Budget cut battle heats up

BY COLBY FRAZIER
DAILY SOUND STAFF WRITER

A battle over sweeping budget cuts to mental health services in Santa Barbara County between the county Department of Alcohol, Drug and Mental Health Services and a number of non-profit, community-based organizations has been unraveling for months.
Many of the blows have occurred behind closed doors, but after a March 11 Board of Supervisor’s meeting where ADMHS officials laid the groundwork for $8.2 million in budget cuts next year, non-profit leaders began preparing to move the battle into the open.

Of the proposed cuts, $5.9 million is expected to come from community-based organization (CBO) budgets -- a number that accounts for more than half of the county funding they receive. Non-profit leaders say this amount could cripple their ability to provide current levels of service.
According to county documents given to non-profit leaders at closed-door meetings and obtained by the Daily Sound, the impacts of the cuts could purge from the system as many as 800 of the roughly 2,804 adults who are currently receiving mental health services. Eight hundred is the number of clients the documents indicate might not suffer from serious mental illness.
For some, that number represents 800 people who today are receiving the help they need, but tomorrow could be on the streets, back on drugs or dead.
“If you have 800 people who are doing better and you throw them out of the system, what level of hopelessness are you going to be creating?” asked Mike Foley, executive director of the Casa Esperanza Homeless Shelter. “The homeless advocacy community is going to fight as hard as we can to fight these cuts.”
Foley was one of several non-profit leaders selected by the county last December to sit on a Redesign Committee, the purpose of which he said, was to work with county officials to retool the deficit-plagued department. One of the first problems he said occurred was that the department had difficultly nailing down exactly how far in the red they were for the current fiscal year.
He said some initial estimates were as low as $2 million, then $14 million, and by Feb. 5, of this year, all parties had settled on a $6.9 million deficit – a number the Board of Supervisors agreed to pay in order to balance the department’s current budget through this June and defer any cuts to the 2008-2009 budget cycle.
But Foley said ADMHS officials seemed set on “slashing and burning” the department with cuts to next year’s budget. Between the Feb. 5 meeting where the Board of Supervisors voted to partially bail the department out with the first of three proposed $2.3 million cash infusions, and March 11, when they received the second, Foley said ADMHS officials drafted a “preliminary budget and restructuring plan” for next year that proposed deep cuts to CBOs, all of which will impact adult mental health services.
“We said we’re here to redesign the system,” Foley said. “They said, ‘we’re here to redesign the budget.’
“They had developed this set of budget cutting that no one on the team had agreed with. It’s really been a very sobering experience and a deeply dishonest experience as well.”

THE EXERCISE

Days prior to the board’s March 11 meeting, Foley said members of the Redesign Committee, ADMHS Director Ann Detrick and other county leaders met to discuss the proposed cuts. At the meeting, Foley said the committee members vehemently voiced their disapproval of the cuts, but were assured they could meet with county officials on March 12 to continue the redesign effort.
After all, the cuts were outlined in a “preliminary budget” report, and could change between then and June, when the final budget is adopted.
First District Supervisor Salud Carbajal said the department had to make the cuts on paper in order to show the board the department was taking steps to right the ship. He said this “exercise” traced back to the Feb. 5 meeting, where Fourth District Supervisor Joni Gray said she would vote in favor of the 2008 bailout on the condition the department could show the board a balanced budget at the March 11 meeting.
“The plan that is being developed, it’s an exercise. It’s a plan required by having votes,” Carbajal said. “It won’t be until June that we tweak, implement or finalize whatever plan that is developed now.”
When Detrick wrapped up her presentation on March 11, the board floated the $2.3 million and voted to “accept” the preliminary budget.
But the very next day, Foley said non-profit leaders gathered to resume the department redesign discussions and were told by county leaders the board had “adopted” the budget proposal and necessary cuts would begin to be implemented.
At the next meeting, Foley said Detrick and former ADMHS interim director Doug Barton, who was employed during this time by the county as a consultant, ended the redesign effort. In explaining why they did not want to continue the redesign, Barton reportedly said a more accurate name for the group would have been a “rightsizing committee.”
Within days of this meeting, Foley said Detrick made calls to a number of non-profits to let them know what sort of cuts to expect.
Detrick declined to be interviewed for this story. One of her assistants deferred all media inquiries to County Communications Director William Boyer.
Boyer said ADMHS officials “tell me they feel positive about making progress with the budget,” but also said county officials continue to meet with CBOs, a claim Foley and other non-profit leaders refuted.
“It is not a secret that the Alcohol, Drug and Mental Health Services Department is facing some serious budget challenges,” Boyer said. “Department officials have spoken publicly before the Board of Supervisors about this. They have been meeting frequently and continue to meet with representatives of the CBOs that are under contract with the county.”

THE WRONG DIRECTION?

