An analysis of a proposal to sell Frederick County's nursing and assisted living centers shows privatization would yield more than $12.4 million in financial benefit to the county over a four-year period.
The county posted the staff report online Friday along with Aurora Health Management's final offer to buy Citizens Care and Rehabilitation Center and Montevue Assisted Living. The Millersville-based company has agreed to pay $30 million for the 170-bed Citizens and 75-bed Montevue.
However, not all of the amount will arrive in county coffers, according to a financial analysis also released Friday.
The report shows that the county's broker, Marcus and Millichap Real Estate Investment Services, would receive a $750,000 commission after a sale.
In addition, the county would pay $650,000 to Aurora to accept the accrued leave of current employees at the two facilities and $833,000 for insurance, transfer and recordation taxes, as well as completing a parking lot behind the centers and returning grants and donations.
Aurora has offered to pay $1.9 million for the centers' accounts receivable. The company has agreed to allow Montevue residents subsidized by the county to continue living at the facility.
In exchange, the county would pay Aurora $10.7 million over a four-year period, with $3.5 million of that amount due at closing, according to the documents.
A staff financial analysis shows that the sale proposal now under consideration would leave the county about $5.8 million short of paying off the bond debt on the centers' new building.
However, selling the facilities would loosen up funds by putting the property back on the tax rolls and eliminating the subsidies needed to operate the centers. So, even after paying off the new building, the county would end up seeing a positive effect on its budget, according to the analysis.
The analysis also compares a sale with continued county ownership of the centers. The estimates show that from fiscal 2014 to 2017, the county stands to gain about $12.4 million by selling the centers.
The drafted asset purchase agreement included with Aurora's best and final offer stipulates that the company would apply to the Maryland Department of Health and Mental Hygiene to transfer state licenses for Citizens and Montevue away from the county. Although Aurora would head up the application process, the county would assist as necessary, the drafted document states.
The sale would require letters of approval from the Department of Health and Mental Hygiene and the Maryland Health Care Commission, the drafted agreement states.
The drafted purchase agreement does not commit Aurora to retain the employees now working at the facility, but Frederick County Commissioners President Blaine Young said an updated version requires the company to keep all staff at their current salaries.
The most recent version of the asset purchase agreement and the continuing care agreement for Montevue residents will be posted on the county's website Monday, a spokeswoman said.
Commissioners will discuss the proposed sale during a public hearing at 6 p.m. June 25 at Frederick Community College.
Follow Bethany Rodgers on Twitter: @BethRodgersFNP.
ON THE WEB
The county's financial analysis of selling the two facilities and Aurora's best and final purchase offer are available online at www.frederickcountymd.gov/ccrc-maloptions.