Q. Are Jewish values, heritage and identity at risk at Reutlinger?
The agreement between Reutlinger and Eskaton was drafted with an emphasis on maintaining Reutlinger’s community culture and heritage and a focus on the continued fiscal health of the community to maintain and improve quality care. In particular, the agreement explicitly protects Reutlinger’s name and identity as a facility with a commitment to Jewish values, policies and practices. Further stipulations in the agreement preserve policies that maintain the Residents’ Assistance Fund and Holocaust Survivors; the on-site synagogue and full-time Rabbi; Kosher and non-Kosher meals; all Torahs and prayer books and Mezzuzot on doorposts. Reutlinger will be vested with extensive rights to enforce Eskaton’s fundamental commitments in the agreement and maintain the community’s Jewish identity. Eskaton has agreed to cover all legal fees in the event of any alleged breach to the agreement.
Q. Will Reutlinger relocate its facility and residents?
No relocation is planned and none is expected. Stipulations within the affiliation disallow the facility’s relocation within the first five years of the agreement and would only be contemplated thereafter in the unforeseen event of catastrophe or unlikely circumstances. In the event of such unlikely circumstances, all residents would be guaranteed comparable accommodations in the East Bay at comparable costs, including at a facility with the same Jewish values, scope of services, quality of care and commitments.
Q. How does the affiliation help Reutlinger continue its mission?
Reutlinger and Eskaton share mission values that focus on providing high quality health care and social support services in a life-enhancing and stimulating environment. The affiliation will allow both organizations the ability to expand their respective missions, while protecting Reutlinger religious and cultural Jewish values unequivocally moving forward.
From a financial perspective, the proposed affiliation will provide financial support for Reutlinger to help carry out and enhance its mission with new and evolving health care technologies. Reutlinger will receive up to $5 million from Eskaton to honor all of the community’s obligations and to carry out planned physical upgrades at the facility, to the extent that Reutlinger’s own capital is insufficient to do so. Additionally, Eskaton has agreed to support Reutlinger where possible by reducing the management fee if necessary to eliminate any Reutlinger net operating margin deficit, excluding donations from management fee calculations and agreeing to return all management fees received by Reutlinger if necessary to guarantee any Reutlinger liability that impairs Reutlinger’s ability to carry out Eskaton’s fundamental commitments in the agreement and/or eliminate any Reutlinger cumulative net operating margin deficit.
Q. What will happen to the assets owned by the community?
All community assets, subject to existing community liabilities, will be maintained for the benefit of community residents. The affiliation does not involve any sale, transfer, surrender, merger or disposition of any asset owned by Reutlinger. Eskaton will manage use of all assets for Reutlinger, but Reutlinger’s assets remain dedicated to a charitable trust and must be used for the specific charitable purposes outlined in Reutlinger’s governance documents.
Q. What efforts did Reutlinger take to inform the public of the affiliation agreement with Eskaton?
Reutlinger scheduled town hall meetings with members of the Jewish community several times since signing the Notice of Intent to Affiliate with Eskaton in November 2018. Meetings were both scheduled in advance and coordinated in response to requests from the community for additional information. Informational and website materials were drafted as soon as terms were known and completed for a variety of audiences, disclosing the nature of the affiliation, efforts by Reutlinger to preserve its mission and cultural values and the need for additional resources for Reutlinger to flourish well into the future.
Q. Was Reutlinger facing an urgent need to affiliate with an outside organization?
Efforts were made to identify a sustainable solution during the past half-decade ahead of any financial need by Reutlinger. Future needs were projected out as were revenues, and the Reutlinger Board of Directors understood its advantage in leveraging Reutlinger’s fiscal health, well-being and strong position to negotiate favorable returns from a potential partner. Reutlinger’s priorities all along have been to unreservedly preserve the community as a Jewish-based institution for retirees in the East Bay.
Q. Did Reutlinger consider alternatives to the agreement with Eskaton?
Yes. Reutlinger entered discussions to affiliate with Eskaton only after exhausting a variety of possibilities presented by Jewish institutions. Eskaton was determined to be the right fit from both a financial and cultural perspective. Eskaton, in the affiliation, pledged substantial economic support and agreed to provide Reutlinger with strong protective rights to ensure its Jewish community values moving forward.
Q. Why isn’t TRC partnering with a Jewish organization?
TRC evaluated several Jewish organizations for strategic partnerships. Ultimately, TRC determined a partnership with these organizations was not viable. TRC’s goal for a partnership was to ensure the right fit both financially and culturally.
Q. Has Reutlinger followed all steps of the affiliation process completely and correctly?
Yes. The process followed by Reutlinger with respect to the affiliation, including submitting the affiliation for approval by the California Attorney General, is the process prescribed by law and consistent with the process customarily followed in similar transactions.
Q. What type of information did Reutlinger obtain from Eskaton to plan for long-term sustainability during due diligence?
Reutlinger leadership conducted extensive diligence of Eskaton prior to the affiliation agreement. Financially, Reutlinger used external accounting and auditing professionals to review Eskaton financial statements. Subsequently, Reutlinger vetted Five-Star survey results for Eskaton from the U.S. Centers for Medicare and Medicaid Services, interviewed members of Eskaton management and Board of Directors, toured a number of Eskaton sites and also reviewed Eskaton’s litigation history prior to the agreement.
Q. Will the Reutlinger board of directors remain as-is
No. Eskaton will become the sole governing member of TRC. The Eskaton Board of Directors will become the Reutlinger Board of Directors. In turn, the outgoing Reutlinger Board of Directors will appoint a representative to the Eskaton Board of Directors from the East Bay Jewish community to enforce commitments from Eskaton to maintain Jewish values and heritage at Reutlinger. Jordan Rose, final chairman of the Reutlinger Board of Directors, will be the first such representative on the Eskaton Board of Directors. The Eskaton Board of Directors currently has 12 members and will expand to 13 once the Reutlinger representative is appointed. The Reutlinger Community will retain its name and corporate status as a 501(c)(3) not-for-profit organization.
Q. How long a term will the Eskaton board member, appointed as the Reutlinger representative, serve?
Each appointed representative will serve a maximum of nine years broken into three (3), three-year terms, barring resignation, loss of life, etc. Successor replacements will be determined by a three-to-five-person committee (Commitment Committee). The Commitment Committee will be selected first by the outgoing TRC Board. Moving forward, the existing Commitment Committee will select individuals to fill vacancies when needed.
Q. Will leadership at TRC change as the community transitions from a stand-alone to an affiliate of Eskaton?
Jay Zimmer will remain as president and CEO through the transition. An executive director will be appointed by Eskaton in succession. Zimmer will play an active role in recruitment efforts for the successor. Jordan Rose will be the first representative selected to serve on the Eskaton Board of Directors.
Q. Will there be any other changes to staff from the affiliation outside elimination of certain management positions?
All collective bargaining agreements at Reutlinger will remain in full force and effect through the affiliation. Both Reutlinger and Eskaton agreed with the affiliation to maintain current care and nursing staff at Reutlinger. Certain management positions at Reutlinger may be eliminated if redundant and replaced with Eskaton personnel. Reutlinger management personnel have already been notified of the potential changes. Moving forward, staffing may be adjusted to meet the needs of Reutlinger residents as required by applicable regulations.
Q. What exactly does Eskaton get from this agreement?
The agreement will allow Eskaton to continue to expand its footprint and provide services to a larger population of seniors in the Bay Area in addition to existing locations in Pleasanton and Burlingame.