If county officials were truly interested in saving money and maintaining a balanced budget in the long run, they would do an about face and funnel more money into the non-profit sector, Foley said. As a basic rule, he said CBOs provide services cheaper and more efficiently than the county; all while leveraging the funds into additional revenue from private, state and federal sources.
“We can do it better and we can do it cheaper,” he said.
To make matters worse, Foley said the 800 or so people that could be cut from the system will likely end up costing the county far more money when they wind up in hospitals and acute care units.
According to Annmarie Cameron, executive director of Mental Health Association in Santa Barbara County, the county spends an average of $105 per night for each person who utilizes a CBO-owned board and care bed, which is a far cry from the $900 bill for a night in the hospital.
Cameron, who also served on the redesign committee, said she operates 14 board and care beds. She said Mental Health Association is able to keep its costs down because all of its facilities are owned outright and the association is able to fundraise hundreds of thousands of dollars and utilize volunteers.
“We have a diversity of funding sources they don’t have,” she said.
Cameron and Foley aren’t alone in recognizing the ability of CBOs to save money.
A 2006 Blue Ribbon Budget Task Force that was commissioned by the county said one way to increase revenue is to increase outsourcing.
“Private corporations are often able to manage government facilities in a more efficient way because they are faced with competition and motivated by profit to find efficiencies,” the report said.
Carbajal said he also recognizes the ability of CBOs to provide services more efficiently than the county, and said the fact that non-profits are shouldering the majority of the cuts is “concerning.”
“CBOs definitely provide a bigger bang for our dollar,” he said.
If that’s how the county sees it, then Foley wonders why ADMHS is proposing cuts that seem to go against the grain of what everyone already knows.
“What they’re presenting the Board of Supervisors is financial stupidity,” Foley said. “They’re going to end up in this non-stop cycle of deficits.”

THE IMPACT

While Carbajal said he remains hopeful additional sources of revenue can be identified before June to stem some of the cuts, non-profit leaders fear the wheels of change have been set in motion and aren’t going to stop anytime soon.
This feeling has been exacerbated in recent weeks with the calls from Detrick.
One such phone call was made to Bill Batty, executive director of Family Service Agency of Santa Barbara.
Batty said he received verbal notice from Detrick that he can expect to lose the $68,000 the county currently provides for the 211 Helpline, which he said is the county’s primary crisis intervention line and has been around for more than four decades.
When asked if he feels like this is an “exercise,” Batty said it certainly doesn’t feel like one.
“For me it doesn’t feel like it’s a drill,” he said. “It actually feels like it’s happened.”
Batty said he made every effort to convince Detrick to reconsider.
While the $68,000 Batty receives is a drop in the bucket compared to other CBOs, it is used to fund a program that he called a “critical resource in our community.”
He said the Helpline, as it was known before the federal government created 211, has a 24-hour staff that handles crisis intervention and acts as a kind of service directory. The Helpline also provides information to the public in the event of a disaster.
Like all of the CBOs interviewed for this story, Batty said he realizes the department has a real budget crisis on their hands and needs to do something about it. But he hopes county officials can see the bigger picture. He also said the nearly $3 million in cuts to county owned clinics that are expected to occur in step with cuts to CBOs will be “absolutely catastrophic.”
“At the end of the day I think by cutting that they’re going to increase costs,” Batty said. “It’s really a shame that we’re even at this point.”
On the other end of the fund spectrum is Cameron, who said the county provides $1 million to the Mental Health Association.
With the proposed cuts, she said this $1 million could be reduced to as little as $80,000. If it is, she said the 14 board and care beds she provides would cease to exist and the Fellowship Club, which has been in the area since 1954, could also be threatened.
Cameron said the $80,000 figure is a worst-case-scenario, and remains hopeful she’ll be able to hold onto the majority of the funding.
Cameron is one of many CBOs who received a call late last week from Detrick, who has scheduled a series of meetings with non-profit leaders tomorrow. She said she isn’t sure what will be discussed, but hopes it’s good news.
But even if the Mental Health Association is able to hold onto its funding, Cameron said other non-profits will get cut and she’s in the advocacy business, which means she cringes when the word is mentioned at all.
“I’m not naïve,” she said. “I know they’re going to have cuts and I’d like to see the department be really smart about how they make these changes.”
When asked about the possibility of the cuts being rescinded during the June budget sessions, Cameron said that presents a huge problem because she and other directors need to know now how many eviction notices to write up.
“We can’t wait around until June to see what happens,” she said.
Barry Schoer, executive director of Sanctuary Psychiatric Centers, said he receives $337,000 in funding from the county to operate 40 units of supportive housing.
Without the county funds Schoer said his organization would likely be forced to turn the 40 apartment units into Section 8 affordable housing, which most of the people currently living there couldn’t afford.
Like Cameron, Schoer was speaking with a worst-case scenario in mind. He said if the county cuts 15 to 20 percent of his funds, he might be able to find alternative revenue streams to continue the housing as is.
When the supportive housing units first opened years ago, Schoer said they were considered a model in transition housing, similar to the El Carrillo Studios on Carrillo Street.
“They were saying this is the model, now they’re saying we don’t need your model,” he said.
Foley said the $126,000 Casa Esperanza receives from the county appears to be safe. He said ADMHS officials have been reluctant to strip funding for homeless services and hopes it stays that way.
Though Carbajal said he sees the proposed cuts as a means to fund the department through this June, he also acknowledged that it will be nearly impossible to not make some cuts in June.
“I’m losing sleep at night because of these issues. It’s not easy to go to bed at night with these major challenges looming and knowing there could be hundreds of residents affected,” Carbajal said. “No doubt to them it’s very real and unless the board is able to do something in June, this will be the plan.”
In his more than 30 years in the mental health community, Schoer said he’s never seen a plan quite like this.
“Nothing has ever compared to this. It’s a debacle with a total disregard for what the community-based agencies have created over these years to provide a safety net for all of these folks,” he said. “They really haven’t got a clue about the devastation they’re about to wreak.”
The Board of Supervisors is scheduled to receive an update from Detrick on budgetary matters on April 22. Foley said the meeting will be well-attended.