Image: Star Gazette

The Chemung County Skilled Nursing Facility, located in downtown Elmira, is a healthcare facility owned and operated by Chemung County that provides long-term, inpatient, skilled nursing services to residents who have chronic, debilitating illnesses or require inpatient rehabilitation services.

With the capacity to employ approximately 300 people and house up to 200 patients, Chemung County’s Nursing Facility is an important part of the fabric of our community, as it provides critical societal benefits such as high quality, affordable healthcare and stable, well-paying jobs for healthcare professionals.

However, the Nursing Facility also unfortunately places a significant fiscal strain on Chemung County. As anyone who follows local government well understands, Chemung County has an extraordinarily tight budget. The combination of very serious and time-sensitive infrastructure needs for our municipal sewer system together with a yearly reliance on deficit spending that continues to diminish Chemung County’s reserves has resulted in all options – including outright privatization of the Nursing Facility or the creation of a public-private approach to its management – being placed on the table by Chemung County Executive Chris Moss as he evaluates what options we have for reducing county expenditures.

As explained below, the process of exploring whether Chemung County should privatize the Nursing Facility is already underway. It appears the Legislature will be provided with financial data, i.e. the costs associated with owning and operating the Nursing Facility along with the potential fiscal benefits a sale could bring, before any binding decisions are made.

However, financial data is just one piece of this analysis. The critical question is not simply how much the Nursing Facility costs, but whether we, as a community, feel those costs are outweighed by the societal benefits it provides back to Chemung County. In order to undertake this evaluation, we – and by that I mean all members of the community – need a mechanism through which we can identify and somehow attempt to quantify these benefits.

The purpose of this blog post is to encourage community discussion of this very important issue. Please feel free to leave a comment here or on the Chemung County Matters Facebook page, and/or attend the first of my 2020 7th District Town Hall meetings on Thursday, February 27th at the West Elmira Community Center beginning at 5:30 pm where this matter will be discussed. The public is also welcome to offer comments of up to 5 minutes in length at the Chemung County Legislature’s monthly full meetings, although the format of public comment period at the meetings is not great for promoting true discussion as legislators are not permitted to respond.

History

Chemung County’s website, found here, provides a brief history of the Nursing Facility:

In 1837, the Chemung County Board of Supervisors directed its “Superintendent of the Poor” to purchase a new site for a County Home. A 180 acre farm with a log house located in Breesport was purchased.  A stone foundation and a small addition were built onto the log house and the County Home opened its doors and was to remain operating for the next 134 years.

The first hospital wing was built in 1888, separating the skilled nursing area from the almshouse. At the “infirmary” in 1902 there were five iron bathtubs for the men and one enameled iron tub for the women.

Groundbreaking for the present building took place in May of 1969 and was ready for occupancy in July 1971. One hundred residents were transferred from the County Home to the new nursing facility. The last of these residents died in 1988, but there are still staff members who remember working at “the Infirmary”.

Currently, over 300 personnel care for 200 residents. The nursing department consists of over 200 staff members, thereby constituting the bulk of employment. The 200 beds are divided into five units of 40 beds each. The 12 private rooms on each unit are occupied on a first-come first-serve basis, cost the same as a semi-private bed, and are not limited to self-paying clients.

An overview of county-owned nursing facilities in New York

In 2013 the Center for Governmental Research (CGR) published a report, found here and embedded below, of its research into the benefits and drawbacks for counties that own and operate nursing facilities in New York state.

Although the report is seven years old, it is a very good starting point toward understanding the many aspects surrounding this issue.

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A prior consideration of privatization in Chemung County

At the time CGR was conducting its research, officials in Chemung County began posing questions regarding full or partial privatization of the Chemung County Nursing Facility.

Like now, the questions began with a fiscal analysis. For many years the Nursing Facility has relied upon an intergovernmental transfer (called an “IGT”) to fund its operational budget. In general, an IGT is a financing mechanism authorized by the federal government that allows states to use revenue from local governments to help fund the state’s share of allowable Medicaid expenditures.

Chemung County can apply for two IGTs within each fiscal year whereby the county pays $1,500,000 to New York state and receives $3,000,000 in return. In other words, Chemung County has the option to pay up to $3,000,000 in 2020 and receive $6,000,000, all of which must be used to fund the Nursing Facility.

In 2013 Chemung County entered into an agreement with Marcus & Millichap, a real estate investment firm from Brooklyn, to provide the County Executive with a financial overview and explore options for a possible sale in order to avoid paying any costs associated with an IGT. Information about Marcus & Millichap can be found here.

The 2013 agreement with Marcus & Millichap and a report it authored about our Nursing Facility in 2013 are embedded below:

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The articles below, originally printed in Elmira’s Star Gazette in 2012 and 2013, provide a good overview of the various viewpoints expressed in the community during 2012 and 2013:

This letter by Town of Elmira resident Rosalie Kraji speaks directly to the need we all have for more than just financial data to properly evaluate the Chemung County Nursing Facility’s benefit to our community.

Ultimately, the Legislature did not undertake any steps to privatize the Nursing Facility at that time.

A new look at potential privatization

During last November’s budget workshop it became clear that County Executive Moss intends to revisit the possibility of full or partial privatization.

The 2020 budget does not include any IGT expenditures. Although this does not preclude Chemung County from deciding to apply for one or both, the likelihood is that, unless other changes are made, 2020 deficit spending for Chemung County would increase to nearly $2,000,000 with one IGT and $3,500,000 if two are used.

It appears the Nursing Facility has adequate funding in its own reserves to remain fiscally healthy throughout 2020 without an IGT while county leaders and the community evaluate its finances and long-term viability, and consider all options for future management.

A lengthy discussion of the way Chemung County funds the Nursing Facility begins at 46:40 in the video embedded below that was taken at the Legislature’s second budget workshop on November 13, 2019.

A resolution to enter into a new agreement with Marcus & Millichap appeared on the agenda for the Legislature’s first Health and Human Services Committee meeting of 2020. The agreement, identical to the one from 2013 aside from an increase in commission from 3% to 4% in the event Marcus & Millichap facilitates a sale, calls for the company to provide county leaders and the community with financial data and explore privatization options.

The resolution passed by a vote of 11-4, with Legislators McCarthy, Briggs, Woodard and I voting against it.

I voted no because although nothing in the agreement requires the county to authorize a sale in the event Marcus & Millichap identifies a buyer, I have serious concerns that we have not determined how to properly identify and evaluate the societal benefits provided by the Nursing Facility to our community. Without that part of the analysis, I believe it would be hard – if not impossible – to cast an informed vote on this critical issue.

Going forward

I am very open-minded about this issue, and recognize it needs and deserves thoughtful, abundant community input in order for Chemung County to find the right solution.

As we await feedback from Marcus and Millichap, I have asked our county budget director a few financial questions, including:

-What percentage, if any, of the Nursing Facility’s budget is funded by county property tax dollars? Please use an average percentage over the past 5 years (2014-2019). What does this average equate to on per-year basis for an owner of property valued at $100,000?

– What percentage, if any, of the Nursing Facility’s budget is funded by county sales tax dollars? Please use an average percentage over the past 5 years (2014-2019).     

-What percentage, if any, of the Nursing Facility’s budget is funded by county reserves? Please use an average percentage over the past 5 years (2014-2019). 

-If no IGT is funded at any point going forward, approximately how long will the Nursing Facility remain fiscally viable?

I will do my best to provide answers to these and other questions when I receive them, as well as updates as things progress on this issue. Please participate in the process by sharing your views and letting me know what questions you would like to see asked as we work through this together.

–Christina Sonsire