Low census, uncertainty impact Hillcrest finances

McCOOK, Neb. — The Hillcrest Board of Trustees discussed shortfalls in July revenue Wednesday morning.

The lack of new residents and additional expenses due to COVID-19 has taken a toll on the facility. The July budget for Hillcrest was projected to be $14,000 in the black but instead, was down by $82,000 for the month, said board president, Randy Dean. The drop was due to the facility’s decreased population and COVID-19-related expenses, he said.

Dean reviewed operational expenses for July and said although some areas were near projected revenue and expenses, the facility did not bring in near as much revenue as expected in other areas. This included private pay residents, projected at $213,000 in revenue with $158,000 actual; Medicaid, $235,000 and $199,000 actual, and Medicare, $124,000 budgeted and $45,000 actual.

“It’s what we expected,” Dean said, although adding that July was a “tough month.”

Another item mentioned by Dean were administrative expenses, with $24,000 projected and $63,000 actual costs. Dean said about $40,000 of those costs were personal protective equipment purchased by the facility.

And although the facility was approved for federal stimulus funding in the second round of disbursements, those funds have still not yet been spent. Staff is waiting for direction from the government for that, Dean said. “We have to spend the money the way the government wants us to spend it,” he said. The facility received $889,000 from the federally funded Payroll Protection Program and $630,000 in Medicare enhancement funding due to COVID-19.

Hillcrest is owned by the county but operates on its own budget. The census as of Wednesday is 65 residents, said administrator, James Foster, down from the usual 90. The facility has the capacity of 100 residents.

Shane Filipe of Rural Health Development, the healthcare firm that oversees the administrator, said Wednesday that Hillcrest is still in Phase II but can accept new residents. Of the 211 long-care facilities in the state, only six have not had COVID-19, he said and Hillcrest continues to test its employees, with another round of testing done last week. Filipi said they are taking a cautious approach before moving into Phase III and waiting to see if the re-opening of schools affects the virus.

He reiterated that staff is waiting for more guidance from the government before disbursing Payroll Protection funds. Half of the stimulus funding released last week, at $2.5 billion, has to be spent on testing, Filipi said, and that could be used toward an antigen testing machine for the facility.

One bright spot in July’s budget was the childcare center, with revenue at $14,800 for July, up from the $11,500 originally projected. “This is the first time in a long time I’ve seen the childcare center in the black,” Dean said. More infants have been accepted at the center and the infant area is being enlarged to accommodate this increase. Hillcrest may utilize an incentive funded by the McCook Economic Development Corp. and local businesses, that pays daycare facilities $250 per month for each infant placed.

Dean also noted that the Hillcrest Foundation has agreed to pay for new cribs, a changing table and a “pack and play” playpen, along with other improvements at the facility.

He also addressed the request from Red Willow County Commissioners on Monday for Hillcrest to consider taking over payments on a $2 million construction bond, issued in 2010, that the facility used for remodeling costs. There’s about $1 million left to pay on the bond, Dean said, at about $145,000 in annual payments, with a county levy in place since 2016 for that bond. He asked for feedback from the board on whether the facility could make payments.

Several board members commented, with Brian Rokusek saying although Hillcrest couldn’t economically handle it now, he wasn’t opposed to re-visiting the issue sometime in the future. Board member Mike Eklund agreed, saying he’d be willing to “negotiate or compromise,” but for now, with not knowing how COVID-19 will play out, the facility was not in the position to make any payments.

Red Willow County Commissioner Steve Downer, who attended the meeting as a representative of the county, said the shortfall in restricted funds for the county has been resolved by using interfund transfers, from the road department to the general fund.

In 2012, the county borrowed $1 million for Hillcrest’s cash flow problems, after Medicare and Medicaid billing were not filed for three months. The facility paid that loan back in 2017.