Green Acres gets lease waiver again

By Barbara Brown
Chisago County is losing $15,000 in revenue a month because the management of Green Acres Country Care Center cannot pay the rent.
On Sept. 24, for the second time in six months, the Chisago County board of commissioners agreed to forgive the monthly lease payments for the Board of Social Ministries (BSM) which operates Green Acres.
BSM rents the building from the county at $15,000 per month. The countyís previous board placed that money into a capital improvements savings account, to be used for needs at the current Green Acres nursing home. More recently, that fund was going to be used toward the new Green Acres nursing home planned for the west side of I-35 in North Branch.
The first payment abatement was granted for June, July and August.
The newest three-month agreement ñ which will run through November ñ will allow BSM to use the Green Acres building rent free and take the total months of granted relief to 6 and the amount the county has lost in rent to $90,000 by the end of this agreement.
Commissioners and BSM employees are working together to work out a plan for the future of Green Acres and the countyís role in the project.
Right now, BSM has a contract for lease with the county that makes that decision a little trickier than it may appear on the surface.
The contract says that if the county should break the contract, it would be required to pay BSM for services and equipment brought in to fulfill the contract.
Also, the contract stipulates that the county would be responsible for paying out unemployment benefits for employees of Green Acres, among other provisions.
The contract may be under renegotiation if BSM comes back to the county in three months and requests a third relief period, said Commissioner Ben Montzka.
Another complicating factor in the decision of whether the county should continue to invest in providing the Green Acres program is that the county had previously committed itself to providing the longer term care services for its older citizens, Montzka said in a telephone interview this week.
He said the previous board had developed an attitude of partnership with BSM when he sees the relationship with the county and BSM as tenant-landlord.
Those personalized emotions and the feeling of responsibility of caring for Chisagoís elderly population has driven the board to be more forgiving to this point than most any other landlord ever would be, Montzka said.
Green Acres Administrator Steve Mork said he understands those feelings of being torn. He said BSM is not in the business to make money off its residents, but to offer a service where it is needed.
He said the facility is going through a period of adjustment and transition and would like to see the county by its side to see it through.
Private assisted living and long-term care centers also are pushing the need for county-subsidized care out of the picture, Montzka said.
Changes in reimbursement from federal and state money to health care providers have impacted the not-for-profit BSM just like private and for-profit because if assisted living or long-term care facilities accept Medicare or Medicaid, they cannot raise rates to cover budget shortfalls.
Mork said more than just the changes in reimbursements have put the center in financial straits.
He said last Octoberís state freeze of medical assistance, expected to last at least two years, also has had a negative impact.
He said the state sets the rates for all nursing facilities across the state to force equalization of services, but also forcing facilities to operate without the ability to adjust rates in response to inflation or increase of operating expenses.
One of those operating expenses, Mork said, is an expected jolt to the cost of natural gas, which Green Acres uses for heating.
At the same time, Mork said, the recent opening of a total of 138 beds in Chisago City, Forest Lake and Cambridge has drawn residents from North Branch.
ìPreviously 60 to 75 percent of our admissions were from outside North Branch,î Mork said. ìNow with other options out there, we are losing residents.î
Mork said losing new residents to other facilities, the simple decrease in the number of people using nursing and assisted living homes in general and the increase in expenses has put Green Acres in a financial bind.
ìIf it was one thing,î Mork said, ìI think we would find an answer. But because these are several things converging, that makes it difficult to navigate through.î
Montzka said the recent wave of changes and fiscal pitfalls that have come to BSM in the past year have made him thankful that the county has not yet started the new building.
ìIf the previous board had been successful and started building the new facility, the county would be in quite a situation,î he said.
Montzka said Commissioners Rick Olseen and Lora Walker are working with BSM to figure out how to address the concerns of money losses on both sides. BSM claims to have lost $191,000 so far this year.
ìBecause these provisions are in that contract, there is a relationship there that is more of a partnership than a landlord relationship,î Mork said.
Green Acres would be running at about 12 percent over budget if the county did not grant the lease waiver.
The company has already cut 10 positions, to 95 in July from 115 at the beginning of the year, and has cut the number of hours paid to the activities director, human resources director and volunteer coordinator.
Plans for the new building have been put on hold for now, according to County Administrator John Moosey.
Moosey said the project timeline was pushed ahead at least 36 months with construction not slated to begin until Dec. 2005.
ìItís complicated,î Moosey said. ìThereís only one good answer ñ that the industry turns around and we can build this great facility.
ìAll the other scenarios arenít so good.î
The project decision is on hold until BSM can show that its operations are self-supporting, according to a letter to Moosey from John Racek with Larson Allen Weishair and Co. in Minneapolis.
Mork must cut at least $20,000 in expenses per month just to break even, the letter said. Racek suggested to Moosey in the letter that the proof of BSMís commitment to remaining in the county and its commitment to the new building project would be shown in how much the organizationís operations turn around during the payment waiver time.
ìWe have to approach this situation with open minds and open hearts,î Montzka said. ìI am hopeful that BSM is successful in getting past this situation.î
Mork added: ìThe issue that surrounds Green Acres is quality of life.
ìIf we let it go, it would be a significant loss for the people of North Branch ñ for the families of the people who live here and for the people who work here.î

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