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Gracedale backers brace for pitch to sell nursing home

Morning Call (Allentown, PA) - 3/26/2015

March 26--Northampton County Executive John Brown released new projections last week forecasting a $39.5 million operating loss at Gracedale over the next four years, but for Councilman Lamont McClure, it's the same song, different verse, in a five-year battle over the nursing home's future.

The dire predictions are nothing more than another administration laying the groundwork to sell the financially struggling facility, said McClure, a frequent critic of county administrators and an avid supporter of Gracedale.

Voters elected to keep Gracedale under county control as part of a five-year referendum question in 2011. About a third of the county's workforce operates at Gracedale, which has a $69.3 million budget in 2015.

"I don't believe John Brown wants to keep Gracedale in county hands," McClure said.

Brown has been non-committal about Gracedale's future beyond following the referendum.

"I'm charged with operating it the best way we can with the resources we have available, and that's what we're doing and we'll continue to do," Brown said Wednesday after his State of the County address.

The county's contribution to Gracedale likely will climb $1.5 million annually for the next four years, Brown and Director of Human Services Allison Frantz said last Thursday in a presentation to Northampton County Council.

The figure does not include capital improvements, which could drive up costs by another $7 million by 2018, according to county documents.

While the county has drastically changed nursing home operations in the past three years by bringing in a private management firm, better controlling overtime costs, improving the census, hiring a new pharmacy to provide medication and dozens of other minor changes, the efficiencies will not keep up with the cost of labor, Brown and Frantz said.

"The only thing that may change here is to soften the curve," Brown told council. "We have done the best we can with the operation."

McClure, however, questioned the accuracy of those projections.

Brown and his predecessor John Stoffa each anticipated worst-case scenarios during the annual budget process that have not come to fruition, McClure said. Director of Fiscal Affairs Jim Hunter was off by $7 million when he estimated the final total for the county's reserve fund in November, he noted, and the Stoffa administration didn't fair much better. In 2013, Acting Director of Fiscal Affairs Doran Hamann was off by $9 million.

"Those numbers are predictions. I have seen a pro-sale administration in the past make wildly inaccurate forecasts," McClure said, referring to Stoffa.

Director Tom Tosti of Local 88 of the American Federation of State, County and Municipal Employees, which represents about 600 Gracedale employees, questioned the accuracy of the report as well. Like McClure, he theorized Brown is preparing to sell Gracedale.

"John Stoffa said the same thing in 2010," Tosti said. "The numbers actually have been dwindling, not been going up and up."

Gracedale's operational loss was relatively stable in 2014, climbing from $6.5 million in 2013 to $6.7 million, according to Brown's figures. However, the county only needed to contribute $3.5 million to cover its losses at the nursing home in 2014, when actuaries determined the county could move over $3.2 million from its self-insurance trust fund.

While McClure hoped it won't be needed, he said he would not oppose another referendum to decide Gracedale's future. Taxpayers recognize the county has an ethical obligation to care for its elderly, he said, and the executive branch should do the same.

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