County moves to sell Pine Haven

HUDSON—The Pine Haven Subcommittee of the Columbia County Board of Supervisors took the first public step last week toward privatizing the 120-bed nonprofit Pine Haven Nursing and Rehabilitation Center in Philmont. The county has owned the facility since the 1920s.

The subcommittee voted 4-1 on April 24 to recommend to the Health and Medical Services Committee that the county stop work on the $32-million Pine Haven project, the plan for a new 128-bed skilled nursing and rehabilitation facility, “pending future developments.” The subcommittee also recommended that the board solicit proposals from those interested in purchasing Pine Haven.

Supervisor Patrick Grattan (R-Kinderhook), who chairs the subcommittee, made the motion. Voting with him were Supervisors Art Bassin (D-Ancram), John Reilly (R-Gallatin) and Sarah Sterling (D-1st Ward, Hudson). Voting “nay” was Clifford “Kippy” Weigelt (R-Claverack).

For the hour prior to the vote, the talk was of numbers. County Treasurer P.J. Keeler and county controller Ron Caponera attended the meeting to make a presentation about Pine Haven’s finances. Despite Medicaid reimbursements and “intergovernmental transfers” from the federal government to offset some of the costs of running county nursing homes, Pine Haven ended 2012 owing the county $1.2 million; in 2013 the shortfall for the facility was $3.5 million.

The county’s 2015 budget would need a $4 million line just for Pine Haven, said Mr. Grattan, leading to a 10% tax increase “for Pine Haven alone,” he said.

Such dire projections affect not only the county’s general fund but also its bond rating from Moody’s Investors Service. In order to build the new Pine Haven facility, the county needed to issue a new serial bond, that is, one with regular, level debt payments. Moody’s rating is critical for bonding, said Mr. Caponera. “Moody’s cares about your fund balance: what you have in the bank.”

The subcommittee met a day before Moody’s issued its rating. In fact, the agency maintained the county’s solid rating of Aa3, though it also gave the county a “negative outlook” because of the need to support the nursing home.

Although the county’s cash balance is down, Mr. Keeler told the subcommittee, its financial condition is “still, overall, healthy.” The county paid $6.7 million to its schools in April, he said, and when Pine Haven needs a loan to cover pension payments, or even payroll, the county can cover it.

The county’s debt level is low, but with only about 63,000 residents, the debt level per capita is high. “We have a fiduciary responsibility to those 63,000 residents,” Mr. Keeler added.

Private operators of nursing homes have economies of scale that the county will never have, said Mr. Reilly. “Private companies run 40 and 50 nursing homes, we have just one. Our staff might be efficient, doing the best they can do, but it won’t be enough.”

Mr. Grattan concurred. He, Ms. Sterling and Mr. Keeler had met on April 23 with representatives from the Pine Haven union. “They suggest they can help,” said Mr. Grattan, “but not to the tune of $2 million a year, much less $32 million.” Pine Haven has about 200 employees, including per diem workers, and “we know which employees have significant time there,” said Mr. Grattan.

Outside of New York City, he added, of 33 county-owned nursing homes, eight are for sale and another five are being considered for sale.

When Mr. Weigelt asked if a private owner would take the nursing home elsewhere, Mr. Reilly said that if they did, they would lose their state Certificate of Need. A new owner could, however, decide to close Pine Haven and leave. “But no one has said that the location is a negative,” he added.

Mr. Caponera agreed. At this time, he said, New York State does not allow publicly traded companies to own nursing homes in the state. “I bet that in five years, that law will change,” he said, and nonprofit private operators are positioning themselves for that eventuality, when the for-profit companies can get into New York State, and buy them out.

Addressing the decision to suspend work on a new nursing facility to replace the existing Pine Haven, Mr. Grattan said, “I was on the Health Committee in 2010, and I was a big supporter.” But since then, he said, “The picture has changed. I don’t see how the county can build a new nursing home.” Not only Pine Haven’s inability to pay all its bills without help from the county but also the debt and the drag on the county’s finances preclude such a large building project, the chairman said.

With that, the subcommittee worked out the wording of its motion. Mr. Weigelt voted against it, saying he opposed stopping the project and had not received information that he had requested. He didn’t want to cut off the project, he said, and discover later that new conditions made it possible.

“If the situation changes, I’ll be the first to retract the motion,” said Mr. Grattan. I’m willing to listen to anyone. But at $350,000 a month, we don’t have the luxury to sit around and wait.”

“We’ll work with potential buyers to protect our workers,” promised Ms. Sterling.

“Thank you,” said Mr. Grattan as the meeting adjourned. “This is not an easy thing for anyone.”

The Health and Medical Services Committee meets next on Tuesday, May 20.

 

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