August 27, 2002

From the end of 2000 to the beginning of 2002, the County of Middlesex engaged in lengthy and complicated negotiations with JFK/Solaris for the eventual transfer of Roosevelt Care Center to the JFK/Solaris Health System. Those negotiations envisioned the construction of two brand new, state-of-the-art, extended-care facilities, each with a capacity of 180 beds to replace the existing Roosevelt Care Center, which was originally built as a tuberculosis hospital.

It was our intention to accomplish two objectives: 1) improve the quality of life for residents of Roosevelt Care Center, and 2) construct facilities more efficient to operate so that we could substantially reduce, or eliminate, the need for property tax subsidies for the operation of the facilities.

In my Director's Message of January 2001, following protracted delays in reaching agreement with JFK/Solaris, I announced the intention of the Board of Chosen Freeholders to move ahead, without delay, on the construction of one 180-bed facility to be financed and constructed by the County. An architect and construction manager were retained and the design for the new facility has been approved. Demolition and site preparation bids for this 180-bed facility have already been awarded, and bids for construction are expected to be awarded in September.

Negotiations with JFK/Solaris were eventually terminated, as they failed to produce an agreement with terms acceptable to the County. The elimination of
JFK/Solaris created uncertainty among residents of Roosevelt Care Center, since the new 180-bed facility would not accommodate all of the approximately 320 (313 as of July 26, 2002) residents presently in the facility. At this point let me reiterate that our program to replace the existing Roosevelt Care Center was always based on the premise that two facilities accommodating 360 residents would be constructed, one by the County and one by JFK/Solaris. Once the negotiations with JFK/Solaris proved unsuccessful, half of the proposed resident capacity was eliminated.

Since the termination of the JFK/Solaris negotiations there has been considerable study, review and evaluation intended to develop a plan to deal with this loss of 180
bed capacity. We have come to the conclusion that it would be best for the residents of the facility, their families, county property taxpayers, and the residents of Middlesex County as a whole, for the County to provide for the care of at least 320 residents. This has been the relatively stable population of the facility for some time.

Our planning process has been impacted by the decision of the State of New Jersey to recognize a portion of the Roosevelt Care Center complex as "historic". Given the need for additional capacity, the need to continue to care for existing residents, the need to eliminate or dramatically reduce property tax subsidies for the operation of the facility, and the need to deal with the historic designation of the original portion of the Roosevelt Care Center complex, we have developed the following plan:

Residents presently housed at Roosevelt Care Center will remain in place until such time as the new 180-bed facility is constructed. When that facility is put into service in July of 2004, 180 suitable residents will have the opportunity to relocate to that facility, which has a 30-bed unit specifically designed for sufferers of Alzheimer's disease.

Once those residents are moved, the balance of the residents in Roosevelt Care Center will, once again, remain exactly where they are, while the County undertakes the renovation of the portions of Roosevelt Care Center, which have been designated "historic", and which were built as part of the original facility. Renovating the L-shaped portion of the original Roosevelt Care Center to a level of amenities equal to those in the new facility is estimated to cost approximately $15 million. When completed, the renovated historic portions of Roosevelt Care Center should provide capacity for 165 residents, but the 165 beds will include a mix of resident care, which is more cost effective in terms of staffing.

Our plan will include common areas and an entry foyer, as well as 15 comprehensive personal-care beds on the first floor of the renovated facility. Comprehensive personal-care beds are intended to provide care for more independent residents, which do not require expensive, full time, comprehensive nursing services. The second and third floors of the renovated facility will each contain 60 full nursing-service, long-term care beds, and the fourth floor of the facility will contain 30 additional comprehensive personal-care beds. Dr. Frank Damiani, Administrator of Roosevelt Care Center, estimates that, at the present time, there are 45 residents in Roosevelt Care Center, which do not require the full range of nursing services provided.
In addition to renovations of the original portions of Roosevelt Care Center, which have been designated as "historic", we will build approximately 7,500 sq. ft. of new construction adding 2500 sq. ft. to each of the first three floors. This new construction will include a small number of the 120 long-term care beds already mentioned, as well as cheerful dining areas. We believe that if the historic building is properly configured, we will be able to achieve operating efficiencies which will allow us to reduce operating costs and to eliminate, or dramatically reduce, property-tax subsidy of the facility.

