Meeting discusses loan technicalities

One commissioner said the county shouldn't lend cash to a private concern.
By MARY GRZEBIENIAK
VINDICATOR CORRESPONDENT
MERCER -- Woodland Place, the former county nursing home that was sold to a nonprofit group in 1998, will borrow $1 million from Mercer County to pay its bills.
Commissioners Olivia Lazor and Michele Brooks voted for the loan despite being advised against it by Controller Thomas Amundsen and Tresa Templeton, former county fiscal director. Commissioner Brian Beader cast the dissenting vote against the loan when commissioners met Thursday.
Supporting the decision
Brooks said her vote was based on "the bottom line," pointing out that the county is responsible anyway if Woodland Place defaults on nearly $6 million left unpaid from an $8.8 million loan. The county guaranteed that loan in 2001 in exchange for $3.5 million cash payment, using the building as collateral.
The $3.5 million was placed in an escrow account, which will provide money for the loan approved Thursday. That loan will be used to finish renovations and meet other expenses.
Brooks added that, with the completion of the renovations next month, the facility on Pa. Route 58 in Coolspring Township stands on the brink of making a profit for the first time. It is set to open 15 independent living units, which are currently "the biggest moneymaker" in the nursing home industry, she said.
Lazor said the county has an obligation to see the nursing home continue because, as part of the original agreement, it must take county residents who are refused by other nursing homes. She added that the privatization of the home saved the county a lot of money.
When commissioners transferred the home, it was an "albatross," with poor heating, only one air-conditioned area and four-bed rooms without bathrooms, Lazor said.
In addition, Brooks and Lazor cited their concern for the fate of the 70 residents and 90 employees of Woodland Place.
Legality
Beader said he doesn't think it's fair for the county to loan money to a private institution. He added that he wasn't sure the move is legal.
Brooks was quick to point out, however, the bond counsel approved the move, and Solicitor Mark Longietti said he believes that such a loan is covered by an exception in the state constitution.
All three commissioners agreed that, before they extend the loan, Woodland Place must agree not to take any more loans or grants without county approval and hire a nursing home consultant at its own cost if commissioners demand it.
The county home ran deficits of $300,000 to $400,000 per year before its sale. The facility is appraised at $5.5 million, Brooks said, adding that the county could sell it "maybe for $3 million." In addition, Woodland Place has $875,000 in other debts, which would come off the sale of the home should the county have to take possession, Brooks said.
Terms of the five-year loan would include an interest at the prime rate plus a fourth percent readjusted annually with principal and interest payments of $5,000 per month with a balloon payment at the end of the term. The Woodland Place board of directors will vote on the loan agreement soon.