Government and Health Care

Kent County approves $1.5M fund appropriation

June 29, 2018
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LRE appropriation
Courtesy Lakeshore Regional Entity

The Kent County Board of Commissioners has approved $1.5 million in funding to assist the organization that oversees the area’s community mental health service providers.

The board voted to appropriate a one-time payment to Lakeshore Regional Entity, which oversees funding for organizations that work in Allegan, Kent, Lake, Mason, Muskegon, Oceana and Ottawa counties.

The one-time payment of up to $1.5 million — half from the community stabilization revenue and half from budget lapse — will help finance LRE’s internal service fund for 2018, meant to act as a cushion in case the organization runs a deficit.

The organization ended 2017 with a $24.3-million deficit, but internal service funds were only $15.5 million that year.

Having a sufficient internal fund for 2018 is one of five issues outlined by the Michigan Department of Health and Human Services in a letter to the organization dated March 30, informing LRE its contract as a prepaid inpatient health plan organization would be canceled if the problems were not solved.

Stan Stek, a Kent County commissioner, board member of the CMH Network180 and board chair of LRE, said the alternative to not allocating money and fulfilling the state’s requirements would be the state taking over the system. He had concerns about what could have happened next, such as the possibility of the state contracting with a private health insurance company.

“The impact on our Kent Count residents is so significant, that given that situation, I’m in support of this,” said Diane Jones, Kent County commissioner and chair of the board’s Finance and Physical Resources Committee.

LRE is asking for a pro-rata share of at least $2 million and up to $3.56 million — determined based on the amount of some annual payments from the state — from 14 organizations in the state, with Kent County providing the largest share.

The contract from LRE indicates the organization “shall repay” these contributions on a pro-rata basis “as soon as these funds become available until the full amount of the contributions have been repaid,” which Stek said could take one or two years.

Commissioner Harold Voorhees, who voted not to send the issue to the board during the finance committee meeting because of his uncertainties about repayment, changed his mind during the full board’s vote.

“There was an area in which I had and still have some concerns, but when I consider the risk of not moving on this, I’ll be a yes vote today,” Voorhees said.

Stek said these funds will fulfill the state’s internal service fund requirement for 2018, and funding for future years will be “addressed in an entirely different way.”

The proposal was approved with 17 votes, with Stek abstaining due to “conflict of interest.”

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