Heritage Administrator Kurt Hansen is asking the Hubbard County Board to consider using American Rescue Plan (ARP) funds to offset pandemic-related losses in 2020.

Based on historical trends, Hansen said the 2020 budget for the county-owned nursing facility was based on an 89 percent occupancy rate for Heritage Living Center and 95 percent for the Cottages and the Heritage Manor.

“The pandemic, as you know, began in March and by the end of the year occupancy for Heritage Living Center and our Cottages had been reduced to around 50 percent,” Hansen said.

In 2020, elective surgeries were postponed, “which immediately slowed down admissions in our short-stay transitional care unit at the nursing home,” Hansen explained. “We found that individuals exploring long-term senior care options for loved ones stopped inquiring” or made comments about waiting until COVID had passed.

“We even had a few take their loved ones out” of the facility “due to the isolation and concern for their loved one,” he continued.

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Hansen said roughly $500,000 in U.S. Department of Health and Human Services funding helped cover unanticipated expenses at Heritage Living Center in 2020, such as infection control, COVID testing, personal protection equipment purchases, cash flow and some lost revenue.

Revenue in 2019 was $7,135,000 at Heritage Living Center compared to $5,892,699 in 2020. Revenue fell from $1,037,173 to $742,393 at the Cottages during the same time period. Heritage Manor saw $707,814 in revenue in 2019 followed by $645,114 in 2020.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBIDTA) in 2020 showed a loss of $38,994 at the nursing home and $10,803 at the Cottages.

Hansen reviewed 2021 occupancy at the facility.

“It’s still showing the impact of COVID,” he said. “We’re still holding around 50 percent occupancy through April. The Manor is a little bit better at 65 percent, or 17 out of 26 tenants. Currently, the nursing home is at 40 (out of 64) residents, which is 62 percent. The Cottages are at 12 (out of 18), or 67 percent.”

Hansen said, for this fiscal year, they budgeted for 75 percent occupancy at the nursing home, 89 percent for Cottages and 86 percent for the Manor.

Hansen said an industry expert anticipates a 1 percent increase in occupancy per month.

Projected 2021 EBIDTA are “dismal,” Hansen said, calling them “conservative numbers.” EBIDTA losses are estimated at $366,556 at Heritage Living Center, $188,123 at Cottages and $108,739 at Heritage Manor.

Board chair David De La Hunt noted the campus needs about $900,000 per year in cash flow.

County Auditor Kay Rave said the county has covered $35,000 in expenses on behalf of the facility.

A debt service payment is due in December.

According to Hansen, building maintenance budgeted for this fiscal year – such as replacing 20-year-old carpet at the Manor – totals $255,600. Some boiler repairs are estimated at $6,000. Marketing the facility’s vacancies is estimated at $40,000.

Finally, $429,487 in payables are due, “so we do have some deferred capital cash needs staring us in the face,” Hansen said.

The Heritage community contributes almost $6 million in wages and benefits to its employees, Hansen pointed out.

Noting he could easily hire 15 people, he said applicants are hard to find. “Labor is a major issue for Heritage right now, along with our industry.”

Hansen said funds are needed to compete within “a dramatically changing labor market and so that poses challenges for us also.”

2021 essential worker costs are projected to be $5,035,614. Through reductions in revenue, Hansen said the facility made commensurate reductions in labor. “We had a sizable decrease last August, roughly $1.2 million in reductions. Approximately 12 or 13 full-time equivalents’ hours were reduced to try and recalibrate the operation,” he said.

The Heritage community has not had a positive COVID case since December 2020.

“COVID’s still around,” Hansen said.

The board formed ad hoc committees to review guidance and develop a funding strategy for Hubbard County. One committee will focus on the ARP funding for the county and other on capital improvement planning.