WALLA WALLA — Sales tax money raised to expand Walla Walla County’s mental health and substance abuse services will be used to halt “hemorrhaging” of reserve funds in the county Human Services Department, county commissioners decided this week.
At their Monday meeting, commissioners approved the use of up to $335,000 collected last year to offset the costs of providing mental health services to Medicaid clients in 2013. Under the plan, the use of the sales tax funds to support current operations will end on Dec. 31 of this year.
Other measures in the proposal call for developing program plans to minimize use of reserve funds and extending the loan payback period Community Service Center building at 1520 Kelly Place from 10 to 15 years.
The proposal was one of six alternatives put forward by Harvey Crowder, interim director of the county’s Human Services Department, to stop a drain on the department’s reserve funds that began several years ago. If left unchecked, Crowder told commissioners, the reserve funds could potentially be exhausted in 18 months.
Use of the tax money combined with other measures, will allow the department to maintain $450,000 in reserves while avoiding layoffs or furloughs of staff working with mental health and developmental disability clients, Crowder said.
“My intention is to use that as a way of transitioning out of this hemorrhaging of reserve funds and getting (mental health and developmental disability services) into a more businesslike model,” he told commissioners at a March 12 workshop.
Commissioners approved the .01 percent sales tax in October 2011. The tax will bring in an estimated $700,000-$800,000 per year.
While the ordinance authorizing the tax states the money must be used to provide new or expanded programs, the law also allows a portion to be used to supplant existing funds. The allowed amount starts at 50 percent of the tax funds collected in 2012 and diminishes to 10 percent by 2016.
At the March 12 workshop, Crowder discussed the situation with Commissioners Perry Dozier, Greg Tompkins and Jim Johnson. In December 2008, under then-executive director Sharon Saffer, the flexible reserve funds were at $3,263,827 and have since then been steadily diminishing to the point where many reserve accounts were depleted in 2012, Crowder said.
Saffer resigned from the department in October 2009 and was replaced in March 2010 by Daryl Daugs, who left in August 2012. Crowder, who is also executive director of the county Health Department, was appointed as interim director that same month.
Crowder told commissioners that in 2009, about $1.6 million was spent from reserves, of which $1.5 million was for purchase of Community Service Center building. Although spending from reserve funds dropped in 2010 and 2011, it rose in 2012 to $1,164,096.
The four largest expenditures in 2012 were $328,735 for mental health, $107,436 for developmental disability programs, $415,491 for renovations to the Community Service Center and $209,000 on payments for the loan used to buy the building.
Dozier noted the expenditures for mental health and development disabilities were “ongoing that you (Crowder) are going to have year after year after year, which is (about) $436,000...So what happened was your predecessor grew a couple of programs that were funded strictly out of reserves that basically had its own sunset clause because we’re going to run out of money and this thing was going to come to a crash … So you took over a train that was out of control and now we’ve got to figure out what to do because (there is) $436,000 you don’t have in your bank account to continue operations this year.”
Crowder said, “I would tell you that they had a great plan to spend down the reserves because of the pressure from the community to spend those reserves and they did a good job of it. There just wasn’t a plan to stop.”
Dozier, who is chairman of the commission, said at the March 12 workshop he did not favor layoffs or furloughs as a way to stabilize the reserve funds.
“I would like to utilize, if we can, the monies that we’ve collected from the (.01 percent sales tax) and reassess this entire situation for employment by the end of the year and (by then) Dr. Crowder may have a clearer picture of what he needs to do for 2014,” he said.