The proposed Montgomery Meadows Adult Home would be operated as an Assisted Living model with a Dementia Care Section.

Part of the County’s charge to our firm was to analyze the current operation in comparison with those of proprietary facilities that make an operational profit, to help determine if there are any things that Montgomery Meadows could do to increase their operational profitability.

Since Montgomery Meadows does not currently operate an Adult Home, we have prepared a comparison chart of the non-capital component income and expenses of four New York and one Ohio proprietary Adult Homes that Montgomery Meadows could use for budget purposes. We have also omitted the taxes from these comparisons since Montgomery Meadows is not subject to tax. For privacy reasons, the names of these facilities have been omitted from the chart.

All the financial data were taken from year-end 2002 financial statements.

All the facilities are earning in excess of $3,000.00 per bed per year, after all debt service and taxes are paid. One facility earned in excess of $5,000.00 per bed. (Ohio figures are from the initial fill-up period and the facility reached 90% occupancy in the fourth quarter of 2002. The annualized fourth-quarter figures project net earnings well in excess of $3,000.00 per bed.)

The four New York State facilities are 120 beds each, and the Ohio facility is 92 beds, expandable to 120 beds with all private rooms. Single private residents who desire a larger room are occupying several of the two-bed rooms in the New York State facilities. This is the reason for the apparent lower percentage of occupancy. All of the facilities have more than 95% of all available beds occupied.

On the following chart, NY-2 and OH-1 are of significance to the proposed Montgomery Meadows operation as these facilities are operating assisted living and dementia units. Of particular interest is that the only major cost increase for these facilities are the labor components.

The following are of significance to the Montgomery Meadows operations:

• None of the facilities contract out any management services.
• All the facilities operate their own full service laundries.
• All the facilities serve their residents restaurant style in dining rooms. The dementia units have their own serving kitchens and dining rooms in which the food is served restaurant style.
• All the facilities have a high private pay component, which is indicative of a high quality of care and food service.
• Raw food costs range from a low of $3.25 per resident day to a high of $4.01 per resident day.