The sale of the county-run Pleasant Acres Nursing and Rehabilitation Center nursing home in York County, Penn., generated about $33.5 million — and while most of that money has to be used for unfunded retirement benefits for nursing home employees, the York Dispatch reported, the county still came out ahead.
Of the proceeds of the sale to Premier Healthcare Management, $21.9 million has to be used to pay unfunded retirement benefits promised to nursing home employees, county administrator and chief clerk Mark Derr told the publication. The county has to provide retirement benefits for qualified retired county employees hired before January 1 1989, but the boards at the time never set money aside to pay for the benefits, Derr said.
The Other Post-Employment Benefits (OPEB) trust was established in December 2016 to mitigate the county’s estimated unfunded OPEB liability of $135 million by the end of 2016. The liability has since been reduced to $85 million, and the $21.9 million contribution from the sale of the nursing home will reduce that even more, Derr told York Dispatch.
Other costs have to come out of the nursing home sale proceeds, including $507,000 for the transfer tax and $3.13 million to refund the pension contributions of about 250 employees with fewer than eight years of service.
But the sale of the home also means that the county no longer must pay millions to subsidize the operational costs of the nursing home, Derr told York Dispatch. York County pumped about $8 million a year into the facility over the past decade, the publication noted. As of December 11, York County had spent $9.3 million to keep the facility above water in 2018 alone, York Dispatch reported.
“When we take all the billings that we’ve done for the residents at Pleasant Acres, and all the other revenue that comes in from all sources, we come up with about $26.8 million in revenue,” Derr told the publication. “But our expenses add up to $36.2 million.”
The sale price of $33.5 million included an immediate contribution of $100,000 to the resident welfare fund from Premier, which added to York County’s contribution of $500,000, the publication reported. Premier also agreed to contribute an additional $100,000 per year for four more years to the resident welfare fund.
The totals result in about $3.8 million in funds left over from the sale; Derr told the York Dispatch that remaining sale proceeds will be used to settle outstanding grievances against the home and to fund the severance settlement with the workers’ union.
Premier and the union have not yet come up with a new contract, Derr said, but after a new one is negotiated, York County will have to pay for any difference in compensation that union members receive for the last three months of the current year.
Written by Maggie Flynn