In a major retreat from safety-net responsibilities, the Flagler County Commission is shutting down the $359,000 adult day care program it’s managed for two decades. Commissioners agreed at a workshop on Monday to close the program by the end of the fiscal year in September. Commissioners cited unsustainable subsidies helping too few clients. Some 25 to 50 clients who may have no alternative will be affected.
Fearing future property tax revenue cuts, the county will now develop an exit plan for the program’s remaining vulnerable clients. The decision may be a harbinger of many like it in county and city governments that may reshape the scope of government responsibilities in anticipation of an upended tax base.
Commissioners since last year have been critical of the program’s bottom line, and came close to phasing it out last winter. They stopped short, requesting a more detailed presentation that Joe Hegedus, director of Flagler County’s Health and Human Services Department, provided. The numbers were not encouraging, though social services numbers never are. Like parks and transportation for the needy, they’re not money-makers but services.
“Social services never have, ever in my 25 years’ experience, been anything about revenue,” Hegedus said. “It costs to serve our most vulnerable folks, to pick them up and get them on their feet, and it’s just about whether or not that’s an acceptable cost to us as a community.”
The County Commission decided that it is not acceptable.
“It’s like the new Chick-fil-A,” Commissioner Kim Carney said. “Did you see how long that line was to try to get in a sandwich from the new Chick-fil-A? If this was the best program in town, you would have people knocking on your doors. You would have to turn them away.”
The analogy was not quite exact: a unique social service is not cheap fast food, especially in a community where, Hegedus said, no other alternative adult day care programs or providers exist for a vulnerable population. Other than in-home care, which is two to three times as expensive, there are no other providers but Flagler County. Still, Carney’s point is that demand for the service is simply not at a level that would justify that much underwriting.
“My concern is it’s a speculative business plan regardless, just to break even,” Commission Chair Leann Pennington said. “We just don’t have revenue like that to expend. And I understand, it’s not something we’re supposed to make money on. I’m not trying to make money, just break even or close to it, but we’re not even close to it for a population of that small. So it’s one thing to lose $200,000 a year, but you’re helping 800 to 1,000 or a couple of thousand people in the community. It’s another thing to lose it on a population that’s less than 20 people. It just doesn’t seem like that’s a good use of tax dollars for local government to be in the business of.”
The commission’s consensus was unanimous, with painful regret from most, especially Commissioner Greg Hansen, who at the beginning of the discussion was adamant that the program should be preserved. By the end of the discussion, it was him who said: “Shut it down,” but only the way one pulls a trigger. He did not want lingering half-measures. “If we do this, we do it, cut it. That’s it. No more dollars going for this program,” Hansen said. “And I got to tell you, that pains me. That really pains me.”
Hegedus tried valiantly to advocate for the program. He said the adult daycare program–previously the responsibility of the defunct Flagler Council on Aging–provides essential community-based care at a net annual cost of about $4,666 per participant per year. The program ostensibly supports 45 to 50 adults.
The $4,666 figure is a best-case scenario. The program’s current budget is $359,000, with projected expenses of $336,000. The program’s goal is to generate $125,000 in revenue. But last year it generated just $84,000, and the year before, $101,000. The $4,666 figure is based on assuming that net expenses will be $210,000, and that there will be 45 participants. By the county’s own calculation, enrollment is less than half that–from 15 to 25 a month at best, thus raising the cost per participant proportionately. The typical client attends about five hours a week.
Going by last year’s actual figures, with net expenses of $240,000 and even 30 participants, the per-participant cost was $8,000. The numbers don’t take account of ongoing staffing problems, which at the moment limit enrollment to 15 clients on any given day. The program has three staffers but needs five.
“The program costs outside of personnel and staff have been minimized,” Hegedus said. The program provides food, utilities and program supplies. The largest cost is personnel.
Hegedus had ideas on improving the bottom line. The county bills $10 an hour for clients who pay privately. Raising that to $15 an hour (the rate charged in a similar program in St. Johns County) would marginally narrow the gap, though that would have to be done incrementally over the next three years. Doubling enrollment and raising the hourly rate would bring the program closer to breaking even, but not quite: “This assumes that these are all private pay clients,” Hegedus said. They’re not. “We have Medicaid clients, others, referrals that don’t pay as much as the private pay rate.” They pay less.
The county could also have secured licensing to care for dementia patients, which would potentially increase enrollment and revenue, as Alzheimer’s patients command a higher revenue rate. The county could have also required clients to stay longer than the currently required minimum of four hours. But doubling attendance would also strain the staff, depending on the level of needs of the clients.
“We’re kind of shooting ourselves in the foot to a certain degree with some of these ideas,” Hegedus conceded, when he thought the program still had a shot. He proposed implementing the ideas gradually, and reevaluating in the future. “Again, I believe, and I would pose to you, that this is a critical service for the most vulnerable in our community,” he said, “and even at an annual cost of $4,400 per client, I personally believe that’s an acceptable cost to provide the service that we do, and again, with no other option for folks in our community.”
Commissioner Andy Dance said the program is an important component in the quality of life of its clients. But he fears what may happen if a lot of property tax revenue is eliminated. Lawmakers are expected to place a proposed constitutional amendment on November’s ballot that would in one way or another sharply reduce property tax revenue for local governments. “I don’t know if this ends up surviving that, because we’re going to have so many things that we’re not going to be able to do, everything that we used to be able to do,” Dance said. “We’re going to be making that decision really soon as a community, as a state.”
“If we are faced with what we believe may be coming out of Tallahassee, then I would say that you’re not going to be providing subsidies at all,” County Administrator Heidi Petito said. “You’re not going to be able to afford it.” By that point, it appeared clear that the commissioners were headed toward ending the program, while Petito wanted clarity on what sort of budget she could submit in a few months.
To Pennington, it’s not even about the property tax. “We should be filling the necessities, regardless of whether or not what they’re doing with property tax,” she said.
Whatever route they took to get there, all five commissioners eventually agreed that the program must end.
“My suggestion would just be to set a clear end date of services, and that gives both staff and clients a projected timeline they can plan towards,” Hegedus said. The next step will be for Petito to bring an exit plan to the commission in coming months.
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