Albany County Nursing Home would be privatized

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Date: Thursday, October 11, 2012

ALBANY -- Albany County Executive Dan McCoy's first budget calls for privatizing the money-hemorrhaging county nursing home along with raising property taxes by 8.9 percent -- well over the state's 2 percent cap.

"I've said I will never waffle from our seniors," said McCoy. "We have to protect the seniors, and we have to protect the taxpayers and accept responsibility. We can't kick the can down the road anymore."

McCoy, a Democrat, said the biggest issue in putting together the $568 million budget was balancing the books amid rising costs of the county's 43 so-called "unfunded mandates" from the state and federal governments, including Medicaid.

The spending plan would mean a $60 hike in the county tax bill on a home assessed at $200,000, or an increase from $3.47 per $1,000 of assessed value to $3.77.

While the budget avoids layoffs, it does cut two children's mental health programs: Intensive Case Management and Supportive Case Management.

The real point of debate in the budget, however, is likely to be the County Nursing Home. After a month of negotiations, on Sunday McCoy signed a tentative deal with Upstate Services Group, which operates Hudson Park in Albany, to lease the home from the county.

He said the privatization would be a "partnership," though the county would have no authority over Upstate Services Group, which runs 11 other facilities.

"They're going to continue on with our core mission, and we're not going to be sending seniors out of the county," McCoy said.

McCoy's transition team recommended closing the home, citing escalating costs of the operation and a $12 million deficit in 2011. A request for proposals to run the facility put out earlier this year drew only one response, which would have actually cost the county additional money.

If approved by the County Legislature and state Department of Health, the proposed transition would take place in the second half of 2013.

The contract would include a 10-year lease, with an option for an additional five years.

"It was probably the hardest decision I will ever make as county executive," said McCoy, whose father was once a resident of the home. McCoy took office in January and had supported building a new facility as the County Legislature's chairman.

County Department of Social Services employees would help ensure the county home avoids "cherry-picking," a practice in which private nursing homes deny residence to people requiring more care in order to minimize staff and maximize profitability, according to McCoy.

County Legislature Chairman Shawn Morse, an advocate for the nursing home, said he was "cautiously optimistic" about the proposal.

"I think I can understand the direction that the county executive is trying to take," he said. "Anytime you privatize you lose the autonomy to control it, and anytime you go private there's a danger of being driven by money instead of the mission."

Other legislators reflected the optimism, including Republican Minority Leader Christine Benedict and Gary Domalewicz, a Democrat and chairman of the Committee on Elder Care.

McCoy's office sent a letter to nursing home employees on Wednesday morning explaining the situation. Upstate Services would interview all of the current facility employees and "hopefully" keep them all on staff, McCoy said.

Without the property tax increase, McCoy said, the Crime Victims and Sexual Violence Center, Children's Dental Clinic, Mental Health Substance Abuse Clinic, Children's Mental Health and the entire Aging Department would have to be eliminated.

The budget is an $8 million increase over the $560 million 2012 spending plan. Last week, the county accepted a bid from JPMorgan for a $13.5 million Tax Anticipation Note to help meet the structural deficits of last year's budget, according to Albany County Comptroller Michael Conners.

He said McCoy had a compelling case for raising property taxes, citing the burden of unfunded mandates.

On the bright side, county sales tax revenues for 2012 will be 6 percent more than initially projected.

Because the budget levy exceeds the state tax cap, passage would require the votes 26 of the 39 county legislators, a two-thirds "super-majority." Twenty-nine members are Democrats.

"I think the most important thing we have to focus on is that people are struggling out there. It's a difficult thing raising taxes, but there are services that I don't know if people out there could do without," Morse said. "We can't let people fall through the cracks."

The legislature must vote on the budget by Dec. 16. - 518-454-5035 - @kristenvbrown