Scott Gilman

GRAND RAPIDS, MI -- An unexpected cash flow shortage has prompted Kent County officials to make sudden cuts to both the staff and programs of Network 180, the county's community mental health authority.

Concerned citizens and representatives from various service providers packed a basement conference room at the Kent County Health Department Tuesday, Jan. 2, to hear Network 180 Executive Director Scott Gilman explain the problem.

"One of our jobs as Community Mental Health, as the public system, is to fight like heck to make sure the people that need the services that they're entitled to get those," Gilman said at the first meeting of the year for Kent County's Family and Children's Coordinating Council.

"The funding that we have for doing that job better is in jeopardy," Gilman said.

He explained Network 180 expected to receive $104 million from Medicaid patients in the 2017 fiscal year, and set its spending plan accordingly. Actual collections for the year came in more than $9 million short, Gilman said.

For a variety of reasons, many of those previously qualifying for Medicaid because they are "disabled, aged or blind" have shifted their participation to the state's newer "Healthy Michigan" plan, Michigan's Medicaid expansion under the Affordable Care Act. Because a smaller percentage of the money from Healthy Michigan flows back to local community mental health authorities, Gillman said, the shift in participation poses a serious threat to the budget of Network 180 and other agencies like it.

The Lakeshore Regional Entity, which coordinates community mental health services across a seven-county region that includes Kent County, experienced a $23 million loss for the same reason, Gilman said. The regional entity asked Network 180 to cover its share of that loss, which amounts to a budget reduction of $10.7 million.

"We have to operate within the funds that are available to us," Gilman said.

Network 180 first looked inward, he said. The agency of about 200 total employees is now in the process of eliminating 17 positions, primarily from its administrative staff. Hiring for another 15 positions will be frozen and salaries for all employees will also remain stagnant, Gilman said.

But the agency is also planning cuts to existing services and programs that Gilman said it is not required to provide.

One of those is the local "clubhouse" services offered through Cherry Health's Sheldon House program.

Tara VanDyke, program manager of Sheldon House, called the news of the impending cuts "heartbreaking" and a "devastating" blow for their members.

"It's a resource that's critical to our community," VanDyke said.

The clubhouses, which also appear elsewhere in the state, call themselves "working communities," where members are given the support, resources and opportunities to obtain employment, increase independence, develop new skills, return to school and establish the support systems crucial to one's mental health recovery.

Ottawa County residents recently received word that the budget squeeze would impact services at their community's Lakeshore Clubhouse, prompting a flurry of letters from members to their elected officials.

Among other planned Network 180 cuts are its supported housing programs, in which mental health professionals are placed within housing complexes, a nursing home monitoring program, outreach programs for local Hispanic and Native American populations and another outreach service meant to reach those who live in northern Kent County.

Veneese Chandler, director of Family Outreach Center, spoke Tuesday on behalf of the Native American outreach program run by her organization that will be eliminated as part of the planned cuts. Many other programs in the community offering similar services are full, Chandler said.

"We're creating an even bigger hole for a community that's already very, very much underserved," she said.

Gilman said he is not able to set specifc end dates for each program, since Network 180 must first notify the appropriate parties.

"Over the next two weeks, our goal is to make sure that we communicate with the clinical staffs and the courts coordinators so that consumers aren't surprised," he said.

In total, the planned service cuts will result in another $1.2 million in budgetary savings. Gilman acknowledges that is still a distance from the more than $10 million funding gap the agency faces.

"We still have a ways to go," he said.

But with reserve funds drained in recent years, Gilman said, there is no room for error. With such a dramatic cut to operating revenue, the agency will simply be forced to stop providing some services unless it can find funds to replace those lost.

"The region has completely exhausted their cash supply," Gilman said.

West Michigan is not alone. Once other regions spend down any reserve funds, Gilman said, they too will likely come face to face with difficult budgetary choices because of the shift in Medicaid dollars.

"In many ways we're the canary in the coal mine," he said.

The Lakeshore Regional Entity held an emergency meeting on Dec. 27 to discuss the issue, Gilman said. In addition to seeking assistance from the state and pushing for a rapid actuarial review, he said, the region is also probing the possibility of hiring an emergency manager to help it deal with its budget shortfall.

Officials are also calling on individual residents to advocate for help supporting the programs and services on the chopping block.

"Voicing your opinion like our friends at Sheldon House have been doing -- they've been doing an A-plus job, I want thank you guys for what you've been doing -- that's what we need to have happen right now," Gilman said.