Published: June 26, 2009 12:08 am      

County selling Laurel Crest

EBENSBURG — Saying that Cambria County taxpayers can no longer prop up Laurel Crest financially, the county commissioners voted Thursday to put the nursing home up for sale.

The decision comes as the nursing home is facing another deficit this year – estimated at $2 million, the commissioners said. That’s on top of a $4.5 million deficit for 2008, which is $1.5 million more than the $3 million commissioners had anticipated, they disclosed.

To pay for the $2 million operating loss, the commissioners said that they would have to raise taxes by two mills during a nationwide economic downtown in which many residents could not afford to pay higher taxes.

Other than raising taxes or selling Laurel Crest, the only other option would be to close the facility, which would mean an upheaval for residents and no jobs for employees, the commissioners pointed out.

They advised residents and employees of the planned sale in separate meetings Thursday afternoon.

About a dozen Laurel Crest workers showed up to protest the possible sale.

One woman, who refused to give her name, said she has worked there for 23 years and is “one of the veterans in the trenches trying to keep it going. This is just like a slap in the face to us.”

She charged that the facility is top-heavy with administrators and supervisors, but President Commissioner P.J. Stevens replied, “Cuts have been made, and we’re running lean. Expenses have been cut tremendously.”

A man who also declined to give his name contended that the commissioners should take a long-range view of the finances, including the years when there have been surpluses. He contended that Laurel Crest was never set up to be a “money-maker.”

Pete Storm, president of the Laurel Crest Residents Council, said that residents were surprised to learn of the sale.

“I just don’t know what to think. I’m still trying to get my thoughts together,” Storm said.

The commissioners said a variety of factors contributed to their decision to put the 370-bed facility up for sale, including:

• Coping with continued state inspections for what were termed minor deficiencies, at one point prompting a 68-day freeze on new admissions that was lifted April 1.

• Competition from private facilities. Laurel Crest was unable to reach the 274-resident level this year that was described as realistic figure for a “break-even budget” in 2009.

• “Exorbitant labor costs” and excessive employee absenteeism. In 2007, the number of employee-called-off hours totaled 43,690 or the equivalent of 5,461 shifts. That number was 39,189 in 2008, or the equivalent of 4,898 shifts. A total of 409 full- and part-time employees work there.

• Proposed cuts in federal and state reimbursements.

The decision comes 61/2 years after a previous board of commissioners was prepared to sell the nursing home for $6.3 million to Conemaugh Health System and its partner, Grane Healthcare. But that was delayed by lawsuits over the sale, and the county eventually backed out of the deal.

Since then, Laurel Crest has had years in which it has made money and then years in which it lost money and county tax dollars had to be used to subsidize operations.

Last year the commissioners received approval from three county judges to borrow $6 million to cover financial shortfalls stemming from budget woes at Laurel Crest. A one-mill tax increase went into effect with the 2008 budget to begin paying off the loan over five years. That was the third tax increase in four years and was followed by another increase of 3.65 mills in the 2009 budget to pay for increased costs.

Although some county residents might say they’d be willing to pay more to save Laurel Crest, “we have to consider those people who can’t afford any more (increases),” Stevens said.

Stevens also said the option of selling the facility – rather than closing it or raising taxes to keep in operating – “would better serve the residents of Laurel Crest. There would be a more stable environment based on customer service and free from a political environment,” Stevens said.

The sale will be handled by Marcus & Millichap of Chicago, a real estate investment services firm that has advised county-owned nursing homes on strategic options, the commissioners said. The firm, which will market Laurel Crest nationwide, will be paid 3 percent of the sale proceeds.

While the commissioners do have a minimal sale price for the facility, they declined to reveal the figure.

Any sale would require the buyer to set aside a number of beds designated for residents whose bills are paid through Medicaid. Of the 230 residents currently housed at Laurel Crest, 90 percent of them are covered by Medicaid funds.

The commissioners said that they hope to have the nursing home sold by the end of the year so that a new owner would take over the facility Jan. 1.

Commissioner Bill Harris said that from a historical standpoint, some “officeholders, some of their political hacks and some disgruntled employees have especially used this venue to undermine management and the commissioners” in operating the nursing home.