We’re in the end game regarding the Albany County Nursing Home (ACNH).
As I’ll lay out in another post shortly, when the key numbers are votes …
But in this post, we’ll dispense with some bogus, and seriously misleading, numbers that advocates of keeping the Nursing Home open have been throwing around the last month or so.
The advocates have been saying that instead of losing a lot of money, ACNH is “only” losing $2-4 million per year. The sad thing is that there are at least some Legislators who have bought into these numbers or at least paused. It’s especially sad because if they had merely taken the time to learn how the County budget works – not just for the Nursing Home – but generally, they would have immediately known something was amiss. It’s not as if a lot of them are rookies; most have been around for a long time. But these folks don’t do their homework. And their leadership probably prefers to keep the members and perhaps themselves in the dark. After all, they don’t even have their own budget staff, capable of figuring things out.
Supposedly, the $2-4 million figure is based on 2011. But why don’t they start with the current year’s budget? Here’s are the losses they budgeted for this year and how to find them in the Budget:
- $2.69 million loss in the Nursing Home Fund (look for the line called “County Share”), but you can’t just look here.
- $1.70 million cost embedded in the General Fund (A Fund) DSS Medicaid budget that is required to pay for the $3.40 million in IGT revenue in the Nursing Home Fund. This does not have a separate line, but is 50 percent of the revenue value shown in the NH Fund.
- $2.40 million for Hospital Medical Undistributed for half year. Full year would be about $4.34 million. This includes retiree health benefit costs, which is not part of the current operation as well as the cost for current employees. However, there are two important points that should be taken into account. First, the cost of retirees will continue even if the NH is sold or closed, but it will decline over time. In contrast, that number will increase if the County maintains the NH. Second, to the degree that the County has to pay now for retiree health benefits, that’s because it did not set aside funds during the years when the liability was being accrued. Unlike, pension costs, for which funds are set aside currently for future costs, the actual spending on retiree health benefit costs are put off to the future – understating the true current cost.
- $0.93 million in the CS Fund for only six months, which is where the County pays for Workers’ Compensation, Unemployment Insurance, etc. A full year’s operation would obviously cost more, perhaps not double that number, but close, or about $1.87 million.
- $0.25 million in bond payments for the current facility.
So these numbers add up to nearly $8 million and, when fully annualized, they add to about $10.8 million.
And even the $10.8 million does not include one time costs in 2013 of $2 million to pay to USG while it takes over the operation of the NH and do not include $4.8 million in retroactive recoveries of IGT revenues.
Retroactive recoveries of IGT? Well, we discussed those before, but stop and consider that this would likely at least partly explain an artificially low loss in 2011.
So when you add it all up, excluding any payment to USG for taking over the NH, the budget that the Albany County Legislature adopted for this year, 2013 assumes a loss of about $15.64 million.
Before Legislators get deceived by understated numbers from two years ago, they should look at what they’ve already embraced for this year.
And, if they don’t understand how they got there, perhaps they should ask for some lessons about how the budget really works.
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