Letter: County board member Scott Campbell explains his votes this week

Published

On Wednesday evening, DeKalb County Board held a special meeting to vote on three items:

  • Placing a referendum on the November ballot asking county residents to approve a property tax levy to maintain DeKalb County Rehab & Nursing Center (DCRNC).
  • Accepting Saba Healthcare’s Letter of Intent (LOI) to purchase DCRNC.
  • Accepting Illuminate HC’s LOI to purchase DCRNC.

The board rejected the referendum, rejected the Saba LOI, and accepted the Illuminate LOI.

District 7 board member Scott Campbell, who helped to craft a bipartisan alternative to selling the struggling facility, has written a letter to the editor to explain his vote to support Illuminate’s offer. Here it is in its entirety:

I know the decision to sell the DCRNC hits people in the heart. It hits me there too. I wish we weren’t selling it. But after the referendum for additional tax revenue to support it failed, I did vote to sell it. I telegraphed my intention to do that, on NPR, to the news media broadly, in open meetings of the County Board and committees, and to my union brothers and sisters in AFSCME. I’d like to explain why I had to do that, and in a broader sense why we are selling the DCRNC, and why it feels so wrong to just about all of us who have had loved ones there (as I have), have friends that work there (as I do), have seen the great care and high-quality facility provided there (as I have), and value it as a jewel of the community (as I do).

All I ask is that you set aside your anger and frustration long enough to sit through a small primer in public finance and governance. And that you realize that, as people who know me well, I believe, will attest, I have no interest or ambitions in holding my office beyond doing good for our community members who need government to level the playing field for them in our unchecked capitalism that tends to destroy marginalized people.

Let me start with some basic numbers. The 2022 budget for property tax levy revenue to DeKalb County is $24 million dollars. The general fund of DeKalb County is about $32 million. The budgeted increase in the general fund this year is $0 (zero), which is typical. The DCRNC, by three separately developed estimates, will lose about $5.3 million this year. Put another way, the DCRNC will consume 22% of our total tax levy, for one service, granted an important one. By the most optimistic estimates, assuming major reductions in expenses, this loss number will stabilize at about $1.5 million by 2024. That’s with drastic cuts in expenses.

The value of the entity to residents and staff of the nursing home is priceless. I wholeheartedly stipulate to that value as well, but caution that it is not a value that can be used to pay bills.

Also, some facts and background on county governance. The general fund is the equivalent of your checking account. It’s where monthly bills get paid from, and where income goes into. It’s not a savings account for a special purchase, like a college savings fund or the County’s equivalent of the asset replacement or opportunity funds. The general fund needs to have equal inputs to outputs, or eventually your run out of general fund and can’t pay bills anymore. It’s not a fund that you can drain and defer projects until you can refill it, like you might a personal savings account. The general fund…cannot…drop…below…your…total…monthly…bills. For any reason. If it does, the County can’t pay bills, and we become an economic wasteland overnight. In terms of scale, the general fund is about three months worth of total county expenditures. The County does have other funds, like the aforementioned asset replacement fund, and a rainy day fund called the opportunity fund. Or it did. Those have already been drained to support the DCRNC. Next up, we loan money from the general fund to float the DCRNC.

Now let’s do some math. In a best case, with significant expense reductions that drop the expense structure of the DCRNC to match that of local competitors (who operate at about 25% less expense per patient than the DCRNC), over the next five years the DCRNC will lose about $13.5 million, with a loss rate of $1.5 million every year thereafter. Since the general fund doesn’t increase (it’s not supposed to be a growing slush fund at taxpayer expense), and the other funds available to support the DCRNC are about empty already, under the BEST case scenario with large cuts and very careful expense discipline and growth in census at DCRNC, the general fund will be cut in half in five years and depleted in another 10 or so. No more DeKalb County, as we know it.

