Commentary: Strafford County nursing home proposal is unnecessary and way too expensive

To: Strafford County CommissionersStrafford County AdministratorRe: Nursing Home Proposals

Commissioners and Administrator Ray Bower,

Since the onset of your push for a new nursing home, we have consistently discussed in public hearings, as well as written communications, our desire for clarity and transparency of process. To date, however, perception and reality have been the opposite. Your actions have been clandestine and secretive, eliminating any trust that existed. In the following communication, we hope to once again relay our concerns and opposition to any nursing facility absent a well-informed delegation and a well-developed plan that requires due diligence by all involved.

Transparency, clarity and trust

Let us begin with transparency, clarity, and trust issues. Many of us are keenly aware that transparency has been negligible to non-existent. The original nursing home that we deemed the “Taj Majal” was thrust upon us without even a hint or a previous heads-up. You then attempted to pressure the delegation into an artificial timeline based on the threat of “we will lose federal dollars” and we are once again witnessing that same argument/tactic being utilized. Fortunately, conservative arguments prevailed and the delegation was able to pause the coordinated rush of the first nursing home and stop the full-scale bonding.

For those that were present, recall at the first presentation put upon us, Commissioner George Maglaras and the several from the Democrat caucus begged us to ”trust” and “have faith” in the commissioners and the administrator. During this presentation, Maglaras stated (in reference to the nursing home proposal) “this has never been done in New Hampshire, probably not in the United States, I got the idea from Europe." The original “Taj Mahal” was proposed at a cost of $170 million.

The delegation later learned that the original iteration had to be scrapped, as it had been proposed on a site that had not been properly vetted or assessed for things such as wetlands or Indian artifacts. The fact that Warrenstreet, the commissioners and Administrator Ray Bower hadn't known the property was ill-suited (a simple site walk should have highlighted the wetlands), yet started and proposed a design estimated at $170 million-plus along with the associated costs to date, shows incompetence by all involved. So far, our county’s citizens are $500K in the hole, the money taken from “county funds” without delegation approval. It is our belief that the commissioners have gotten used to decades of the rubber-stamping of their budgets and actions by a majority Democrat delegation and assume the current delegation would approve huge bonding and let this unauthorized spending go unchallenged.

Next, most of the delegation learned of “Taj Majal 2.0” not by a pre-briefing by the administrator or commissioners, but rather in the newspapers. Again, no forewarning, no discussion, no transparency. Finally, a recent query of Jonathan Hale (Warrenstreet) that Rep. Turcotte sent only to him, came back with cc:s to Maglaras and Bower. When Rep. Turcotte asked him if he had conferred with them prior to answering his questions, he said no, but that “I let them know by email that I received your questions and they gave me permission to respond to you”. Why was permission to respond to a delegation member required or believed to be required? This does not come across as being transparent, rather the opposite, as it appears as a coordinated operation that limits transparency.

Furthermore, recall that it is alleged the bidding timeframe for architects for this massive and expensive project was but a couple weeks, hardly time for any firm to produce a rational bid. Due to our concerns, it would appear Warrenstreet may have been pre-selected ahead of time.

Cost estimates

The costs shown on the various paperwork for the current proposal (Taj 2.0) we have received ranges from $130 million to $165 million (recent meeting now has costs at $170 million again). When interest on bonds is included, Strafford County citizens are being asked to build a $300 million facility. We can also assume that these figures do not include mechanical heating/cooling costs, potential solar panel installations which probably gets the construction costs over $200 million.

At $560-plus per square foot (not including mechanical and bond interest), how is it that the cost for a nursing home in Strafford County NH is more than the cost of a new hospital in downtown Boston (see chart of hospital costs throughout the USA below)?

Furthermore, the proposed nursing home costs more than private high-end LifeCare senior communities by a whopping $150-$200 per square foot. Like the proposed nursing home, these communities have independent living, assisted living, memory care, etc.

“Mid-level assisted living costs between $263 and $335 while high-level AL costs between $344 and $429 per gross square foot, according to the report. That’s compared with a mid-level range of $226 and $304 and a high-level range of $297 and $369 last year.” (Above quote from article: Senior Living Industry Could See Construction Slow Further in 2023.)

For perspective, at the low-end construction estimate of $165 million, each of the 215 units proposed would cost $767,000 each. You could build 470 homes costing $350,000 each for the same amount of money.

Next, the design is extremely inefficient when you consider the costs of heating and cooling, as well as initial construction costs. While it may be efficient for nursing staff, these inefficiency costs need to be calculated.

Then we have a daycare facility? An enclosed atrium? Stores? What will be the added costs of these unnecessary employees? What would construction costs be absent these unneeded “extras”?

