12-12-23
To: Strafford County Commissioners
Strafford County Administrator
Re: Nursing Home Proposals
Commissioners and Administrator 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
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 was had not been properly vetted or assessed for things such as
wetlands or Indian artifacts. The fact that Warrenstreet, the Commissioners and Administrator
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+ 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 $130M to $165M (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
$200M.
At $560+ 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)?
Location 2019 2020 2021 2022 2023
National
Average $362.69 $371.48 $382.12 $400.11 $419.18
New
York, NY $484.88 $494.19 $506.94 $523.11 $540.45
Chicago,
IL $436.50 $444.21 $456.40 $474.03 $494.76
Boston,
MA $414.67 $427.46 $433.44 $454.36 $479.38
Los
Angeles,
CA
$409.55 $419.04 $430.83 $452.05 $475.20
Ann
Arbor,
MI
$362.97 $369.02 $382.83 $396.83 $409.43
Omaha,
NE $330.20 $340.43 $352.74 $363.59 $383.59
Denver,
CO $323.44 $333.80 $345.51 $362.23 $378.97
Atlanta,
GA $322.76 $329.05 $342.71 $359.46 $375.52
Phoenix,
AR $320.55 $327.81 $332.73 $351.97 $373.71
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, assistant 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
By Nick Andrews | April 7, 2023]
For perspective, at the low-end construction estimate of $165M, 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 article: Senior Living Industry Could See Construction Slow Further in 2023
By Nick Andrews | April 7, 2023]
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 $130M in construction costs. Since that presentation, projected
costs have jumped conservatively by $35 – $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 $164K 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 $100K 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 6 weeks. Doing the math, that equates to an equivalent of
2 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.
Sincerely,
Representative Claudine Burnham – Milton
Representative Cliff Newton – Rochester
Representative Kelley Potenza – Rochester
Representative Len Turcotte – Barrington/Strafford