Mental health region prepares budget with eye on state mandate

Mar. 14—CLINTON — Eastern Iowa Mental Health region officials are contemplating how to budget for the upcoming fiscal year while monitoring the state of the region's fund balance.

The Region board was presented this month with two separate budget proposals, one with $9.2 million in expenditures and a second with $9.7 million in expenditures.

The Region is required under state legislation not to eclipse a fund balance of 40% by June 30, 2022. The projected end of year unencumbered fund balance based on the current trend is over 48%.

The Region projects a higher fund balance than anticipated by about $2 million at the end of the current fiscal year, which ends on June 30, Region Fiscal Agent David Farmer said. The Region ended fiscal year 2020 at $2.6 million and expects to end fiscal year 2020 at $1.1 million.

The projected fund balance at the end of the current fiscal year is projected to be $5.1 million, Farmer said. The Region was expecting a fund balance of $3.1 million at the end of the fiscal year but is underspending, Farmer said.

Under the $9.7 million budget option, the Region is considering revenues at $9.2 million, which would be the same amount on the current legislation. The budget would have $9.7 million in expenditures for fiscal years 2022 through 2026.

At the end of fiscal year 2022, the fund balance would come down to $4.6 million, about 47.5%. Utilizing the same revenues and expenses, the region's fund balance at the end of fiscal year 2023 would decrease to $4.1 million, with a 42% fund balance in the region.

Cedar, Jackson and Muscatine counties would still be over the 40% level, with about $1.3 million exposed to future reduction. Cedar, Jackson and Muscatine counties would all be projected to be over the 40% limit by a combined $1.3 million at the end of fiscal years 2022 and 2023, Farmer said.

"Under the current legislation, the fund balance over that 40% level at June 30, 2022, would be reported to the state by November 30 of 2022," Farmer said. "And DOM (Department of Management) would come in and say, for your fiscal year 2024 tax levies and budget, you would be reduced by $1.3 million."

The adjusted revenues due to the reduction would be about $7.9 million for fiscal years 2024 and 2025, with expenditures still at about $9.7 million.

The Region fund balance would decrease to about $2.2 million at the end of fiscal year 2024 and $422,000 at the end of fiscal years 2025.

Cedar and Jackson counties would still be over the 40% level at the end of fiscal year 2024. No region would be over the 40% level at the end of fiscal year 2025. Cedar, Jackson and Muscatine counties would have negative fund balance at the end of fiscal year 2025.

At the end of fiscal year 2026, the Region would have a fund balance negative $258,000. Cedar, Jackson, Muscatine and Scott Counties would have negative fund balances as well, Farmer said.

Under the proposal for $9.2 million in expenditures, the Region fund balance would be about $5.2 million at the end of fiscal years 2022 and 2023. The fund balance would be at about 56% at the end of both fiscal years.

About $1.5 million would be exposed to future reduction at the end of fiscal year 2022 and about $1.8 million at the end of fiscal year 2023.

Cedar, Jackson and Muscatine Counties would be over 40% at the end of fiscal years 2022 through 2024. Clinton County would be over 40% at the end of just fiscal year 2022.

The Region would see reductions of about $1.5 million in fiscal year 2024 and about $1.8 million in fiscal year 2025. The Region fund balance would decrease to about $3.6 million at the end of fiscal year 2024 and about $1.8 million at the end of fiscal years 2025.

Cedar, Jackson and Muscatine Counties would have negative fund balances at the end of fiscal years 2025 and 2026. Scott County would have a negative fund balance at the end of fiscal year 2026.

The Region's fund balance would be about $1.4 million at the end of fiscal year 2026 under the proposal, about 16%. The Region fund balance would be about 39% at the end of fiscal year 2024 and about 20% at the end of fiscal year 2025.

The board will consider a budget later this month utilizing the $9.2 million option with the addition of a portion of budgeted amounts for the peer warm line and the law enforcement liaison.

The Region will consider allocating about $225,000 for the law enforcement liaison and about $36,000 for the peer warm line. The proposed budget with the allocations would be over $9.4 million.

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