Finance committee recommends no action on proposed Island Home borrowing authorization after sharp debate over long-term subsidy

The Nantucket Finance Committee recommended no action on a warrant article that would authorize borrowing and other town funding for a proposed new Island Home nursing facility, voting 4–3 after more than two hours of presentations and questioning.

The committee heard a pro‑forma from CliftonLarsonAllen that modeled a 45‑bed facility with an assumed stabilized occupancy of 93 percent. Tom Hammond, CLA’s director leading the forecast, said the model assumed 42 occupied rooms in year one and a payer mix of private pay, Medicare and Medicaid that produces roughly $7.6 million in operating revenue and about $11.8 million in operating expenses in that first year. “That yields $7.6 million of operating revenues in year one” and “operating expenses are $11.8 million,” Hammond said, noting the pro‑forma nonetheless leaves an operational gap the town would need to cover.

CLA’s forecast showed a town investment — largely debt service in year one plus other support — on the order of $14.7–14.8 million, and an approximate $4.2 million annual operating loss in the first modeled year. Hammond described key assumptions: private‑pay rates rising to $800 per day in the pro‑forma, Medicare and Medicaid rate growth of 2–3 percent annually in the model, and labor cost growth assumptions. He warned that Medicaid reimbursement “is very uncertain at this point in time.”

Committee members pressed staff and the consultants on several risk factors: whether Nantucket can achieve the modeled 93 percent occupancy (historical island occupancy had been closer to the low‑to‑mid‑80s until recent increases); how sensitive results are to wage and benefits escalation in a high‑cost labor market; the mix of short‑term rehab (Medicare) versus long‑term residents (MassHealth); and whether the estimated construction costs will hold as bid packages return. John Lemieux, the project OPM, said partial subcontractor bids show the market has softened in places but that the GMP process was still incomplete.

Several members framed the vote as weighing an emotional/community need against a sustained fiscal cost. Committee member Joe said bluntly: “This is not an investment that makes any sense,” calling the projected cumulative subsidy “very large.” Others stressed community impacts if the town does not maintain a local long‑term care option for residents and their families.

After extended debate the committee took two formal motions. A motion to adopt the borrowing authorization failed. A subsequent motion “not to adopt” passed 4–3, with committee members voting along differing fiscal and policy lines. Committee members agreed they could add a short explanatory comment to the Finance Committee’s warrant‑book entry to clarify the committee’s reasoning for town meeting voters.

What comes next: the project’s bids and the OPM’s final guaranteed maximum price (GMP) remain incomplete; proponents may continue outreach to voters at town meeting and through select board materials. Because the finance committee recommended no action rather than an explicit denial by voters, the project proponents can still bring the final numbers and arguments to town meeting and the ballot.