City takes control of nursing home building

Jason Ferguson

Eighteen months after Monument Health announced it was closing the Custer Care Center, the City of Custer is on the home stretch of having a nursing home in Custer once more.
On May 3 the City of Custer and Monument Health signed an agreement that will see the nursing home facility at 1065 Montgomery Street become the property of the city, managed by a board of volunteers and run by a company that has a dozen profitable such facilities throughout the state.
To be sure, those involved with the process of acquiring the facility say, there is still plenty of work to go. But, if all goes well, the yet-to-be-named nursing home could open its doors to new residents as soon as the fall.
“It’s for the greater good of the community,” said Monica McGowan, one of the citizens who banded together to work on acquiring the building and keeping a nursing home in Custer. “We heard, and would agree, that if we don’t have a nursing home it’s a death knell for the community. You have to take care of your seniors.”
Hundreds of man hours went into acquiring the facility and lining up a suitable company to run it, and the work to do that began immediately after Monument Health announced the closing (which happened only a handful of days after Monument officials told a group gathered at a Custer Economic Development Corporation meeting that things were fine with its facilities in Custer) when mayor Bob Brown decided he wasn’t just going to accept the closing and went to work on how to either prevent Monument Health from closing it or how to bring another nursing home into the fold. Privately, residents also began to meet in the hopes of saving the facility.
Brown said former Monument Custer Hospital and Market president Mark Schmidt had told him earlier the nursing home didn’t have enough employees and would be cutting back, and in December told Brown the Monument Health board of directors would soon have a vote to determine whether or not to keep the facility open at all.
“That’s when I started bugging him. ‘Give me a chance,’ asking what the city can do (to keep it open),” Brown said, adding that he was told the facility was hemorrhaging money but the decision would not be about money.
Soon thereafter Brown says Schmidt called city hall and told office staff to let Brown known he wanted to hold a special meeting. It was at that meeting Schmidt informed Brown the Monument Health board had made a decision—the care center was to be closed. By February of 2022 Monument had shut the facility down, at least in terms of providing nursing home care.
Over the next few weeks, Brown said, he was in constant contact with Monument Health, “trying everything and getting nowhere” in regards to getting the board to change its mind. By the end of January he knew he needed to enlist help. That’s when he called local businesswoman Janet Boyer.
“Quite honestly, I did it because Bob asked me to,” Boyer said. “He knew exactly what he wanted and who he wanted on the board.
“Both my mother and my father were (at the facility, then called Colonial Manor Nursing Home). Their care was amazing. So I saw firsthand how much it was needed.”
Brown had other names in mind for the task force as well. Local businessman Mike Tennyson was enlisted to help, as was former Custer County sheriff Rick Wheeler.
As for McGowan, she called Boyer and said she pled her case for an hour as to why she needed to be on the committee.
Others were brought into the fold either through the committee or through help via expertise or advisement. Those include Marci  O’Connell, former mayor Gary Lipp, city alderman Todd Pechota, Dr. Joy Falkenburg and Dr. Cleve Trimble.
“It me, it was really personal,” Tennyson said.
And for good reason. Tennyson helped tend the masons that laid the concrete block and brick at the facility when he was fresh out of high school, and his father, mother and grandmother were all residents. His late daughter, Jill, was a social worker at the facility and was passionate about the work she did there.
“On a macro perspective, that’s one of our biggest assets we have in this community and we have to preserve it,” Tennyson said. “We have quickly become a retirement community. We have to have a continuum of care (hospital, assisted living, nursing home) for our residents. We have a great hospital, we have great doctors. We need that component. We need a nursing home. It’s an asset Custer cannot afford to lose.”
Wheeler said he also has had family at the facility over the years, but had his doubts if he was the right man for the job in terms of being a board member.
“It’s just something dear to me I want to keep open,” he said. “It’s important we have a nursing home so people don’t have to leave the area to see their folks.”
Despite the mayor and task force’s passion the building should remain a nursing home, many at Monument Health didn’t feel the same. Although the two sides eventually came to a deal and will continue to play in the same sandbox, so to speak, at the facility, the relationship was complicated, and at times, task force members say, felt adversarial.
Tennyson said initially Monument brass were less than empathetic to the town’s plight to keep a nursing home and weren’t budging that the building belonged to Monument and it would stay that way.
McGowan, the researcher of the task force, dug into the agreements between the city, Monument Health or entities such as Custer Community Health Services, Inc. and found a warranty deed that initially said if Monument Health (then Regional Health) stopped using the facility as an elderly care facility, it would revert back to the city’s ownership. However, in 2016 the wording of the deed was changed slightly so that it had to only be used “for health care-related purposes.” For a while, the task force and city even considered suing Monument Health in an attempt to stop the closing, but realized with the updated warranty deed verbiage they likely didn’t have a leg to stand on.
“(We realized) we would be better off sitting across the table and working out an amenable solution to this,” Tennyson said.
While family members of residents of the facility scrambled to find locations for their loved ones (with some having to place them hundreds of miles away) meetings were taking place where Monument officials told the city and task force members how much of a financial disaster the facility was, that it couldn’t be properly staffed, and as such, quality of care was suffering. The COVID-19 pandemic exacerbated a lot of issues as well, task members were told.
McGowan said the task force asked for documents that would help with due diligence, some of which were never received. Tennyson said Monument Health wanted a non-disclosure agreement signed, which he said the task force would have gladly done in the hopes of receiving the financial statements to see where the problems lay. Those were never received, either.
The tide began to turn, however, when current Monument Health Custer Hospital and Market president Barb Hespen began in that role. Tennyson called Hespen’s arrival “a breath of fresh air.”
