The Pioneer Place board of directors will ask voters to approve a new tax levy to help it cover operational costs in November. (The Enterprise/Pat Caldwell)

VALE – The Pioneer Place board of directors hopes voters will step up in November and approve a new tax to help the facility survive.

The proposed tax rate would be 47.74 cents per 1,000 of assessed value beginning in 2021.

The tax levy would raise an estimated $267,000 a year and enable Pioneer Place to pay for its operating expenses, which are climbing each year. The total operating expenses budgeted for this year at Pioneer Place is $4.58 million. 

“It wasn’t a quick decision. It was a lengthy decision with the board talking about what was the best way where we can make sure we can keep Pioneer Place viable and pay our bills,” said John Nalivka, Pioneer Place board chair.

Pioneer Place is a government entity providing skilled nursing, assisted living and rehabilitation services.

A five-member board of local residents oversees Pioneer Place. The facility is funded by a local taxing district but by law that money can’t be used for operating expenses.

Pioneer Nursing Home Health District was created in 1975 and in the 1990s local voters approved a bond measure that financed the construction of the facility. Pioneer Place opened in 2003. Pioneer Place employs 70 to 80 people with a payroll of about $2.3 million.

The current bond – 57 cents per $1,000 of assessed value – will be paid off in two years and that tax would no longer be collected.

That means, said Nalivka, voters will only see a one year overlap between the original levy and the new operating measure.

“It will be a significantly lower assessment than the current bond. So, we felt when the bond is paid down we really need to have this additional income coming in so we can manage the finances of the facility,” said Nalivka.

Pioneer Place is more than 20 years old and will need extensive renovation work, said Nalivka.

“The state came in and said our vent system in the kitchen is not up to par. So, we have to replace all of that, so there’s $70,000 really quickly,” said Nalivka.

The facility also will must buy a new back-up generator, said former Pioneer Place administrator Tom Hathaway.

“We have one generator that supplies emergency power to the entire building in the event of an immediate power outage,” said Hathaway.

Hathaway said the generator is critical to provide power for oxygen and other medical devices needed by residents.

“The generator has a natural gas source. The (state) fire marshal is concerned if there is an earthquake and natural gas service to the building were to fail, there would be no emergency power and people on oxygen and IV pumps would be immediately compromised and have to be evacuated,” said Hathaway.

Pioneer Place must also navigate the rising cost of state and federal regulations and labor, including minimum wage hikes, said Hathaway.

 “When you have increased operating expenses, you have to find a way to reduce those expenses. That is where things get hard. If you start reducing staff you are reducing quality in terms of care. Once you reduce quality of care you have unhappy families,” said Hathaway.

Hathaway said reducing the quality of care at Pioneer Place isn’t an option.

“We don’t need a lot to come within spitting distance to break even,” said Hathaway.

Hathaway said the tax levy will produce about $20,000 a month if it is approved.

“That helps on those months when we lose money. What it does is it lets us replenish the cash reserves we’ve held and had in the past, but they’ve been exhausted by prior years of poor financial performance,” said Hathaway.

Nalivka said the board has “been having to really manage the finances at Pioneer Place” because of rising costs.

“We have increased the rates for the assisted living on private pay but we’ve been very cautious about doing that. We live in a small community and when you start pushing up your price it affects people,” said Nalivka.

The Covid epidemic also has been costly, said Hathaway.

“We had to add staff and increase supply expenses,” he said.

Hathaway said Pioneer Place faced financial woes before, including low numbers of residents and patients.

“We were operating in the red and we had to dip into reserves for four years. So, the cash reserves have dwindled,” said Hathaway.

If the tax levy doesn’t pass, that doesn’t mean Pioneer Place would close, said Hathaway.

“There are adequate cash reserves to keep the building open but it is just going to be a lot harder,” said Hathaway.

New Pioneer Place administrator Chris Monroe said passage of the tax levy is vital for the facility.

“The levy would be something more sustainable,” said Monroe.

Pioneer Place consistently passes state inspections with high marks and was one of 17 nursing homes in Oregon identified in the 2018 HealthInsight Quality Awards. The honor is bestowed on nursing homes that prove their “excellence in providing high-quality care for their residents.”

“We do everything we can to make sure this is a top-notch facility but it does come at a cost,” said Nalivka.

News tip? Contact reporter Pat Caldwell at [email protected] or 541-235-1003.

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