MAYVILLE - The fate of the Chautauqua County Home boils down to two options for lawmakers: sell the skilled nursing facility to a reputable buyer, or find ways to drastically reduce operating costs while continuing to front taxpayer money.
Don Pryor of the Center for Governmental Research gave the highly anticipated financial viability report Tuesday during a special meeting of the legislature.
The two-hour meeting proceeded a rally by CSEA union members outside the Gerace Office Building, many of whom chanted: 'Quality care is not for sale.'
OBSERVER Photos by Eric Tichy
CSEA union workers rallied outside the Gerace Office Building Tuesday before a special meeting of the legislature. A financial viability report on the County Home was given, focusing on two options lawmakers have regarding the future of the cash-strapped facility.
The 132-page report essentially offers two choices legislators will have when deciding the future of the cash-strapped County Home.
Choice No. 1 includes selling or leasing the home to a buyer willing to meet all stipulations outlined by the county. The other option, meanwhile, would be to retain ownership - at least for three years - while immediately implementing cost-saving measures and revenue enhancements.
"In the end this comes down to your collective wisdom in terms of what are the values most important to you," Pryor told the legislature. "Is it more financial? If so you probably sell.
"Is it continuing the legacy or continuing the historical commitment to this home? Then you may go in a different direction."
Included in the report were the two offers made on the County Home. Lawmakers last month learned that Absolut Care Facilities Management, LLC and Altitude Health Services Inc. had placed qualified bids on the facility.
Absolut Care, which operates two nursing facilities in Chautauqua County, submitted an offer of $1.6 million a year with a purchase option of $16 million.
Altitude Health, located near Chicago, offered $16.5 million in cash for the County Home.
Pryor, however, expressed concerns regarding those offers. He noted a lack of detailed financial strategies and incomplete questions from both bidders.
Pryor went as far as calling the offer sheets vague, and said more questions needed to be asked by the legislature if the decision was made to sell or lease the facility.
"We think there are some serious issues here in terms of the process itself that I assume, before you make any decision, that you all will be very careful about vetting and going forward," he said.
"Our view is that they (the firm that marketed the County Home) or nobody else at this point thoroughly vetted either of the proposals."
The County Home was marketed by the Chicago-based group Marcus and Millichap.
For the county to retain the home, savings must start and revenue needs to increase. Those potential savings - almost $2.3 million a year - would require limits on salary and benefit increases for County Home workers.
It's a requirement Pryor said would be difficult, yet possible if discussions with the union began immediately.
"The only way this would work is if the county and nursing home were willing to implement a series of cost-savings or revenue-enhancement opportunities," Pryor said.
Other requirements to cut down on costs include implementing electronic medical record keeping and savings through attrition, the report states.
Even with those savings, the county would need to front its portion of a federal matching grant - known as an intergovernmental transfer. In the last five years, the county has contributed $6.6 million in IGT funding, netting the home a $14.9 million revenue boost.
Without the matching. source, the county would see a net annual cost of $3.5 million to keep the home open.
"These are some hard choices here," Pryor said. "We are not saying these are going to be easy to do." There is no guarantee IGT funding will continue, the report notes.
County Executive Greg Edwards said the report affirmed his stance that selling the home would save taxpayers from the burden of continued losses.
"I'm not surprised, that's really the only two choices we had," Edwards told reporters following the meeting. "Continue it and get substantial concessions out of the union ... or sell it to a private-sector entity who is going to pay taxes ... "
"There was a tremendous amount of guess-work being done," Edwards said of the report. "Guessing whether IGT is going to be continued; guessing whether or not the expenses can be (decreased). But that's what the report is, it's an estimation."
As for taxpayers, selling and returning the home to the tax rolls would lower the average tax rate by $1.76 a year. Retaining the facility, which includes continued IGT funding from the county's fund balance, would raise the average tax bill by as much as $17 a year.