More meetings were held, and the framework of a deal through negotiations that included Monument Health president and CEO Paulette Davidson, as well as Monument Health legal counsel, began to form. That agreement was not for the city to take over the facility in its entirety. Rather, Monument Health would  agree to give the city the building back via a warranty deed with the caveat  Monument Health have exclusive use of the laundry and kitchen facilities. The recently-constructed hospital has neither such facilities. Monument is now developing plans to add these features to the new hospital.
Monument Health will continue to provide food service and laundry service for the nursing home when it reopens, something Tennyson says makes sense and can even save money as there won’t be a need to hire employees for those jobs.
“We would have been losing money if we had to hire them, because as we ramp this thing up, maybe six months into this we only have six residents up there,” he said. “If we can buy the meals from Monument it’s more economical for us.”
The nursing home will also rely on Monument Health for myriad of medical services, including physical therapy, labs and occupational therapy. Monument Health has agreed to pay its way in terms of utilities for the first sixth months of operation.
As for operation of the facility, it originally appeared that was going to be done by Avera Health, the well-known East River healthcare company, but a deal for that entity to manage the nursing home fell through at the last minute due to a joint-purchasing agreement with Monument Health that basically stipulated both those companies will stay on “their sides” of the Missouri River. The task force then learned of Caring Professionals, which has 12 profitable facilities across the state it manages, although the closest one to the Black Hills is in Lemmon.
McGowan said one of the things that stuck with her in the interviews of the owners of Caring Professionals is that even the management of the facilities operated by Caring Progressionals are CNA certified and work on the floor of the homes. Tennyson and McGowan said Caring Professionals showed immediate interest, received positive reviews and was also given the thumbs up from the state’s Department of Health.
“They are very excited about coming to Custer,” Tennyson said.
The task force formed a 501(c)3 not for profit corporation called Custer Cares. McGowan, Tennyson, Boyer and Wheeler are the incorporators and will serve as members of the board of directors, although the board can have up to seven members and would like to welcome at a few more board members with medical knowledge.
In the coming months the city will deed the facility to Custer Cares, which will operate the facility with Caring Professionals serving as the management company. The financial risk will be on Custer Cares, not Caring Professionals or the city, as the Custer City Council made it clear early in the process that while it whole-heartedly supported pursuing the facility it did not want to be in the nursing home business.
The city has also agreed to provide a safety net of sorts financially for the organization. For years, the city has paid $347,000 annually to Monument Health for the hospital, and with that newest 10-year obligation about to be paid off, the council has agreed to commit to three years of the same payment to Custer Cares, should it be needed. The council resolution committing that money to Custer Cares can then be used as collateral for a $1 million line of credit, which Dacotah Bank is helping facilitate. Projections show the nursing home should break even at 14 to 15 months, but will “bleed bad” as it gets going, Tennyson said.
However, if all goes planned, the $347,000 payments should never been needed. If it turns out it’s not working and won’t make money, Tennyson said, Custer Cares can hold its head high knowing it tried to make it work. Should the nursing home fail, the facility will once again belong to the city.
Custer Cares will have to find furniture for the dining room and common room at the facility, but the beds in the rooms remain. Monument Health is also providing a lot of equipment.
Caring Professionals has told Custer Cares that 30 to 35 patients is the right size for such a facility, so the wings at the facility will be opened one at a time as the previous wing gains traction. If the facility takes off a wing could be remodeled into a private pay wing, as it has been found that a combination of Medicare, Medicaid and private pay seems to make nursing home facilities function best in terms of finances.
Perhaps the biggest challenge, though is finding the staff to operate the facility. Housing is sparse in Custer for new people moving to town, but Tennyson and McGowan said some former employees have indicated they may return to work at the facility with the new management at the helm.
“It’s by far our biggest challenge,” Tennyson said. “If we’ve got the right culture and special sauce up there it can be a great place to work even though it’s a hard job.”
Tennyson lauded Brown and the Custer City Council for how supportive they were of the task force as the process moved along, a process that was done quietly, but necessarily privately.
“We told Bob we wanted to operate in quiet because it was a very emotional issue,” Boyer said. “We weren’t trying to pull something on the citizens. The mayor and the council were so good to us. They never pressured us. They had total confidence in us.”
A public hearing is planned to discuss the future of the facility Tuesday, May 23 at the Custer County Courthouse Annex Pine Room. The hearing is scheduled to begin at 5:30 p.m.
Both McGowan and Tennyson emphasized there is still work to be done before the opening is set in stone, and Brown said while he can see the finish line, he’s not ready to celebrate just yet.
“When one person goes in there, I’ll be good,” he said. “The task force has been Johnny on the spot. It would have never happened without them, and the council supported them every step of the way. It’s worked really well. It was a team effort on everybody’s part.”
Despite the tense negotiations, Custer Cares members say they are appreciative to Monument Health for giving the facility back to Custer and look forward to working with them as the nursing home opens.
Hespen said in a press release that Monument Health is a proud partner and dedicated member to the City of Custer.
“As a member of this community we want Custer to have the opportunity to find the right care provider to serve the needs of the community,” she said. “We are dedicated to providing high-quality patient care now and into the future. It’s also important that the community has access to all the services it needs. We have appreciated the collaboration with the City of Custer on the future use of this facility.”
Custer Cares members say it’s paramount the community support the facility when it opens. If it doesn’t receive community support, they say, it is doomed to failure. Volunteers will also likely be needed for interior work projects prior to opening.
“It won’t survive without this community’s support,” Tennyson said, saying he recalls when community organizations supported the operation both physically and financially and school children visited the facility regularly. “That is what we are going to need again. That’s what’s going to build confidence in the operation. Then the community will realize what a great asset it really is and worthy of their support.”

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