The Arnone Report: Shop Local, $32.4 million bid for county nursing homes
By Freeholder Thomas A. Arnone
Freeholder Tom Arone
Believe it or not, the holidays are upon us. We’ve been extremely fortunate as the weather has been mild thus far, allowing many of us to continue to enjoy the outdoor activities we love to do throughout our beautiful county – from the beaches and parks, to local tree and menorah lightings, to shopping in our beautiful downtowns and local shopping centers.
I can’t stress enough how important it is to shop local, I encourage all of you to do some this holiday season when buying gifts for your loved ones. I was happy to join our Lieutenant Governor, Kim Guadagno, on Small Business Saturday (the Saturday after Thanksgiving), along with my fellow Freeholder, Serena DiMaso, on a tour of several local businesses in the Red Bank region. We were pleased to see these businesses thriving on that start to the holiday shopping season, as well as the crowds we saw on the bustling sidewalks throughout the downtown.
It’s a proven fact that independent and locally-owned businesses recirculate more revenue locally. The spending done by a local business to operate (including inventory, utilities, equipment and salary to employees) directly impacts the economy within our own community. In addition, the indirect impact happens as employees and business owners spend their income within our local economy, recirculating dollars through their earned money.
The economic impact made locally happens in so many levels, to break it down – for every $100 spent at a local business, approximately $68 stays in that community’s local economy compared to only $43 if you shop at a large business. In other words, going local creates more local wealth and jobs, as you are literally helping your neighbors and their families when choosing to do so.
We’ve made is easy for you to do your holiday shopping close to home this year with the 2015 Made in Monmouth Local Holiday Shopping Directory that is available on the Monmouth County website at www.VisitMonmouth.com. This easy to use, online shopping guide has links to makers and sellers of all sorts of products and gift ideas that are made right here in Monmouth County. The interactive directory includes only Monmouth County small businesses that produce products within the County.
There is tremendous variety in the directory, everything from beautiful handmade children’s products to wine made from grapes grown and fermented in Monmouth County to art and jewelry for every budget and occasion to gourmet foods and candies. Every vendor listed in the directory makes unique consumer products in Monmouth County, you will find something for everyone on your list—including your pets!
In addition, if you’d like to see some of these small business owners in person, Cream Ridge Winery is hosting a mini “Made in Monmouth” on December 12th & 13th, 11am- 6pm, inside the winery. Cream Ridge Winery is located at 145 Route 539, Cream Ridge, NJ 08514
As you may know, Monmouth County held an auction on October 20 for the sale of our two care centers, John L. Montgomery (JLM) and Geraldine L. Thompson (GLT). We were very pleased with the outcome, as we received bids worth $32.4 million from two companies that want to purchase the facilities separately.
Allaire Healthcare Group offered the high bid of $17.4 million for John L. Montgomery, and Preferred Care was the high bidder on Geraldine L. Thompson with $15 million. While we did receive an offer for one company to purchase both facilities together, Allaire Healthcare, provided a bid at $27.4 million, we believe it is in the best interest of the County, as well as the residents and our employees to have accepted the two separate offers.
As I said in the past, I truly believe that selling the care centers was the right thing to do – fiscally for the county, but also for the continued care and well-being of the residents and employees. The residents should not be forced to live in facilities that need capital improvements which cannot be done, and it is certainly not fair to our employees who have taken 0% increases over the last four years.
The care centers combined have lost more than $40 million since 2007 and if we continued on the current path of operating at such an enormous loss, we would more likely be having a conversation about closing our doors in several years. The reality is that health care has changed drastically in the last ten years, and these two companies are in business of providing health care and therefore are better equipped to keep up with the changing demands within the marketplace.
I, along with my fellow members of the Freeholder Board have said publically that we had certain provisions we would provide to the new owners as part of the plan of sale. The new owners would have to operate both centers as nursing homes for at least 10 years, as well as provide specific protections for existing nursing home residents. These provisions also included the stipulation to reserve a certain number of beds for Monmouth County residents, as well as Medicaid patients. In addition, the new owners are required to give all current nursing home employees an interview for a potential job.
Both owners still need to be approved by the New Jersey Department of Health, which has to sign off on the sale before it can be complete, but we hope to finalize the sale by the end of the year. I am very confident that we have made the right decision and the patients and employees will be well cared for.
Thank you as always for your support and dedication to making Monmouth County a great place to live and work. I wish you and your family a very happy holiday season!
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Mr. Arnone, the ONLY number this taxpayer, and I’m sure some others, wants to know — what dollar amount WILL my taxes DECREASE this coming Jan 1?
To recap – you Freeholders say that the care centers were an EXPENSE, meaning we taxpayers subsidized them at a cost. We will no longer be incurring this cost. Additionally, there is a one time surplus of $32+ million to either pay down debts that we’re paying interest on. These funds should not be transferred to some other project as those projects should have already had their own funding, or never been approved.
So what dollar amount will my taxes DECREASE, on Jan 1, 2016?
This is the road to re-election (or maybe a sitting Freeholder taking back one of those lost Assembly seats…) ANY thing not a tax DECREASE may as well be begging for voters to elect more dems.
let’s not go nuts buying more fancy equipment or jazzing up some offices- give it back to the taxpayers, or the Dems will have a big issue to bash us with next year- don’t need another self- inflicted wound, moving into a tough Presidential year.
I think “Just one number” is not thinking here. The deal is not done. The Freeholder should be commended here. They went through a bit of a painful process and here we are with a deal to sell for $ 32,000,0000 and eliminate year-after-year operation losses.
Maybe I am a bit of a “homer” here but when I look at my tax bill the Monmouth County tax is the least of my tax problems.
Look at the quality of life here in Monmouth and activities of the Freeholders implementing cost saving measures and revenue enhancing ideas at multiple levels.
Clearly the sale of the nursing homes at this price surprised me. Yet I recognize the deal must include some assets and land. The County is not losing “beds” and they have too many empty beds for too long without the appropriate cost reduction required to avoid operating losses.
When the nursing homes are not covering operating expenses in the amount of $5,000,000 per year selling them to private company makes much sense. A private group may have more success in filling beds beyond the typical 80-85% level needed to break even.
Of course down the road would be the necessary upgrade of equipment and facilities. The cost saving here will be enormous.
There is much consolidation in the industry. Mom & Pop homes have disappeared – with a loss of beds too. The Unaffordable Affordable Care Act has not helped. Bending the cost curve down is being mandated by lower rate pressure, or put another way rates that do not keep up with cost levels.
Cost flexibility is the only way to survive and thrive. Government has trouble being flexible with costs.
Revenues are going down, there are more NJ medicaid patients coming with the demographics but the revenue per patient day is being squeezed by the feds and Trenton.
A private company will likely have a better chance to fill the beds with deals made with carriers. Getting the average patient revenue up is difficult for a government enterprise. These private companies will be able to make deals.
On the cost side, there are new ideas. Contract nursing and contract therapy – similar to contract food prep – have helped reduce costs without reducing jobs. The problem is the staff levels must be ready for a higher occupancy level then might exist.
Good job Freeholders.