| 10/20/2009 9:39:00 AM | Email this article • Print this article |
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| COUNTRYSIDE CO-OP? — An informational meeting Monday aimed at gauging community and staff interest for turning Jefferson County’s skilled care nursing home into a worker-owned co-op drew a standing-room only crowd, with attendees spilling out the community meeting room and into the hallways. Pictured above, Jefferson County Supervisor Greg David gives an introduction. — Daily Union photo by Pam Chickering Wilson. |
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Countryside co-op option spurs interest
By Pam Chickering Wilson
Union staff writer
JEFFERSON - After two hours of presentations and questions Monday evening, the standing-room-only crowd at Countryside Home raised every visible hand in favor of looking further into making the county home into a worker-owned cooperative.
Were that eventually to happen, the skilled care nursing home would become the first in the United States to transform into a co-op, although there are models of related businesses - such as home-care organizations - making the transition.
Billed as a small gathering of stakeholders interested in Countryside's future, Monday's informational meeting drew 85-plus people, including Countryside employees, county and community leaders, family members of Countryside residents and county residents interested in preserving local ownership of the county home.
The gathering was hosted by the nonprofit Town and Country Resource Conservation and Development Council Inc.
After the failure of a referendum last month that sought to raise the county tax levy, the Jefferson County Board of Supervisors made good on its promise to begin the process to sell Countryside Home.
Although state law prohibited the county from specifically linking the sought-for revenue increase to Countryside Home, the board previously had made it clear that it would consider the September vote a referendum on whether the county should continue to operate Countryside.
Jefferson County administrator Gary Petre told the audience that revenues are not meeting expenditures at the county nursing home, and the county annually takes $3.1 million out of its tax levies to cover this operating deficit.
"This is nothing new for Countryside," he said. "In fact, the deficit used to be higher, as Countryside administrator Earlene Ronk has taken steps to narrow that gap since she took her position in 2003."
Meanwhile, Petre said, the county projects a $2.9 million overall budget shortfall in the coming year - for all county costs, not just Countryside Home. Thus, the board decided that, were the referendum rejected, it would move forward to sell Countryside to a private entity.
"The county is proceeding in the direction given by the board," he said.
"The sale of Countryside would allow us to pay back the general fund," Petre added, although he noted that the county still owes $3 million on the new facility, built in 2003.
Even with the sale of Countryside, if the economy does not pick up, Petre said, the county could find itself in economic straits in 2013 and 2014, as its revenues from investments have dropped significantly while other costs have risen.
When Petre paused for questions, a woman in the audience said that she considers Ehlers and Associates' financial predictions for the county - which came at a pricetag of $14,000 - to be on the conservative side. The audience member said that she expects the economy to pick up in the next year and be well on its way to recovery by the next year.
Petre said that Ehlers is considered to be the expert in the area of providing financial advice for municipalities and counties, and while its estimate might be conservative, that is safer than predicting big gains that are not realized.
"The county has been using its fund balance for the last three years," Petre said. "We can't continue to do that."
Also speaking was Margaret Bau, a cooperative development specialist with the United States Department of Agriculture's Rural Development Program in Wisconsin.
Bau explained to the mostly novice crowd what co-ops are and described the different types that exist.
She noted that cooperatives are businesses, too, but unlike a corporation, which must produce income for its shareholders, co-ops are member owned and controlled, with profits or benefits going back to the members (the workers, community or people who use the services).
Decisions in a co-op are made by democratic vote, with each member getting one vote.
"A co-op exists to provide good quality goods and services, not for a return on investments," she said, noting that another benefit is that the ownership and decisionmaking in a co-op remains local.
There are 29,000 co-ops in the United States, Bau said, and 850 in Wisconsin. This state is second only to Minnesota in the number of cooperatives.
Research indicates that although co-ops take longer to set up than traditional businesses, their ultimate survival rate is twice that of private sector businesses, Bau said.
She quoted statistics from a Quebec study showing that 62 percent of co-ops existed after five years versus 35 percent of traditional businesses, and 44 percent of co-ops existed after a decade, compared to only 20 percent of traditional businesses.
Dennis Heling, executive director of the Jefferson County Economic Development Consortium, said that the first step would be to do a SWAC analysis (which stands for strengths, weaknesses and concerns), and to assemble a steering committee of community leaders and experts in the field to determine the feasibility of a Countryside Home co-op and what benefits it could bring to the county.
Ronk then stepped up to the podium to share facts and statistics about how the county home runs today.
"It's not Countryside's fault the county's in this position," she said. "The recession has done this county in, and selling this facility has become the convenient answer."
Ronk called the possibility of a co-op an "exciting opportunity for community members to have a stake" in keeping the county home locally owned and operated.
Other counties are finding themselves in the same position. Of Wisconsin's 72 counties, 39 of them own a total of 42 nursing homes. Four of these counties held referenda this fall asking voters for more money, targeted at keeping their county homes open. Two of these passed and two failed, including Jefferson County's.
