AGENCY NEWS

Budget for FY 2011

Over the past 12 months we have been down-sizing our agency to match the cuts we’ve been receiving in our operating budget. In FY 2009 we ended the year with total revenues of $10,639,051. This coming year, FY 2011, we are beginning the year with estimated revenues of $9,350,361. That is a pretty large drop over a one year period. Back in January, I thought our biggest challenges would be on the treatment side because we seemed to have so many more options for prevention funding. Now, that situation has reversed and our treatment budget appears to be balanced but we have huge problems with prevention funding. We have met the treatment budget challenge by eliminating agency positions as we have had resignations, by eliminating evening childcare at Heart of Iowa, and by searching for as many options as possible for replacement funding. Unfortunately, most of the prevention funding we’re looking at won’t be announced until late July or late August.  The most significant budget changes have hit in our Linn County services where we have eliminated 9 outpatient clinical positions and two prevention positions. That has made a significant impact on our services in Linn County and has caused our waiting time for assessments to grow to just over 4 weeks. We will not be able to offer July 1^st salary increases to staff but I will continue to monitor revenues and if possible we’ll try to work in a small increase later in the year.  We learned last week that we were not renewed for our tobacco reduction grant. Although we will resubmit for that funding, the state has penalized us by 1/12 of the grant by now funding only 11 months starting August 2^nd instead of July 1^st. Hopefully the state will approve the next application but we won’t find out until July 13^th. Apparently the state reviewing officials didn’t like the grant applications for 25 of Iowa’s 99 counties so there are a lot of agencies that will have budget problems over this. We also learned last week that the Linn Decat committee would not be renewing funding for our minority girls prevention project. We are currently looking at a total deficit in prevention programs of about $115,000. This is assuming that we get the second application for tobacco funding approved. We can still get much of this deficit covered if we receive either or both of the federal prevention grants that won’t be announced until late summer. At our June 10^th Board meeting we will be deciding whether we need to make cuts now through staff layoffs or whether we should use agency reserves to carry us until the federal grants are announced. My preference is to use agency reserves to continue all positions through July and August. When the federal grants are announced we’ll either have money to offer continued prevention roles or we will have to do staff reductions this fall. In the mean time, both Laurel and Paul will continue to look for new grants for prevention.  

Disaster Recovery Funding

One bright spot for us over the past year has been the federal disaster assistance grant that allowed us to provide Linn County services and actually add a couple of counselors to meet the extra counseling needs of flood impacted persons. We have seen over 400 flood impacted persons in our Linn County treatment programs in the past year. We continue to see nearly one third of our new clients reporting some flood related problems they have been experiencing with about 40 new cases each month of clients who either lost their home or their job because of the 2008 flood. Based on the experiences of other disaster impacted communities we can expect the after-effects of the flood to be seen in higher mental health and substance abuse rates in our community for several more months to come. We received help from the United Way, The Greater Cedar Rapids Community Foundation and federal disaster assistance grants that had allowed us to expand our counseling staff to meet that need. Much of that funding is now coming to an end but we have received an extension on our Greater Cedar Rapids Community Foundation Grant that will pay for an additional six months of a counselor and we anticipate a final round of federal funding which should cover 6 counselors for three months. Without these sources of additional help, we would have been faced with a huge increase in clients and a significant reduction in our counseling staff last summer.

Dispute over Flood Clean-up Costs

We continue to have one major dispute over the 2008 flood clean-up costs. Although we had flood insurance on the building involved, the insurance company payment is significantly different than the vender’s bill. We’ve worked now for almost two years to try to resolve this without making any progress. The vender has now filed a mechanic’s lien on our Heart of Iowa facility which unfortunately means we have to hire an attorney to defend our interests. The insurance company’s position is that this is a “private matter” between us and the vender. Our position is that if the bill is a legitimate bill, the insurance should have paid it. If it isn’t a legitimate bill, the insurance company should be working with us to challenge the bill and contest the mechanic’s lien. I suspect we’ll need to have our attorney both challenge the mechanic’s lien and try to enforce our rights under our insurance policy. We’ve hired Steven Pace from Shuttleworth & Ingersol to serve as our attorney on this because he is currently working on similar legal cases from several other businesses in Cedar Rapids against this same vender.

