Today is the day Mercer County jettisons its obligations to the once debt-plagued Coolspring Township nursing home, Woodland Place.

But history repeats itself: This happened 12 years ago.

In December 1997, a board of Mercer County Commissioners sold the former county home to the non-profit board of Woodland Place in an effort to get out of the nursing home business for good.

It didn’t stick.

In 2002, they would be financially tied again to Woodland Place. By 2004, they would be paying hundreds of thousands of the home’s debts each year. And today, Mercer County is about $6.5 million poorer because of those debts.

Today is also the day the nursing home is let loose from taxpayer protection and gets a new name. Just as it became Woodland Place near the beginning of 1998, the nursing home will evolve into Avalon Springs under new ownership Jan. 1.

Still, in the minds of many Mercer Countians, Woodland Place has been a fiasco. Here’s the chronology of what happened, and the anatomy of how it may have gone wrong.

Roots of Woodland

People have called the county’s obligation to pay for Woodland Place a problem. But before it was privatized, the Mercer County Living Center was an albatross in its own right.

It cost the county between $300,000 and $500,000 every year just to maintain the nursing home, said former County Commissioner Cloyd “Gene” Brenneman.

Without any improvement for 40 years, the place was in deplorable condition, Brenneman said. Wind blew through the gaps in the windows in the winter, and it became a greenhouse in the summer.

Selling the home was the only way to save it, Brenneman said, noting commissioners didn’t choose to privatize in a vacuum.

For the last 20 years, he said, most counties have been moving away from the “county home” model of caring for the elderly. Commissioners were talking to boards in other counties who had done the same thing, Brenneman said.

Brenneman and former Commissioner Richard Stevenson – now a state representative – voted to privatize and turn the Living Center over to Woodland, run by a non-profit board. Former Commissioner Olivia Lazor was the lone dissenter.

According to Ms. Lazor, she was initially in favor of the plan, “until they didn’t put any money behind it.”

With the building in such bad shape, Ms. Lazor said Woodland needed the cash for major renovations. Ms. Lazor has always said her stake in Woodland was to keep it open, operational and to be sure there are places for the county’s poor to stay.

Commissioners sold the building for $3 million. But some have said the Woodland board paid too much. In borrowing $3 million to buy the home – and later much more to renovate it – did the home’s new board bite off more than it could chew?

Whether or not Woodland’s starting debts sowed the seeds of later problems, it’s clear the $3 million price wasn’t settled on overnight. There were about nine months of negotiations before Woodland bought the home, said county Controller Tom Amundsen.

County jumps back in

By about 2001, Woodland Place was in sore financial shape. They owed $3.5 million in mortgage debt and another $4.3 million for two renovation projects.

The home itself was valued for less than the $8.8 million they owed, current Woodland board president Timothy Jablon has said. It is being sold today for only about $5 million.

They were looking for a way to consolidate their loans, and the county was the ticket. By underwriting the debt – effectively co-signing – the county could ease the interest rate burden.

So in 2002, a board consisting of Brenneman, Ms. Lazor, and the late former Commissioner Kenneth Seamans approved underwriting Woodland’s consolidated, $8.8 million bond issue. Seamans, who had just been installed months before to fill a vacancy on the board, would later become a vocal critic of Woodland Place.

The decision to back Woodland and essentially become responsible for its future debts was a quiet one. Counties often do underwrite projects, using their bond rating and the promise of their taxing power to ease investors’ risk. Since then, the county has underwritten projects like Sharon’s new sewer plant, potentially saving millions to the taxpayers.

But commissioners made their decision without enough information, said Amundsen, who had been controller for just three months in March 2002 when commissioners backed Woodland’s debt.

Amundsen opposed the move at the time. There wasn’t enough financial information on the home to be sure of its financial footing, and he said then the county could end up owning Woodland all over again.

That’s just about what happened.

Woodland continued to flounder. It didn’t make a big splash until 2004, though, when a new board of commissioners considered advancing the home $1 million to bail it out.

Then-Commissioner Michele Brooks – now a state representative – argued that without the $1 million, the county would just end up making Woodland’s bond payments anyway.

