Encourage the Board of Public Works to Delay or Stop the Sale of Montevue and Citizens!

Although the Frederick County Board of County Commissioners has approved the sale of the Montevue Assisted Living Facility and Citizens Care and Rehabilitation Center, concerned citizens are continuing to pursue a variety of strategies to delay…and ultimately to prevent…the bargain basement sale of these award-winning facilities to a private company that has been in the business for just four years.

On July 24, the Maryland State Board of Public Works (BPW) met to consider a proposal by the Frederick BoCC to sell these county facilities to Aurora Holdings VII, LLC. Additionally, the Board of Public Works was asked to forgive a debt of $200,000 in state grant funds, which were provided by Maryland as a contribution to the construction of the new facilities. (See: Transcript, pages 105 – 131, available at BPW web page: http://bpw.maryland.gov/MeetingDocs/2013-July-24-Transcript.pdf)

The Board of Public Works consists of Governor Martin O’Malley, Treasurer Nancy Kopp, and Comptroller Peter Franchot. In a 2-1 vote, the three-member board decided to defer a decision so they could have their legal staff review the lawsuits to see if they were related and/or conflicted with their decision on this request.

Some have wondered why Governor O’Malley voted to approve the request. But a review of the proceeding, reveals that the governor had been led to believe that our community’s concerns have been addressed by the BOCC.

You can watch the July 24th meeting here.

But, in his testimony before the Board of Public Works, BoCC President Blaine Young made a number of clear misrepresentations to the three members of the Board and their staff. His claims, along with others by County Attorney John Mathias and County Manager Lori Depies are flatly contradicted by the joint Asset Purchase Agreement (APA), which is posted on the County web page: http://www.frederickcountymd.gov/DocumentCenter/View/262412

Among other things, the Asset Purchase Agreement says:

1. The County has no obligation to provide for the continuing care of present or future residents in need of assistance (page 27);

2. If the county stops paying the subsidy for any reason, Aurora will have no obligation to provide services to those who can’t pay the full, private-pay rate (page 23);

3. Aurora has no obligation to continue the employment, the terms, or the benefits of any employee (page 20).

In addition, we dispute other significant claims made by Commissioner Young, at the July 24th hearing and on other occasions. (See below” “NOTES: When Writing to the Maryland State Board of Public Works.”)

Further documentation in support of our positions is available from the County web page at: http://www.frederickcountymd.gov/index.aspx?NID=5318 and on our Facebook page at: https://www.facebook.com/StopTheSaleOfMontevueCitizens

The Maryland State Board of Public Works has the authority to delay the sale of these facilities. There is uncertainty as to whether or not BPW could actually stop the sale, but even the delay gives citizens additional time in which to pursue civil litigation in this matter.

The Board of Public Works will meet again on August 21. It is not known if the it will take action on this matter at that time, or if their staff may need more time to adequately review the legal issues. The BPW may also decide to defer to the courts.

writenowIn the meantime, we urge all Frederick County residents to speak out on this issue.

Please write to the Board of Public Works at the address provided and help us correct the mistaken impressions left by our County officials. Every message is helpful, but you can include some of the information here.

Working together, and leaving no stone unturned, we can still stop the Board of County Commissioners from selling off these high quality facilities…and destroying 185 years of our heritage.

Thanks so much!

NOTES: When Writing to the Maryland State Board of Public Works

The Board of Public Works consists of Governor Martin O’Malley, Treasurer Nancy Kopp, and Comptroller Peter Franchot.

You can email all three at this address: email.bpw@maryland.gov

1. The County will sell all assets—valued at well over $50 Million– to Aurora Holdings, VII, LLC, for $30 Million. Closing is expected within six months, unless the Board of Public Works puts a stop to it.

2. The County opened the two state-of-the-art facilities in July 2012 at a cost of $38 Million. The publicly owned land (7.5 acres of commercial, street-front property–valued at $6 – $7 Million) will be included for free.

3. The County will sell ALL of its Accounts Receivable, as of the closing date, to Aurora for $1.9 Million (CURRENT value = $5.6 Million)—a net gain of some $3.7 Million*.

4. At closing, the County will pay Aurora $3.5 Million as a 12 month advance on the annual operating subsidy.

5. The County will pay Aurora another $7.2 Million in subsidies over the next three years.

6. The full value of the deal is more than: $38 Million + $7 Million + $3.7 Million + $3.5 Million + $7.2 Million; or $59.4 Million.

7. As noted above, the County will pay Aurora $3.5 Million at closing to subsidize operations for the full year. However, the BoCC approved a budget to subsidize the facilities in the amount of $2.8 Million for the same time period, while under County ownership—a $700,000 disparity that has not been explained.

8. The County will pay Marcus & Millichap Real Estate Brokers, $750,000 for their services in a sole-source agreement, “piggy-backed” on an agreement with New York’s Steuben County.

9. The BoCC voted to abolish the Citizens Board of Trustees and approve the sale on June 25, 2013, after a raucous public hearing, attended by more than 400 citizens, over 90% of whom opposed the sale.

10. The County has held the land since 1828 as a public trust, with the deeded covenant that it be held “for the benefit of the poor of said county, and to and for no other use, intent or purpose whatsoever.”

*At the industry standard recovery rate of 98%… In addition, Aurora took over facilities management—and bill collections—on August 1, 2013. If Aurora fails to collect on the past due receivables and lets current billings run (for the expected six months), the corporation stands to make an even greater profit.

11. Despite the BoCC-approved County budget, which projects a subsidy for Montevue/Citizens at $2.8 Million, Commissioners President Blaine Young claims that the subsidy is more than twice the official number = $6 Million. Young, however, violates standard accounting principles, conflating the County’s operating budget (expenses like wages, maintenance and repairs, utilities, non-capital equipment, etc.) with the capital budget (construction costs, debt service, etc.). No other agency reports its finances in this manner.

12. The County-owned homes are already profitable and on track to completely eliminate the subsidy within another year—according to the original plan. The most recent financial reports for April and May show profits of $82,000 and $225,000, respectively.

13. Aurora agreed to provide current County employees with “comparable” benefits. There are no such assurances with regard to future employees and, in fact, the benefits for current workers show severe cuts to retirement, vacation time, and health insurance.


The Citizens and Montevue controversy in the media

Open a chronological listing of links to news articles, editorials, columns and letters to the editor from the News Post, Gazette other news sources about this issue.

Please note this from the News Archive home page:

Envision Frederick County is compiling an archive of news articles, editorials, columns and letters to the editor, from a range of local and regional publications. The archive will grow to include well more than 1,000 entries, covering the last decade or so.

In other words, the link above will take you to some, but not all of the “news articles, editorials, columns and letters to the editor” about this issue, as we are working to catch up with the past.