City Of Neligh Enters Into Agreement For Nursing Home

Nearly two months to the day of Neligh Care & Rehab moving into receivership, the City of Neligh approved entering into a confidentiality agreement to review potential ownership.

Nearly 70 people attended Thursday’s town hall meeting, where the Neligh City Council heard community concerns, question and support while also gaining more information from receivership managers Ken and Linda Klaasmeyer.

At the end of the 90-minute meeting, the council unanimously approved entering into a confidentiality agreement to review financial documents to better assess cash flow, as well as authorizing City Attorney Jim McNally to write a non-binding letter of intent to property owners Golden Living Center.

Following the meeting at the Neligh Legion, Council Member Stephanie Wanek said she welcomed community input and found it encouraging as they dive into more specifics with the potential purchase.

“As a council, I think we really appreciate the community of Neligh coming out today and listening to the Klaasmeyers and hearing more about the situation that our nursing home is in and the potential for its future,” Wanek said.

While those in attendance appeared to favor moving forward with one of the three options presented by Klaasmeyer and Associates, Wanek said Thursday’s meeting was one of many steps necessary before making a decision whether or not to proceed.

“As a council, we have a lot of research to do,” she said. “We need to look into financials and talk to some other communities who have community-run nursing homes.”    

​Ken Klaasmeyer facilitated the meeting and answered questions regarding this company’s role, how purchasing the facility would work and other inquiries by both the council and community. He also listed three options on how Neligh could respond to the facility now being for sale. 1. Do nothing, 2. Build a new facility or 3. Lease the facility.

Option 1: Do Nothing
Should the City of Neligh not purchase Neligh Care & Rehab, the facility could be either closed or leased to another company. Either result would mean Neligh has no local control over the facility, Klaasmeyer said.

Klaasmeyer said Skyline/Cottonwood was leasing the facility from Golden Living Center, and that building is available for the City of Neligh or anyone to lease. The facility is licensed for 70 beds and comes with a monthly lease of $19,000. There are, as of Tuesday, 40 residents — 27 medicaid, 9 private pay, two medicare and two VA. Of those 40, eight are hospice.

Klaasmeyer said he hasn’t fully worked through all of the financials but admitted there are some cash flow issues. However, he said, some of those could be worked out with Golden Living with a new lease agreement or if their Medicare number is used, rather than having a new number issued.

“It’s kind of a little bit of a gamble of what you want to do. I think Neligh needs a nursing home. I think it could be a very good nursing home,” he said.

Option 2: Build A New Facility
The State of Nebraska regulates the number of beds licensed in Nebraska. If Neligh were to build a new facility, it would be required to purchase bed licenses. Sid Charf asked if it would be possible to purchase those beds from the current facility.

“Golden would have to sell them. If somebody leased them from Golden, Golden would rather have the lease payment than selling those beds,” Klaasmeyer said. “I don’t think that would happen. Now, if they couldn’t find anybody to lease it, they’d still have to find someone that would be willing to buy the beds.”

Historically, beds have been purchased for $12,000 per bed, but Klaasmeyer said the Minden hospital likely would sell theirs for a couple thousand dollars each since they only have until the end of June to sell them.

State law requires a closing facility to sell their beds by the end of the quarter they are closing. If they don’t sell the beds, they simply go away, meaning the number of licensed beds in Nebraska decreases.
​
Klaasmeyer said a new facility would cost between $150,000 and $200,000 per bed. For a new 60-bed facility, the cost would be about $9 million.

Option 3: Lease Facility From Golden Living
Klaasmeyer suggested the City of Neligh consider leasing the facility for five years with an option to purchase and the price already determined. Should the facility be cash flowing, they could move forward. However, if the lease was not working, the City would not be tied to the project long term.

Council member Leonard Miller questioned if leasing would give the City leverage for Golden Living Center to make improvements in the facility. Klaasmeyer said he encouraged those specifics be included in the lease agreement.

“Things change a lot. And, I mean, Golden, when we first talked to them, they were going to do all 21 buildings. And then a couple weeks later, they said, ‘Go ahead and talk to some of these communities,’ ” Klaasmeyer said. “So, I think they’re kind of backing down from some of their positions because I don’t think there’s that many good national operators that are willing to do this.”

City Ownership
Bev Clark asked several questions regarding ownership and how the residents would benefit from the local control.

After the meeting, Clark said she’d like to see the facility be maintained in Neligh for the benefit of residents and future clients. However, Clark was quick to say she doesn’t want the facility in the same situation in five years that it's in now with another company possibly coming in and taking over.  

“Then, those employees, those residents in the facility, are going to be in the same position that they are now. So, you know, my biggest concern is are we going to be able to maintain and improve the quality of care that the residents get because I think there is some competition in the area,” she said.

Clark also questioned whether it was feasible for the community to take over management and maintain some profitability or at least break even and retain good employees.

“Good employees are going to reside in our community. They’re going to be the ones that are sending their children to our schools,” she said. “That’s what’s going to be keeping our Main Street alive. And so, I just want to do whatever we can in order to make sure we achieve all of those goals.”

Next Step
Concern for employees was heard time and again during the meeting. Cathy Vandersnick reminded people that the employees went three weeks without a paycheck and continued to care for the residents.

“That shows the dedication and the love that they have for the people and the community,” she said.

Vandersnick said a loved one has been at Neligh Care & Rehab for about a year, and the care was fabulous, including since it went into receivership by the state.

“I’ve seen the full, full gamut of it all after they went into receivership. Everybody was just the way they were from the beginning,” she said. “They came to work, they did their job, their attitude was wonderful, and as someone said — three weeks without pay, that’s tough to do. Awesome dedication.”

Vandersnick said after the meeting that she supported the City Council’s decision to enter into a confidentiality agreement to seek more financial information and to issue the letter of intent.

That vote, she said, shows dedication to the community, not just the nursing facility.

“I’m really, really impressed with the City of Neligh, the City Council, the fact that from the beginning, they stepped right up,” she said. “They were interested in doing their part to keep this in the community. That’s awesome to show that they wanted to stay.”