DC highway facility could cost $11 million to $16 million — or $32 million for all brand new
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By LeAnn R. Ralph
MENOMONIE — Depending on which option Dunn County chooses, upgrading and renovating the highway department building could cost anywhere from $11 million to $16 million — while a brand new facility would cost $32 million.
Cedar Corporation conducted a building space needs study, and the conclusion is that the Dunn County highway department is undersized based on the amount of equipment that is stored outside, said Dustin Binder, highway commissioner, at the Dunn County Highway Committee’s September 11 meeting.
The existing building does not have much expansion potential, Binder said.
Options for renovating and adding on to the existing building range from $11 million to $16 million.
Because of the large dollar amount, Binder said he had largely relegated the project of updating and expanding the highway department facility to “the back burner.”
Binder said he wanted committee members to discuss the options to figure out whether the project should be put off indefinitely, or whether the highway department should look at starting the process of design in a year or two.
“Do we take it farther or scrap the idea of making improvements?” he asked.
Energy efficiency
Gary Bjork, county board supervisor from Colfax and a member of the highway committee, asked about the proposal for the judicial center to use geothermal.
The $11 million in debt service for converting the judicial center to geothermal would result in enough energy savings to pay the debt service, said Dan Dunbar, assistant county manager and the county’s chief information officer.
If the judicial center did not realize enough in energy savings to pay for the debt service, then the qualified energy service company under contract to Dunn County would pay the difference, he said.
It was not clear from Dunbar’s answer whether using geothermal for heating and cooling the highway department facility also would be considered or whether Dunn County could benefit from the tax credit payments from the federal government in the same way for the highway department facility that the county could benefit from making the judicial center energy efficient.
The highway committee should start early to get the process going, Bjork commented.
The building renovation and upgrade would be the amount needed to protect the county’s investment in equipment, said one member of the highway committee.
Dunn County would have to borrow the money for the building and have a long-term borrowing plan, Binder said.
The highway department building would be a county-wide investment that could use pre-cast (concrete) building material or steel for a cold storage building, he said.
Options
According to information available to the highway committee, there are three options that were proposed by the space needs study.
Option A would add 36,000 square feet along with a 1,920 square-foot wash bay, would use exterior cold storage, and the existing white building would be used for additional storage.
The cost for Option A would be an estimated $10.2 million or $11.1 million, depending on whether it is a pre-engineered building or a precast building.
Option A would put most of the equipment owned by the highway department under a roof.
Option B would add 54,000 square feet along with a 1,920 square-foot wash bay, exterior cold storage, and the existing white building would be used permanently by the Dunn County Sheriff’s Department.
Option B would cost $12.8 million or $13.6 million.
Option B would allow all equipment to be stored under a roof and would have room for future expansion.
Option C would add 72,000 square feet along with a 1,920 square-foot wash bay, exterior cold storage, the existing white building would be used by the sheriff’s department, and the project would renovate the existing building.
The cost for Option C would be $14.6 million or $16.2 million.
Debt payments
The idea of renovating and building additional storage for the highway department can be explored in two years, three years, five years or even 10 years, Binder said.
“We can operate the way we are,” he said.
Dunbar said from listening to committee members, it seemed as if the committee is in favor of doing some kind of a project.
Dunn County currently has a debt service payment of $5.2 million annually, he said.
The debt will peak next year, and then after that, debt will be decreasing, Dunbar said.
There is a way to fit a highway department project into the debt service payment and still maintain the $5.2 million debt service payment currently being made each year, he said.
At the beginning of 2023, according to a presentation last October from PMA Asset Management to the Dunn County Board, Dunn County had total debt of $32.6 million.
By the fall of 2023, Dunn County had paid off another $4 million in debt, so that the county’s debt was $28.1 million.
The outstanding debt will be less than $28.1 million this year because the county is continuing to make debt service payments.
PMA indicated the county could borrow $4 million annually and maintain the $5.2 million debt service payment, Dunbar said.
Once a certain amount of debt is paid off, the county can borrow more money and still keep the debt service payment at $5.2 million, he said.
Dr. Beata Haug, chief financial officer for Dunn County, said there would be a presentation to the Dunn County Board at the October meeting or the November meeting to show the county’s opportunity for debt and how quickly it could be paid off.
