Final Settlement Reached Over Citizens, Montevue

The County will retain ownership, but Aurora will continue to manage the facilities.

Frederick, Md (KM)  Frederick County will continue its ownership of Citizens Care and Rehabilitation and Montevue Assisted Living Centers under a settlement finalized on September 1st between the two parties. That announcement was made on Tuesday by County Executive Jan Gardner. She said Aurora Holdings VII, LLC, will operate the two facilities for the next 18-months.

“Employees, patients and their families will notice no changes in the operations or in the transitions of ownership,” she said.

In 2013, the last Board of County Commissioners voted to sell the two facilities to Aurora. But the transaction was caught up in a lawsuit from a citizens group, and Gardner had made keeping the centers in the county’s hands a campaign promise during the 2014 election for County Executive. “I also want to share that all of the pending litigation has either been dismissed, or is in the process of being dismissed,” she said.

If the sale had gone forward, Gardner says the county would not have come out ahead. “So to close and retain these facilities is literally is costing us half as much as it would have to sell them. And at the conclusion of that sale, we would have had nothing. We would not have had the assets and we would not have had the services to the citizens of our community,” she said.

“There’s a statement that’s out there repeatedly that we’re issuing $38-million in new debt to buy or acquire the nursing homes. Of course, we never really sold them. I do want to say we never paid those bonds off. Those bonds still exist. All we did in the spring of this year was to refinance them,” says Gardner.

The good news is this settlement means that Montevue Assisted Living can start taking in subsidized patients once  again, Gardner says. “There are currently, at least as of Friday, 26 subsidized patients in Montevue remaining from the 51 who were there on May 1st, 2014, when the county entered a lease-sale agreement for the facilities. We will slowly be able to add a few patients,” she says.

She says the County will try to achieve a balance between subsidized patients at Montevue and those who pay privately. Any subsidized patients will need to be to residents of Frederick County for a year, and  US citizens. In addition, they must be evaluated and referred to by the Adult Evaluation and Review Services of the Health Department.

The deal, which was finalized on September 1st, is the same as the one announced on May 18th. Aurora has guaranteed annual profits to the county of $2.5-million for the next 18-months. The company will pay a below-market management fee of 4.5% of gross revenues under this management agreement. If Aurora fails to provide the county with $2.5-million each year in profits, its contract with the county could be terminated.

“I am grateful that the county is able to continue our longstanding mission to take care of our own, to honor the 1828 covenant or deed on the property and keep our promise to our seniors,” says Gardner. “This is a good day in Frederick County.”

During the County Council meeting later on, Councilman  Billy Shreve continued to call for a workshop to discuss the financial details of this agreement. “I don’t understand how you can’t have it ready. You’ve been looking at this deal for a year so you had to do some kind of financial analysis to show all this stuff. I mean You should have it ready right now and say ‘here’s what we based everything on.’ It’s total smoke and mirrors,” he said.

The County staff said they plan to have a presentation to the Council about this deal at a future date.

By Kevin McManus