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Clifton-Fine Hospital future up in the air

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The state Legislature’s refusal to allow Clifton-Fine Hospital to convert to a nonprofit could jeopardize 90 jobs and the future of the hospital.

“It would be a tragic loss,” Clifton town Supervisor Robert L. Snider said. “Something has to be done about the costs of health insurance and retirement.”

The Star Lake hospital had sought legislative approval to switch from a public benefit corporation to a nonprofit organization so it could leave the state retirement system.

In 2009, the hospital’s payment for pensions was $290,000. Its projected payment for this year is $735,000. And a state audit notes that the hospital’s annual contributions to the state retirement system could exceed $1 million in two years. Although bankruptcy for the hospital is not considered imminent, its pension cost figures represent a 250 percent increase in five years.

“That’s just unsustainable for the hospital,” Administrator Robert P. Kimmes said.

On the other hand, the corporate change would be expected to save $498,000 in 2013 and $774,000 in 2014, if rates continue to increase at historical averages.

If allowed to become a nonprofit, the hospital, which is not unionized, would begin a 403b retirement plan with an employer match.

The legislation, which passed the Senate but never made it to the Assembly floor, was blocked by opposition from the Civil Service Employees Association.

Fine Supervisor Mark C. Hall said the bill was held up in an Assembly committee for more than two years.

“To me, it’s just disheartening when politics trumps common sense. It’s a poster child for government reform,” he said. “This is a local issue. This procedure for local issues is ridiculous. It’s the way government gets a bad name. I can’t be mad at the Assembly. They never even voted on it.”

Stephen A. Madarasz, CSEA director of communication, did not return a call on CSEA’s reasoning, but others said it is because the union fears a precedent.

“It’s the tip of the iceberg,” Mr. Snider said. “Communities throughout the state cannot afford New York’s retirement system.”

CSEA’s concern is not Clifton-Fine, but the state’s four other public benefit corporations, including a consortium of 11 hospitals in New York City that represent 6,000 beds, Mr. Kimmes said.

“You can’t even compare their size to Clifton-Fine,” he said. “Each organization is a little different.”

Union leaders in St. Lawrence County have supported the hospital’s proposal as a way to safeguard its jobs and the health care services it offers in an isolated part of the Adirondacks.

“I don’t buy the fact that it’s going to spread like wildfire. I’m not going to criticize CSEA, but I don’t think this is right for Clifton-Fine Hospital,” retired labor leader Ernest J. LaBaff said. “You have to be concerned about the 90 employees and the hospital.”

Mr. LaBaff, a member of the county Industrial Development Agency, which passed a resolution in support of the hospital, said he had to heed the state comptroller’s report that the hospital could go under.

The legislation also had the support of the North Country Regional Economic Development Council and the St. Lawrence County Board of Legislators, where the resolution was introduced by Anthony J. Arquiett, D-Helena, former president of United Auto Workers Local 465, Massena.

“It’s a delicate issue,” Mr. Arquiett said. “I’m sure CSEA believes it has the best interests at heart of state pension workers. It’s important everyone be cognizant of the 90 jobs at the hospital and the services they provide.”

Assemblyman Kenneth D. Blankenbush, R-Black River, said he wants to meet with CSEA to work out a bill it would find acceptable.

“I believe CSEA doesn’t want this hospital to shut down,” he said.

Mr. Kimmes said the hospital will try to bring state legislators around to its cause if they return to session after the elections and is talking with the state Health Department to see if there is another way to change the hospital’s organizational status.

“We’re going to keep fighting to get out of the New York state retirement system,” Mr. Kimmes said. “We’re not bankrupt right now, but the financial burden of the retirement system will continue to make it financially difficult for us. In the long term, we won’t be able to afford this anymore.”

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