Warren County Administrator Paul Dusek advises county supervisors April 18 that going forward with the sale of Westmount nursing home makes sense, as the county would be facing substantial liabilities if it takes other courses of action. The board voted by a narrow margin not to go forward immediately with a pending sale to Specialty Care Group, after question were raised about the sale price and terms. The decision may be reversed soon, however, as two supervisors who have supported the sale were not present for Friday's vote. (rear): County Board Clerk Joan Sady and Board of Supervisors Chairman Kevin Geraghty listen to Dusek's comments.
A resolution to move ahead with the proposed sale of Warren County’s Westmount nursing home was narrowly defeated by the county Board of Supervisors Friday April 18, after questions were raised about the proposed sale terms and price.
Twelve of the 18 supervisors voted in favor of the sale, but the weighted vote of the board — which allocates more power according to population represented — tallied 501 against moving forward to 499 in favor.
The vote doesn’t necessarily halt the proposed sale of the facility for $2.3 million to Specialty Care Group, however, as two supervisors who have supported the sale were absent from the supervisors’ monthly meeting.
County leaders said after the meeting that the issue would likely be raised again within weeks at the county board’s Facilities Committee meeting.
Supervisors said at the April 18 meeting that they weren’t ready to move ahead with the sale because they weren’t sure whether the nursing home’s cogeneration plant operation — which has cost the county millions of dollars — may have depressed the price offered by Specialty Care. The cogeneration plant operates under a lease-purchase agreement with Siemens Building Technologies that extends for about seven more years.
Voting against moving forward with the sale were Queensbury supervisor John Strough, Glens Falls supervisors Peter McDevitt and Jim Brock, Johnsburg Supervisor Ron Vanselow. and Queensbury supervisors-at-large Mark Westcott and Doug Beaty.
McDevitt, representing Glens Falls Ward 2, urged the board to renew negotiations with Fort Hudson Health Systems, as their lower bid for the home might be boosted with the lack of obligation to the cogeneration contract with Siemens. McDevitt cited Fort Hudson’s reputation and their track record in caring for and employing local residents.
But Board of Supervisors Chairman Kevin Geraghty and county Administrator Paul Dusek responded that Fort Hudson didn’t cite the cogeneration contract during the negotiation process as a factor in their bid.
Several supervisors, however, cited an April 18 article in the Post-Star in which Andrew Cruikshank, CEO of Fort Hudson was quoted as saying that his firm was unwilling to buy the nursing home with the cogeneration contract in force.
But Geraghty repeatedly said that no such concerns were raised in the negotiation talks with Fort Hudson. The main problem with the potential sale to Fort Hudson, he said, was their stipulation that the nursing home be owned and operated under non-profit status, which would take the home off the county tax rolls. Specialty Care’s bid called for the nursing home to be a taxable, for-profit entity.
Brock, who represents Glens Falls 4th Ward, raised the question that with the home now losing about $700,000 per year — with approximately $500,000 annually due to the cogeneration contract — the quality of care under private ownership might be compromised.
Supervisors also cited their opposition to the county guaranteeing that Specialty Care would receive reimbursement for cogeneration costs from the state — a provision that could cost county taxpayers $1.26 million over the next seven years.
But Dusek and county Budget Officer Frank Thomas warned that financial deficits at the home were projected to spiral, costing county taxpayers plenty during the time the sale of the home was postponed. He said that in 2015 alone, the county would likely face a $780,000 shortfall, and more if state reimbursement rates were reduced, which is a possibility.
Strough questioned whether the 28-acre parcel of county-owned land, proposed to be included in the sale of the facility, could yield a substantially higher sum for taxpayers if sold separately for development.
Several county supervisors have questioned whether the sale price reflected the true value of the home, citing that other counties around the state have received far higher prices per bed. Dusek and others have said the $2.3 million price represents market value, and that nursing homes selling for a higher price have been larger facilities.
But Westcott noted that Steuben County sold its 105-bed nursing home to Specialty Care for $11 million, or $105,000 per bed, versus the proposed sale of Westmount, which would yield $28,700 per bed.
He suggested that the county halt the cogeneration operation and re-connect to the power grid, stop making payments to Siemens, and re-bid the sale of the home.
Dusek and county Attorney Martin Auffredou, however, have warned that such a move would expose the county to a $1.3 million liability and likely prompt a lawsuit by Siemens that would leave taxpayers with heavy legal expenses.
But McDevitt suggested that county officials propose to Siemens — which is under investigation by law enforcement authorities over the Westmount contract — that the cogeneration contract be voided.
“Let’s reach out to Seimens, tell them we’d like to end this deal — and tell them to come and pick up their equipment,” he said. “Maybe they don’t want to go down this crazy road.”