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HomeMy WebLinkAboutNorthern Lights Special Study Committee - Agenda - 8/21/2023 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 Monday, August 21, 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: 245 837 055 244 Passcode: icDeq5 Download Teams | Join on the web Or call in (audio only) +1 715-318-2087,,272676342# United States, Eau Claire Phone Conference ID: 272 676 342# 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 August 10, 2023 4) Public Comment: Limited to 3 minutes per person, 15 minutes maximum 5) Discussion and Possible Action Regarding Finalizing the Special Study Committee Report to the Bayfield County Board to be presented on August 29, 2023. 6) Reports: a) Capital Projects b) Parking Lot c) Roof 7) Adjourn 1 Minutes of the Northern Lights / Bayfield County Special Study Committee Meeting 1:30pm, August 10, 2023 Meeting was held Remotely through Microsoft Teams and in person in the Bayfield County Emergency Operations Center, Washburn, WI Members Present: Jeff Silbert (virtual), Mark Ehlers, Mary Dougherty (arrived late), 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, Rene Eastman-Vice President of Financial and Regulatory Services for Leading Age Wisconsin Called to order at 1:32 p.m. by Committee Vice-Chair, Mark Ehlers Introductions: Introductions were made. Reading of Purpose Statement: Dougherty read the purpose statement to the board. 1:34 p.m. – Marry Dougherty joined the meeting. Minutes from July 24, 2023: Motion by Avol-Law, seconded by Silbert to approve the minutes for the July 24, 2023 Northern Lights / Bayfield County Special Study Committee Meeting. Motion carried. 1:35 p.m. – Dougherty took over the meeting as chair. Public Comment: None. Review Suggestions from Collaboration Committee and 2023 Financial Update: Abeles- Allison reviewed the Findings and Opportunities document with the committee. Silbert asked if the rewrite of the Northern Lights lease could be included. Ehlers informed the committee that the facility is anticipating a $900k-$1 mill shortfall by the end of FY2023. Ehlers explained that the facility has spent all of the loan money received from the county, the IRS reimbursement, and will need to max out their line of credit by the end of the year. Eastman explained that Medicaid reimbursements to nursing homes are based on cost reports. Discussion took place regarding reimbursement rate impacts on Northern Lights. 2 After discussion, the committee agreed to add the following items to the findings portion of the document: • An annual operational budget shortfall of $1,000,000 is projected for 2024 and in the future. • An annual capital improvement budget shortfall of $300,000 is projected for 2024 and in the future. • In spite of best intentions, it may not be possible to save Northern Lights. After discussion, the committee agreed to add the following items to the opportunities to improve long-term financial outlook of Northern Lights portion of the document: • The above options need to be explored to see what financial impacts they have. • Item 7: change the word appropriately to better. • Northern Lights should explore is 501c3 fund raising and development plans. • Bayfield County could consider a request for assistance from Northern Lights to help analyze the above from a business plan perspective. • The county should explore a county operated nursing home with a management team. Discussion took place regarding the possibility of Bayfield County taking over ownership of the Northern Lights licensure and contracting out the management of the facility. Special Study Committee Recommendations to the Northern Lights Board and Bayfield County Executive Committee and Plan to Finalize Special Study Committee Report: The committee agreed to maintain the presented format for the final report and agreed that the county be responsible for asking the auditors if the possibility of moving to a county-owned nursing home was feasible. Capital Improvement Listing: Ehlers reported that he was still waiting on some final estimates. Northern Lights Board Development: Dougherty suggested the Northern Lights Board communicate with Pederson regarding board education materials. The committee agreed. Next Meeting Topics: • Capital Improvement Listing • 2023 Financial Update • Reviewing and possibly approving the final draft of the report to be presented to the Northern Lights Board and Executive Committee Next Meeting Dates: • Monday, August 21, 2023 at 1:30 p.m. (EOC) Meeting adjourned at 2:59 p.m. Respectfully submitted by Paige Terry. Northern Lights Study Committee Findings and Opportunities FINAL REPORT 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 debts within the next 10 years. 4. Bayfield County has provided supplemental assistance to NL over the last several years including: a. reducing debt service payments b. providing loans to address needs. c. providing emergency funding for working capital d. providing support to secure CBDG-CV infrastructure funding to upgrade HVAC system. e. providing a portion of County ARPA funds to support telephone system, generator, sewer, 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. 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 that are unable to pay the full cost. b. Both the County and NL acknowledge staffing shortages, and unmet training and equipment needs that hinder service delivery. 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 a nursing home facility in Bayfield County. 4. New State Legislation in 2023 will increase nursing home reimbursement formulas to align more closely with the true cost of service provision. This should have a positive impact on a nursing homes financial stability. 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 the same as at present. 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. The NL facility deferred maintenance projects in need of attention. Over the next five years approximately $400,000 per year will be required, this includes approximately $1 million for roof replacement costs. 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. 8. An annual operational budget shortfall of $1,000,000 is projected for 2024 and in the future. 