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 Mayor Marty Neitzel called the hearing to order and asked for
speakers. Wanda Lee Rohlfs was the only person who wished to address
the council and stated she was surprised that there were not more
people on hand to discuss this.
Mayor Neitzel asked Rohlfs if she would be making a comment or
posing questions, clarifying that she wanted to hold the questions
until the discussion for the vote, but would hear comments during
the public hearing.
Rohlfs said she had both comments and questions.
Neitzel then said Rohlfs would be permitted time for questions on
the agenda when the item came up for the vote.
Moving forward with comments, Rohlfs said in her research on the
bond topic she had discovered some conflicts. She said to qualify
under the bond rules, the bond would need to show “increased
employment, increased revenue, and increased tax (revenue) for the
issuer (the city of Lincoln).”
She said in conflict, a document submitted to the Health Facilities
and Services Review Board, for this project said, “according to the
applicant, this project seeks to continue health services NOT
improve those services in terms of filling an unmet need. Unlike
projects to establish beds and services, the proposed project is
only a technical establishment as it is more appropriate the
off-site replacement of St. Clara’s Manor. The applicant is seeking
to improve the wellbeing of the existing population. As the facility
currently serves the Logan County planning area, Lincoln market
area, the improvement of the existing physical plant of an area
provider will naturally have a consequence of improving health care
delivery and nursing services.”
The document went on to say that the concerns were the aging
structure currently occupied by St. Clara’s and the inability to
populate the 140-bed facility. It said that the new building would
be smaller, dropping from a 140-bed capacity to a 106-bed capacity.
Rohlfs said that it did not appear to her that building a smaller
facility would increase revenue or employment. Rohlfs said this was
in conflict with the bond application documents.
She said she would also question the need for a new facility when
the current facility was only partially occupied. When the topic came back up for discussion during the regular voting
session of the council, Rohlfs returned with another question. She
said that St. Clara’s had applied for a loan with Hickory Point Bank
and had been denied. She also noted that the loan with that
institution had been drawn out as $9.5 million in 2016 and $6.5
million in 2017, which totals less than what the Manor is now
seeking in bonds from the city.
Witsman was on hand for this week’s meeting along with Clyde
Reynolds, who serves as a board member at St. Clara’s Manor.
 Witsman explained that the Hickory Point Bank did not deny St.
Clara’s loan application. A letter of commitment had been issued by
that bank that they would lend St. Clara’s the money. That letter
had specified that the letter itself did not constitute the official
loan approval. He added that St. Clara’s had chosen not to do
business with Hickory Point Bank because it wanted to work with the
local lending institution, State Bank of Lincoln.
He went on to explain that St. Clara’s in consideration for the $10
million limit for the city in bond issuance, coupled with knowing
that the city needed to renew its General Obligation Bond in 2016,
had dropped $100,000 from the original amount for 2016, so as not to
put the city in a bad position.
For 2017 the bond with the city calls for $7.6 million as opposed to
the $6.5 million listed on the Hickory Point document. Witsman said
that the $100,000 dropped off of the 2016 request had been added
into the 2017 request. There had also been inflationary cost
increases for the project on the whole, since the issuance of the
document from Hickory Point Bank, which accounted for the rest of
the increase ($1 million) showing in the 2017 request.
Reynolds came forward to address the question about the 140 beds
versus 106. He explained that there are some current issues with
filling the 140 beds because of the way the facility is designed. He
noted the history of the building, and how it had started out as a
hospital. In the 1960’s when it was transitioned into a nursing
home, the design called for two beds in each room. He said there are
only 70 rooms in the two-story structure.
In this day and age, Reynolds said that more and more people are
unwilling to share their room; they want private rooms instead. He
said clients also do not want to live on the second floor of the
current facility; they all want to live on the ground floor. The new facility, he said would have more rooms, and 87 percent of
those rooms would be designed for single occupancy, which would
better meet the desires of the current residents as well as future
residents. Reynolds said the new facility would improve the quality
of life for the residents because it would be one floor only, every
room would have outdoor views. Physical therapy areas would be
better, and there would also be outdoor therapy areas, as well as
raised-bed gardening for the more active residents. He said common
areas would be improved, and places for the family to spend time
with their resident would be improved. Reynolds said the new
facility would be an attractive home-like atmosphere.
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He also noted that the new location would be close to St. Clara’s
sister facility, Castle Manor, allowing for an easier physical
transition when clients are moving from assisted living at Castle to
the full-service nursing care at the Manor.
Others who had questions for Witsman and Reynolds included Rick Hoefle, who
asked if the attorney could assure that the city would have no liability for the
repayment of the bond? He also asked if the city’s credit rating would be
impacted negatively if St. Clara’s defaulted on the bond.
Witsman said the city would have zero liability and that he couldn’t see it
impacting the credit rating.
Hoefle said that Witsman had “danced around the question.” He asked for a simple
yes or no answer, would the city’s credit rating be impacted?
Witsman said he was not qualified to give a simple yes or no answer because he
did not work for a credit rating agency. He added that if there were to be any
consequence, he felt like documentation could be sent to the credit rating firm
explaining the bond and the problem would be cleared up easily.
Hoefle also wanted to know if the Manor does expect to increase staff, thus
increasing local employment.
Reynolds responded to the question saying that at first, no, he didn’t believe
there would be any increase in staff. However, he said with more rooms set up
the way clients want them, he could see growth in occupancy in the future, and
that could lead to more staff.
Steve Parrot asked if the current facility had outlived its usefulness, and was
it unsafe for residents. Reynolds said that it is an aging building in need of
some big ticket maintenance work and upgrades. It had been estimated that to
bring the building up to snuff, the cost would exceed $4 million, and would
still be a two-story building with double occupancy rooms that clients don’t
want.
Hoefle asked what would become of the Fifth Street Manor when the new Manor was
completed.
Reynolds said the board would like to see the building recycled into another
use, but that they had also considered the fact that they might need to demolish
the building and open the lot up for other development.
Welch noted that he was happy to see that the board has taken into consideration
what actions it might need to take. He did not want the building left abandoned
in the city to become a future eyesore and issue.
Considering that the city wants to stay within the $10 million cap on bond
issuance, Welch asked if the St. Clara’s board and attorneys had an alternate
plan if the city was unable to issue the full $7.6 million in 2017.
Welch noted that the city has capital improvement plans of its own, and it could
come up, though he doesn’t know that it will, that the city would need to issue
a bond for itself.
Witsman said that had been discussed. St. Clara’s is owned by Heritage of Care,
and the corporation is prepared to seek alternative funding if the city is
unable to take on the full $7.6 million in 2017. He said one alternative
discussed could also be to spread the $7.6 million across two calendar years
instead of one, reducing the amount of each bond to give the city more working
room for its own projects.
Rohlfs asked when the new facility was slated to be complete.
The answer was that it is expected to be ready for occupancy in early 2018.
Rohlfs also wanted to know if the project would utilize local contractors. She
said that other projects brought before the city had stated local contractors
would be used, but that had not happened. She believed the city was obligated to
assure that local people got the work.
Michelle Bauer said that was out of the hands of the city. The city cannot
dictate who St. Clara’s does business with and cannot force them to hire
locally.
When the motion finally came to a vote, seven aldermen - Bauer, Jeff Hoinacki,
Kathy Horn, Todd Mourning, Jonie Tibbs, Parrot and Welch voted, yes, to approve
the bond. Hoefle voted an emphatic “No.” The motion passed 7-1.
[Nila Smith]
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