Schumer: FEMA must release funds to keep Lake Shore open

U.S. Senator Charles E. Schumer called on the Federal Emergency Management Agency Monday to expedite the release of over $1 million in already-approved reimbursements owed to the TLC Health Network from outstanding Project Worksheets to keep Lake Shore Health Care Center open until a buyer can be found.

TLC Health Network is currently navigating Chapter 11 bankruptcy and struggling to keep Lake Shore up and running, as it quickly draws down on remaining available funds. It is negotiating with two prospective buyers, but there is concern that if Lake Shore is forced to close its doors, those negotiations may be put on hold.

Schumer has identified three outstanding PWs – where the hospital system has already spent the funds and FEMA has agreed the costs are reimbursable – that FEMA has yet to reimburse for TLC; now he is pushing for their immediate release.

These worksheets have been pending for over a year, stemming from TLC-owned Tri-County Hospital in Gowanda, and reimbursements could be used immediately to help keep Lake Shore open for longer.

Schumer highlighted Lake Shore’s value to the local community, both in the services it provides, and the number it employs; Lake Shore’s 460 employees make it one of the largest employers in northern Chautauqua County.

“Lake Shore Health Care Center is on life support and FEMA is sitting on over a million dollars of approved reimbursements for its owner, TLC Health Network, which could keep Lake Shore’s lights on until a sale is completed. So, I’m calling on the feds to release this money as soon as possible because TLC needs all the help it can get,” Schumer said. “It is my goal to avoid any closure of Lake Shore, and transition to a new owner that has the long-term finances to support and grow the health center in Irving. Lake Shore – beyond providing an essential service to Western New Yorkers – is one of Chautauqua County’s largest employers and a hub of the local economy. We need all hands on deck to keep Lake Shore open during this difficult time, and FEMA needs to do their part.”

“Senator Schumer’s tireless efforts on behalf of saving Lake Shore Hospital have secured tremendously helpful results. The infusion of additional operating funds that are owed will allow the time necessary to obtain a positive solution. We are continuing our mission of strengthening all of our rural hospitals that our people need so much,” State Senator Catharine Young added.

“We want to thank Senator Schumer and Senator Young for their efforts on behalf of Lake Shore Hospital and the entire TLC system. As we work to navigate this difficult time it is critical that we receive these outstanding funds from FEMA and so we appreciate the senators’ efforts on our behalf,” John Galati, interim director and CEO of Lake Shore Hospital, said.

TLC Health Network, which owns Lake Shore Health Center in Irving, had announced plans to close Lake Shore hospital in October due to sustained losses. While they anticipated running out of operating funds as recently as Jan. 14, through the efforts of Senator Young and the entire state delegation, a bridge loan from New York state and other short-term financing has kept the hospital open.

The longer Lake Shore remains open, Schumer explained, the greater the chances will be that TLC will reach a deal with one of two potential buyers, who have the finances to keep Lake Shore open longer-term.

Schumer is therefore pressing FEMA to expedite the release of reimbursements for three outstanding PWs owed to TLC Health Network, totaling $1,048,454. Even though these PWs are associated with another TLC-owned hospital – Tri-County Hospital in Gowanda – they could be used immediately to sustain Lake Shore’s operations as they are reimbursements.

Below is Senator Schumer’s letter to FEMA Administrator William Craig Fugate:

Dear Administrator Fugate,

I write to urge FEMA to release funding and finalize payment for a number of outstanding project worksheets for the TLC Health Network. The Tri-County Hospital in Gowanda, New York, which was part of the TLC system, was destroyed in a 2009 flood. Following the flood the hospital system submitted a number of project worksheets for demolition, clean-up and renovation of a new facility.

To date, according to the Hospital’s records, they are awaiting payment on 3 important project worksheets (PWs):

PW 1095 – Gowanda Medical Services Building Repairs ($535,140)

PW 807 – Forestville Replacement Primary ($34,212)

PW 1324 – Demolition of Tri-County ($479,102)

In some cases, the hospital has been waiting over a year for payment on these worksheets and I urge you to work with the New York State Emergency Management Office to ensure these funds are released as soon as possible. Payment of these 3 PWs is critical for the TLC Health Network, which is currently in the midst of a Chapter 11 Bankruptcy proceeding. There are hundreds of jobs and thousands of patients that rely on the TLC Health Network – and the $1,048,454 from these 3 PWs could provide a desperately needed boost in operating funds for the system.

Recently you approved funding for an alternate project for the TLC Health Network. While that will help the system make some necessary repairs and improvements, it would require the owners to first spend funds up front to do the necessary work and then be eligible for reimbursement from FEMA. In the case of the 3 PWs listed above, the eligible work has already been completed by the system and they are awaiting reimbursement. An expedited review and release of these funds is critical. Without this $1 million, the hospital faces the risk of having to close its doors for good.

Thank you for your attention to this matter. I urge you to examine remaining reviews and release these funds as soon as possible.

Sincerely,

Charles E. Schumer

U.S. Senator