Center For Nursing And Rehabilitation Seeks Takeover By Southwestern Vermont Medical
CNR Board President Asks Loan Forgiveness From Village Trustees
by Alex Brooks
Greg Laurin, President of the Board of the Center For Nursing and Rehabilitation (formerly the Hoosick Falls Health Center) came to the Village of Hoosick Falls Trustees Meeting and asked for their consent to have the Center taken over by Southwestern Vermont Medical Center, and for forgiveness of a loan the Center owes to the Village.
Laurin said the Center has been losing significant sums of money in recent years. They have spent all the investment funds and the endowment they had at one time. He said about two years ago they realized they were in serious trouble and began discussions with Southwestern Vermont Medical. SVMC has hired a consultant to study in great detail how they could turn around the fortunes of the Center, and eventually came to the conclusion that they could at least bring it back to a break-even point as part of the Southwestern Vermont Medical system, and both institutions began the process of getting permission from the New York State Health Department for the takeover. This has now progressed to the point where the Center’s Board will give final consent to the takeover at a meeting this week, and the SVMC Board will vote on the takeover proposal next week.
Laurin said all of the Center’s creditors have to agree to the takeover before it can go forward, so the Village Trustees have to give consent to allow it to go forward. The Trustees quickly and unanimously gave their consent.
The second part, forgiving $130,000 that is owed to the Village’s Economic Development Fund, was more difficult. Laurin painted a pretty dire picture of the Center’s finances. He said they owe about $1.6 million and have about a half million in payables. They have been kept afloat by a loan of $580,000 from the Dormitory Authority of the State of New York given in late 2016. The intention of that loan was to keep the facility operating until a takeover by SVMC could be aceomplished. Laurin said taking over an institution with that much debt might give the SVMC Board doubts when they vote next week, and he hoped to “sweeten the pot” by having the Village forgive this debt. Laurin pointed out that the original loan from the Village Economic Development fund was $370,000, and the Center has paid a total of of $362,000 so far in payments on interest and principal, so they are not far from returning what they received if interest is discounted.
Laurin said if SVMC does not take over the Center, it will probably have to close its doors in a matter of months, and over 100 jobs in the Village would be lost. The Center would then try to sell the facility to a private for-profit company, which would significantly impact its affordability for the local population.
He pointed out that the SVMC is a non-profit organization which would run the Center with patient care prioritized over profit. Laurin said if the takeover does go forward, the Center would continue to have a Board of Trustees and would continue to own the facility, and SVMC would take over management. He said SVMC contemplates a significant investment in the facility to turn it around.
The Village Board was concerned about the hit to its economic development fund, and not sure if they had the authority to forgive a loan from that fund, since the money originally came from the State. But considering the dire straits that the Center for Nursing and Rehabilitation is in, and the enormous benefit to the Village if SVMC were able to turn it around and bring it back to financial stability, they voted to forgive the loan, subject to a contingency that they must research whether they are permitted to forgive debts owed to that fund. Trustee Kevin O’Malley voted against the motion, because he was in favor of forgiving only a part of the debt. [/private]