The Hubbard County Board agreed to earmark $500,000 in American Rescue Plan (ARP) funds for the Heritage Living campus.
Last month, Heritage Administrator Kurt Hansen and Katie Lundmark, regional director of operations for Ecumen, reported pandemic-related losses in 2020. A steep decline in occupancy resulted in less revenue for the county-owned nursing facility.
“These relief dollars would be extremely beneficial to the Heritage Living community,” Hansen told county commissioners at their July 6 meeting.
Compared to March through December 2019, Lundmark said the facility experienced a $2,123,020 loss in uncompensated revenue during that same 10-month period in 2020.
This year, Lundmark said the facility projects a $993,024 drop in revenue compared to last year.
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County Administrator Jeff Cadwell said it was up to the board to allocate the $4 million in ARP funds.
County commissioner Char Christensen reminded the board that the Heartland Lakes Development Commission successfully closed on 20 acres by Walmart. She said roughly $2 million in ARP monies could be used for infrastructure, “which would put in the septic and the road and then that could be developed by private developers.”
The second consideration, Christensen said, is that the county will likely be covering a $440,000 debt service payment in December on behalf of Heritage.
County commissioner Tom Krueger asked about the actual net loss.
Right now, Hansen said, Heritage is running at about $40,000 to $50,000 per month in net losses, “so it’s pretty significant.”
County commissioner David De La Hunt said Heritage needs about $750,000 in earnings before interest, taxes, depreciation and amortization (EBIDTA) to meet all of its commitments.
In 2020, De La Hunt said EBIDTA fell short by roughly $725,000 and it’s projected to be $1,350,000 in the red this year.
Lundmark noted that ARP is the only mechanism available to Heritage because of its county-owned structure.
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Hansen said Heritage has explored other funding sources to help with the operational shortfalls. “Because we’re a county entity, it disqualifies us, really,” he said.
De La Hunt proposed approving $750,000 to help with Heritage’s cash flow problem.
A motion to approve $500,000 passed unanimously.