The presentation will focus on what can be borrowed to keep the debt service payment at $5.2 million, she said.
A five-year model also could be constructed for the highway department that would show the cost for road work, wages and operational expenses, Dr. Haug said.
NDC
One highway committee member said that when he talks to his constituents, they are not in favor of the Neighbors of Dunn County.
Selling NDC would look better to people concerning the county’s debt. If the facility was sold, then the money could be put toward something else, like the highway department facility, he said.
The nursing home was doing well until Covid-19, Dr. Haug said.
During the Covid-19 pandemic, all health care facilities (nursing homes, clinics and hospitals) were experiencing difficulty keeping staff.
NDC used “travel nurses” to fill staff shortages and that is expensive, Dr. Haug said.
According to various internet sources, travel nurses can earn up to $132,000 per year, which works out to be around $63 per hour.
The five-year projection model showed that moving forward, the Neighbors would be in the black, and in 2025, the facility will pay back what is owed to the county that was borrowed from the county when the facility was operating in the red, Dr. Haug explained.
Medicaid rates have increased, so the Neighbors will sustain itself “and then some,” she said.
For more than a decade, Wisconsin paid the lowest Medicaid rate in the United States for nursing home reimbursements or was 48 out of 50 states in Medicaid reimbursements.
According to “Long-term Care Workforce Crisis: A 2016 Report” produced by the Wisconsin Health Care Association/Wisconsin Center for Assisted Living, LeadingAge Wisconsin, the Wisconsin Assisted Living Association and the Residential Services Association of Wisconsin, the average Wisconsin facility lost $55.89 per day for each Medicaid recipient.
The reports notes there were 16,490 Medicaid recipients residing in nursing homes in 2016, which would amount to a daily loss statewide of $921,626 — or nearly $1 million per day.
At that rate, since 2016, nursing homes in Wisconsin have lost $2.9 billion in revenue.
There likely are more Medicaid recipients living in nursing homes today than in 2016.
According to the United States Census Bureau, the population of people 65 years and older has grown from about 40 million to nearly 56 million between 2010 and 2020
Rates
Medicaid reimbursement rates were increased this year enough to make a difference in nursing home operations, and the reimbursement rate is set to have regular increases.
The Neighbors required borrowing from Dunn County’s general fund during two years of the pandemic but will be sustainable now with the increased Medicaid reimbursement, Dr. Haug said.
The Neighbors of Dunn County is operated as an enterprise fund, which means that the accounting is done in the same way as it would be for a business enterprise.
The highway department also is operated as an enterprise fund.
Revenue available to the Neighbors comes from Medicare reimbursements for people who are there for rehabilitation and from Medicaid and private pay for people who live at the Neighbors. The revenue for the nursing home facility does not include property tax levy.
Revenue for the highway department does include property tax levy.
Increased cost
In 10 years, the cost of renovating the highway department facility and building additional storage will be twice the amount that it is now, Binder said.
Bjork said he would prefer not to put off the highway department project for four or five years.
Dr. Haug said PMA could give information on the rules and regulations for borrowing and whether it would be possible to borrow $16 million in two increments and use the money in different years.
The county could invest $16 million in the highway department facility, but to build brand new would be $30 million to $32 million, Binder said.
New highway department facilities in St. Croix County, Barron County and Eau Claire County were built at a cost of about $30 million, he said.
Readers should note that Dunn County has 425 miles of county highway to maintain, while St. Croix County has 335 miles of county highway, Barron County has 291 miles, and Eau Claire County has 421 miles of county highway.
Spending $16 million would bring the Dunn County Highway Department facility up to be comparable with St. Croix County, Barron County and Eau Claire County, Binder said.
There is a cost impact on highway department vehicles and Dunn County Sheriff’s Department vehicles from being stored outside, Dr. Haug said.
The equipment deteriorates from salt, sun and cold weather, she said.
It would be interesting to see if there is a way to determine how many more years the life of the equipment could be extended it if were stored inside, Dunbar said.
A wash bay would most definitely extend the life of the highway department vehicles. Washing the salt off the trucks and then parking them inside would extend their useful lives, Binder said.
Over the next several months, the highway committee will wait for additional numbers provided by the presentations and will continue discussing the issue of the highway department facility, said Randy Prochnow, county board supervisor from Menomonie and chair of the highway committee.
