LAKEPORT – The Board of Supervisors voted Tuesday to give more help to the county's beleaguered Mental Health Department, approving a $1 million loan to help the department pay down its vendors.

County Administrative Officer Kelly Cox took to the board a proposal to make the loan out of the county's building and infrastructure designated reserve in an effort to pay $2.3 million in outstanding invoices

Those bills are owed to county departments, service providers and other private vendors, according to Cox's report to the board. The list of obligations includes amounts owed to hospitals, residential treatment centers and psychologists.

Mental Health is a department that is self-funded through reimbursements for services, but state audits have found that the department received reimbursements several years ago to which it wasn't entitled. That's resulting in the state now withholding current reimbursements, Cox told the board Tuesday.

Last week, the board transferred realignment funds to the department, a few weeks after it approved a proposal by Mental Health Director Kristy Kelly to eliminate 18 positions in the department. Three extra-time staff also were eliminated, as Lake County News has reported.

While the realignment funds helped repay some of the department's bills, “that still leaves a significant balance unpaid,” said Cox, explaining the reasoning behind the $1 million loan.

Mental Health would then be required to make quarterly payments, beginning Dec. 31, Cox said.

The department will now owe the county $2.4 million, said Cox. The board previously had approved a $2 million general fund loan to Mental Health – which is being repaid with $200,000 annual payments – and which the department has paid down.

Cox said he didn't know of an alternative to help Mental Health. “I'm reluctant to recommend it but I believe it's necessary to do this.”

There is another issue at play as well, with Mental Health approaching a deadline by which it needs to make its vendor payments or else be disqualified from government reimbursements.

Board Chair Denise Rushing asked what changes are being made in the department's running. Cox said they're replaced a difficult computer system used for submitting claims and have completed thorough financial reviews to make sure the same problems don't happen again.

Cox noted that the state currently is withholding an “incredible amount” of money from Mental Health because of the overpayments. He said Mental Health has told him they believe they've gotten through the worst of it, and he'll be watching them like a hawk.

Supervisor Anthony Farrington brought up using the building and infrastructure designated reserve for local infrastructure projects, suggesting the county could use the funds instead for its own stimulus program.

After the Mental Health loan is made, Cox said $2.5 million would still be left in the fund, which is a general fund reserve and not to be used for sewer or roads. He had recommended its creation years ago, and the county has been able to increase the amount it contains, although he doesn't know if they can in light of the state's fiscal crisis.

Supervisor Rob Brown suggested that the county paying its bills is an economic stimulus issue.

Rushing said she couldn't see a downside to Cox's proposal. Farrington said he wasn't in disagreement, but he wanted to check the pulse of the board about addressing county projects with the funds.

“My goal is going to be to infuse money back into that fund, one way or the other. I just can't guarantee it,” said Cox.

Brown offered the resolution, which the board approved 5-0.

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