Amid staff opposition, DeKalb County Board set to vote on $8.1M sale of ailing nursing home

SYCAMORE - An $8.1 million sale of the struggling DeKalb County Rehabilitation and Nursing Center could go before the DeKalb County Board as early as Wednesday, although nursing home employees continue to rail against it.

Employees and members of the American Federation of State, County and Municipal Employees No. 3537, the union which represents county nursing center staff, rallied against a privatization of the center Wednesday. During the County Board’s Committee of the Whole meeting, members held signs that said “Save our nursing home” and “No to privatization”, a message staff have directed at the county board for months. Selling the nursing center to a private buyer, they feared, could mean lost benefits for long-time union employees and lowered standards of care for patients, several members told the Daily Chronicle in an interview after the hourslong meeting this week.

Evanston-based Illuminate HC LLC has offered $8,150,000 for the struggling nursing home at 2600 N. Annie Glidden Road in DeKalb, which sits more than $7 million in the hole. Illuminate HC is a health care facility management company that states its speciality is skilled care, according to its website. The County Board is expected to vote on the sale Wednesday. A vote of 2/3 majority of the County Board is needed to push the sale forward.

In line with months of debate, more than a dozen community members and nursing center staff filled the Legislative Center this week to appeal to the county board in opposition of a sale.

Chuck Coulter, a maintenance worker at the DeKalb County Rehab and Nursing Center and union president of AFSCME No. 3537, said he’s concerned that the sale process has been rushed at the county level. He urged the board to reconsider a sale and give the nursing home a chance at righting financial wrongs.

He said he believes the board should put the matter up for a referendum instead, to allow the public to weigh in.

“We’re not just the nursing home, we are the foundation of what DeKalb is,” Coulter said. “[Ownership changes] would be telling us that all of our hard work was for nothing. It would be telling us that our work to love our residents now has a dollar sign attached to it. That instead of thriving for great quality of care, our quality of care will be dependent on what the bottom line is. And you can’t put a number on people.”

Diane Chappell, who works in the DeKalb County Clerk and Recorder’s Office, said her mother, Rita Hammett, has lived at the county nursing home for nearly seven years.

“During the pandemic it was a scary time for all of us,” Chappell said. “The staff did wonderfully, they got us through it, got to see mom. Six and a half years ago when we had to decide what to do with mom...We asked her where she would like to go and with pride she said the county. ... She’s doing amazing. The staff there is phenomenal, nurses, CNAs, social services.”

Despite the pleas, the County Board’s executive committee moved forward with a 6-3 vote to put the sale up before the whole County Board as early as Wednesday. Board members Rukisha Crawford, Craig Roman and Suzanne Willis voted against placing the decision up for a vote.

County officials have said the nursing home isn’t financially sustainable on its own anymore. A multi-million dollar expansion project undertaken in 2018 remains unfinished at the facility, and could cost thousands more if completed, officials said in April. In August 2020, the county board approved a sale of $13 million in bonds to cover the nursing home’s expansion, meant to accommodate what officials said at the time was a growing population and expand the facility’s transitional care unit capabilities. The bond is a 30-year deal, averaging $661,500 the county is liable to pay, or $19.8 million for the next three decades.

Now, years later amid lowered resident numbers and financial constraints, and what employees have alleged is years of mismanagement, the nursing home expansion may have been a bad idea, said board member Bill Cummings, a Republican representing District 8.

“We could debate about whether the expansion project was a good idea in 2020,” Cummings, who wasn’t on the board in 2018, said Wednesday. “It probably was not. ... A lot of this is 2020 in hindsight.”

For the past 24 years up until Dec. 31, the nursing center was run by St. Louis-based Management Performance Associates, a firm that was under county contract. The firm, responsible for overseeing daily operations and creating the facility’s annual budget for county board approval, declined to renew its contract in December.

Cummings served on the nursing center’s operating board before it was dissolved in December.

“I get very angry when I think about some of the things the management company apparently was doing,” Cummings said. “I was on that operating board when it was dissolved and I can tell you, they were not providing us with adequate information. ... Whether it was being willfully withheld, which I suspect, or whether it was accidental. I don’t think it was accidental.”

The sale offer

Ray Giannini, senior managing director for Marcus and Millichap, the county’s hired consultant who marketed the nursing facility, said he was initially approached by eight interested parties for the sale. However, after consultation and what he said was the parties learning more about its financial plight, only Illuminate put its offer in writing.

The nursing home has been on the market since late April, when the board elected to begin the sale process.

“The marketing process produced two tours,” Giannini said. “A lot of buyers didn’t physically go inside.”

County Board member Scott Campbell, a Democrat representing District 7, asked Giannini to show the county board in full Wednesday all offers proposed to purchase the facility.

“Spell it out for us, you can tell us why you think they’re bogus, or why you think they’re non-viable, that’s great,” Campbell said. “But in the interest of transparency and protecting the taxpayers’ dollars, I think we should see the dollar amounts and your narrative on why or why not the offer should move forward.”

The non-binding contract would also have stipulations, including that the board could later decide to back out of a deal in the future if they so choose, said DeKalb County Administrator Brian Gregory.

If a sale contract is signed by the county board, Illuminate would be expected to pay $20,000 in upfront, non-refundable costs as a showing of good faith, officials said. The county government would still be liable for the $7.3 million debt hole created by the nursing center, and the expansion bond debt.

If the County Board approves the $8.15 million sale, 3% of the sale revenue will go to Marcus & Millichap for commission, Gregory said. That leaves about $7.9 million which Gregory proposed the county use to pay off the nursing home debt, which totals about $13 million.

According to DeKalb County documents, Illuminate operates 11 skilled nursing facilities in Michigan, and is in the process of acquiring 10 additional facilities in Ohio. Records report that the facilities average about 70% Medicaid patients. According to county documents, CNA staff under Illuminate-owned facilities are offered $17 per hour.

Keeping it under county control

Campbell also presented financial reports Wednesday which outlined how the facility could right-size its budget issues by 2024 if it remained under county control.

According to DeKalb County documents, the proposal includes a five-year look at what it would take to keep the facility under county control. Officials said the proposal wasn’t a recommendation for or against a sale, but rather a look at financial realities and how to address them.

Proposed solutions include reducing nursing center staff by 21.5 full-time equivalent positions over a 12-month period, to allow for the reduction of staff primarily through attrition. A 3% increase in salary ranges was also included to adjust for inflation and bargaining.

The report looked at 2020 and 2021 budgets for the facility, five-year projections, a staffing model taking into account agency-provided workers, and scenarios for budget projections such as if a 0.1% tax levy were to be used to offset budget constraints.

Despite previously suggesting it, the County Board in March declined to move forward with a proposed 2022 ballot referendum that would have asked voters to consider a tax levy to help the facility’s money problems.

At 127 beds filled currently, the nursing center would need to get census up to 140 to break even, according to the report, which projected a growth of one resident per month.

The nursing facility faces millions in debt caused by what officials have said was years of mismanagement, delinquent billing, falling resident numbers and too heavy a reliance of agency-staffed workers who get paid more than county employees.

Over the past year, the County Board has grappled with the financial future of the facility. In January, the board approved a $10,000 contract with Chicago-based consulting firm Marcus and Millichap to help determine what options lay in front of them to address the nursing center’s longevity.

Since county officials said they first learned about the nursing home’s financial struggles in March 2021, the board has committed more than $7.3 million in financial assistance nearly monthly to the facility since, to offset payroll obligations and other costs the center was unable to pay itself, Gregory has said.

In the year since, the matter has been brought before the county board and committees 24 times.