Measure B to review long-term financial plan
With revenue dropping and more buildings to maintain, the Measure B oversight committee mulled prudent and capital reserves at a special meeting.
October 27, 2022 — Measure B, the half-cent sales tax to fund mental health, is heading into its fifth year, when the tax will be reduced from a half-cent to an eighth of a cent. The behavioral health training center in Redwood Valley and the critical residential treatment center in Ukiah are now open. A crisis respite center in Fort Bragg could be open by the end of the year, and preparations to demolish a building and build a psychiatric health facility in Ukiah are underway. But now, with the prospect of much less revenue and several buildings to maintain, the 11-member oversight committee is turning its attention to how to pay for long-term maintenance of the physical infrastructure.
Two items at Wednesday’s special meeting dovetailed with one another. County facilities director Janelle Rau offered a presentation about the maintenance and life cycle costs of the Measure B-owned buildings, which have been added to the county’s list of assets. Commissioner Sherrie Ebyam proposed developing a long-term financial plan, including projected revenue and ongoing costs, and expectations for the prudent reserve.
The prudent reserve for Measure B is currently 6.85%, following the county’s policy per advice from former county CEO and Measure B oversight commissioner Carmel Angelo.
Rau told the committee that the numbers she estimates for maintaining a 20-year life cycle for the buildings is rough, because one is new, another is not yet built, and the other hasn’t been used for very long.
“So that’s the CRT (critical residential treatment center), the puff (psychiatric health facility), and then the training center in Redwood Valley,” she clarified. “From an operational perspective, it’s approximately $155,000 per year. That’s the total of the three buildings. So Redwood Valley is approximately $35,000. The psychiatric health facility we’re estimating at between $78,000 and $80,000, and then the CRT was an estimate of $42,000. And again, that’s an annual cost to operate, separate and aside from the services that are included in that. From a capital asset management perspective, over a 20-year period, for a total of the three buildings, we estimated $3 million: $553,000 for the CRT, the psychiatric health facility a little over $2 million, and then the Redwood Valley training center, approximately $400,000.”
Dr. Jeanine Miller, who is the current chair of the committee and the head of the county’s Behavioral Health Department, posed the question that may have been on everyone’s minds when she asked, “Do we need a capital facilities reserve for Measure B to be able to maintain these buildings for twenty years?”
Commissioner and county CEO Darcie Antle said, “My question would be, if it’s not Measure B, Jeanine, are you going to have money? Because otherwise it’s going to come back to the general fund, and that’s not likely an option.”
Miller replied that, without a plan, the money for maintenance and repairs could come out of the very services the buildings are supposed to house. “Behavioral Health would not have that if we do not have it through Measure B,” she confirmed. “I don't know where those costs would come (from). It would actually come from having to reduce client care overall. There isn’t going to be any revenue on these buildings. If we were to be generating revenue they would most likely be running in a hole, which means we’d be using Measure treatment dollars to maintain them at a zero budget. So there isn’t going to be a revenue to maintain these facilities, because the services are not going to cover themselves, so we are trying to make it so the services do cover themselves, which means not creating a large rent to maintain the buildings.”
Miller added that the current plan for a prudent reserve is not specifically a capital reserve.
“At the time, what we brought forth for the prudent reserve was to cover treatment services long term, knowing that the psychiatric health facility is not going to be 100% covered. It’s going to require Measure B dollars to operate. We’ve known that from day one. We also don’t know if the crisis residential treatment will or will not be able to operate at a zero dollar amount. Will it be able to cover all of its costs? This year is really going to tell us whether or not we’re able to cover all costs or what that looks like long term. So when we brought a prudent reserve forward, that’s why we brought it forward...we didn’t want to build a building and then four years from now, we do not have the funds because we’re not bringing enough in, and then how do we fund that loss for those facilities.”
The eight commissioners present voted 6-2, with Commissioners Tom Allman and Donna Moschetti dissenting, to ask the county’s Behavioral Health and facilities departments to put together a multi-year financial estimate for the committee to review at a future meeting.
Commissioners agreed that a crisis stabilization unit was beyond the financial abilities of Measure B. Moschetti, who represents the local branch of the National Alliance on Mental Illness, summed up the committee’s perspective.
“NAMI National as a whole, supports the CSU,” she said. “However, NAMI local does not. It does not pay for itself. It’s a beautiful idea. It is a wonderful part of the mental health continuum of care. But it is very expensive. First of all, we’d need staffing. It’s hard to staff anything we have already. But secondly, you can keep a person for 23 hours and 59 minutes. You can only bill for 20. And of course we’re not going to let people go when they’re not able to go. And so we’d have to provide four hours of care at no reimbursement cost. I personally, and I asked my board, we don’t think that this county can support that.”
The committee has been charged with assembling a stakeholder group to craft a request for proposals from service providers competing to offer drug addiction treatment. Miller estimated that the document could be ready for review in 60 days.