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Budget analysts differ on Foley savings

The John J. Foley Skilled Nursing Facility in

The John J. Foley Skilled Nursing Facility in Yaphank. (July 31, 2012) Credit: Johnny Milano

Suffolk could save nearly $17 million over the next five years by selling its county nursing home -- far less than County Executive Steve Bellone had originally estimated -- according to a new legislative report.

Earlier this month, as the administration pitched the sale of the John J. Foley Skilled Nursing Facility to for-profit operators, it projected a five-year net savings of $56 million.

Deputy County Executive Jon Schneider said despite the differences, the larger point is that a nursing home sale will save Suffolk money. He noted that the legislative and administration's budget offices agree that Foley is running a $14 million deficit this year, mostly because lawmakers had anticipated a public-private partnership that never materialized.

"There's clearly some disagreement over how many tens of millions we'll be saving," Schneider said. "But under any scenario, the county is still saving tens of millions of dollars."

The legislature's nonpartisan Budget Review Office came to its estimate by assuming that the 264-bed nursing home -- if still under county control -- would "operate . . . in the most productive and efficient manner possible, maximizing occupancy and minimizing costs." It projected the Yaphank facility would run an annual deficit of between $4.5 million and $7.3 million from 2013-17.

After accounting for continued expenses such as retired employee health care, selling the facility would save the county an average of about $3.4 million a year, or just under $17 million, through 2017.

Bellone's budget office cited Foley's recent history of costing the county $8 million to $10 million a year to operate, and accounting for its below-75 percent occupancy rate and reduced reimbursement level, projects future deficits of more than $12 million a year by 2017.

Either way, each side's estimates significantly exceed the savings necessary to privatize a public health function. Under county code, the minimum savings required are 10 percent of operating costs over five years. In the legislative budget report, which estimated a $4.5 million nursing home deficit in 2013, $450,000 would be required -- but $2.2 million, or 48 percent savings, are actually projected.

Opponents of the $23 million sale -- which lawmakers could consider on Sept. 13 -- argue that the county has been neglecting Foley for more than two years, since former County Executive Steve Levy decided to sell or close it. They say Levy and Bellone missed opportunities to market open beds and eliminate the shortfall.

Asked about the different savings estimates, Legis. John Kennedy (R-Nesconset) said it showed the administration assumed the facility would continue to not run efficiently.

"This is a self-created hardship," he said.

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