Written by Roberta Biros (a.k.a. “Roberta in Mercer”)
Before the idea of government bailouts was even in vogue, former Mercer County Commissioners Ken Seamans, Gene Brenneman and Olivia Lazor were way ahead of the curve when in 2002 when they decided to guarantee a bond for the poorly managed Woodland Place Nursing facility. A County guaranteed bond was issued with no apparent strings attached, and now Mercer County residents are being forced to pay for it.
First, let us review the facts . . .
- Mercer County sold the county owned home to a private firm in 1998 for $3.5 million. At that time, the proceeds from the sale were put into an escrow account.
- In 2002, the company running the home found themselves in need of money for upgrades to the facility, and they went to the county to back the loan. An $8.8 million county guaranteed bond was issued.
- In 2004, the nursing home started to have problems and they were unable to make the bond payments without the assistance of the County. Mercer County started pulling money from the original escrow account to cover the bond payments.
- In 2008, the County has spent most of the original proceeds from the sale and they are close to having to dip into the general fund to continue to make payments on behalf of the home. There is still a $6.2 million balance that will carry through until 2013.
- In March of 2008, independent consultants accessed Woodland Place and stated “the home is unable to stand alone in supporting its outstanding debts”.
- This week, County Commissioners announced a 2-mill property tax hike. 1.5-mill of the increased is earmarked for future bond payments for Woodland Place (with the remaining .5-mill for increased County costs).
Now, let’s talk about the real story behind the facts . . .
In much the same fashion as “unqualified buyers” attempting to get a home mortgage, Woodland Place needed the County to guarantee the loan in 2002 because they were not qualified for the loan on their own merit. That was the first sign that the loan shouldn’t have been guaranteed in the first place. Unfortunately, the nursing home got what they asked for regardless of their inability to repay the loan, and County residents have been on the hook ever since.
To the apparent surprise of County Commissioners, the nursing home failed to hold up its end of the bargain, and County tax payers are ultimately responsible for the bailout. The county has made numerous payments on behalf of the home, but the company running the home seems to get off scot free each time a bond payment comes due.
—–REALITY CHECK—–
In an attempt to apply some common sense to a nonsensical problem, I have a hypothetical question for anyone out there with a home mortgage (so this probably applies to many of you) . . .
If you knew that if you failed to make your mortgage payment someone would make it for you with no penalty / repayment / or additional cost whatsoever, would you EVER make your mortgage payment?
Your answer? Yea, me neither.
That is the sweet deal that they folks at Woodland place have for themselves, and they aren’t complaining or trying to get away from the situation.
—–END REALITY CHECK—–
First, I’m curious as to why there weren’t a “million and one” strings attached by the County when the bond was first approved, but I’m amazed that in six years nothing more has been done. Even more unfortunate is the fact that County Commissioners have failed to come up with any type of plan to deal with this obvious financial disaster. Instead, they have chosen to sit back and make payments for the nursing home from the County’s dwindling coffers.
Most interesting to me is the obvious sign of confidence shown by the current County Commissioners when the announced the most recent 2-mill tax increase on its own merit . . . with no other plan in place for the future of Woodland Place or any future repayment of the funds. The Commissioners have failed to put together ANY form of presentable plan for Woodland Place since 2002. To give the County taxpayers a tax increase with no plan to back it up in 2008 is unforgivable. It seems like the ONLY plan on the table at present is to allow things to go on as “business as usual” for Woodland Place, and the County will simply plan on making every single payment until the bond is repaid in 2013.
In October of 2007 the three current County Commissioners, Brian Beader, Ken Ammann, and John Lechner ran on the platform of addressing Woodland Place. During a debate at Penn State Shenango in Sharon the three Commissioners made the following statements:
Brian Beader:
“I want to bring closure to Woodland Place because it bothers me.”
Ken Amman:
“We should look into eliminated the last 2-mill (tax) increase or at least lowering it.”
John Lechner (stated that if the nursing home couldn’t be turned around, he’d):
“Bite the $5 million bullet” and sell the home.
It is obvious that there are big problems here that need to be addressed. The Commissioners had big ideas during their campaign, and now is the time to address the problems head on.
A year after the election, this is their opportunity to address Woodland Place, and the only solution that they can come up with is a tax hike? No mention of discussions with Woodland Place administrators to step down, no push to find a buyer or new management team for the failed business, no plan to move in and take over the books to find out where all the money went, no talks of foreclosure, no deal to lease the nursing home to another company, no scrubbing of the budget to cut costs and get back on track? The residents of Mercer County have a right to know where there money is going, and the County Commissioners have a responsibility to safeguard that money. There is no transparency here (by the County Commissioners or by Woodland Place), and the efforts that have been displayed by the Commissioners seem weak at best.
I’ve said it before, and it is worth repeating . . . if Mercer County Commissioners are in over their heads, they need to step up and publicly admit it. Perhaps this tax increase and lack of a publicly presented plan is their way of saying “we have no idea what to do”.
To read my other blog posts regarding Woodland Place, go to:
http://mercerconservatives.blogspot.com/search/label/Woodland%20Place
As always, just my opinion.
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Mercer County Conservatives 