That’s best case. Now we’ve had two months of a hard numbers plan for expense reductions and 7 months of a general mandate to reduce expenses at the DCRNC and almost two years of knowing we were in trouble and borrowing money to keep the DCRNC afloat (which should have driven expense reductions naturally). In any of those time periods, expenses have not gone down. They’ve gone up. So the ‘best case’ appears to be a myth. Let’s look at the worst case, which is what appears to be the ‘actual case’, of about a $5 million per year ongoing loss at the DCRNC. We’re about to start tapping the general fund, so we will deplete that in 3 years, all other expenses and tax levies remaining constant.

Now as County Board members we won’t let that happen. Which means we’ll try to increase taxes. But DeKalb is a PTELL county, which means we’re tax capped at 5% annual increase. This year and probably next (possibly 2024 as well), inflation will exceed our tax cap. So even with a maximum tax increase, we won’t really have new money to keep the general fund afloat. We’ll just be chasing inflation, and losing that race even without the DCRNC subsidy. Which means, we can’t tax to support the DCRNC without authorization to tax beyond the PTELL cap. That’s what the referendum was for.

So we’ll cut $5.5 million out of other departments to float the DCRNC instead of or in addition to taxing more. How much is that cut? Well, to give a sense of scale, it exceeds the budgets of community mental health and public health and regional office of education, combined, though thankfully through special tax and grant sources those are largely self-sustaining entities, as the DCRNC used to be. Getting drastic, eliminating all of the following county departments simultaneously wouldn’t make up a $5.5 million shortfall: property assessment office, elections, community development, regional office of education, treasurer, judiciary, jury commission, circuit clerk, coroner, emergency services, States Attorney and the public defender. $5.5 million is a big number. A really big hole of a number, and it has to come from somewhere.

So now we’re into 2023. We’ve cut departments and services across the board to get money to sustain the DCRNC. Mental health services, senior services, and educational services are cut to people who are, in my essentially socialist mind, as deserving as seniors. Crime is on the rise. Road maintenance is being deferred. Courts are backed up even more than they are. It’s a new board, and it acts, as we do, through the budget process. Every department is suffering, except the DCRNC which we are (thankfully) keeping going at 2021 service levels because cuts don’t seem to be happening yet. I’m just going to bluntly say what will happen. We’ll close the DCRNC to save $5.5 million per year and restore every other service we’ve cut and are hearing very loudly about. Reality. Or we’ll try to sell the DCRNC again, but this time in an even more distressed position. We’ll get $4 million for it this round, because the discount on the price paid is proportional to the length and magnitude of the financial loss on the books. Or, we’ll just get no bidders, instead of the paltry two we got this time.

I’m not being alarmist. This is the simple math of it, which I assure you I understand extremely well through diligent effort to save the DCRNC. A $5.5 million annual loss in one department bankrupts the county very, very quickly. Which won’t happen, because we’ll close it first, after bleeding the general fund down to dangerous levels forcing us to tax it back up over the next decade. DCRNC…closed by 2024.

So, in the total analysis that every County Board member should have done, regardless of their love for the DCRNC or not, defeating the referendum put us on an unalterable path toward selling the facility now, selling it later for less, or closing it within two years and putting all of its residents on the street. That’s what defeating the levy did. There is no other possible outcome. I swear…to…God. By selling now, given no additional levy revenue, we at least can assure the residents and employees that they have an indefinite future at the facility, rather than a 1-2 year stay of execution. That future isn’t ideal. But it’s a promise of a future.

That is the calculus behind my vote, after the referendum failed. I took the more palatable of two unpalatable offers to buy the facility. In my mind and that of those who have studied this problem, it was the compassionate and responsible choice. Though it is hard to set aside the heart to let the head see that. Please try. We have limited resources and apparently even more limited appetite amongst your elected officials to increase those resources for this worthy cause.

I’m sorry it had to be this way. But it did. We tried. We failed.

Scott Campbell, County Board District 7