Earlier this year, our community made the decision to seek an affiliation with Eskaton, a regionally based, multi-site (and nonprofit) provider of senior living services. We made this decision in light of the rapidly changing trends, market conditions and challenges faced by single-site facilities in the senior housing and residential care industry, and the anticipated necessity of upcoming capital projects due to the age of our facility. This affiliation partners our community with an experienced and financially strong nonprofit provider that will allow us to expand our services; preserve our charitable mission, as well as our Jewish culture and heritage; and ensure the long-term survival of our community.
A few weeks ago, we hosted a representative from the California Attorney General’s Office at our community in Danville for a public meeting concerning our proposed affiliation. The meeting was conducted as part of the state’s comprehensive review process that applies when two nonprofit organizations, such as our community and Eskaton, seek an affiliation.
During the public meeting, which lasted about four hours, we heard both passionate and insightful comments in support of preserving our historic Jewish retirement community in the East Bay. There were also concerns raised at the meeting by those who do not support the affiliation.
While we acknowledge and understand those concerns, I want to assure our residents, our employees and our community that the decision to affiliate with Eskaton was reached only after substantial deliberation and after a thorough and thoughtful evaluation of how to best preserve our organization’s charitable mission for the future. Simply put, this affiliation provides our community with the best chance of success for the foreseeable future. Eskaton has committed up to $5 million for physical upgrades to improve our community and will provide the scale we need to partner with larger hospitals for greater care, two areas in which we have struggled as a stand-alone facility. As stewards of the community’s welfare and sustainability, we made this decision to preserve Reutlinger and honor our area’s Jewish community.
I also want to address a few misunderstandings about the affiliation agreement that arose during the public meeting and in subsequent media coverage.
Our community’s commitment to Jewish culture and heritage will not change as a result of the agreement or the affiliation. The affiliation agreement explicitly protects the Jewish values that have defined our community since its inception 70 years ago. In this regard, the agreement specifically preserves the name and identity of Reutlinger as a skilled nursing and residential care facility with a commitment to Jewish values, policies and practices. The agreement also specifically requires that we, as well as Eskaton, preserve the community’s current policies that protect and maintain the Residents’ Assistant Fund and honor Holocaust survivors; continue the synagogue and full-time Rabbi on-site; maintain the availability of both kosher and non-kosher meals; and preserve our Torahs, prayer books, and mezuzahs on our doorposts.
The affiliation agreement will protect our community and all our interests. We have been given a permanent seat on the Eskaton Board of Directors, and will be able to enforce all obligations Eskaton has made to our community through the affiliation. In this regard, our designee will possess extensive rights to address any breach of any fundamental commitment, and — as a sign of good faith — Eskaton has agreed to cover all legal fees of our designee should any legal action be necessary.
The affiliation agreement does not reflect any plan or a timeline for relocation of our community. While the agreement references possible relocation after five years, I want to make this clear: No relocation is planned and none is expected. The language in the agreement referencing relocation was included to protect our residents from potential catastrophes and unlikely circumstances. In the unlikely event a relocation is ever needed, all residents would be guaranteed comparable accommodations at comparable costs, including at a facility with the same Jewish values, scope of services, quality of care and commitments in the East Bay as our community.
We spent a substantial amount of time in due diligence to determine the affiliation with Eskaton was our best option and in our community’s best interests moving forward. Our counsel vetted the agreement fully for about a year with our community’s exclusive interests in mind. Due diligence included a detailed review (during multiple board meetings) of a recent jury verdict against Eskaton, the result of a lawsuit filed seven years ago. In the end, Eskaton agreed to lower its management fees from its standard 6 percent to 4 percent, and guaranteed that donations to our community would be exempt from all fee calculations. Eskaton also agreed to cover all operational losses moving forward.
Our affiliation with Eskaton is a bold step but one that is appropriate and necessary. We started our search for long-term sustainability of Reutlinger while it was still a strong, highly regarded community asset. The decision helped us leverage the best partnership possible for our community. We did so with the time and commitment of many trusted, caring people in our community.
We appreciate being part of a community that cares so much about its senior-living organization and its residents. We are hopeful for a positive determination from the California Attorney General in the months ahead, which will mark the start of the next successful era for the Jewish retirement community in the East Bay.