New financial numbers are in for a proposal that would combine human services in 12 counties in Southeastern Minnesota. Initial estimates showed Winona County would pay more for the collaborative approach; now, the numbers reflect a modest savings. On Tuesday, however, county leaders said some of the numbers were based on old data, questioning whether Winona County would save at all with the switch.
The “Human Services Redesign” initiative would combine human services among the 12 counties, expected to reduce administrative overhead and create an overall savings when compared to current spending. When project planners attempted to come up with a financial model using population, tax capacity and actual human services used, the estimated savings were distributed in a way that would have meant Winona County would pay more than it currently does providing the services alone. The estimates, which do not include $19 million in start-up costs, showed that the 12-county region would save between $25 and $40 million in the first five years, although Winona County would likely have been obligated to pitch in more than $1.8 million over current expenditures by year five under that financial scenario.
Project planners said that all the formulas identified for the financial composition of the redesign effort created winners and losers, and asked for a “political solution.” Tuesday, that compromise was aired, and the numbers showed that Winona County would save $2.8 million over 15 years when compared to expenditures in 2010.
County Administrator Duane Hebert explained that the savings estimate was a bit misleading, however, because human services expenses have dropped significantly since 2010.
Counties must decide whether to pursue the collaborative model by July 1. On Tuesday, Hebert that the governance model must be decided soon, which has been a sticking point for the biggest county, Olmsted, whose leaders want more of a say. Olmsted County comprises 47 percent of the funding for the collaborative model, and is lobbying for 47 percent of the voting power for the joint powers board that would control the redesign program. Still other counties, said Hebert, have expressed an unwillingness to participate if Olmsted County decides to pursue the redesign efforts.
Project planners have hoped that other sources of funding — from the state, or possibly grants — could cover the $19 million in start-up costs that are not factored into the financial plan. One option explored to help cover that cost was a regional sales tax, although Hebert said that idea was dismissed. Another option mentioned Tuesday was using county property tax levy reserve dollars to cover the bill.
Commissioner Jim Pomeroy attended the recent planning meetings for the project, and said that the identified savings for Winona County were really more of a “cost avoidance,” adding that the figure for year 15 was really merely $13,000 over the 2010 base expenditure numbers.
Pomeroy also said that the savings estimates were based largely on attrition, reducing human services staff members across the 12-county region by hundreds of employees. Hebert said the staffing cuts were between 200 and 300 positions, adding that counties would have to figure out how to make that happen.
The work thus far on the redesign concept has been done using a $750,000 Bush Foundation grant, along with $250,000 in funds from the 12 counties.
The redesign would pull administrative work and other services that are considered “low touch,” or don’t require face-to-face time with clients, into a collaborative main delivery system not housed in individual counties. Services and functions considered “high touch,” or those that require staff members work closely with clients,such as child protection cases, would have staff members traveling to clients, rather than clients seeking out services. High touch staff members would be based out of regional human services centers, facilities that would be placed in areas with the highest population and need. It is not yet determined which cities and areas would have such centers.