Stoffa Picks Potential Gracedale Buyer

While the decision is far from final, if Northampton County sells Gracedale to a private company, the buyers will be a joint partnership: TL Management, LLC and Global Healthcare, County Executive John Stoffa said Thursday.

 Out of four bids, TL's $35 million offer was deemed the most attractive on a variety of points other than financial considerations, Stoffa told county council at its meeting.

Among those points, Stoffa said:

•  The company currently runs 14 nursing care facilities, with 11 in Pennsylvania
• A minimum of 85 percent of residents would remain paid for by Medicare.
• The company has a good resident care and labor record and has promised to retain about 90 percent of the current staff.

The $35 million bid is for 15 to 25 acres of the property, Stoffa said. The company may be interested in additional acreage which would be negotiated separately, he added.

“The administration will begin exclusive negotiations with TL/Global,” Stoffa reported to council members, estimating that he expected details of the deal to be ironed out by May or June.

Meanwhile, the of the possible sale is far from decided.

Councilman Ron Angle said he is frustrated by the issue and doesn't like the choice to be made, especially since he has favored making Gracedale more economically competitive for years. The facility is in need of capital improvements and has run in the red for several years..

“We weren't good stewards of Gracedale. We weren't competitive,” Angle said. “Now in the near future, I am going to be faced with making choices that were not my first, second or third choice.”

The alternative to the sale is “a huge tax increase,” officials have said. Angle said he feels there is no choice but to sell, though he wants to make sure facility residents will have the same quality of life with the chosen private buyer and asked for a list of TL Management other Pennsylvania facilities so he can check them out personally.

“I want to see if those people will do as good a job taking care of people as we do now,” he said.

Tom Tosti director of American Federation of State, County and Municipal Employees District Council No. 88, Gracedale's employees' union expressed union concerns about the sale.

“One of the reasons you shouldn't sell is because of the residents,” he said, adding that he feels it is likely that a private company will reduce or replace staff. “By displacing people, it will displace the continuity of care.”

He also said the sale could cause local people to become unemployed.

“I don't think Northampton County can afford to have anyone else out of work,” he said, noting that it could have an effect on other area businesses.

He also cited statistics indicating that public nursing homes are generally better-run than privately-owned ones.

“What I'm asking you is to not put something on to sell Gracedale, but put it to a vote by the citizens,” Tosti asked the council. “Don't put it to a decision here, let the voters decide in May.”

The Northampton County a petition for a voter's referendum on the issue.

Angle told Tosti the union was in the position to help avert the sale months ago, but refused to cooperate with the municipality to rein in costs.

“I ask you, sir, would you let your members vote on giving back the $6 million in benefits?” Angle asked, referring to the union negotiations last year in which AFSCME 88 refused to make salary and benefits concessions. “Personally, the people I represent don't get 67, 68 percent in benefits. They get 24 or 25 percent. I want to know why you didn't let your union members vote on this proposal.”

If the union were to renegotiate, Angle said he'd reconsider his support of selling the county facility.

“You give me back the six percent, and I'll change my vote,” Angle said.

Not all council members favor the proposed sale. Councilman Lamont McClure and Councilwoman Ann McHale introduced an ordinance that would prohibit the sale of Gracedale. The ordinance will be discussed and voted on at the council's next meeting on February 17.

County Solicitor Philip Lauer said the ordinance was in keeping with the law. When a voter initiative is placed on the ballot by petition, the legislative body being petitioned has 60 days to introduce the ordinance and pass it, or it goes to the voters for a decision.

If that amount of time delays its placement on the ballot past election board deadlines, it would be placed on the ballot in November. While various issues concerning the legalities of the matter are being decided in court, the action by council to consider the prohibition is proper, Lauer said.

“Until something like that happens, under the home rule charter, you are doing what you are required to be doing,” Lauer said. “There are a lot of things that could happen in litigation. The courts will eventually speak to those issues.”

The county executive's office is currently appealing in court to have the ballot measure removed. It claims the measure is improper because the county's home rule charter doesn't allow budgetary or capital issues to be decided by ballot vote, nor does it allow measures that bind the decisions of future elected council members.

County Judge Stephen Baratta is scheduled to hear both the petition challenges and the county's appeal on Friday.