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County leaders say their role in cogeneration is "above-board"

QUEENSBURY Warren County Officials were dismayed this week after the area daily newspaper published a story of a purported investigation by the state Attorney Generals Office involving a contract the county has with Siemens Building Technologies, a firm that installed electric generators at the countys nursing home, providing power and heat to various county facilities. The county officials said this week they believed the state probe focused on Medicaid reimbursements to counties across the state that had installed natural-gas cogeneration equipment and the investigation had occurred last year, and not recently. Warren County Treasurer Frank OKeefe said in a phone interview Thursday that in 2007 he had been summoned to the State Attorney Generals Albany bureau and questioned about Warren Countys cogeneration contract. I was really surprised to see this in the newspapers, OKeefe said. I hadnt heard anything more about it for over a year I thought it was over. The article published last Thursday in the Post-Star included a reference to Medicaid fraud, and several area government watchdogs have been raising alarm about the countys deal with a company which has incurred some legal troubles. Monday, Warren County Attorney Paul Dusek dismissed allegations that any wrongdoing had occurred on behalf of the county. He said that several citizens had raised concerns last year, and in response, a thorough review and investigation of the See COGNERATION, page 8 Cogeneration From page 1 contracts and Medicaid reimbursement was conducted in 2007, and the outcome was favorable. I have heard nothing from the Attorney Generals office, and ifthere was anything serious, I would have heard about it, he said. Legal and financial arrangements between the county and Siemens have a history of close scrutiny, Dusek said Monday. In 2003 when the county first researched the prospects in of signing acogeneration contract with Siemens, Dusek contacted the SaratogaCounty Attorney and compared notes, got a copy of their contract with Siemens, and examined it, Dusek said. At that time, Dusek and other Warren County officials scrutinizedMedicaid reimbursement, legal and financial aspects of the deal, and theprojected cost savings, Dusek said. Warren County applied for and received a Certificate of Need from thestate plus they obtained all required state approvals, which included endorsement of the Medicaid reimbursement arrangement, he said. There was no reason to believe there would be any problemsassociated with this transaction, Dusek said. Then in 2007, when concerned citizens and OKeefea rare elected Democrat in a heavily-Republican county raisedconcerns about the contract, the county held a series of meetings. These meetings included a Medicaid consultant, who said thereimbursements were legal and appropriate, Dusek said. The county delayed a certification of the first-year cogenerationreport in 2007 while the county officials conducted extensive research into the contract, Dusek said. We heard out all the issues several citizens raised about thecontracts, and after a long string of meetings and research, Iconcluded that there were no problems that I could find, Dusek said. Warren County Administrator Hal Payne said this week that the $3.5 million contract with Siemens was approved by the state Dept. of Health prior to the installation of generators in April 2005. All associated documentation clearly included the use of Medicaid reimbursements in the equation while calculating the potential financial benefits for the county, he said. The States approval was the final step, Payne said Thursday. They approved the entire concept. Payne said that the Warren County plant was the third in New York State, preceded by Genesee and Saratoga County plants, also built and managed by Siemens. According to Payne a third-party audit and engineering review of the plant was commissioned by Warren County in 2007. The audit was conducted by McCarthy and Conlon, LLP of Queensbury, while the engineering review was conducted by Clough Harbour and Associates, LLP of Albany. A 2007 letter from Clough Harbor to Hal Payne, obtained by the Journal, endorses Siemens methods for calculating the countys utility savings. According to this report, in its first year of operation the cogeneration operation saved about 1.6 million kilowatt hours, while generating 165,887 additional natural gas therms. Clough Harbour concluded the total county savings for the first full year of operation was $299,952. A letter to county officials from McCarthy and Conlon, LLP, dated April 12, 2007 states that the $299,952 calculated by Clough Harbour did not include the additional benefits Westmount received from Medicaid reimbursements. The audit document states that using the standard Medicaid reimbursement formulas, the county had received an additional $60,115 in benefits in 2006. The document states, The utility cost benefit (of cogeneration) will continue indefinitely, as long as there are no significant changes to the existing Medicaid reimbursement methodology. Payne said that he too has had no contact with the State Attorney General, and added that Warren County has done everything in its power to analyze the implications of cogeneration. This whole thing has become political and it shouldnt be, Payne said. The County Board of Supervisors is trying to cut costs and save the taxpayers money. He reiterated earlier figures released several weeks ago, that indicate Warren County has saved about $800,000 for taxpayers so far, including $170,000 more than expected last year alone. Warren County Board of Supervisors Fred Monroe said Thursday he was unaware of any Attorney General investigation. He said the county had been contacted last year by the New York State Inspector General regarding the statewide appropriation of Medicaid reimbursements to health facilities with cogeneration. Everything has been reviewed by our County Attorney, Monroe said. Our goal is simple, to save taxpayers money. Calls to the state attorney generals office had not been returned as of Tuesday. Adirondack Journal Editor Thom Randall contributed to this report.

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