The sale of Weatherwood, the nursing home and rehabilitation center in Weatherly, was a hard decision that the Carbon County commissioners wish they didn't have to make. But the money from the sale is helping the county offset some of its expenses and is contributing to another year of no increases for county real estate taxes.
During the county commissioners' meeting on Thursday, Commissioner William O'Gurek, chairman, talked about the sale of the nursing home as a major factor in helping to balance 2011's budget.
He noted that had the county not sold Weatherwood, which was costing taxpayers $3 million annually or $8,220 a day, a tax increase would have been necessary to keep the county operating in the black.
The sale of Weatherwood, which went to Guardian Elder Care of Brockway for $11,050,000, is providing a surplus that the county is now using wisely.
After the sale was finalized on July 1, the county was able to reimburse the general fund $4.9 million, which was loaned to Weatherwood in 2009 and 2010 to help offset rising costs.
Officials are also utilizing $2.5 million of the remaining funds from the sale to offset a $2.2 million deficit that is expected from less revenue coming into the county and higher operational expenses.
The county will also place $1.5 million from the Weatherwood account into the debt services fund, which represents the county's annual payments on long-term debts. Currently the county's long-term debt is $8.5 million.
O'Gurek explained that the reason for putting $1.5 million in the debt service account is to cover the spike in the county's payment obligation that is expected to occur over the next four years.
He said that half a millage from the real estate tax, or around $860,000, goes toward covering these annual payments, but due to the spike, the millage would no longer completely cover the bill. O'Gurek said that the spike shows that in 2011, the county would owe $1.3 million; in 2012, $1.5 million; and in 2013 and 2014, $1.3 million each.
"The commissioners have opted to smooth the anticipated spike by transferring $1.5 million from the Weatherwood account into debt services as opposed to the option of raising the debt service millage," he said. "We are looking long term on the county's responsibility to its long-term debt. We wanted to try to keep that millage where it's at and even though a half of mill won't generate enough to make those debt payments in 2011, 2012, 2013, and 2014. We now have it in place that the debt service millage will not have to be increased to support our long-term debt service obligations for the next four years."
O'Gurek also noted that the sale will help the borough of Weatherly, Weatherly School District and the county in years to come because Guardian will now pay a combined total $140,000 in taxes on the 200-bed facility.
But the commissioners agree that they will not continue to depend on the remaining surplus from the sale, but rather look at ways to streamline costs so they can continue to properly serve the county's taxpayers without having to raise taxes.
The remaining balance from the sale of Weatherwood will stay in the account and will be used to cover audit costs and other bills that are still associated with the county's former property.