Email:info@flhoffman.com

(flhc/mm/ 4)

From: Frank L. Hoffman
To: Patricia Outhouse – 518-843-3503 – FAX 843-3537
Date: 24 October 2002

Meeting Attendance:

The purpose of this meeting was to discuss the financial feasibility of the various options available to Montgomery Meadows, and how Montgomery County could overcome its loss of $1,000,000.00 in federal funding over the next four years. The following items were discussed.

• What would happen to the County’s cash flow if Montgomery Meadows were sold to a third party?
• The County might be willing to invest in a significant capital expenditure if they can be assured of a positive cash flow.
• Can Montgomery Meadows raise their private pay rate?
• For the purposes of estimating new construction costs (replacement), use the State cap-rate (+/- $135,000/bed at time of construction) for new construction and 75% of the cap-rate for resident care wing additions, as don’t have an architect on board to draw the plans.
• What would happen if Montgomery Meadows was totally replaced?
• What would happen if The SNF beds were relocated to the east side of the present building and the present wings were converted into an Adult Home.
• For estimating purposes, use $4,000,000.00 ($50,000.00/bed for 80 beds) for the cost of renovations and repairs the existing building to convert the wings to an Adult Home.
• Are there additional funds available for dementia and behavioral care proposed for the adult or nursing home should separate units be constructed?
• What effect does rebasing have on the bottom line?
• If we increase the number of private rooms in the existing SNF, what effect would it have on the bottom line?
• Adult Home private room rate to be $80.00/day plus special assisting living services.
• SNF addition would be approximately 80,000 sq. ft.
• Existing main floor is 55,000 sq. ft.
• Basement of existing building is approximately 25,000 sq. ft.

Rob will do all the projections on spreadsheets so that they can be adjusted with various options. He will bring them on his computer for the next meeting (date to be determined).

There should be separate spreadsheets for the Nursing Home and the proposed Adult Home. Each spreadsheet should have lines of columns that shows the effect on the County’s budget. Show current costs along with projections and the net effect after construction and renovations.

A formal market study should be done if the financial feasibility study gives a positive direction.

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