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HomeMy WebLinkAboutNorthern Lights Special Study Committee - Agenda - 8/10/2023 Bayfield County Administrator 117 E 5th Street, PO Box 878, Washburn, WI 54891 Ph: 715-373-6181 Fx: 715-373-6153 www.Bayfieldcounty.wi.gov Mark Abeles-Allison, County Administrator Kristine Kavajecz, Human Resource Director Paige Terry, Clerk III NORTHERN LIGHTS / BAYFIELD COUNTY SPECIAL STUDY COMMITTEE Ellen Avol-Law Mark Ehlers, Vice-Chair Jeff Silbert Mary Dougherty, Chair *** AGENDA *** Dear Committee Members: This letter is written to inform you of the Bayfield County Executive Committee Meeting scheduled for 1:30pm Thursday, August 10, 2023 in the Emergency Operations Center (EOC). This meeting will be held in-person and remotely. Supervisors and the public will be able to participate in the Meeting in person or via voice either by using the internet link or phone number below. Microsoft Teams meeting Join on your computer, mobile app or room device Click here to join the meeting Meeting ID: 227 079 995 914 Passcode: FvdYAM Download Teams | Join on the web Or call in (audio only) +1 715-318-2087,,661301693# United States, Eau Claire Phone Conference ID: 661 301 693# Find a local number | Reset PIN Learn More | Meeting options Contact Bayfield County at 715-373-6181 if you have access questions or email Mark.Abeles-Allison@bayfieldcounty.wi.gov if during the meeting. Any person wishing to attend who, because of a disability, requires special accommodations, should contact the County Clerk’s office at 715-373-6100, at least 24 hours before the scheduled meeting time, so appropriate arrangements can be made. Notice is hereby given that in the event the standing committee does not have a quorum the County Board Chair or Vice Chair may act as an ex officio member (County ordinance, Chapter 3, section 2-3-1 (c)). Notice is hereby given that a majority of the Bayfield County Board may be present at the meeting to gather information about a subject over which they have decision-making responsibility. This constitutes a meeting of the Bayfield County Board pursuant to State ex rel. Badke v. Greendale Village Bd., 173 Wis. 2d 553, 494 N.W.2d 408(1993), and must be noticed as such, although the County Board will not take any formal action at this meeting. 1) Call to Order and Introductions 2) Reading of Purpose Statement Conduct a comprehensive assessment of the short-term and long-term success strategies for the Northern Lights facility, including a market overview and a review of the non-profit model currently in place. The assessment will also provide a clear delineation of the roles and responsibilities for future Bayfield County and Northern Lights Board collaboration. This work will be completed in time for the Bayfield County 2024 budget considerations beginning August 20, 2023. 3) Discussion and Possible Action, Minutes from July 24, 2023 4) Public Comment: Limited to 3 minutes per person, 15 minutes maximum 5) Review Suggestions from Collaboration Committee 6) Discussion Regarding Capital Improvement Listing 7) Discussion Regarding 2023 Financial Update 8) Northern Lights Board Development 9) Discussion and Possible Action Regarding Special Study Committee Recommendations to the Northern Lights Board and Bayfield County Executive Committee. 10) Discussion and Possible Action Regarding Plan to Finalize Special Study Committee Report 11) Next Meeting Topics 12) Next Meeting Dates: • Monday, August 21 at 1:30 p.m. (EOC) 13) Adjourn 1 Minutes of the Northern Lights / Bayfield County Special Study Committee Meeting 1:30pm, July 24, 2023 Meeting was held Remotely through Microsoft Teams and in person in the Bayfield County Emergency Operations Center, Washburn, WI Members Present: Jeff Silbert, Mark Ehlers, Mary Dougherty, Ellen Avol-Law Members Excused: Others Present: Mark Abeles-Allison-County Administrator, Paige Terry-Clerk III, Carrie Linder-Bayfield County Human Services Aging & Disability Services Manager, Kellie Pederson-UW Extension Community Development Educator, Kim Mattson-Bayfield County Accountant, Michelle Stouffer-Acting Northern Lights Administrator, Autumn Koleski-Northern Lights Human Resources Director, Rene Eastman-Vice President of Financial and Regulatory Services for Leading Age Wisconsin, Peter Radmer-Northern Lights Board Director, Larry Fickbohm-County Board Supervisor Called to order at 1:30 p.m. by Committee Chair, Mary Dougherty Introductions: Introductions were made. Reading of Purpose Statement: Dougherty read the purpose statement to the board. Minutes from July 12, 2023: Motion by Silbert, seconded by Avol-Law to approve the minutes for the July 12, 2023 Northern Lights / Bayfield County Special Study Committee Meeting as amended. Motion carried. Public Comment: None. Purpose Statement: The committee reviewed Abeles-Allison’s dissection of the purpose statement in an attempt to set clear expectations for the committee. The committee agreed on the following recommendations: a) Short-Term Success Strategy: a. The facility obtains financial stability which is defined as the equivalent of one month of cash in the bank. b. The Northern Lights Board and facility management will be stable with a clear understanding of the roles. c. Continued focus on infrastructure repair and replacement. d. Solidification of the facility’s processes while establishing patient accountability. e. Develop a clear planning process. f. Review the recommendations made during the previously conducted Market Assessment and follow up the assessment with a Business Feasibility Analysis. b) Long-Term Success Strategy: 2 a. The facility is financially stable with the equivalent of two