New Audit Requirements

We fall under some new rules this year on our retirement plan that requires us to have the plan audited. We’ve contracted with Clifton Gunderson to do this audit for our 2009 calendar year retirement plan. They will be checking to see that proper amounts were contributed for those employees electing the retirement and that funds withheld and agency match were properly submitted. Although having this audit will help insure we don’t make any errors in retirement contributions, unfortunately it comes with a $7000 price tag. I’d prefer to just check these figures internally and save the $7000 but we don’t have that option. The field work will be started Monday, June 7^th and should be wrapped up fairly quickly. New federal rules this year also require an electronic filing of the federal form 5500. This is a form I’ve filed manually in the past but will now cost us $500 to have Lincoln Financial file for us. They also do a non-discrimination test (for another $500) which has been required for the past couple of years during which they measure benefits I receive against those other employees get. Although I contribute under the same rules as everyone else, they manage to find a few hundred dollars each year that I need to pull out of my retirement account so the plan meets this non-discrimination test. I have no idea why, but follow their directions. I’m sure the reason for all of these rules is to keep employers from ripping off the employees accounts but they sure do add to the agency’s costs.

Flex Plan Sign-ups

We are scheduled for our annual flex benefit sign-ups on Tuesday June 8^th in Cedar Rapids and at Heart of Iowa June 10^th. They’ll also have a sign-up date in Clinton at a date to be determined. There are a couple of changes this year to remember. First of all if you haven’t spent all of your funds from the current year we have an extension until September 15^th so medical claims from July 1^st until September 15^th can apply to either the FY 2010 or the FY 2011 TASC plan. Second, the new health care reform rules will not allow you to claim over the counter meds (cold meds, aspirin, etc.) after December 31, 2010. This may impact the amount you want to set aside under this plan for the year.

Staff Changes

Lorna Richards has resigned from her role as coordinator of the Jones County Drug Free Coalition. Because the Rural Linn grant will be winding down starting July 1st, Jennifer Husmann will be moving from her role as coordinator of the Rural Linn project to replace Lorna in Jones County. Jodi Becicka and Jessica Blazek have been hired to help with child care at Heart of Iowa for the summer months. We are hiring fewer summer workers this year because the reduction in evening child care has left some of our part time workers with more available hours to work. Please help each of these staff feel welcome in their new roles.

Clinton Building Remodeling

Unfortunately, we probably did not get the energy audit of this building completed in time to qualify for any of the federal stimulus money. We’ll continue to follow-up on this but Paul and I believe the money is probably already depleted. We’ll be working with the architects over the next 4-6 weeks to develop bidding documents and cost estimates for this remodeling. Our goal is to get the bidding documents out by mid July and hope to begin construction sometime in August or September. Once we select the contractor and approve the bid, we’ll get a better understanding of completion schedule. I’m still hopeful that we can get a schedule to complete by the end of December but Paul is feeling we may need a couple of additional months. Our plan is to borrow about $600,000 to go with the $600,000 Community Development Block Grant we received. We will be remodeling the second floor for our use so we’ll need to hold staff input meetings soon with the architect on what we’d like this space to look like. The space we’ll be remodeling for other community agencies will also need those input sessions because it will be significantly less expensive to lay the space out the way we want during the initial remodeling than it will be to go back later and move walls. We will not be charging rent to these other agencies but will ask them to pay a per square foot cost for utilities, maintenance/janitorial, and a long range maintenance reserve for roof repairs or other major expenses we’ll run into in the future. The architect should be able to get us some estimates on this type of cost and ASAC will also be paying into this reserve for the space we are using. We’d like this reserve to build over time to the point we have money for any major roof repairs or other big ticket items that occur in the future.

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