Mental Health Director Kristy Kelly will take the issue to the Board of Supervisors at its Tuesday meeting, with the item scheduled to begin at 1:30 p.m.
Kelly told Lake County News she will give the board an update on her department's financial situation and will ask for direction to move forward on how to address the shortfall, including staff reductions.
“We would ask to begin explorations right away,” said Kelly.
Kelly told Lake County News that they have to cut about $460,000 in the 2009-10 fiscal year. Her report to the board includes actions already taken, such as terminating a lease in Clearlake for an annual savings of $91,404, and the elimination of eight unfilled full-time positions plus a managed care manager slot.
Layoffs may be a part of that picture, but Kelly said she wasn't prepared to speak publicly about that yet.
However, the Mental Health Department's management team reportedly met with local clinics to inform them of the severity of the situation and plans for staff layoffs.
An April 1 memo from Kelly to all Mental Health and Alcohol and Other Drug Services (AODS) staff, obtained by Lake County News, said that 10 percent of the department's personnel costs have to be cut in the upcoming fiscal year in order to balance the budget.
The document said achieving savings through staff furloughs was determined to be unworkable because the current memorandum of understanding between the Lake County Employees Association and the county doesn't provide for that option.
“The layoff process is the only existing mechanism to reduce staffing, and is well-defined in the MOU,” Kelly's memo stated. “Layoffs are anticipated for both clinical and support staff.”
The AODS budget is balanced and no AODS classifications are targeted for layoffs, although AODS staff could be affected by Mental Health Department staff exercising seniority rights, the memo said.
Once the board approves the budget review plan, Kelly's memo to her staff said a meet and confer process between the county and the union will begin.
Mike Minton, the union representative for Lake County Employees Association, criticized the county for its handling of staffing issues.
“I have absolutely no faith and no trust in the county,” he said, accusing them of manipulating figures “and everything else” to suit their needs. Disputes over previous negotiations led the union to file a complaint against the county with the Public Employee Relations Board earlier this year.
He said everyone is talking about layoffs these days. Employees are asking about how to save their jobs and have even been willing to forgo pay raises, but he added that the county has not offered to discuss furloughs. Minton said the union wanted to set up a meet and confer to explore the issue.
State audits, repayments hit department hard
The estimated 2009-10 budget for the Mental Health Department shows a deficit of more than $1 million, which will include $2.1 million in unpaid bills that the county will have by June 30, according to Kelly's report.
“We've had a series of very difficult audit findings,” Kelly said.
Those audits were conducted by the state, and found that the county received funds that it shouldn't have. “This has been going on for a while,” said Kelly.
Her report to the board explains that the state found it was due $5.63 million for overpayments to the county. So far, $4.64 million has been repaid, leaving an outstanding balance of $994,000.
The state is withholding what the county owes from current reimbursement requests, Kelly said.
Her Tuesday board report will discuss the county's efforts to pay the remainder of the funds, which are now due, and its formal appeal process for the 2002-03 fiscal year, for which the state is seeking $737,000 in return payments.
The cost reporting problems to the state arose from inclusion of non-Medi-Cal costs, overreporting of service units, and data entry and clerical errors, Kelly's report to the board explains. The state communicated the audit findings to the county several years after the fiscal year in question ended.
County Administrative Officer Kelly Cox said the problems the Mental Health Department is suffering preceded Kelly's tenure, which began five years ago.
It's also compounded by the state being slow in paying its bills, Cox said.
“There is not enough ongoing revenue to support the level of staffing that they currently have in their operation,” said Cox.
He said the department added staff when they thought they had more money. Then it was discovered they had overclaimed on their reimbursements.
“If we had known they were overclaiming we would never have allowed them to expand,” said Cox.
There are also economic impacts due to realignment funds from the state and federal government that are tied to the economy
Cox said the county doesn't have the money to put into making up the department's shortfall.
He said the department's budget estimates change daily. “It's a really bad situation.”
Now the state is withholding the money the department should receive to make up for the previous overpayments, which is compounding the issue. Cox said he thinks the state is becoming more aggressive about pursuing recover of the funds due to the economy.
Changes to the department's information technology system is meant to help avoid future problems. The new system is expected to be fully implemented by Dec. 31, Kelly's report explains. The department also has created other internal controls.
Kelly said the Mental Health Department has a number extra help positions they'll be looking at when it comes to exploring savings.
“We are going to minimize the impact on clients as much as possible,” said Kelly, with a strong focus being placed on clients with the most serious mental illness.
Part of that will be accomplished by redirecting people who have other health care resources to different providers, including primary care physicians. She said they've discovered that many people are using their services because there are few psychiatrists in the area.
“We have to be very careful with our resources at this point,” she said.
She said she hasn't yet talked to the union about the situation.
Minton said he has yet to see any budget figures from the county.
“They need to show us what their deficit is, they need to show us what their saving is going to be when they start laying people off,” he said.
He's also concerned layoffs will cost the county more in the long run.
He said Mental Health Department employees are now so overworked they can't keep up with the workload, and the department is “disciplining people right and left.”
“How the work going to get done?” he asked.
Kelly hopes the board will give her permission to move forward quickly when it comes to seeking solutions. She said the situation is a tough one.
“I'm sure they'll take it quite seriously,” she said.
E-mail Elizabeth Larson at
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