The clubhouse is a gathering spot for those who receive county-provided mental-health care in Carroll and will get a facelift as part of a change in health-care providers.  Daily Times Herald photo by Jared Strong
The clubhouse is a gathering spot for those who receive county-provided mental-health care in Carroll and will get a facelift as part of a change in health-care providers.  Daily Times Herald photo by Jared Strong
Friday, July 13, 2012

Carroll County leaders knew that their former mental-health-care provider was crumbling at least two months before they took action to find a replacement, according to emails obtained this week by the Daily Times Herald.

Members of the board of supervisors and a county mental-health official have said that their options to replace the Richmond Center of Ames this year were limited, in part, because of the short notice they had for the search. The supervisors have said that taxpayers were forced to pay more for the healthcare because just one provider submitted a proposal.

But at least one board member knew the Richmond Center’s dire condition from an independent review of the center’s finances in January — two months before the board requested proposals to replace the center.

“I read the report ... and concluded that the Richmond Center was in very bad condition, and any other option should be considered,” Supervisor Neil Bock wrote in a Jan. 22 email to Dawn Mentzer, who oversees Carroll’s county-provided mental-health care.

Mentzer replied: “My only regret is that we now have a signed contract that includes block-grant funding for a sinking ship.”

Counties are required by state law to pay for mental-health care for indigent residents. Carroll County budgeted about $3.3 million for mental-health expenses for this year, which is about 19 percent of the total budget. It’s the county’s second-largest annual expense.

The Richmond Center waited until March 19 to ask the supervisors to end the contract no later than June 30, when it was set to expire anyway. And the supervisors did not ask for proposals to replace Richmond Center until March 26.

The Times Herald used state open-records law to obtain county emails dating back to January that discussed the Richmond Center and mental-health services to shed more light on the replacement process, much of which was discussed outside of public meetings.

Supervisors Chairman Mark Beardmore and Bock said in interviews this week that despite the report, the board had been pleased with the center’s work for the past five years and was hesitant to act prematurely.

“We don’t have a crystal ball,” Beardmore said. “You don’t want to throw people under the bus unless you have proof.”

Report reveals mismanagement

The Richmond Center sustained more than $100,000 of losses from July to November 2011, according to a review of its finances by Eyerly-Ball Community Mental Health Services, which replaced the center in Story County to provide mental-health care to residents who can’t afford it.

The Eyerly-Ball review found that Richmond Center was owed money but made little effort to recover it and paid employees for hours they didn’t work, among other problems.

Bock attended a January meeting in which the Richmond Center’s then-executive director John Hostetler met with a social-services group in Ames to discuss the report.

“John Hostetler really took a lot of heat,” Bock wrote in an email. “John accepted responsibility but had no comforting answers. His only rebuttal was that services were being provided and alternate providers were either unavailable or too expensive. A couple of ... board members explicitly and adamantly expressed that John totally failed as a manager and that they totally lack confidence in John.”

The review showed that Richmond Center had under-billed Story County by $143,000 over a three-year period. It also found that the center was overpaying its employees a total of about $100,000 each year because they were paid as full-time employees but actually worked about 35 hours each week.

Further, the report claims that the Richmond Center failed to hire a replacement for its finance officer who departed in April 2011 and moved out of state because the center expected the finance officer to return late that summer but didn’t.

The amount of money the center paid its administrators ballooned in 2009 to 43 percent of its operating budget, compared with 16 percent in 2008.

Bock concluded in an email: “I would not consider any option with John Hostetler as manager.”

A rapid timeline

On March 26 the county released an abbreviated timeline to take bids for a new mental-health-care provider — the supervisors had just three months left to make the transition.

Letters of intent were due by April 2 and proposals by May 1.

Three providers said they would send a proposal: New Opportunities in Carroll, West Iowa Mental Health Center in Denison and Plains Area Mental Health Center in Le Mars.

New Opportunities and West Iowa Mental Health Center eventually withdrew because of the timeline and the number of services the county wanted to offer, the supervisors said.

New Opportunities executive director Chad Jensen said this week his agency withdrew because the county workload would have been too great. West Iowa Mental Health Center officials did not return a call to comment for this article.

On May 14, the county announced that it had only one proposal — a $728,801, three-year agreement from Plains Area Mental Health Center.

Plains Area executive director Patrick Schmitz cited start-up expenses as the main reason expenses were so high.

He said it takes a lot of money for staff to spend the time transferring information, and the center wanted to open a second location in Carroll because of patient-privacy issues.

“The costs are certainly understandable but might be an issue with the board,” Mentzer wrote to Schmitz.

The supervisors balked at the proposal and wondered whether Plains Area inflated the costs because it knew it gave the only offer.

“It’s a matter of what the county needs (versus) what Plains wants,” Beardmore wrote in an email. “They want to offer a full pallet of services to broaden their base and yet have us pay for the whole shibang.”

State lawmakers added a new wrinkle to the issue in March when they approved a massive overhaul of the requirements for county-provided mental-health care, in which Carroll County would be forced to join with other counties to provide the services if it can’t afford to on its own.

“If we do not have a mental health center, our only options will be to look to the west and join with Crawford and whichever direction they take or to the south with Audubon, Guthrie and Greene,” Mentzer wrote.

By May 24, Plains Area Mental Health Center was able to find $190,000 in savings on rent costs and phone systems and delaying a location change, which reduced the proposal to about $540,000.

Finalizing the deal

The board voted in favor of the contract on May 29 — more than four months after Bock and others first learned of the Richmond Center’s troubles.

After the vote the supervisors began a public discussion of letting Plains Area use unoccupied space in the county’s Fricke Building for its second location, but emails obtained by the Times Herald show the talks had been ongoing for weeks.

The board was originally against opening a second location for the center because of the cost, however, the need for a new location became apparent after county officials toured the Richmond Center’s office on U.S. Highway 30 near Main Street.

“It really opened my eyes in terms of Patrick’s need to provide outpatient services at another location.” Mentzer wrote in an email. “Yesterday the back hallway smelled of urine. The individual offices are not the most conducive for therapy as they are small and the doors are thin which does not allow for a sound barrier to the rest of the office. The bulk of the office space is utilized for the clubhouse and there is no ability to expand at the current location. The majority of the office equipment, furnishings and decor are outdated and in need of  replacement. While I certainly agree that we need to contract at a much lower price than what has been proposed, I can understand that in order to establish a successful mental health center the current location poses many barriers.”

Schmitz added that the building would need door-handle locks, a fresh coat of paint and new computers.

The new space in the Fricke building — on Court Street just north of U.S. Highway 30 — has six offices, one restroom, a lobby, a reception and office area, a kitchenette and some closets. Beardmore described the space as “no Taj Mahal,” but “it certainly has more pros than cons.”

Plains Area Mental Health Center agreed to cap first-year spending at $214,750.