She was right about that.

Ms. Brooks and Ms. Lazor both supported the $1 million bailout. Commissioner Brian Beader, new to the job, opposed it. He thought it was throwing good money after bad.

And Amundsen wouldn’t sign the order, arguing it wasn’t legal to funnel the money to a private nursing home. The matter went to court, and Amundsen won.

Between the failed $1 million infusion and the county bailing Woodland out for the first time in September 2004, the public’s eye was drawn to the nursing home. Editorials were written, letters to the editor were printed and ever since, the word “fiasco” has been applied.

Even if underwriting Woodland in 2002 was a mistake, Amundsen said commissioners did one smart thing: They got $3.5 million up front for the original sale of the home when they backed the bond, and they put it aside in escrow instead of into the general fund.

That means as they paid the six-figure Woodland debt twice a year, taxpayers were insulated from the costs, at least for a while. As time went on, though, the money commissioners set aside in 2002 began to dwindle. A solution was needed.

New management

Woodland’s finances degraded even with the county making their bond payments. Vendor debt stacked up. An administrator mistakenly used renovation grant money to pay for operating costs, and it took some sorting out.

Most commissioners past and present and even Woodland’s current board president Jablon now say Woodland needed better management in its day-to-day operations for years.

That management change wouldn’t come, though, until 2008 when new commissioners took office.

Woodland was the heart of the county commissioner campaign through 2007. Even Beader ran on the “unfinished business” of fixing that problem. So when he and Commissioners Kenneth Ammann and John Lechner took office, the three set Woodland in their sights.

Presenting a united front, the board eventually ran with an idea once put forward by Ammann during the campaign – bring in an experienced, outside-management company.

They also pushed Woodland’s board to make the necessary administrative changes, Ammann said. It wasn’t until every commissioner was on the same page that they were able to use their status as effective mortgage holder to leverage the board for a change.

Members of non-profit boards don’t have an easy job. Jablon said every board member – serving unpaid and under intense public scrutiny after 2004 – has done a bang-up job. Often, their focus has been on maintaining quality care for Woodland’s residents.

What helped was a change in the Woodland Place board, in 2008, that brought in people with more nursing-home experience, Jablon said.

Eventually, commissioners found their man to run Woodland. Working for South Western Alpha, a company Ms. Brooks helped put commissioners in touch with, Woodland Administrator John Hughes has helped bring the nursing home to its turning point.

In 2007, Woodland lost $1.7 million. Hughes took over in 2008, when the home posted a $250,000 loss. In 2009, they are posed to make a $500,000 profit, a first for Woodland.

Hughes made plenty of changes, but partly, he said they did it by actually adding services for Woodland residents. By providing higher levels of care, the home got a much better tier of government Medicare and Medicaid reimbursement.

Jablon said Woodland’s managers before Hughes weren’t incompetent – they just weren’t right for the job.

“I can’t say anything bad about people who couldn’t make it go, that’s just what happens,” he said. “Abraham Lincoln failed at many jobs, went bankrupt a few times, and look what happened to him.”

What the future holds

Today will be a bit of a celebration for commissioners. They campaigned on fixing Woodland Place with minimal hurt to the taxpayer, and despite the enormous complexities of the deal, they may have done just that.

It came with a price, though. To kill the $8.8 million bond issue, commissioners have to front $3.9 million from the general fund. And that fund is directly supplied by local property-tax dollars.

And to bring the pricetag home: Over a two-year period, one out of every $11 of county taxes coming in will feed Woodland.

So that’s the bottom line for Mercer Countians: Woodland will continue, 100 jobs and the home of 100 people are saved. The county is finished paying for the home.

Woodland will soon be called Avalon Springs, and its new owners have big plans. They hope to expand, to attract some businesses to set up shop on their parcel of land. Commissioners hope the home flourishes and helps their bottom line via more tax dollars.

The county, meanwhile, is about where it was in 1997, maybe a little better or a little worse for having spent some money and for giving the former county home a new lease on life.

And the county is finally out of the nursing-home business.