MONTICELLO - As part of the ongoing response to the serious fiscal crisis Sullivan County is facing, legislators on Thursday unanimously voted to set a public hearing to transfer the Care Center at Sunset Lake (the Sullivan County Adult Care Center) in Liberty to a Local Development Corporation (LDC), as a first step toward selling the nursing home and short-term rehabilitation facility.

“This was not an easy decision but a necessary one in order to ensure the Care Center continues to fulfill the valuable role it's played in our community for three decades,” said Legislature Chairman Robert A. Doherty. “We have consistently lost millions of dollars a year on its operation, due to shrinking State and Federal funding and ever-increasing costs. Now, we're at a point where COVID-19 has dashed any hope of increasing revenue streams for the foreseeable future, and we cannot ask taxpayers to shoulder even more of the heavy financial weight. Yet neither do we want to close it, considering the critical services and employment it provides to our community.”

For the past two years alone, the 146-bed Care Center has averaged a $3.5 million annual operating loss. In addition, the County has had to contribute $2-$2.7 million of local dollars to be able to access Federal aid. The existing accumulated deficit balloons to nearly $22 million when factoring in long-term liabilities like post-employment benefits, accrued compensation and vacation, and depreciation of the 30-year-old facility.

“My office has been working diligently to avoid closing the facility by instead selling it, with the expectation that the new owner will maintain a minimum number of beds and most, if not all, of the existing positions, along with expanding and improving the Care Center in a way that the County is simply not able to do,” County Manager Joshua Potosek explained. “This is the best and really only option to pursue. Keeping the Care Center open under County ownership would involve a significant tax hike, layoffs and/or cuts in existing services, none of which our community can afford.”

On July 14 at 8 a.m. at the Government Center in Monticello, legislators will take public comment on a proposal to transfer the Care Center to the LDC, a nonprofit corporation created by the County to handle the sale of the nursing home and the land on which it sits. A vote by the Legislature to make that transfer will be held subsequent to the public hearing.

“Under State law, an LDC has broader abilities than the County to initiate and conclude a sale that is in the best interests of the County and the Care Center, and it will be able to bond up to the amount we anticipate the Care Center will minimally sell for (in the millions of dollars, at the least),” said Potosek. “Most of that will flow directly into County coffers later this year, thus helping us avoid a potential tax hike in the next budget cycle.”

The LDC will be overseen by three members of the community, appointed by the County Manager, and they will be tasked with carrying out the bonding and finding a real estate firm to market the Care Center. They then will choose the most responsible party interested in the Care Center and initiate a sale. Selection criteria will include not just the offer price but the track record of the buyer and the quality of care they promise to provide.

“I expect this will take approximately 12 months or more, during which the Care Center will continue to be operated by the County (or a third party) via a lease with the LDC,” remarked Chairman Doherty. “Until a sale is finalized, workers will remain County employees with all their normal benefits. We hope to work out an agreement with the buyer of the Care Center to keep as many of those jobs under the new ownership as possible, along with other guarantees, including a minimum number of beds and the institution of a private union shop.

“We're aiming to keep the Care Center open by undertaking this process, as the other option we were considering - and rejected - was outright closure.”

Comments on the proposed transfer to the LDC will be taken in person at the July 14 public hearing or can be submitted in writing no later than July 13 via email to Annmarie.martin@co.sullivan.ny.us or via mail to Clerk of the Legislature AnnMarie Martin, 100 North Street, Monticello, NY 12701.

Care Center Sale

FACT SHEET

WHAT IS PROPOSED? The Sullivan County Adult Care Center (known as the Care Center at Sunset Lake) is proposed to (1) be transferred to a Local Development Corporation (LDC) in order to (2) be sold to a private operator.