This plan, while it does not envision a historic restoration, will, in our view, go a long way to satisfy the historic interest in the oldest portions of Roosevelt Care Center and, when added to the 180 beds in the new facility, will provide us with a capacity, which is substantially higher than our present census. (345 vs. 313)
This plan is contingent on the validation of several assumptions. To that end, I believe it is essential to conduct an in-depth feasibility study, which will confirm:

  1. the estimated cost of the project;
  2. that the renovated historic portion of Roosevelt, together with the 7,500 feet of new construction, will accommodate the projected resident count;
  3. that the renovated facility can be configured to minimize operating costs and to maximize revenue;
  4. that there are no environmental issues, which would cause the project to become cost prohibitive; and
  5. that revenues for the facility, including the Capital Facilities Allowance, which will be added to existing Medicaid reimbursement, will, over time, be sufficient to operate the facility at or near break-even without property tax subsidies, including the costs of construction.

If the feasibility study validates these assumptions, we would move ahead with the renovations of the original portions of Roosevelt, which have been designated as "historic". While those renovations are underway, residents would remain in place until completion of the renovation project. At that time, residents would move into the newly renovated facility overlooking Roosevelt Park, and the non-original portions of the building, once empty, would be demolished.

I had previously spoken with Mayor George Spadoro of the Township of Edison. The Mayor expressed a desire that the County continue to provide care at the Roosevelt site in Edison, and that the Care Center remain open. The Mayor also indicated that he would like to see the portion of the original building, which has been designated "historic" preserved. Both of the Mayor's wishes would be accommodated by this plan, which I am proposing and of which the Mayor is in support.

This plan, admittedly, is a compromise economically. A business decision based solely on economics would argue for the construction of a second new extended-care facility and against rehabilitation of any part of the existing building. This concession was made in an effort to preserve the original portion of Roosevelt, which has been designated as "historic", and which, I cannot argue, is an imposing structure possessing significant character. This concession, in terms of capital costs, can be justified if our assumption---that the original portion of Roosevelt can be rehabilitated into a configuration, which can be efficiently operated based on existing Medicaid funding formulas---is verified. I have been advised that with a $15 million renovation budget, the original building can be so configured. I have also been advised that that $15 million figure will allow us to provide the same level of lifestyle amenities for the residents in the rehabilitated building as we are providing in our new extended-care facility, construction for which will begin soon.

The two main problems with the existing facility are 1) It could not be operated in a cost-effective way and, 2) It did not provide the level of lifestyle amenities that this board would like to see our residents enjoy.

It is unlikely that the existing Roosevelt Care Center complex, as a whole, could ever be reconfigured to operate without substantial county property tax subsidies. The building was never designed with Medicaid efficiency in mind and no amount of "cost cutting" would ever overcome the design inefficiencies and eliminate the subsidy without reducing the quality of life for residents to an unacceptable level.

It would also be very difficult and very costly to try and rehabilitate the existing buildings to provide the level of amenities, which this board deemed appropriate in the design for our new facility. Preliminary estimates indicate that if we had elected simply to rehabilitate the existing Roosevelt Care Center complex, rather than build a new facility, the total cost of the rehabilitation for 345 beds, including "phasing" (as the work would have to be done around the existing residents), would have approached
$60 million. This would be compared with $35 million for this new construction/ rehab proposal for 345 beds. If we had agreed to spend that $60 million to rehabilitate the existing complex, it would not have resulted in an efficient operating configuration, and the operation of Roosevelt would have continued to require substantial property tax subsidies.

This proposal, which includes a new facility of 180 beds and a rehabilitation of the original portions of Roosevelt Care Center of 165 beds will not only provide us with a cost effective operating configuration for both facilities but will also provide the high quality of life our residents are entitled to expect. It will provide a bed count in the two buildings, which will substantially exceed the existing 310-320 resident census, which has been relatively constant over the last two years. It will preserve the original Roosevelt Hospital, which has historic significance to some. It will be much less expensive than a total rehabilitation of Roosevelt, and it will bring well-deserved relief to the residents and families who have worried about what would happen to the residents, which would have been placed in the eliminated JFK/Solaris facility.

This is a complicated proposal, but one which should satisfy all legitimate concerns for the future of Roosevelt Care Center. It is my sincere hope that our assumptions will be validated, that we will be able to begin work on this project soon, and that all of our extended-care residents will, eventually, be located in facilities where they will receive an appropriate level of nursing care, as well as the quality of life which they are entitled to expect in a facility which does not unduly burden the property taxpayers of the County.