On Wednesday, November 13th, the Southeast Iowa Link (SEIL) Mental Health Region denied Muscatine County admission to the region for fiscal year 2020. According to Ryanne Wood, SEIL CEO, “It truly was just a matter of timing. The region has a lot on its plate right now. . . We essentially had thirty days to figure it out. . . If the request had come three to six months earlier, the decision probably could have been different.”
Wood’s statement squares with SEIL’s 28E Agreement, which allows a government entity to enter into agreements with other public and private agencies. In SEIL’s 28E, it states that counties must vote to, “[p]ermit any new member counties,” and that, “[e]ach member county desiring to vote upon the proposal shall do so by resolution of its Board of Supervisors and return of the same to SEIL Governing Board Chair a copy of the resolution stating the County’s vote within thirty (30) days of the date that the County received a copy of the proposal.” In this case, a representative from each county saw the proposal at the November 13th meeting and would need to have voted by mid-December.
Though some members of the Muscatine County Board of Supervisors (MCBS) expressed concern that the Department of Human Services in Iowa (DHS), represented by Community System Consultant Julie Jetter, foisted the thirty day timeline on SEIL unnecessarily in a SEIL Finance Committee meeting on November 12th, Wood maintains they made their decision based on the language in the 28E agreement and examples of how other regions have handled the matter, which Jetter referenced. Jetter declined to comment on her role in SEIL’s decision-making process.
Following SEIL’s decision, Muscatine County finds itself in a difficult position, as it currently belongs to no region for the 2020 fiscal year. The MCBS would prefer the county not rejoin the Eastern Iowa Mental Health and Disabilities Region (EIR) which it voted to leave on Monday, November 4th. Instead, they would like DHS to assign them to the SEIL region, an action it can take to prevent, “orphan counties.”
The MCBS opted to leave the EIR because of mounting financial difficulties. According to Nathan Mather, Chair of the MCBS, “the Eastern Iowa Region is looking at cash insolvency at the end of the [fiscal] year, in June 2020.”
In large part, the danger of insolvency came from the EIR’s reaction to Senate File 504. Passed in 2017, the law required regions to not reserve more than twenty-five percent of their funds beginning in fiscal year 2018. Though legislators later removed this provision, the EIR had already complied, giving out $1.3 million in one-time grants. Paired with unexpected rises in service costs, the EIR found itself in dire straits. In an emergency budget meeting, the region cut approximately $1.3 million, which proved insufficient, requiring another roughly $1 million cut on November 7th. The EIR still projects a $12 million shortfall in fiscal year 2020.
Along with discomfort with these draconian cuts, the MCBS expressed concerns that Scott County routinely accessed more EIR funding than other counties in the region per capita. Scott County previously imposed lower tax levies on its residents than other counties in the region and counted state equalization dollars towards its total contribution in certain fiscal years, effectively allowing it to become a net spender rather than a neutral participant.
On Friday, November 15th, the EIR announced it would not require Muscatine County to make its final money transfer to the EIR fiscal agent, a mechanism which distributes money raised through property taxes across the region, as they intend to leave before the start of the next fiscal year. Scott County also agreed to pay an additional $650 thousand dollars into the fiscal agent and contribute $2 million more over the next two fiscal years to draw down some (but not all) of its historical debt. “It sounds really nice, and it’s a start, but it only erases the deficit in the fiscal agent. . .. It will take more to cash flow until October,” said Mather.
The MCBS remains skeptical of the EIR’s money management abilities and plans to continue working with DHS to try and join the SEIL Region for Fiscal Year 2020. “It’s better than it was, but it’s still woefully inadequate,” concluded Mather.