State reaffirms need to wait for judicial decision

This aerial photo taken in June shows Odyssey Assisted Living at Montevue at the left and Citizens Care and Rehabilitation Center of Frederick at the right.

State officials seem to have reached a consensus with local leaders that more waiting is in order before a decision on whether the county must repay a Maryland grant for the construction of a publicly owned care center.

In a chiding June correspondence, the Maryland Board of Public Works had urged the county to abide by its grant agreement and wait for state consent to the sale of Citizens Care and Rehabilitation Center and Montevue Assisted Living. Opponents of the sale hailed the letter as a state reprimand against the county's decision to finalize the first part of the sale.

However, a more recent letter from the Maryland board gives no indication that state officials will try to thwart the county's efforts to privatize the centers. The letter, which replied to a message from Commissioner Paul Smith, expresses appreciation for his correspondence and reiterates the state's decision to reserve judgment about the sale until legal issues are resolved.

"I agree that the Board of Public Works made clear at its 2013 meeting that it would not be appropriate for the Board to take action on the County's request before a judicial determination is made concerning the lawfulness of the transfer," stated the BPW letter signed by executive secretary Sheila McDonald.

Smith said he believes the recent BPW letter marks the end, for now, of exchanges between the county and state on the issue. 

Cindy Powell, a vocal critic of the sale, said the state's letter does seem to warn the county against taking additional steps toward full privatization.

"What the state made clear to the county is, you can't go any further than where you are and that we're not happy where you are," she said.

Maryland leaders are weighing in on the sale because of a $200,000 state grant for construction of Citizens and Montevue, facilities previously owned and operated by the county. Last year, the public works board, composed of the state governor, comptroller and treasurer, tabled discussion about granting permission for the sale until the resolution of a lawsuit challenging the transaction.

In May, county leaders decided to shift the facility finances and staff to a private company, Aurora Holdings VII, and the June letter from BPW argued that these actions amounted to a disposal of property without the state's permission. 

The response from Smith stated that there was no conflict between the state board's directive and the county's actions. While the county has transferred facility finances and staff to Aurora, it has retained the center land and buildings. The $30 million property sales are on hold until the legal matters are resolved, Smith wrote.

If the county ends up selling the facilities, returning some of the state grant funding might be necessary, Smith acknowledged. The county will make the repayment at once when the public works board requests a certain amount, he stated.

In its most recent letter on July 21, the public works board stated that once the legal issues involved in the sale are resolved, the county can renew its request for state permission to privatize Citizens and Montevue, which has been renamed Odyssey Assisted Living at Montevue.

If the state wanted to work against the sale, its only course of action is to demand return of the $200,000, money commissioners have already offered to repay, Smith noted.

"I think if they really wanted to get tough with us, they have a limited remedy," he said.

Follow Bethany Rodgers on Twitter: @BethRodgersFNP.

(17) comments

averageterp

luckily this is the last july that blaine will be part of Frederick county's government.

dbjanda1

Darth---You complain about the losses over the years so that allows Blaine to continue that same strategy as justification for what he did... Where does it say that the nursing homes were to make money and what were their audited losses in the last fiscal years ???...Was it in the millions ???...I doubt it that's why Blaine had to hurry up and sell them right away...Me

darththevader

Keeping it and losing millions would be continuing the same strategy. Selling is stopping the profuse bleeding.

Not sure where your disconnect is. If you lose 3 million a year the break even is 10 years from the time you sell it. If you lose 3 million a year and keep it you've lost an additional 30 million in 10 years

darththevader

So much drama. Did everybody see all the seniors kicked to the curb when Aurora took over? Neither did I. Dumping Citizens started coming up 100 years ago

dbjanda1

This sale/lease is a monkey Blaine can't get off his back...He blame Jan for losing money over it and uses that as an excuse for him to lose even more...What decision did Jan make to cause Blaine to lose money on the sale/lease contract ???...The answer is none but Blaine will never admit it...Me

darththevader

Do the math. Losing millions a year as long as the county owns it. Selling it is what stops the losses.

ALincoln

I and so many others who have a strong moral compass hope that Montevue and Citizens will be serving the indigent poor of Frederick County long after Blaine Young has left politics, which we hope will be in the near future.

Shouldn't the proposed new name be Odyssey Assisted Living For the Wealthy at Montevue?

MCEDDE21

Don't forget that the Blaine Board just approved $37 Million in "refunding" bonds, theoretically paying off the remainder of the outstanding construction debt for Montevue ($33 Million). This unusual muni bond will be issued at a floating rate, adjustable monthly at LIBOR plus 0.15%. Currently, the return on this taxable investment is 1.05%.

Personally, I can't imagine anyone jumping on a shaky investment like this, let alone the typical muni-bond investor, who likes stable, tax-free returns in the range of 3% - 7%. I expect, at the least, that they will demand a substantial discount.

Presumably, the additional $4 Million on this offering, will be used to pay for that discount and to pay the double interest on all the affected bonds for the next four to eight years until they mature. In essence, this is another huge give-away to Aurora.

jerseygrl42

I see that smitty is going to hold a series of "educational " forums...wonder if he will extol the virtues of Gardner's garbage incinerator, or that $101 Million the county taxpayers have to kick in to pay back the "loan" to Jefferson so-called Tech park which in reality is a housing development, on behalf of Sinclair and the other interested parties, or how about that $20 Million loan to Buckinghams Choice, maybe the shooting gallery the developer wants to build on Thurston, or the 12,000 new homes approved with a half billion dollars in infra-structure that the taxpayers will cough up once the single lane roads are brought to a standstill and we run out of trailer space for schools ...any of those on your agenda for education smitty????...yeah I think not...don't want to discuss the stuff you clowns have brought to the county the past 4 years now do you...

The Grass is NOT Greener

........ So what does this have to do with the article? Or is this more baloney you're just throwing around every time you have the opportunity to post in a comment section?[spam]

KellyAlzan

Grass - please stay in topic

Thanks!
Kelly

The Grass is NOT Greener

[yawn]

MCEDDE21

Last June, the BoCC approved an "asset purchase agreement" to sell our County homes to Aurora. In July, Blaine visited the Board of Public Works to request its approval. When the BPW tabled the matter, Blaine made a second appeal. At the BPW’s August meeting, the State’s top financial officers made clear that they would not act on the County's request until the Court challenges had been resolved.

In September, Blaine made another plea, offering a $200,000 check, which, incidentally, had not been authorized by vote of the BoCC until after the fact (and then, in a secret meeting). The BPW returned the check and repeated its August message.

When Blaine unilaterally signed a second "asset purchase agreement" (more accurately a sale/lease agreement) on May 1, 2014, the BPW issued a "reminder" letter (June 10), to the effect that it would not approve such a "disposition of assets" until the Court had decided the legality.

Earlier this month, Commissioner Smith answered the BPW's "reminder” letter with contrition. The BPW responded on July 24, briefly and cordially, asserting for the fourth time its position regarding the County's request. It will not act until the legal issues are resolved. End of story.

cctjr64

And again this just shows Blaine's sneaky way of doing business by the lease. Come on November 4 so we can get him out

FredTOT650

If you dont mind me asking, why does everyone on here seem to be against Young rather than Pro-Gardner.

To an outsider, that appears to be a poor stance that you will vote for someone else just because you dont want another person to win

girlpolitic

Carl, heard you are the guest speaker at the McDonald's dedication on 7th Street next month.

The Grass is NOT Greener

[lol][beam][lol]

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