The crux of the problem comes in the gap between the costs to provide care for the neediest of patients and the reimbursement the county home receives from the state and federal governments for providing that care, Ronk said.
Countryside receives $151 per day for Medicaid patients, compared to its $295 cost for caring for those patients. A few private-pay patients cover the costs of their care, and the rest are Medicare patients for whom the nursing home receives $331 per day.
Another nursing home operator in the audience, who did not give her name, said her business is "on the verge of shutting down in the next few months" due to that disparity. Her facility is 80-percent Medicaid beds, she said.
Looking back over the county home's 155-year history, Ronk said, "our mission in the past has been to provide for the poorest of the poor, the sickest of the sick."
Though Countryside houses some individuals from outside the county, Ronk said, "We have given priority preference to Jefferson County residents because of the support we get from the county."
If the county home were sold to a private entity, it is likely that owner would "dump" most of the Medicaid beds in favor of more profitable patients. Current patients would continue to be cared for, but in the future, this would leave the sick, elderly, indigent population with no place to go in the county.
"Perhaps a bed can be found in Wausau," Ronk said when asked what would happen to these people. "Maybe they'd have to be cared for by family members at home."
If a Minneapolis corporation buys Countryside, the administrator said, (as is one possibility) that corporation would be motivated to cut costs, not only by cutting low-reimbursement beds. It probably also would result in staff cuts, benefit cuts, and a lowering of the level of care.
Meanwhile, any profits that company might make through these cuts would go back to Minnesota, not Jefferson County.
Attendees had lots of questions for Ronk. Asked what would happen if a private company bought the county home, she said it likely would get rid of 22 full-time staffers, which is the amount the county provides over what is required; cut certified nursing assistant staff pay, cut health insurance benefits, not offer the state retirement plan, up Medicare beds and cut Medicaid beds. As a result, she said, staff turnover likely would rise.
"Our average staffer has been here more than 11 years," Ronk said, noting that longevity of employees is one of the major indicators of the quality of care a nursing home provides.
The transition to a co-op could result in some cuts, particularly the loss of the state retirement package, Ronk said. However, the profit motive would not cut into the nursing home's operating funds, and any profit it made would stay in the county rather than go to a corporation in another state.
"What if you get about halfway through the process (of setting up the co-op) and the county sells the facility?" one man asked.
Ronk said that county officials have said they would consider the co-op option among any other proposals they receive. In the meantime, if the idea generates a lot of support and planners can show significant progress, she would hope the county could slow down its move toward a sale to give co-op organizers time to work.
"If the workers don't buy into this, it won't happen," said Supervisor Greg David, who represents rural Watertown and also is the sustainable issues team leader of the Town and Country Resource Conservation and Development Council Inc. "This would be their co-op."
A man in the audience remarked, "Time is short. Those who favor this option really have to make it their No. 1 priority, because the county board has its directive."
Asked how audience members could help this process along, David advised people to educate themselves about co-ops, to call their county board members to express their support of the idea, and to talk to Countryside workers.
Another audience member wanted to know whether co-ops are tax-exempt. Bau said they are not, but they can be organized as a nonprofit organizations.
Asked how Countryside employees have received the idea, Ronk said that they seem to be very interested in the possibility. In addition, she said, she brought it up at the last meeting of Wisconsin's county nursing home association, and it is extremely interested in what happens in Jefferson County.
"They're getting our notes," she said. "They're getting our minutes."
The final speaker, Bill Moberly of the Association of Federal, State, County and Municipal Employees union's Council 40, said when he first heard of the idea, he wondered where the money would come from. But the enthusiasm and determination he has seen so far convinces him that there must be a way.
"From what I've seen thus far, people are committed to finding answers to their questions and finding out how to make this thing work," he said.
"This is a serious issue," Moberly continued, commending Ronk for her efforts to cut Countryside's revenue requirements from the county during the last several years.
"And yet, no other county department stands here today," he said. "Who goes next? Should we shut down the courthouse? The Highway Department? I don't think that's what people in Jefferson County want to do."
Moberly said the message concerned community members must take to county planners is "slow this train down" to allow the co-op planners to seriously look into this option to save this facility and their jobs.
County Supervisor Bill Molinaro said he came to the meeting hoping to hear just how Countryside could be transformed into a co-op, but instead the idea seems to be in the very formative stages.
"I think co-ops are a wonderful idea, but I haven't heard any answers about where the money's going to come from," said Molinaro, who serves as vice chairman of the county Finance Committee.
He said he'd be willing to give it some time, but not too much.
"We lose $11,000 per day," he said. "The longer we wait, the deeper we go into debt."
County Supervisor Jim Mode said that as a person involved in agribusiness, he has had exposure to many co-ops over the years and he finds them to be a viable business model.
"We've got to do a complete financial analysis and build a business model to find out exactly what it's going to take," Mode said.
To close out the meeting, David asked who in the audience felt that planners should "throw in the towel" and stop looking into the feasibility of a Countryside co-op. From this reporter's perspective, no visible hands were raised.
He then asked who thought that planners should continue to pursue the idea, and every visible hand went up.
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