months of cash in the bank. b. The Northern Lights Board and facility management will be stable with a clear understanding of the roles. c. Infrastructure is up to date. d. A clear planning process is in place. e. Accounts receivable is down to a 6-week turnaround. f. Establish a Bayfield County / Northern Lights agreement that will establish clarity and accountability to ensure the facility’s success. g. Participate in collaboration with other community members. c) Capital Improvement Listing: The committee reviewed the capital improvement list included in the packet. Stouffer reported that she is waiting on more project estimates to come in. Ehlers informed the committee that he has yet to meet with Bayfield County IT Director, Paul Houck but suspects the entire IT infrastructure will need to be replaced. Dougherty stated she would like to see a complete capital list by the next committee meeting. Silbert recommended prioritizing the list. Ehlers stated he would add the IT improvements to the capital improvement list. Dougherty suggested the committee discuss at the next meeting if the county would be willing to pay for some or all of the facility’s capital improvements. d) Market Study Overview: Dougherty reviewed a brief overview of the market assessment. Silbert asked if the Northern Lights facility would have room on campus for memory care beds and if those beds would be profitable. Stouffer reported she is currently reviewing the requirements for a memory care facility and stated that memory care beds do appear to be profitable. Discussion regarding renovating the Northern Lights facility to include space for memory care residents. Pederson recommended researching the possibility of adding a memory care section to Northern Lights and recommended that a Business Feasibility Analysis be conducted as a follow up to the Market Assessment that was conducted for Northern Lights. e) Non-Profit Model Review: The committee reviewed the current model and compared it to other models. The committee is comfortable with the current non-profit model. Pederson suggested that the county continue its lobbying efforts for the increase in Medicare/Medicaid rates. Suggestions from Collaboration Committee: Abeles-Allison reviewed a list of collaboration opportunities with the committee. Dougherty suggested having a more in-depth discussion of all the opportunities at the next meeting. Northern Lights Board Development: Dougherty recommended adding the item to the Northern Lights Board agenda and dispensing with the item due to time constraints of the meeting. Next Meeting Topics: The committee discussed the following topics: • In-Depth Review of Suggestions from Collaboration Committee • Northern Lights Board Development 3 • 2023 Financial Update • Capital Improvement Listing and County Involvement Next Meeting Dates: • Thursday, August 10, 2023 at 1:30 p.m. (EOC) • Monday, August 21, 2023 at 1:30 p.m. (EOC) 2023 Financial Update: Ehlers delivered a financial update to the committee and reported that the facility will not be receiving the $85,000 that they believed they would for the Medicaid Reimbursement from the year before. Ehlers explained that Northern Lights was also notified that they were overpaid for reimbursements by $19,000. Meeting adjourned at 3:11 p.m. Respectfully submitted by Paige Terry. NORTHERN LIGHTS SHORT / LONG TERM CAPITAL IMPROVEMENT PLAN (LISTING) Capital Improvements: 1-2 years • Window replacement: $168,000 • Custom Carpet: $59,000 • Parking lot repair ? ($100K, estimate) • Sidewalk repair: $17,000 • Kitchen cooler, walk in. ? TOTAL = $375,000 Capital Improvements: 5 years • Tunnel/New building basement repair - Dig up and reseal basement/tunnel - Previous quotes approximately $180,000 • Control Update on upstairs air handlers - 3 air handlers to be updated - Previous quotes at roughly $15,000 per unit • Control update on resident room radiator controls - Previous quotes approximately $2000 per room. - 45 resident rooms plus common area controls - Total $90,000 plus common areas + 15,000 = $105k • Roof Inspection - Potential repair/replace - Inspection this coming week TOTAL = $330,000 Northern Lights Study Committee Findings and Opportunities August 2023 STATEMENT OF FACTS 1. Northern Lights Health Services (NL) operates and holds licenses for a 50-bed skilled nursing facility and a 16-bed assisted-living facility. 2. NL is the only nursing home facility in Bayfield County (County) and provides an essential service to BC residents. 3. The County owns the NL facility. a. The current lease between NL and the County requires NL to make an annual debt service payment of $240,000 and maintain the facility. b. Because of recent modifications to the debt service arrangements, NL is not likely to complete repayment of these debts within in the next 10 years. 4. Bayfield County has provided substantial financial assistance to NL over the last several years by: a. reducing debt service payments b. providing loans to address financial needs c. providing emergency funding for working capital d. providing support to secure CBDG-CV infrastructure funding to upgrade HVAC system and sewer system e. providing a portion of County ARPA funds to support telephone system and window upgrades 5. The current State-sponsored financial reimbursement model for nursing facilities is inadequate to cover actual costs of service provision. 6. Nursing homes across the state are closing due to the persistent challenges in the industry, including inadequate reimbursement rates and staffing shortages. 7. NL continues to face fiscal challenges and staffing shortages. 