C-TH to consider employee purchase plan of Valley Meadows
Tomorrow Carson-Tahoe Hospital officials are scheduled to consider an employee-backed proposal to operate Valley Meadows Rehab and Sub-Acute Hospital, formerly known as the Cottonwood Care Center.
The employee group is headed by Valley Meadows administrator Jim Heinzen, who was also the Gardnerville Ranchos nursing home’s court-appointed receiver. The employees are partnering with the nursing home’s landlord, PDQ Investments.
Financial losses at Valley Meadows since the hospital bought it four years ago led to the hospital’s decision to be out of the nursing home business by this coming June 30.
In early March, officials ordered C-TH administrator Steve Smith to develop a plan to close Valley Meadows and move its residents if a buyer could not be found.
n Meeting the deadline. The employee-landlord partnership and the preliminary proposal were developed in response to that directive. On March 25, hospital trustees gave the partnership, Valley Meadows Living Care Inc., about two weeks to come up with an acceptable plan to take over the operation.
The partnership had initially asked C-TH to cover one month of the facility’s payroll, about $217,000. The employee-operators also asked the hospital to sign over the nursing home’s equipment, its accounts receivable and cash on hand. They asked the hospital to transfer its license to them and to refer patients to Valley Meadows as long as it is in good standing with the state.
PDQ managing partner Dave Pumphrey said Tuesday that negotiations had been “hot and heavy” for several days last week.
n Proposal concessions. “We’re asking for no cash at all,” Pumphrey said. “We’re not asking for the hospital to cover the payroll. PDQ will agree to release them (C-TH) from paying the June rent (a contractual obligation). We have also agreed to release the hospital from other obligations and liabilities under the lease – that’s the big carrot.”
Pumphrey said the Valley Meadows partnership will also agree to assume the nursing home’s liabilities as well as its assets. And, PDQ will forgive some past debts and is willing to accept promissory notes if the facility cannot pay all of its rent. The rent, itself, cannot be lowered because it would affect reimbursement levels from the state.
“We think we might have a better chance of getting the board’s approval if we don’t ask for any money,” Pumphrey said. “It also helps that they did an analysis of what it would cost to close down the nursing home. It costs a lot, it’s nearly as expensive as keeping it open.”
n Others still interested. Pumphrey said discussions with two national nursing home operators who may be interested in purchasing the operation are still on-going.
“But, at this stage of the game we can’t hold our breaths,” he said. “The best resolution is the employees – they’ve been doing a great job and are very motivated.
“Our formal offer will be presented Thursday. It assumes Valley Meadows can get licensed (by the state) and that the transfer will be approved by Judge (Michael) Fondi.”
If hospital trustees do not approve the partnership’s plan as a possible long-term solution or even as a short-term measure to keep the operation going until another institutional buyer can take over, they could order administrators to begin proceedings to close the facility and move its residents.