Community Services Seeks Ways to Blunt Sharp State Budget Cuts


Martha's Vineyard Community Services sees the writing on the wall.

Just across Vineyard Sound and Buzzard's Bay, the Center for Health and Human Services of New Bedford is closing its outpatient counseling operation - turning away 600 clients after not being able to pull itself out of the red.

Community Services executive director Ned Robinson-Lynch gets a handful of e-mail warnings from health and human services peers across the commonwealth each day, urgent reminders to lobby public officials to help buffer agencies like his against $600 million in state budget cuts. The governor is moving through the line items, threatening to cut more and promising not to raise taxes.

It's the reality for health and human services agencies across the nation, which are taking substantial hits as state and federal revenues continue to plummet.

Only 10 days remain before the annual Possible Dreams auction - the agency's star-studded fundraiser that funnels its six-figure proceeds into Community Services's budget to help meet otherwise unfunded expenses - and expectations are high.

They have to be. The state funds about half of Community Services's $5 million budget, and Mr. Robinson-Lynch expects pending cuts will translate to a 10 to 15 per cent reduction in his operating revenues for the current fiscal year. As wrangling in Boston over allocations to various state departments continues, Community Services stepped into a new fiscal year with little sense of what to expect from the state.

"We have good faith that essential services will continue, but it is a bit of a wing and a prayer," Mr. Robinson-Lynch said. "We know for certain we can't expand. It's the tough part of doing business with the state."

The stakes this year are even higher than usual. A contentious labor dispute ended in June with the Hospital Workers Union earning a seat at the table to negotiate contracts for 37 employees of the Island Counseling Center and Visiting Nurse Service. Undoubtedly, the question of wages will be central to negotiations.

Because of the lag in collecting reimbursements from both the state and public and private insurance companies, fiscal year 2001 is the last one for which Community Services's books are complete. A scan of the agency's finances for the 12 months ending in June 2001 shows considerable amounts of red.

Of the agency's five programs, only two - Women's Support Services and Island Community Resources - carried themselves. Even so, the former having finished $39,000 in the clear is attributable primarily to a staff shortage for part of the year, a circumstance management would rather not see again despite the financial benefit.

Island Counseling Center ended the year $238,000 in the hole, with losses $100,000 more severe than administrators projected. Eighty per cent of ICC losses can be linked to its outpatient mental health program, which depends on clients and insurance companies to pay for private counseling to 1,400 clients annually.

ICC administrator Stephen Barnes said about a third of the program's patients have no insurance. Among those, he said, 50 to 100 can pay nothing at all for sessions - a cost the agency must swallow. Mr. Barnes said losses in the outpatient mental health program were exacerbated in FY 2001 due to staff shortages for bill collecting, a problem he said has been alleviated.

"It's not a business that you make money," he said.

The Early Childhood program also ended up $150,000 on the debit side, about $20,000 less than the agency predicted.

Visiting Nurse Service carries the heaviest burden, finishing FY 2001 with $335,000 in uncovered expenses - an outcome blamed primarily on Medicare cuts.

Community Services relies on aggressive fundraising to offset the bulk of almost $670,000 in unfunded expenses. In FY 2001, Possible Dreams kicked in $325,000, sales from the MVCS Thrift Shop contributed $300,000, and annual solicitations, along with the Windsurf Challenge, raised another $290,000. But overhead and expenses for all three chipped away more than a quarter of the money they brought in.

"Fundraising should be for extra things, but right now, we count on it," said Mr. Robinson-Lynch.

The agency ended the year with $90,000 in operating losses - a shortfall it could manage because of its net assets equal to 12 months of payroll and reserve funding. The agency currently has $300,000 in cash reserves - enough for three pay periods - as well as $600,000 in money market accounts.

This sort of cushion, Mr. Robinson-Lynch said, gives Community Services the assurance of not returning to the days of the late 1980s in which the board chairmen had to beg the bank for a loan to pay employees.

In addition to these assets and reserves, the agency has about $2.7 million in an endowment fund - which proved to be a point of contention throughout the labor dispute. When the Community Services board instituted the endowment fund in 1996 in order to perpetually fund free care, they vowed not to touch the money. Any interest generated empties back into the endowment until it reaches the $5 million mark, at which point the agency will use endowment interest for unfunded care needs in the future.

Talk of building a new campus crept to the surface during labor disputes, but those plans are on hold for the moment, Mr. Robinson-Lynch said.

"We'll be discussing and asking ourselves, is this the best time to build a new building given the state of the economy. We also want to address recent issues the staff has brought to us," Mr. Robinson-Lynch said. "We haven't forgotten about it, but it's on the back burner for now."

The push and pull of Community Services's revenues and expenses is cause for constant vigilance and more than a little concern.

"A healthy reliance on fundraising may become an overreliance on funding. Then we may need to make difficult choices," the director said. "The last thing I want to do is minimize any services."