By Jalen Maki
Tomahawk Leader Editor
MERRILL – The Lincoln County Board of Supervisors is expected to weigh numerous options regarding the future of Pine Crest Nursing Home in Merrill.
Pine Crest, which has operated in Merrill for about 70 years and is owned by Lincoln County, has experienced financial losses in recent years, prompting the board to form a committee to explore the nursing home’s viability and the county’s options moving forward.
During its meeting at the Lincoln County Service Center in Merrill on Tuesday, March 21, the board heard a summary of a report developed by the Pine Crest Ad Hoc Committee.
Formed in June 2022, the committee was tasked with reviewing the nursing home’s current and potential future financial obligations, the use of the building and grounds and the agreement between Lincoln County and North Central Health Care (NCHC). Lincoln County transferred management responsibilities to NCHC in 2019.
The committee was also directed to prepare a report on its findings and provide the board with recommendations on areas for improvement regarding the county’s overall position concerning Pine Crest.
The committee is made up of District 1 Supervisor William Bialecki, District 15 Supervisor Marty Lemke, District 18 Supervisor Ken Wickham, District 20 Supervisor Angela Cummings and District 22 Supervisor Greg Hartwig.
Wickham, who serves as chair of the committee, walked the board through a summary of the nearly 170-page report, released on Tuesday, March 21.
The first topic Wickham discussed was the past and present use of the Pine Crest building and grounds.
The original Pine Crest facility was constructed in the mid-1950s. In several phases over the following decades, the nursing home gradually moved to its current location on E. 6th St. in Merrill.
Wickham said that according to records, Pine Crest originally had 180 bed licenses. The Pine Crest Board of Trustees scaled that number down to 160 in 2019. Two years later, another reduction brought the number of bed licenses down to 120, where it stands today.
The nursing home is currently occupied by an average of 85 residents. Wickham said Pine Crest’s occupancy has decreased in recent years, noting that the facility had as many as 150 to 160 residents prior to about six years ago.
Wickham also highlighted the county’s financial obligations regarding Pine Crest.
Lincoln County is responsible for about $1.5 million in recurring expenses that the county can plan and budget for each year. Among these costs are the roughly $440,000.00 provided from the tax levy and the approximately $300,000.00 in salaries and fringe benefits for maintenance staff assigned to Pine Crest.
Each year through 2038, county is also responsible for $630,000.00 for debt service owed for existing bonding on loans on Pine Crest, Wickham said, adding that the current principal on Pine Crest is just over $8 million, with about $2 million interest.
When discussing non-recurring expenses, Wickham said Pine Crest is in need of “significant maintenance.”
In 2019, Lincoln County contracted with a private consultant to conduct an assessment of the nursing home, which found that between $8 million and $11 million in maintenance will be necessary over the next ten years. The facility’s windows, HVAC systems and parking lot are among the areas in need of work.
Another non-recurring expense Wickham made note of is the roughly $1.2 million that NCHC requested from Lincoln County in February to cover losses at Pine Crest.
A Wednesday, March 22 release from NCHC said the losses were due to “the State of Wisconsin’s changes in how Supplemental Payments are distributed, additional reductions in the Certified Public Expenditure (CPE) payments, as well as a substantial reduction in Medicaid Supplemental Payment Program (SP).”
NCHC Executive Director Gary Olsen said in the release that Pine Crest would have ended 2022 with a gain had those revenue payments from the State not been altered or reduced.
In a letter to Governor Tony Evers dated Friday, March 17, Board Chair Don Friske asked the governor to “direct the Department of Health Services to reallocate the Supplemental Payment or in some other way make (Lincoln County) whole for the 2022 and 2023 annual county budget cycles.”
Challenges, alternative solutions
Wickham also pointed to several “challenges” Lincoln County faces regarding Pine Crest, as well as alternative solutions for the nursing home’s future.
Among the challenges Wickham noted were costs for ongoing and needed maintenance at the 30-year old facility, a declining population at the nursing home and staffing shortages within the healthcare industry.
Wickham also walked the board through several potential actions the county could take moving forward.
Wickham noted that the committee does not endorse or recommend any of the alternatives, and “none of them are mutually exclusive to themselves.”
“It really boils down to two alternatives – either Lincoln County continues to operate Pine Crest as a county-owned nursing home, or we don’t,” he stated.
Wickham touched on an array of options that could be on the table if Lincoln County chooses to continue its ownership of the facility, including exploring ways to cut costs and generate additional revenues, pursuing a management arrangement with an entity other than NCHC and downsizing the facility.
In the event that Lincoln County were to cease its operation of Pine Crest, Wickham said the county could consider finding alternative uses for the facility or selling the property.
Wickham also suggested the option of holding a referendum to allow Lincoln County voters to decide whether or not the county should continue to operate Pine Crest. A potential referendum could ask taxpayers for $3 million to $4 million per year to allow the county to continue its operation of the nursing home, Wickham estimated.
Next county board meeting
Friske said with the committee’s findings now provided to the board and several options proposed, Supervisors can take time prior to the board’s next meeting to review the report and formulate ideas regarding Pine Crest’s future.
“I don’t have any preconceived ideas on where this board will go, but I am looking forward to a very lively discussion at our next county board meeting,” Friske stated.
The next meeting of the Lincoln County Board of Supervisors will be held at the Lincoln County Service Center, 801 N. Sales St., Merrill, on Tuesday, April 18 at 9 a.m.