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County to seek matching funds for Heritage employee raises

Kurt Hansen is administrator for Heritage Living Community.

Hubbard County commissioners voted Wednesday to spend $35,000 annually in a program that would seek matching state and federal funds to raise the salaries of Heritage Living Center employees.

The Equitable Cost Sharing for Publicly Owned Nursing Facilities bill passed by the 2010 Minnesota Legislature begins Jan. 1, 2011 and runs 57 months. It would match a county share of funds once with state monies and again with federal funds.

Seventy-five percent of the tripled funds are to be spent for employee wages and benefits. The remainder would go toward operation of the care center. Heritage operates a memory care unit, a skilled nursing care residence, an assisted living community, an independent senior community and a respite care facility.

Executive director Kurt Hansen said the annual payroll is $2.4 million.

If no matching funds are available after the program expires, Hubbard County will fund the raises. Commissioners reasoned they couldn't pull the rug out from under the "hard-working" employees in the future if additional funding sources fell through.

The board called an emergency session to discuss the matter because Heritage officials recently learned about the nursing home's eligibility. It was one of 45 facilities selected in Minnesota.

The county needed to make an irrevocable commitment before Oct. 1.

The money will give the employees raises of 2-3 percent. The expenditures, which were not budgeted for 2011, will come out of the county's "developmental designation" funds.

That fund was created last year when departments rolled their vehicle and large office equipment expenditures into a single fund the board controls.

"This is an opportunity it makes sense to go for," said Hansen.

To sustain the pay raises without outside funds would cost the county roughly $60,000 annually.

Commissioner Cal Johannsen, in voting for the increase, said Heritage employees have absorbed pay freezes in the past and stayed loyal to the facilities when they might have earned more in the private sector.

Past programs sent county monies to the state to get the federal matching funds in what was called an "intergovernmental transfer program."

Counties would then get a dividend of $9,000 to $15,000, Hansen told the county board.

With the new program "all proceeds come back to your care center, not the state," Hansen added.

One way to opt out of the program once the application is filed would be for the county to sell the facility, Hansen told the board. It would not qualify for the funds if it was no longer a publicly held facility.

Board chair Lyle Robinson was initially reluctant to get into the program.

"The state has proven to be an unreliable partner," Robinson said. "They play a shell game, giving us 'new money' when they just took it from us."

But commissioner Cal Johannsen said if the state and federal matches fall through "the whole thing is null and void."

Hansen said over the years Heritage "has not been able to give effective pay increases" and fund family benefit programs.

"There's no such thing as 3 percent," he said. "The pay is less competitive. The staff works very hard."

He said professional nurses at the facilities could make much higher wages working for the hospital.

"The employees took cuts to wait for better days," Johannsen said. Higher wages will turn around through the community, he noted.

Nursing home rates would go up $4.50 per day, affecting primarily the private payers. Most clients are Medicare patients.

The county would pay the state, the state would pay the federal government and the federal government sends the matched funds back, Hansen explained.

"Is the state gonna be skimming here?" Johannsen asked.

"They always have in the past," Robinson said, voicing concerns about the risk of enrolling in a new program that might not get funding.

"We have a tendency to jump at free money."

"There's liability and risk in owning these health care entities anyway," Hansen said. "You hope the state's economic affairs would be in better order" as the program matures.

Commissioner Don Carlson hesitated before voting to go forward. "We're squeezing the departments so much," he said. "It scares me not to do it, too. I don't like the position I'm in."

But in voting their approval, commissioners noted the community supports the nursing home.

"We need to take care of our old people in the community," Johannsen said. "We need good staff do it."

"We have not treated the nursing home the way we should have," Robinson said, casting his yes vote on behalf of absent commissioner Dick Devine, a longtime supporter of Heritage.

"I must keep in mind his wishes," Robinson said, "It means running a squad car one more year."

Sarah Smith

Sarah Smith is the outdoors editor. She covers courts, business and breaking news in addition to outdoors events.

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