2. Background
• Visiting Nurse Service (VNS) is Rochester, New York’s
first homecare agency providing insurance-covered and
private pay services, meal delivery, hospice & palliative
care.
• Originally founded in 1919 as the Public Health Nursing
Association, VNS announced an affiliation agreement
with the University of Rochester's Strong Health in 1997
and converted to a not-for-profit status.
• To Improve operation efficiency and serve the
Rochester community better, VNS is looking for
relocation solutions.
3. Two Current Locations
2180 Empire Blvd. Webster. (Own, 42,000 Square feet.)
65 College Ave. Rochester. (Lease, 5,300 Square feet)
4. Financial Impact of Property Cost Differential
NPV/ Annual Cash
Flow
NPV Year 1 Year 2 Year 3 Year 4 Year 5
Lease & Mortgage 16,878,436 (55,060) 374,562.00 364,525 354,696 345,076
Lease & Up Front
Cash Payment 13,036,904 (2,060,244) 496,554 481,243 466,379 451,952
Sale & Mortgage 542,571 842,535 (80,513) (75,176) (70,155) (65,433)
Sale & Up Front
Cash Payment 367,582 (1,152,780) 49,709 48,257 46,843 45,466
Lease & Rent (372,598.) (24,309) (10,825) (10,663) (10,496) (10,325)
Sale & Rent (12,540,010) 895,216 (444,989) (430,424) (416,331) (402,696)
5. Where are VNS Employees?
15-minute Driving Circle
30-minute Driving Circle
2180 Empire Blvd
65 College Ave.
100 Carlson Rd
Other Employees
Employees travelling to Empire Blvd every day
6. Where are VNS Employees?
2180 Empire Blvd
65 College Ave.
100 Carlson Rd
Employees travelling to Empire Blvd every day
Other Employees
30-minute Driving Circle
15-minute Driving Circle
7. Employees’ Annual Commute Distance
Comparison: Current Location vs New Location
(New Location Example: 100 Carlson Blvd, Rochester 14610)
8. Employees’ Travel Distance Distribution
Standard Deviation going to Empire Blvd: 8.0
Standard Deviation going to Carlson Building: 12.5
231
92
15 3
138
149
37
17
0
50
100
150
200
250
<10 10-20 20-30 >30
NumberofEmployees
Distance per travel (miles)
Current Empire Blvd. Employees TravelDistance Distribution
Travelling to Emipre Elvd. Travelling to Carlson property
9. Employees’ Travel Distance Distribution
185
66
10 5
172
71
16 6
0
20
40
60
80
100
120
140
160
180
200
<10 10-20 20-30 >30
NumberofEmployees
Distance per travel (miles)
Current College Ave. Employees Travel DistanceDistribution
Travelling to College Ave. Travelling to Carlson property
Standard Deviation going to College Avenue: 6.5
Standard Deviation going to Carlson Building: 6.7
11. Effects of Employee Turnover Rate
Registered Nurses: 80
Training Cost per Nurse: $54,000
Home Health Care Provider: 210
Training Cost per Provider: $5,000
Turnover 18% 17% 16% 15% 14% 13%
RN Saving $- $43,200 $86,400 $129,600 $172,800 $216,000
HHC
Saving $- $10,500 $21,000 $31,500 $42,000 $52,500
Total
Savings $- $53,700 $107,400 $161,100 $214,800 $268,500
12. Potential Ways to Reduce Turnover
Create Day Care program. Minimize cost through “Day Care Dollars”
Pre-k school. Tap funding for inner-city pre-K programs
Subsidized cafeteria, including funding for children’s programs
A single location could more easily support a "pipeline" for Home Care
Workers to become RN's or other administrative roles. "Progress with
VNS”
Consolidated location encourages organization-wide meetings. Promotes
a cohesive and friendly/social working environment
Increases interactions between the community and VNS, including
making services more available at a larger location
Encourages integration with other parts of the city and URMC programs,
such as Community Health and Wellness
13. Advantages of Moving
Increase operational efficiencies
Lower turnover rate thereby reduce costs
Increase services & integration with community
14. Disadvantages of Moving
Potentially upfront costs for new facilities
Identifying a site/building with enough parking (approx
250) could be challenging.
15. Observations
From a longer-term perspective, the direct cost of the
move and impact on annual financials is substantial, but
not the only determinent.
Reducing turnover rates, increasing operational
efficiencies and identifying cost savings will have a
substantial impact on the long-term financial health of
VNS
16. Next Steps
Further assess potential lease and sale properties.
Conduct emplyee surveys to determine:
Pros and cons of move
Daily “pain points” for employees
Develop programs and move could alleviate “pain points” to
decrease turnover rates.
Evaluate financial implication for sub-dividing Empire Building
Assess operational efficiencies and cost savings, both from a
consolidation perspective and general.
Evaluate transportation optimization programs to reduce costs and
increase efficiencies
18. Appendix
Financial Assumptions
Leasing price of Empire : $10-$15/sq-ft (annual) (Take mid point:
$12.5/square )
Selling price of Empire: $35-$45/sq-ft, (annual) (Take mid point: $40/square)
The annual utility expense is $72,500. It includes electric, gas, sewer water,
generator fuel and other services.
Rental for new building：$12-$13/sqr-ft (annual)
One-time payment for new building: $41-$62/sqr-ft (Take mid point:
$50) total : 50*45,000=$3,350,000
IT expense reduction: 10% of $1,156,884=$115,688
Renovation cost for the new purchased property is $10/square foot
There will be no additional renovation cost for renting.
19. Appendix
Mortgage assumption: 30 years
20k tax incurred when leasing out the Empire building to non-profit entity
8% tax rate for the sale of Empire property
Commission fee to agency is 6% of the sales/rent income
Interest rate: 5%
Cost of Capital: 5.5%
20. Appendix
Assumption for employee travel distance:
Office employees travel to office every day
Field employees travel to office once a week
Employees’ Daily Commute Distance:
2,503
2,973
6,035
5,561
8,537 8,535
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Before the move After the move
Current College Ave. Employees Current Empire Blvd. Employees
