Erie County Medical Center will rebuild its Erie County Home on the hospital's Grider Street campus and then give the empty nursing home in Alden back to county government as part of a landmark agreement the Legislature approved Thursday.
Aside from the construction of a nursing home, the package irons out some previous unknowns with the county's future support for the ECMC Corp., a public benefit corporation that, among other things, serves Erie County's neediest residents. For example:
*The medical center will transfer certain buildings used by the county Health Department to county control, eliminating the county's future rent expenses.
*An outstanding $23 million county contribution to the hospital for physical improvements will fall to $11.5 million and be earmarked for the nursing home's construction.
*The county will evenly split with ECMC the $2.5 million cost to demolish eight no-longer-needed buildings on the Grider Street campus to make way for the new nursing home.
*ECMC officials, who reason they can run their nursing home more economically by bringing it into Buffalo, must begin construction by June 1, 2012. The facility is currently sized to offer 390 skilled nursing beds at a cost of $105 million, though the state Health Department will determine its final capacity when awarding a "certificate of need."
*County government will provide $16.2 million a year to support hospital operations, for as long as ECMC remains a public benefit corporation, rather than accept the previous obligation to cover any future ECMC operating losses that might occur.
The $16.2 million will be offset each year by the dollars that the state Health Department orders Erie County to turn over to cover losses that the hospital and home incur as they serve the poor who are uninsured. The state usually gives the county just weeks to turn over those multimillion-dollar payments.
County Executive Chris Collins and County Attorney Cheryl A. Green negotiated the agreement over several months with ECMC officials, including hospital lawyer Anthony J. Colucci III. The 15-member Legislature approved it unanimously, despite concerns that the $16.2 million in operating support continues in perpetuity.
Concerns about an annual payment without end were raised foremost by Joseph G. Makowski, the former State Supreme Court justice who presided over a 2006 settlement between ECMC and county government when Joel A. Giambra was county executive. That agreement did not continue into the next decade, creating the need for a new settlement.
Makowski, now in private practice and representing a client with a claim against ECMC, said he believes a sitting Legislature may not tie the hands of a future Legislature by setting financial aid for an outside entity.
"I do understand the need for budget certainty, but you cannot make a gift of public money," Makowski said, predicting that a taxpayer advocate might sue to block the agreement.
"We were on the hook in perpetuity no matter what," said Legislator Raymond W. Walter, R-Amherst, as lawmakers debated the agreement before their vote. "Finally we have some cost-certainty going forward here."
Makowski represents businessman Hormoz Mansouri, whose HLM Holdings LLC had a previous understanding with ECMC to build a "continuous care community" on 18 acres near the hospital. Mansouri sees no market for the community now that the Erie County Home will move to Grider Street. Makowski said he is negotiating with the hospital to recover the $7.4 million that HLM reportedly spent so far.
Regardless of how those talks go, all is not lost for Mansouri, who in September gave $10,000 to a Collins campaign fund. Another Mansouri company, EI Team, is the county's preferred contractor to plan out the orderly demolition of the eight ECMC buildings. That contract could be worth about $100,000 to EI Team, officials said.
Erie County will borrow its $1.25 million as part of a $170 million loan for myriad projects being arranged by the state-appointed control board. After hesitating for weeks, the Legislature on Thursday agreed to let the control board close on the loan, which will take 13 years to repay.
That 13-year debt closes out hope among several lawmakers that the State Legislature and the next governor will dismantle the Fiscal Stability Authority before 2023. The county executive and most of his friendly flock of Republican lawmakers said they could not ignore the repayment savings the control board offered with its high credit rating -- a recently estimated $17 million over 13 years.
Walter, a skeptic of the need for a control board, voted against the arrangement, saying it was a short-term move with severe long-term implications. So did Democrats Thomas J. Mazur of Cheektowaga, Betty Jean Grant of Buffalo, Christina Wleklinski-Bove of West Seneca and Chairwoman Barbara Miller-Williams of Buffalo.
The "declaration of need," which asks the control board to issue bonds rather than Comptroller Mark C. Poloncarz, passed, 10-5.