BY MICHAEL RICONDA
New City – The audit of Summit Park’s Hospital and Nursing Home have finally been completed by assessors with KPMG, who came to the same conclusion as others who have assessed the facility: Without financial aid from the county, Summit Park is insolvent.
“Summit Park continues to rely on advances from the County of Rockland to meet its operating needs,” the report stated.
The audit, which covered the hospital and nursing home together rather than just the nursing home, the only part the county plans to sell, was presented to the County Legislature’s Budget & Finance committee on August 20. Though the hospital’s assets did increase 10.4 percent from 2011 to 2012, they incurred more expenses, leading to a net loss which was both burdened by and maintained through debt to the county.
In 2012, Summit Park had almost $51 million in total assets and $179 million in total liabilities, reflecting a 27.9 percent increase in the facility’s deficit from 2011. Of those liabilities, $68.5 million was owed to the county and $78.5 million was owed for postemployment benefits, not including pensions.
In spite of county loans to Summit Park which remain unpaid by the facility, Summit Park incurred an operations loss of $27.7 million as its unrestricted net deficit swelled to $136.6 million. In effect, KPMG added evidence to longstanding claims that Summit Park was unsustainable and would require large cash infusions from the county to stay afloat.
KPMG made numerous recommendations for the continued operation and potential sale of the facility as well. They recommended the facility prepare regular financial assessments to expedite year-end statements, perform a fixed asset inventory count to identify potential savings through missing assets, and get up-to-date as the healthcare industry’s technology and bureaucracy undergoes anticipated, drastic changes.
A second audit of County finances by O’Connor Davies LLP elaborated on the hospital’s impact on county finances. The cash shortfall from both the hospital and nursing home is estimated to be at $14 million, with a $16 million operating loss for 2012.
According to DeGroat, not only is this down from $29.2 million in 2011, but will be cut in half when the next county budget factors in $8 million in revenue from the sale of two surplus buildings.
Summit Park has been considered insolvent without county aid for some time, leading the legislature to establish a local development corporation (LDC) to effectuate the sale of the nursing home. This has become an urgent priority for most legislators due to the need to ameliorate the county’s deficit. Some on both sides of the aisle have opposed the plan, including county executive candidate Legislator Ed Day (R). Day and his cohort question, why, if the hospital and nursing home can be made to function efficiently by an LDC, can the county not accomplish this itself with new leadership?
Day lost that battle and with the selection of a board of directors for the LDC, plans for the sale have progressed and could occur as early as 2014.