9. An annual capital improvement budget shortfall of $400,000 is projected for 2024 and in the future. 10. Despite best intentions, it may not be possible to save NL. 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 will demonstrate sound fiscal awareness and management in their operations through evidence of long-term and short-term planning and financial forecasting. 2. NL will demonstrate achieving established nursing home and assisted living benchmarks in Wisconsin. a. This will 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 formal request for financial assistance by the NL Board to the County should be submitted no later than August 25 each year. 4. Northern Lights will demonstrate adequate planning to address deferred maintenance and long-term capital improvements. a. NL will maintain the County facility. b. NL will provide a complete, detailed, prioritized five-year capital improvement plan c. 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 if required. 5. NL is responsible to ensure the facility is adequately utilized and all additional possible revenue streams are pursued. All parties shall work to ensure that new revenue streams and or county assistance do 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 costs. 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. NL could consider diversifying services by adding a dementia care facility as part of their operations. These services are in high demand across the region and include higher reimbursement rates. 4. 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. 5. NL could explore partnership agreements with area care facilities (hospitals) to reserve beds, creating a win-win for both NL and area facilities. 6. NL could engage in focused Board development and governance training to ensure a highly effective Board with capacity to better support and provide oversight to NL’s Management team. 7. NL should further explore its 501c3 fund raising and development plans. 8. The above options need to be explored to see what financial impacts they have. 9. Bayfield County could consider a request for assistance from NL to help analyze the above options from a business plan perspective. 10. The County should explore a county operated nursing home with a management team. 11. WIPFLI suggested a financial planning document that would create and compare benchmarks that could include a status quo financial model and budget for the next several years. A proposal from WIPFLI will be available soon. 12. Discussions with Health Dimensions Group out of Minneapolis (recommended by LeadingAge) reviewed specialized management services after an initial assessment is completed. The services could range from basic to full management assistance for up to 18 months. A proposal will be available soon. NORTHERN LIGHTS SHORT / LONG TERM CAPITAL IMPROVEMENT PLAN (LISTING) August 21, 2023 Capital Improvements: 1-5 years • Window replacement: $168,000 (covered half in part by ARPA?) $85k. • Custom Carpet: $59,000 (What areas?) • Parking lot repair? ($100K, estimate) Highway Prep., contractor chipseal. • Sidewalk repair: $17,000 • Kitchen cooler, walk in. $30k • Tunnel/New building basement repair - Dig up and reseal basement/tunnel - Previous quotes approximately $180,000. (Is this Northern Lights Cost?). • Control Update on upstairs air handlers - 3 air handlers to be updated - Previous quotes at roughly $15,000 per unit, total $45,000 • 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 $1,000,000: 2024/2025 GRAND TOTAL: $1.6 MILLION / 5 years = $300k per year. Bayfield County Highway Department Northern Lights Pavements Analysis 8/9/2023 Overall, the pavements at Northern Lights Services is very aged and showing severe deterioration. The area was broken into three areas consisting of the Visitor’s Parking Area, the Employee Parking Area and the Employee Parking Access Road. Visitor’s Parking Area This area showed many forms of deterioration to include unravelling, cracking, potholes, deflection settlement, and delaminating. Due to the relatively light loading of this area a combination of sweeping, crack sealing, pothole patching, and seal coating the pavement is recommended. Severe Potholing Severe Potholing Cracking and Unraveling Settlement and Unravelling Unraveling and Cracking Unraveling and Cracking Delamination, Unravelling, Cracking, Potholing Employee Parking Area The Employee Parking Area also showed many forms of deterioration to include unravelling, cracking, potholes, and deflection settlement. Due to the relatively light loading of this area a combination of sweeping, crack sealing, pothole patching, and seal coating the pavement is recommended. Employee Parking Area Employee Parking Access Road The Employee Parking Access Road was in the best condition of all pavements but still shows signs of aging that can be remedied. It is recommended that the Access Road be carack sealed and seal coated. Recommendations All areas of pavement at Northern Lights Services are aged and exhibit many forms of deterioration. These can be repaired to bring additional lifespan to these areas, and these should be made quickly to prevent further rapid deterioration. Techniques mentioned include: Sweeping – This can be easily accomplished by hand or using a power broom to remove debris from the surfaces and should be done prior to any other techniques. Crack Sealing – A primary need in pavement maintenance is to seal the surface and prevent water from infiltrating below the pavements. When this occurs the gravel and subbase is weakened and easily damaged from loading. Pothole Patching – This process cleans out the debris from potholes and places patching material to make the surface level and seal it from water intrusion. There are a few larger areas that have lost all the pavement but with the light loading patching is a technique that will provide adequate service life. Seal Coating – AS pavements age they develop small cracks and aggregates in the pavement become dislodged and are removed from the pavement. This is caused by oxidation of the asphalt and is repaired by applying a seal coat. There are various methods to complete this including a sand seal or a chip seal. Both have their advantages and it is recommended these surfaces be treated with a Chip Seal process.