Blaine Manor projected a deficit of more than $700,000 for fiscal year 2010-11 at a budget hearing before the Blaine County Commission on Tuesday. The number is of special interest this year with a levy vote proposed to support the facility set for Aug. 3.
While projected revenues for next year are $1.7 million, expenses are projected to be $2.4 million.
A deficit of this magnitude is typical, said Stephanie Jaskowski, Blaine Manor's director of finance and human resources. The county has been subsidizing the nursing home in Hailey since the manor's separation from St. Luke's hospital in 2000.
The two-year, $1.9 million levy would increase property taxes for two years by an estimated $9.40 for each $100,000 in property value. That sum would cover the county's expenses for Blaine Manor for three years. To cover the costs in recent years, the county has been dipping into its reserves.
Commissioner Angenie McCleary said the use of the county's reserves isn't a permanent solution, as the county's reserve fund must equal 25 to 35 percent of its total budget, to pay bills before tax revenues come in and to provide for potential emergencies.
"It's important to the board that we stop spending from our reserves," McCleary said.
Though the county would no longer be directly paying for Blaine Manor if the levy passes, the levy would only enable it to stop drawing from its reserves, not funnel the money into other programs.
In addition, levy revenues can only legally be spent on Blaine Manor's operational expenses.
The levy can be canceled or reduced for the second year if the full amount is not required.
Any funding by the county for senior care has been a matter of some debate.
"There are very few counties who run nursing homes," McCleary said. "It's just not a sustainable model."
There has been a steady increase in the manor's expenses over the past few years, mainly due to the rising cost of employee health insurance and utilities. Blaine Manor operates mostly on county funding, private pay and reimbursements from Medicare and Medicaid. Jaskowski said the contractual adjustments, the portion of a patient's bill that the facility must write off due to insurance billing agreements, equals about half of its current operational loss.
"If we wanted to break even, we'd have to charge $320 per patient per day," Jaskowski said. "Unfortunately, the market won't bear that."
Blaine Manor's loss comes from the difference between the average patient cost and what the facility currently charges, which is $222 a day. According to the Met Life Mature Market Institute, the average daily rate for a private room in senior-care centers in Boise is $221, though that includes larger facilities and centers with attached assisted- and independent-living facilities, where revenue is higher and expenses lower. Room rates are also affected by local cost of living, which is significantly higher in Blaine County than in Boise.
Jaskowski said she could increase room rates, but residents wouldn't be able to afford it and the amount of Medicare and Medicaid reimbursements would not increase.
Though Jaskowski said her management team is constantly comparison shopping for items they can save on, such as food, much of the expense of running Blaine Manor comes from employee salaries and benefits. She said the facility cannot reduce staffing, due to federal and state nursing home regulations.
The preferred senior-care model is a continuum of care, under which a skilled-nursing facility is connected with independent and assisted senior living. The cost of care for such residents is much lower, and the revenue from those patients helps cover the expenses of skilled nursing.
The proposed Croy Canyon Ranch, a private facility slated to be completed west of Hailey by January 2014, would be a tiered facility. The Croy Canyon Ranch Foundation was formed in 2001. Executive Director Kathleen Eder said the foundation's fundraising is still on track, having raised $3 million to $4 million of a required $13 million.
McCleary said if the levy doesn't pass in August, the county has a number of options to consider. She said the commissioners could try to find another way to balance the deficit by cutting other expenses.
However, she said, "In our minds as a board, there's not a lot of room for cuts."
The county could also hold another levy election in May 2011 or work to develop what McCleary called an "exit strategy" for closing Blaine Manor.
She said an exit strategy would not have an impact on the county's budget for at least a year. She said a plan would likely begin by shutting the manor to new residents. However, many of the facility's costs are fixed, and fewer new residents would mean less revenue. As a result, the facility's cost to the county would likely increase before it could be closed.
McCleary said the commissioners remain hopeful that county residents will vote to approve the levy.
"We have a responsibility to Blaine Manor," McCleary said. "It's amazing how much people are willing to step up and help."
Katherine Wutz: firstname.lastname@example.org