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January 26, 2013

Manor plan hinges on tax hike, union

The Daily Star

---- — A new proposal to stave off privatization of the 174-bed Otsego Manor hinges on persuading unionized workers to accept significant contractual givebacks and building public support for an increase in Otsego County’s share of the sales tax.

The proposal by county Rep. John Kosmer, D-Fly Creek, is designed to avoid selling the Manor to a private company that could replace the current workforce with its own staffers and keep the facility, built at the cost of $33 million, as a county-owned asset.

Kosmer suggested the plan could only work if the public supports a 0.25 percentage-point increase in the current total sales tax rate of 8 percent.

The county and local governments share half of the sales-tax revenues. The state gets the other half. Raising the rate to 8.25 percent percent could generate an additional $1.6 million, which could help offset the Manor’s deficit.

According to a briefing memo that Kosmer shared with other county lawmakers Friday, any increase in the local sales tax would have to be approved by the state Legislature.

But before the sales-tax effort could be undertaken, the county would have to persuade the Civil Service Employees Association — a union representing more than 200 Manor workers — to make contractual concessions, Kosmer suggested.

He said the county needs “a minimum of $1.6 million to $3.8 million in consensus reductions.” The givebacks, coupled with the additional revenue from the higher sales tax, would put the county in a position to subsidize the Manor to the tune of $2.4 million — well below the subsidy level that would otherwise be needed if it were to stay a public nursing home, he said.

“If, and only if, a CSEA contract is renegotiated, public support must be gauged,” Kosmer wrote in outlining the plan.

He suggested secure online technology could be used to poll county residents about whether they support the proposals that would allow the home to be kept by the county or prefer the privatization option.

The poll would run for 31 days, during which residents could also phone in or use traditional mail to respond to the question of where they stand. The respondents would be asked to provide their names and addresses.

“If, and only if, clear public support is demonstrated by this poll, do we then turn to the CSEA,” Kosmer wrote.

Karen Carpenter, a union representative, declined to comment on the specifics of the proposal, saying she has not seen them in writing. But she said she welcomed the effort to find an alternative to privatizing the nursing home.

“Citizens want this service and understand it’s necessary,” Carpenter said. “People understand that a nursing home is not a profit-making business.”

In an interview, Kosmer conceded that the plan is on an uphill track, given that the county board overwhelming came out in favor of finding a private operator.

“The odds aren’t good that this can happen — but it’s the best I can do,” said Kosmer, a member of the board’s Manor Committee.

County Rep. Kathleen Clark, R-Otego, the board’s chairwoman, already has said declared her opposition to any increase in the county share of the sales tax, arguing it would drive shoppers outside the county.

Rep. Donald Lindberg, R-Worcester, a Manor Committee member who was the first to call for privatizing the nursing home, said he welcomed Kosmer’s proposal, although he said he would also be against increasing the sales tax. Lindberg said he also questions whether the plan would end years of mounting operating deficits.

“It’s not going to get better,” he said.

County Treasurer Dan Crowell, who last year advised the board that the Manor’s projected operating deficit had become unsustainable, said Kosmer’s plan merits discussion and represents the only proposal so far for keeping the home in county hands.

“There is no simple miracle answer,” Crowell said, noting the Kosmer plan would have to be embraced by workers who would be consenting to pay cuts and reduced benefits.

Maureen Culbert of Springfield, a volunteer advocate for Manor residents and the driving force behind a grassroots campaign to persuade the county board to drop the privatization plan, called Kosmer’s plan “a great


“I hope we all can work together to save the Manor and keep the Manor county-owned and operated,” she said, noting the 1,800 county residents have signed a petition, urging the county to continue operating the Manor. Her local county representative, Keith McCarty, R-Springfield, was the lone board member to oppose privatization and the first to come out for an increase in the local sales tax.

The Manor’s county subsidy last year stood was $3.3 million. It is expected to grow to $5.6 million this year. Even if the county were to complete the privatization move, it would still be saddled with “legacy costs” of about $2 million a year for the next five years, Kosmer said.

He reasoned that an annual county subsidy of $2.4 million a year is “doable” in light of the fact the privatization option would keep the county on the hook for $2 million in annual legacy costs.