When discussing the design, solar, and heat/cooling system, Warrenstreet mentioned “if the desire is to be green." When constructing or remodeling any new structures, the county’s “desire” should be to do so based on lowest overall costs to the citizens of our county, not on a desire to “be green." As a representative mentioned, natural gas exists on our county complex already.

Warrenstreet mentioned that they believe costs will be increasing another 20% soon. We believe that, however, to be another pressure tactic. We, buttressed by others, believe that we are in a unique inflation bubble brought on by Covid (chain of supply issues, supply/demand issues, and hundreds of billions of dollars being tossed around by Fed’s for all sorts of building and construction). The following mirrors our thoughts: “But, as the construction market is expected to contract, the Weitz report also showed that inflation on building material could level off in the next three years. The cost of asphalt paving, reinforcement bars, fabricated pipe, sheet-metal, structural steel, plywood and lumber are expected to see negative cost growth as soon as this year.” (Above quote from same article on senior living.)

It has been mentioned over and over, but it needs repeating. County nursing homes are supposed to be for the indigent population of Strafford County, not competition for high-end private continual care communities.

Revenue estimates

When the final tally is done, will Lori Shibinette's estimated revenue calculations be valid, or end up putting the county's taxpayers on the hook for huge annual losses? In her presentation, calculations were based on $130 million in construction costs. Since that presentation, projected costs have jumped conservatively by $35 million to $40 million. Add in the contingencies, solar installations and a geothermal installation, the optimistic revenues portend annual losses county taxpayers will have to fund.

Estimates of 94% occupancy appear unreasonable and extremely unlikely since the population rates at the nursing home had been in a steady decline even before Covid hit. Shibinette also assumes we will somehow attract private payer residents at $450 per day (that is $164,000 per year) and Maglaras at our recent meeting predicts reimbursement rates of $600 per day ($18,000 per month, $216,000 per year). Private payers can find a LifeCare facility currently for $100,000 or less per year. A Strafford County nursing home is not supposed to mirror private, high-end communities. Like it or not, private payers will not be looking to live in a county nursing home meant for an indigent population. A belief that “if we build it they will come” is outside of the realm of possibility.

Bower recently made the plea that we need to be able to keep residents at the facility after an injury or issue normally requiring hospitalization as a reason for a new facility. When asked, Bower stated 15-20 residents a year normally utilize temporary, outside hospital or recuperative care for an average of six weeks. Doing the math, that equates to an equivalent of two residents annually, or less than 1% of a fully-occupied nursing home population, hardly a number that will make or break the current nursing home facility.

Options and the path forward

From day one, the commissioners have attempted to push a single, solitary proposal on the delegation. A “grand-plan" high-end facility based on a mythical European model that brings with it a price tag of nearly $200 million, not including interest on bonds.

When delegation members have asked about renovating the existing facility, the question is brushed away with a response of “that won’t work, we looked at it." But as of yet, we have not seen anything to support that statement. In fact, problems such as alleged asbestos and caulking around windows has been used as an excuse as to why a renovation cannot be done and a completely new facility is needed, yet the current nursing home has previously been proposed as a homeless facility without any renovation, part of a yet bigger “three-legged stool” plan.

When asked about an addition to the existing home, followed by renovation of the current facility, that receives the same type of answer. Sullivan County, after years of exploring options (which we have not done in Strafford County), utilized this exact strategy. We are told to explore this option, “it would require delegation approval for funding." Yet to date, the delegation has approved none of the funding of the $500,000 that the commissioners and the administrator have poured into their desired project to date.

Conclusion

While some sort of nursing home improvements may be necessary, it would appear that the commissioners, the county administrator and Warrenstreet have no desire to pursue any options other than their “Taj Mahal” projects. As mentioned above, transparency has been somewhere between severely lacking and absent.

As fiduciaries for the taxpayers in Strafford County, we should not be looking to compete with high-end private-payer facilities and we should not be placing huge bonding debt onto our taxpayers that revenues will be unable to support without taxpayer subsidies. There is an excessive amount of money to be spread around to multiple businesses with the building of a new facility, but that exorbitant amount of dollars comes from the county’s taxpayers. As the proponents of this excessive endeavor, the commissioners and administration must perform their due diligence. As a delegation, we must also. As of yet, that has not been sufficiently done.

Rep. Claudine Burnham - MiltonRep. Cliff Newton - RochesterRep. Kelley Potenza - RochesterRep. Len Turcotte – Barrington/Strafford

More: Commentary: Strafford County senior citizens deserve a safe and up-to-date nursing home

This article originally appeared on Portsmouth Herald: Commentary: Strafford County NH nursing home proposal too expensive