Bulk of Cedar Haven sale proceeds likely headed to pension fund
The bulk of the expected sale proceeds from Cedar Haven Nursing Home in Lebanon County is expected to go to fix the county's ailing pension fund.
A group of outside and county-contracted advisers met with the Lebanon County commissioners Wednesday to start discussing a plan for how to use the $25.5 million a Philadelphia-area health care management company is paying to buy the facility.
Accountants and advisers told the commissioners the amount needed to solidify the county’s employee pension fund is about $17.6 million, around 68 percent of the total sale price. That includes $4.6 million for an annual payment not made this year and about $13 million to cover severe underfunding for the last decade.
The board has said the main reason it considered selling the nursing home was to relieve the county of the exorbitant operational costs and to use the proceeds to enhance the county’s pension fund. Currently, it is only funded at about 72 percent, but officials said 80 percent is a target to make the fund healthy again.
The creaky pension fund and expensive operation of Cedar Haven were two specific reasons Standard & Poor’s Rating Services downgraded the county’s bond rating in March from A- to BBB-.
Fixing those problems, county officials have said, should merit reconsideration of the bond rating. A lower bond rating means higher interest on future bond purchases and high rates for bond insurance.
The commissioners have not made a final decision on how much the county would commit to the pension fund or where any remaining funds would go.