8. NL is mid-transition with new board members and a new management team. NORTHERN LIGHTS STUDY COMMITTEE FINDINGS 1. The NL Board and Management Team is the sole decision maker with regards to operations, including: a. services and programs b. compensation of staff c. regular expenditures d. consideration of collaborations and partnerships 2. The County has a vested interest in ensuring that a nursing home facility exists within the County to best serve County residents. a. This vested interest provides the basis for partnership between the County and NL. 3. Both the County and NL support an equity-based model that strives to serve all county residents a. Both the County and NL acknowledge the financial realities of an inadequate reimbursement structure that creates a financial hardship for NL when extending services to residents with inadequate coverage b. Both the County and NL acknowledge additional constraints, including staffing shortage, unmet training need and equipment needs that further can hinder serving all residents. c. These realities affect NL’s capacity to serve all residents and must be considered and honored to ensure long-term viability and sustainability of the NL facility. 4. State Legislative modifications in 2023 will increase nursing home reimbursement formulas to align more closely with the true cost of service provision. a. This should have a positive impact on NL’s financial well-being beginning in 2024. 5. The Non-profit nursing home model is a long standing and common model in Wisconsin. a. There is evidence of several non-profit nursing home facilities that partner with municipalities to ensure financial success and adequate service provision to residents. b. It is unlikely that a nursing home facility run as a for-profit corporation would support an equity-based model that strives to serve all County residents. 6. The NL Board is responsible for providing strategic direction and fiscal oversight for the organization, as well as hiring and supporting a strong executive management team. a. A strong management team and supportive Board is critical to NL success. b. Focused Board and Staff development would support a stronger organization and address some of the internal organizational challenges 7. NL has a long list of deferred maintenance projects in need of attention. a. Ensuring timely facility maintenance is a critical interest of the County, as the owner of the Northern Lights facility. b. Planning for Capital Improvements is the responsibility of the NL Board and Management Team. OPPORTUNITIES TO IMPROVE PARTNERSHIP BETWEEN BAYFIELD COUNTY & NORTHERN LIGHTS The following recommendations will support a long-term financially viable partnership between the County and NL. 1. NL must demonstrate sound fiscal awareness and management in their operations through evidence of long-term and short-term planning and financial forecasting. 2. NL must meet industry benchmarks in Wisconsin ensuring proper management is in place. a. This must be supported by regular financial statements and biennial or triennial audits b. An audit for the 2023 year is needed. 3. Should NL require financial assistance from the County, A single formal request for financial assistance by the NL Board to the County should be submitted no later than August 20 each year. a. Mid-year financial requests for assistance are discouraged and should only be for unforeseen emergencies. 4. Northern Lights must demonstrate adequate planning to address deferred maintenance and long-term capital improvements. a. Should NL need financial assistance with Capital Improvements, must provide a complete, detailed, prioritized five-year capital improvement plan i. The plan should be submitted no later than August 20 of each year for consideration and inclusion in the County’s budget process for the upcoming fiscal year. 5. NL is responsible to ensure the facility is adequately utilized and all additional possible revenue streams are pursued. a. New revenue streams or financial assistance from the county shall not negatively impact the opportunity for NL to receive Medicaid/Medicare reimbursements. OPPORTUNITES TO IMPROVE LONG-TERM FINANCIAL OUTLOOK OF NORTHERN LIGHTS Through the deliberative process of the Joint County Northern Lights Study Committee, several opportunities surfaced for possible consideration by the NL Board. These opportunities may positively impact NL’s long-term financial sustainability and viability. 1. Northern Lights could capitalize on unused space by renting it out to an outside entity to increase revenue. 2. NL could consider negotiation with the County to support a co-location of additional senior services (ARDC, etc) in the unused portion of the facility to offset the cost of debt service. 3. NL Could discuss the opportunity to contract for home-delivered senior meal preparation in the County with the ADRC director as a possible revenue generator. 4. NL could consider diversifying services by adding a dementia care facility as part of their operations. a. These services are in high demand across the region and include higher reimbursement rates. 5. Northern Lights could invest in additional equipment and training to serve specialized patient needs to increase revenues, including: a. Investment in equipment necessary to care for residents after bariatric surgery b. Investment in training necessary to care for residents after tracheostomies 6. NL could explore partnership agreements with area care facilities (hospitals) to reserve beds, creating a win-win for both NL and area facilities. 7. NL could engage in focused Board development and governance training to ensure a highly effective Board with capacity to appropriately support and provide oversight to NL’s Management team.