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Picture a county that owns a nursing home that loses money and is adding to a growing tax burden every year.

What to do? Sell it? Fix it?

No, we're not talking about Niagara County -- or at least, not only Niagara County.

Two counties in eastern New York faced the same dilemma Niagara County now has in regard to their county-owned nursing homes.

They took opposite paths. Delaware County voted to sell to a private company. Otsego County voted to borrow $30 million and build a new nursing home.

On top of that, Otsego then hired Edmond C. Marchi, a former administrator of Mount View Health Facility, the Niagara County nursing home, to run its new facility.

With the Niagara County Legislature planning to vote on selling Mount View within a month, the cases of Otsego and Delaware counties illustrate the two paths open to Niagara.

Otsego Manor, the 174-bed nursing home in Cooperstown, opened last November. It's based on the ideas that Marchi tried unsuccessfully to get the Niagara County Legislature to accept before he headed for the exit in the fall of 2003.

"It's what Ed always wanted to do," Niagara County Manager Gregory D. Lewis said.

"It's what I've been working for for 16 years," said Marchi.

"That county is poorer than ours," said Frances E. Faery, president of the Niagara County unit of the Civil Service Employees Association. "We could do it if we wanted to."

In Niagara County, Marchi urged what he called a "greenhouse" concept, which involved small new buildings on the campus. Patients who were able to get around on their own could live with a common kitchen and dining room, taking advantage of a fair amount of independence.

Because of concerns about bad weather, the concept was revised to a "cottage" theme, with new wings to be added onto Mount View's existing facility. The current cost estimate is $13 million, and Lewis has said he will recommend it if the proposed sale of Mount View is defeated by the Legislature.

Manor called gorgeous

Otsego Manor, on a sprawling 19-acre campus, cost $30 million to build. The land alone cost $12,000 an acre.

"The county wanted to make a commitment, an upgrade to a residential center that we can be proud of and people wanted to move to," said Carl F. Higgins, chairman of the Otsego County Board of Representatives, which corresponds to a county legislature.

Marchi said Otsego Manor is so gorgeous, the county had to put a sign by the road informing tourists that it was a skilled nursing facility.

"When you drive by the place, it looks like a hotel," he said. "We had visions of people coming and wanting to check in."

It replaced Otsego's old 174-bed nursing home, built in the mid-1950s. Higgins said it had an institutional ambience, with long, narrow hallways.

Otsego County hired a consultant in 1994 to report on whether the county should stay in the nursing home business. The consultant recommended privatization.

As in Niagara County, the public employee unions fought the idea. They won. In 1998, the Board of Representatives voted in favor of a building project.

Higgins said Otsego County was almost debt-free when it floated the $30 million bond issue, and about $25 million of the cost is expected to be reimbursed by the state.

Unlike in Niagara County, where the unions are in a constant battle with the Legislature, Otsego's CSEA made a deal. "I was very pleased with the responsiveness of CSEA down here," said Marchi.

Raymond Snyder, president of the CSEA unit in Otsego County, said the county didn't seek any job cuts, or wage or benefit givebacks, at the nursing home. What it did seek was flexibility -- changes in job titles to promote greater efficiency.

The result was a new title -- "universal worker." Those employees can be assigned to maintenance, housekeeping or dietary duties as needed. "In the old contract you had job titles that could only do certain duties," Snyder said.

The 200 employees all kept their jobs and their old pay and benefits. In fact, the county even added a few new jobs at Otsego Manor, Snyder said.

There is a 35-bed dementia unit. The rest of the facility consists of five "neighborhoods," each divided into three "households," which are decorated and run as the residents see fit. Some are formal, some are looser.

Otsego's old nursing home, which is being converted into county offices, had about 150 patients. Otsego Manor has a waiting list, even for private pay patients who are willing to plunk down $250 a day.

About 73 percent of the patients are Medicaid clients, and the new facility has been able to increase state reimbursement for each Medicaid patient. Marchi said the rate is about $170 a day, a $27 increase over a rate that hadn't changed since 1984. Another hike is expected next year.

The state only changes a Medicaid rate in cases of a sale or major construction of a nursing home.

The increase is needed because the new facility is much larger and costs more to maintain; it has a $17 million annual budget. The facility isn't in the black, but Higgins said, "We hope we'll be close to breaking even, if not breaking even."

One factor is that salaries are lower than at Mount View, $1 to $2 an hour below Niagara County pay rates. Marchi said benefits cost less, too.

Controversy aired

The Delaware County Board of Supervisors voted March 9 to sell its 199-bed nursing home in Delhi for $2.7 million to Leatherstocking Health Care of Ilion.

The move, supported by 15 of the 19 supervisors, followed a bitter fight by the CSEA against the deal.

"There was (controversy). A lot of it was generated by the union to the point of affecting the residents," said James E. Eisel, chairman of the Board of Supervisors.

Eisel said county leaders had to go to the nursing home and reassure the patients they wouldn't be evicted. He said Leatherstocking has promised to employ the current 240-person staff, a promise similar to the one made by Senior Associates, the Amherst company offering to buy Mount View for $2.1 million.

Eisel said Delaware County made no effort to win union concessions, and he said no one studied how much it would cost to pay off the sick and vacation time owed to the 200 workers. He said "impact bargaining" with the CSEA is now under way.

"I feel the supervisors had their minds made up long before the last meeting," said George Lawson, the CSEA president. He said the workers expect to be paid less working for Leatherstocking than they were for the county.

Nurses at the Delaware County facility are paid about the same as those at Mount View, while nurses' aides are about $2 an hour cheaper.

Delaware was applying $3.5 million a year of property tax to subsidize the nursing home's $12 million budget. One supervisor said during the debate that 16 percent of the county property tax levy was being pumped into the nursing home.

Lawson said the sale didn't surface publicly until last year. Eisel said bids were sought in June and two offers were received.

He said renovating the 40-year-old building was considered and rejected. He said Leatherstocking may do it, but it will have a higher Medicaid reimbursement rate than the one the county was saddled with in 1984.

"Prevailing wage. They don't have to deal with. I have to deal with it if I build or rehabilitate," said Eisel when asked why a renovation was rejected. He was referring to the state's Wicks Law, requiring top union wages to be paid on government construction projects.

Lawson said a lot of pressure in favor of the sale of the nursing home came from the local Chamber of Commerce, similar to the Niagara USA Chamber's support of the Mount View sale here.

"They have the strange idea that if you sell it, more business will come to Delaware County," Lawson said.