone down, that some of things they discussed today he’s sure the other boards and other nursing homes’ boards discuss similar things. Hope Creek is a county home and is responsible to the taxpayers of Rock Island County. The press has every right to be here and to participate in the spending of the taxpayers’ money, though he agrees with Mr. Erno 100%. It is what it is as it gets reported. Hopefully once in a while they can get some good reporting too. That’s always good. Mr. Erno said that would be nice. Ms. Shelton noted that most employees want to know there is some job security and that their job will be there. Mr. Simmer said there’s obviously a need for the home to be here.

Mr. Kelly said he was happy to hear that the Illinois Department of Public Health was here and that other facilities came to Hope Creek and got some of their learning and inservices. Hope Creek lives in a glass bowl here. Everyone knows Hope Creek’s business. Mr. Kelly noted that he has friends who have their own businesses. He just talked to one not long ago who is a mechanic and owns an auto repair shop that’s not in this area. He experiences cash flow and he says, “It happens. Life goes on.” Mr. Kelly doesn’t think Hope Creek is throwing taxpayers’ money away. He thinks they are as frugal, insightful, and accountable as they can be. Mr. Dryg and Mr. Gabelmann give them accurate figures and even though they use a different system, their numbers basically jive and correlate with what the Rock Island County Auditor’s Office has to say.

Mr. Kelly added that he personally missed Mr. Hullon last month and is glad to have him back. He thanked Ms. Vogt and the others for working so hard.

Mr. Simmer noted how many good times they’ve had when the state has come in to inspect Hope Creek. They have had a lot of good inspections too that were clean. Of course, that never makes the press. It’s not impressive to report on. The feds were in here and Hope Creek only had a handful of things, like the microwave not being clean enough. Mr. Simmer said to check his microwave right now. He has four kids, so he’s sure there’s a mess in there. Little things like that, Hope Creek gets ticked for. In their own homes it’s not a big deal, but here they are in a glass bowl and are getting nitpicked to death. He had a couple misgivings a year or two ago, but Hope Creek has had five or six good runs now and hasn’t had a problem. That doesn’t get reported on. That’s sad. They run a good ship here. Unfortunately, it will still take that amount of time for the couple stars they gave up. No matter how good they are, it’s still a process getting those back. In one swoop they can be gone, but it takes a year or two to get them back. That’s the system they live within. The girls here are kicking some major butt for the most part. He appreciates everything they do.

Mr. Hullon agreed that these fine folks do a lot of fine work. He noted that he did present to the County Board last Tuesday on the state of affairs at Hope Creek, which generated a lot of response judging by how many folks are in this room. That’s always a good thing.

Mr. Hullon said he is going to give the Hope Creek Board members homework for one month. Next time they meet here, he would like to hear one thing from each member that can be done better at Hope Creek to help the financials, marketing, whatever. He wants one item from each member to put on the table. In his discussion with the County Board members, one County Board member asked what the Hope Creek Board’s advice is. Next time he goes back there, he can further elaborate on that. Mr. Hullon reminded everyone that this is just an advisory board. Some of their wings were clipped here some time ago, for better or worse. They need to continue to advise and be in that advisory mode. It seems to him that they come in here and discuss a lot of different things. Now he wants stuff to take to the Rock Island County Board and let them know that out of this advisory board, these are the things that they can advise the County Board on. Whether it’s on nursing, financials, marketing, or whatever different expertise they were all on this board for. Now he’s telling them he is going to reach out for that particular expertise. He wants to see some answers from that expertise, whether it’s taking on the union or marketing something different. They’ll discuss everything and take something to County Board and put it out there so they can take it and run with it.

Mr. Hullon explained that last time he sat with the food vendors, he asked for or suggested that Hope Creek start doing vendor-managed inventory for the food. He asked Ms. Vogt if she knows if that happened and if they are coming in and managing the food. Mr. Hullon said, for example, if Hope Creek only needed 30 lbs. of turkey, they were selling 50 lbs. Mr. Hullon asked if anything happened with that. Ms. Vogt explained that they are going to Walmart and buying milk now, which is saving quite a bit each month. It’s unbelievable how much buying milk at Walmart has made a big difference. Yes, they are doing some of that.

9) Adjourn

Chair Jessey Hullon adjourned the meeting at 6:13 p.m.

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