WHY IS THIS BEING PROPOSED? Sullivan County is experiencing serious fiscal challenges and has embarked upon a series of measures to reduce expenses in order to avoid significant tax increases and further layoffs beyond the nearly 80 that have already occurred. This sale is part of that effort and is also justified by the consistent and ongoing losses - upwards of $3.4 million in 2019 alone, plus a $2.7 million subsidy in lieu of Federal aid - incurred at the Care Center. In addition, the LDC is empowered by State law to issue tax-exempt bonds up to the anticipated purchase price of the facility, whose proceeds will be deposited into the County's coffers to provide financial stability.

BY WHAT AUTHORITY CAN THIS BE UNDERTAKEN? Section 1411(d) of the NYS Not-for-Profit Corporation Law authorizes the legislative body of a county, by resolution, to determine that certain real property of the county not required for use by the county may be sold or leased to an LDC. It also provides that the sale or lease may be on such terms as may be agreed upon by the county and the LDC, without appraisal or public bidding, except that a lease cannot exceed 99 years. A public hearing on such a transfer is required with 10 days' notice.

WHAT IS THE PROCESS? These are the steps that will be taken over the next year or so:

1. On July 2, 2020, the Sullivan County Legislature unanimously voted to set a public hearing prior to a separate vote to transfer the Care Center to the LDC, which will then lease it back to the County (or a third party) to operate until a sale is concluded. Care Center employees will remain County employees during this period.

2. On July 14, 2020, the Sullivan County Legislature will accept oral public comment on this proposal during an 8 a.m. public hearing at the Government Center's Hearing Room, 100 North Street, Monticello. Written comments will be accepted up until that day and time and can be emailed to Annmarie.martin@co.sullivan.ny.us or mailed to Clerk of the Legislature AnnMarie Martin, 100 North Street, Monticello, NY 12701.

3. Should legislators wish to proceed with the transfer, a vote on such will be held subsequent to the July 14 hearing.

4. If that vote passes by assent of at least six of the nine legislators, the County Manager will appoint three members of the community to the LDC's board.

5. The LDC will be empowered to issue bonds up to the anticipated purchase price of the Care Center, and to also seek a real estate firm to market the facility to interested buyers. The proceeds of the bonding will be used to pay for the LDC's expenses, though the bulk of that amount will be transferred directly to the County to address its fiscal challenges.

6. A buyer will be selected by the LDC based on (in no particular order) offer price, experience with the operation of long- and short-term care facilities, demonstrated quality of care in those facilities, and plans to sustain and enhance the Care Center under its ownership, including the retention of employees and a guaranteed minimum of beds (yet to be determined).

7. The LDC's board will handle the sale of the Care Center. When ownership is transferred to the buyer, the County's lease will end and the LDC will be dissolved, with its remaining assets handed over to the County.

WHAT ARE THE ADVANTAGES?

· The Care Center will not be closed or reduced in size.

· Existing residents will not be displaced.

· The County will receive much-needed funding at a critical time.

· Taxpayers will no longer be required to subsidize the facility's operational losses.

· Staff will continue to be employed by the County until a sale is completed.

· The full range of services will continue to be provided to our community.

· The LDC will ensure the most responsible buyer is selected.

· A significant tax increase, layoffs and/or cuts in services will be avoided.

CARE CENTER INFO AND STATISTICS

· 256 Sunset Lake Road, Liberty, NY

· County-built and operated since 1990

· 146 beds

· 199 positions, with a payroll totaling $13,632,014 in 2020 (benefits included)

· Services include a full array of medical, nursing, personal care, dietary, physical therapy, occupational therapy, speech therapy, podiatry, dental, psychiatry, pharmacy, social, spiritual, recreational and housekeeping.

· Residents and/or families are involved in decisions about care and receive services based on their individual needs.

· Expenses in 2019: $18,920,719

· Revenue in 2019: $15,409,966

· Operational Losses in 2019: $3,510,753

· County Match for Intergovernmental Transfer (Federal Aid): $2,737,812

· Total County Subsidy for 2019: $6,248,565

· Total Accumulated Deficit in 2019: $21,750,767.