Task force: healthcare facilities sales tax could save care center
by Steve Kadel
staff writer
Feb 07, 2013 | 2617 views | 0 0 comments | 11 11 recommendations | email to a friend | print
A group of Moab civic leaders hopes a possible new sales tax will prevent financially ailing Canyonlands Care Center from closing.

Healthcare Task Force members said the tax is the top priority as a revenue source for the care center during their initial meeting Friday, Feb. 1.

The center is losing $40,000 to $50,000 a month, depending on the number of residents at the facility, said Roy Barraclough, the care center’s administrator. Task force members did not stipulate how much the tax would be, but estimates indicate that a rate of one-half of 1 percent would raise $1 million a year.

Grand County would administer the tax, which would have to be approved by voters. State tax code limits the Healthcare Facilities Tax to no more than 1 percent.

However, the plan does have a potential stumbling block. Canyonlands Care Center Business Manager Tom Lacy said Grand County is a class five county and Utah tax code states that class six counties can use Healthcare Facilities Tax money to operate care centers. Whether that also extends to class five counties is unclear, Lacy said.

Opinions from both the Grand County and Canyonlands Healthcare Special Service District attorneys indicate the law, as written, excludes class five counties. A letter is being drafted to Utah Attorney General John Swallow’s office asking whether precluding class five counties is the legislation’s intent.

Barraclough said during an interview he wants the service district’s board chairman to sign the letter.

There appears to be precedent for Healthcare Facilities Tax money being used by class five counties. Task force members said Beaver, Kanab, Gunnison and Daggett counties have facilities funded through the tax, although it is not certain if those counties asked for state permission or proceeded without informing the state.

If the tax is pursued, task force members emphasized the need to act quickly to prevent the center’s financial shortfall from growing.

“It’s imperative we get going as soon as possible,” said Kirstin Peterson.

Moab City Manager Donna Metzler said other funding options should be considered, too, because “there’s a very strong possibility it [the tax] would not be approved” by voters.

There was discussion regarding asking the county to give more mineral lease money to the healthcare district, but Grand County Council chairman Gene Ciarus said that would mean taking money from other valuable programs.

If the state attorney general’s office gives a green light to the idea, task force members said it is likely the issue could be on the ballot during the June election. A special election would cost from $30,000 to $50,000, Ciarus said.

Moab Mayor Dave Sakrison said the options are passing a healthcare tax, increasing property taxes, selling the care center or closing the center. If a tax were passed, it would be in effect for 10 years with the option to extend it for another 10 years before it ended.

Barraclough said there are three major reasons the care center is losing money:

• Mandatory participation in the state retirement system for employees has raised costs.

• Medicaid has reduced its daily per-resident reimbursement rate from $174 to $162.

• The rate Moab Regional Hospital charges the care center for resident meals has increased from $10 per day to $30 per day.

Barraclough said the care center ended 2012 with a deficit of $600,000, including cash losses of more than $300,000 and depreciation of just over $292,000.

The task force decided to convene a subcommittee to start discussing election campaign strategy in case the new sales tax is pursued. Another subcommittee will investigate other options.

Barraclough said selling the property isn’t out of the question, and two private parties have expressed interest in seeing the facility. But he added that making the care center attractive enough to sell would probably require adding a skilled nursing component “because that’s where the money is.”

The care center would have to be renovated to satisfy Medicare’s requirement for offering skilled nursing, Barraclough said. No cost estimate has been made.

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