Warren County Freeholders will bring in consultants to advise them on a possible sale or lease of Warren Haven, the county’s nursing home.
Freeholders tentatively plan an initial presentation by consultants at their March 13 public meeting.
They also are getting bids to see how much money can be saved by having outside companies take over Warren Haven’s dietary, housekeeping and laundry services – which would cost many nursing home employees their jobs.
Warren Haven operated at a $3.3 million deficit in 2012, according to county financial officials.
The future of the nursing home was the subject of a Saturday morning budget session by freeholders in the county administration building near Belvidere.
They are trying to eliminate a $4 million deficit before adopting the county’s 2013 budget in late Match.
Warren Haven “is the centerpiece of our budget problem” said Dan Olshefski, the county’s budget analyst.
Jason Sarnoski, director of the three freeholders, recommended investigating the possible sale or lease of the nursing home, while stressing the county has not decided to do either. He said freeholders will be doing a disservice to themselves and the community if they don’t look at every possible option.
A consulting firm will evaluate the facility, its finances, its value on the open market and possible privatization. Sarnoski said at least one firm will do that work for free, explaining it gets a commission only if the nursing home is sold or leased.
“We could go all the way to the one-yard line and say we’re not going to do it and it doesn’t cost the county a dime,” he said.
Sarnoski stressed the public will be involved “early and openly” in the decision-making process about Warren Haven’s future.
While no vote was taken to bring in a consultant, Freeholder Edward Smith supported Sarnoski’s proposal.
“We have to make changes in the way we do business,” said Smith. “The entire county’s ability to finance itself becomes imperiled if we continue in this direction. We have to address it this year.”
Freeholder Richard Gardner seemed reluctant to take any steps toward a possible sale or lease, indicating new marketing initiatives outlined by Warren Haven’s staff should first be given an opportunity to succeed.
“We’re the Cadillac of elder health care,” said Gardner. “I’m not going to dilute the positive energy that’s going forward to try to have these beds filled. Our population is getting older across the state. Folks need care.”
County-run nursing homes are not being closed, said county administrator Steve Marvin, but they are being sold to private operators. Marvin estimated a half dozen county-run nursing homes in New Jersey, including one in neighboring Sussex County, were sold in the last two years and he expects more will be sold.
As she and her management staff left the budget workshop before it ended, Laura Decker, Warren Haven’s administrator, would only say: “I think the freeholders are facing a huge challenge.”
Freeholders praised the nursing home’s management for their efforts to keep costs under control. The problem is, many of those costs are beyond their control.
County officials blame reductions in state and federal support to the nursing home as
primary reasons for the deficit, as well as “uncontrollable” pension and medical benefits for Warren Haven employees.
“In 2001, we had no pension share costs, now we’re looking at $800,000,” said Sarnoski.. “Medical costs have doubled in the last 10 years.”
Total expenses at the nursing home increased by $1 million in the last year, according to Olshefski, while revenue it generated dropped by $1.3 million – from $14.85 million in 2011 to $13.5 million in 2012.
Ironically, $1.3 million also is the maximum amount property taxes can be raised in one year for Warren County’s entire budget, said Olshefski. “We’ve got all these other departments to consider. These freeholders are in a very difficult situation.”
Occupancy is down in the 180-bed facility, which reduces revenue.