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M E M O R A N D U M

To: All Albany County Legislators

From: Albany County Executive Daniel McCoy

Date: November 13, 2012

RE: Albany County Nursing Home/Upstate Services Group Negotiations

Negotiations continue with Upstate Services Group and I wanted to update you on our progress,as well as remind you about our senior leadership meeting with all legislators and USG

tomorrow (Wednesday, November 14

th

) @ 4:30 p.m. in the Cahill Room. We will be schedulingan opportunity on Thursday, November 15th

for any follow-up questions that come out of theWednesday meeting with USG.

The budget I presented includes USG running the Albany County Nursing Home. This is anoption which protects our vulnerable seniors, protects our taxpayers and accepts responsibility toput Albany County on track and save us $60-80 million over the next ten years. My budget toyou included funding for ACNH for the first six months of 2013 during which time USG wouldbe going through the CON process. If the Legislature does not approve a contract with USGonce finalized, I have been clear that in order to pay for operating the nursing home for thesecond half of the year, the tax levy would have to be increased. In the interest of transparency

and open communication, I have offered Legislative Leadership the opportunity on more thanone occasion to participate in negotiations with USG and they have repeatedly declined.

There has been some discussion about a $12 million dollar loan that is part of the negotiation.This money would be a low-interest loan, with a draw down schedule of 6 million dollars in2014, 4 million in 2015 and 2 million in 2016. We are negotiating protections to keep the countyinsulated from liabilities. This loan arrangement is not a novel concept and has been part ofother facility transfers.

Also in the agreement, USG will be given 3 million dollars for capital expenditures. There is aninventory of those expenditures that need to be made and will be made ASAP, when the closing

DANIEL P.MCCOY COUNTY EXECUTIVE

COUNTY OF ALBANY

OFFICE OF THE EXECUTIVE112 STATE STREET,ROOM 200

ALBANY,NEW YORK 12207-2021(518) 447-7040 -FAX (518) 447-5589

WWW.ALBANYCOUNTY.CO M

CHRISTINE QUINN, ESQ DEPUTY COUNTY EXECUTIVE

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occurs. On that short list are a new boiler and roof. These and other repairs need to be made andexpose the County to a cost that would have exceeded 3 million dollars. USG will also have aninitial operating loss and money will be used to get the facility up and running.

As we have all discussed over the years, the Albany County Nursing Home is a critical safetynet for our seniors. This will continue to be the case with USG. They have fantastic credentialsturning around nursing homes in New York State that have financial or regulatory troubles andare a leading provider of high quality comprehensive health care services. They currently oversee

operations of eleven skilled nursing facilities around New York State comprising a total of 1,600beds.

Our residents deserve a better facility one that will improve the lives of our residents. USG isthe solution.

I have talked to many legislators individually to answer any and all questions. I am committed tobeing transparent and available to answer your questions on this sensitive and complex issue.