Waupaca County supervisors defeated a $1.3 million bond proposal to renovate Lakeview Manor.
At a special county board meeting Friday, April 4, supervisors voted on two bonding packages.
The first proposed bond was for $13.8 million. It passed unanimously.
In addition to $12 million for county highway projects in 2015-17, the first bond also covered upgrades to emergency management communications, a new scale at the County Processing and Transfer Facility in Manawa, a new grandstand pavilion and a new roof for the commercial building at the fairgrounds, and funds for the Parks and Recreation Department to repair three boat launches, the sea wall at Gills Landing and construct a new storage building.
The first bond also included $575,000 for a fiber optic network from the courthouse in Waupaca to Lakeview Manor in Weyauwega.
The second bonding package would have paid to remodel Lakeview Manor to create two 10-bed units for assisted living.
The county board approved the remodeling plan by a 14-10 vote in November 2013.
Although supervisors voted 18-9 in favor of the $1.3 million bond proposed for Lakeview Manor on Friday, all borrowing requires a super majority to pass.
Those opposing the project to renovate Lakeview Manor questioned the facility’s ongoing impact on the county tax levy.
They noted that county taxpayers have been subsidizing the facility and that it is unable to support its operations from state and federal revenues.
Between 2005 and 2008, the amount of county tax revenues needed to support the facility rose by 150 percent, from $658,000 in 2005 to $1.67 million in 2008.
Since 2008, the facility’s share of county tax revenues has dropped to $850,000 per year.
“What kind of return can taxpayers expect on this kind of investment?” Supervisor Darrell Handrich asked.
Lakeview Manor Administrator Melissa Drews said the project will eventually allow the facility to reduce its need for county tax revenues by nearly $400,000 over the next couple of years.
She noted, however, that the bond package was structured to increase payments in 2018, which would bring the total impact back up.
Bonding’s impact on county taxes
In 2014, Waupaca County’s annual debt payments on existing bonds have a $5.89 million impact on the tax levy, according to figures from Ehlers, the county’s financial consulting firm.
Current debt results in a property tax rate of $1.61 per $1,000 equalized value.
Without additional borrowing, the county’s debt payments, including principal and interest, would total $34.28 million and end after 2021. The mill rate would gradually decline to 51 cents per $1,000 in the last year of payments.
With the $13.8 million bond approved by the board, the county’s annual debt payments is projected to rise to $6 million in 2015, hold steady for three years, then gradually decline to a final payment of $2.13 million in 2024.
The county’s total debt payments, excluding Lakeview Manor, will be $50.5 million from 2014 to 2024.
The mill rate is projected to rise to $1.64 per $1,000 in 2015, then start dropping after three years.
Had Lakeview Manor been approved, the county’s total debt payments would have been $52 million. The annual impact on the property tax rate would have been about 5 cents per $1,000 after three years.
“We as county supervisors have to look at what we consider priorities for our citizens,” said Supervisor Pat Craig.
She noted that Waupaca County was willing to borrow $4 million per year for good roads because that was seen as a benefit to county residents. She said the county’s nursing home also provided a benefit to citizens in need of long-term care.
Craig said most counties that provide nursing home care for their residents relied on tax levy dollars.
A report by the Wisconsin Association of County Homes shows that 2013 tax levy support for nursing homes varies from $4.43 million in Rock County, $3.64 million in Walworth County, $2 million in Clark County, $2.12 million in Sauk County and $200,000 in Richland County.
Other supervisors questioned why the county is subsidizing a nursing home that competes with the private sector.
In a letter to county supervisors, Supervisor Gary Barrington, who chairs the committee overseeing the facility, noted that Lakeview Manor staff had recently admitted a resident who, after four years, was ejected from a private nursing home in Waupaca County and refused admittance to another.
“This vote is not about money, whether a deficit or a profit,” Supervisor DuWayne Federwitz said. “It’s about people – people who no longer can express their concerns like you and I. It is about society caring for itself. It is about self dignity and personal values.”
Federwitz said all of the letters he has received in opposition to the project were either from individuals connected to private nursing homes or from disgruntled, former employees of Lakeview Manor.
In discussing the issue with his constituents, Federwitz found general support for the county subsidizing the facility.
Voting against the bond were Dennis Kussmann, Darrell Handrich, Lee Much, Joyce Boyer, Mary Kay Poehlman, Bob Ellis, Don Morgan, Carl Kietzmann and Dave Neumann.
“We’re talking about 70-plus jobs and a $10 million annual economic impact,” Barrington said after the vote. “It’s going to be a tough sell to our staff. The employees we have will now all be looking for new jobs. We’ll end up paying contract labor to keep the facility open. It’s going to be expensive.”
County Chairman Dick Koeppen reminded supervisors that the vote was for the remodeling proposal and not on whether to keep the facility to open.