|
Comparing the Care Campus to Other
Alternatives
Click
for Ten-Year Financial Analysis
For anyone who doubts why the Board of Selectmen and the
Cape End Manor Board of Directors have chosen to pursue the Care Campus
proposal, they need only review the ten-year
financial pro formas comparing that scenario to the baseline of the
Town doing nothing at all, and the Town constructing a new nursing home
on its own.
Baseline. If the Town does
nothing at all, this "baseline" scenario predicts that annual
property tax subsidies will rise from $411,000 next year to over $1-million
by FY 2006, with a cumulative cost to the property taxpayers of over $18-million
over the next ten years.
Same Site - New Building.
If the Town were to construct a new nursing home at its expense, without
a partner, on the existing Manor site, then the first year of operations
would require a $1.8-million property tax subsidy which will then level
off to about $1.1-million per year, for each year thereafter.
Care Campus. By comparison,
the Care Campus proposal-where a non-profit health care organization,
and not the Town, is the responsible financial entity-has minimal financial
impact on the Town and provides rehabilitation therapies and affordable
assisted living which the first two scenarios do not.
Assistant Town Manager Mark L. Latour
Cape End Manor Interim CEO Dennis Anderson
| |
Baseline (Same Site
- No New Building) |
Same Site - New Building (Town)
|
Care Campus (Roush
& Associates) |
| Revenues |
- The Medicare increase of FY 2002 is noted in
FY 2003, and the revenue thereafter is assumed to increase 3.5%
annually.
- Medicaid patient days increase as Medicare and
Private patient days decrease
|
- FY 2003 revenues decline from current operations
as facility closure commences mid year, i.e., no new admissions
and patients discharged to other nursing homes,
- FY 2004 previous billing revenue of $250,000
- No additional revenues in 2004 and 2005 during
development and construction of replacement project.
- FY 2006 revenues based on twelve-month fill-up
of new building
|
- FY 2003 previous billing revenue of $250,000.
- No Town revenues from FY 2004 through FY 2006.
- Beginning in FY 2007, the not-for-profit begins
repayment of Town loan.
|
| Expenses |
- Increase 10% annually based on experience over
last five years.
|
- FY 2003 expenses reflect reductions due to closing
related census reduction.
- This plan requires grant repayment of $101,689.
- FY 2004 and FY 2005 include debt service on short-term
borrowing for new project construction.
- FY 2006 includes operating expenses reflecting
12-month fill-up
|
- FY 2003 $145,000 one-time retirement fund repayment
based on prior year obligation.
- Town makes loan advances of $165,000 annually
from FY 2003 through FY 2006.
- Annual debt service on land loan, i.e., $47,500
in FY 2003 to $37,375 in FY 2012, for acquisition of site at assumed
capital cost of $500,000
|
| Result |
- Annual deficit climbs from greater than $400,000
in FY 2004 to greater than $1,000,000 in 2006 to greater than
$3,700,000 in FY 2012.
- The cumulative ten-year deficit is $18,245,613
|
- The annual operating deficit is $1.1-million
per year, for every year.
|
- The cumulative ten-year deficit is $230,275.
|
|