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FAIRMONT - After three failed motions and plenty of discussion, a preliminary 2027 budget for the Faribault and Martin County Health and Human Services was approved 9-3 at their meeting on Wednesday.
The crux of the discussion and issue surrounding the budget was the increase in local participation via increased property taxes. The proposed budget asked for an 18.5 percent increase in local participation between the two counties from 2026 to 2027, which would be an additional $1.45 million. This would be split, with Martin County having an additional $857,883 to pay and Faribault County an additional $596,155.
The biggest changes came from income maintenance/financial assistance and behavioral health/social services, totaling over $1.2 million.
Executive Director Chera Sevcik said there will be a cost shift from the state to counties to pay for a portion of waivered services.
"We expect that cost to be around $350,000 per year," she said. "We would start incurring that cost in July of next year. Half of that amount has been included in expenditures due to that cost shift."
On top of that, Sevcik said there will be a cost shift to the counties for SNAP benefits that will start later in 2027, which she said the state Department of Children, Youth and Families (DCYF) is projecting will cost about $100,000 per quarter.
"For 2027, that would be $100,000 in quarter four," Sevcik said. "In 2028, that would be added to our budget, about $400,000."
In the former, Sevcik said there is also a loss of revenue from federal SNAP. The total loss of federal funding in that department is $251,682.
"Typically, the federal government had reimbursed us about 50 percent for SNAP for staff time to administer SNAP," she said. "That is going down to 25 percent and the state did not backfill that 25 percent that the feds have stopped."
Faribault County Commissioner Tom Loveall asked for some clarity on if the funding getting cut on the federal side is for administration of SNAP and if the benefits themselves are the same. Sevcik said yes to the first piece, but said they had never had to pay for SNAP benefits before, as it had been covered by the federal SNAP programming.
"Now we will because of the state’s error rate," she said. "Our error rate is zero in our two counties, but we don’t get to claim that. We have to go with the state."
Other contributing factors across both departments include needing to add three staff to implement a new state act, a 20 percent increase in health insurance costs across the board, and potential funds in limbo due to UCare's closure, the ongoing transition process for affected clients to Blue Plus, and the difference in payment models.
"UCare paid us an amount per member per month," Sevcik said. "Blue Plus required 15-minute billing for when you are actually working with a client. It’s very different pay structures."
An initial vote was held to accept the budget outright. The vote tied 6-6, with Martin County Commissioners Kevin Kristenson, Richard Koons, Jaime Bleess and Billeye Rabbe, and Faribault County Commissioners Loveall and Gertrude Paschke voting no.
As they had last year, Bleess recommended cutting back employee workweeks by one or two hours, to 38 or 37 hours a week, to save around $300,000 to $600,000 as needed now.
"To cut an entire position through attrition or otherwise to get to $600,000, you got to go through at least three, four, maybe five people," he said. "You reduce by one, two more hours. Send people home at 2 p.m. You’re achieving a number that can be temporary to deal with a temporary problem, and it’s way easier to turn that switch back next year, the year after, when things sort out a little bit."
Both Paschke and Koons said they have spoken with people who have said they will have to sell their houses and either find an apartment or move elsewhere if property taxes continue to go up. They both agreed that, in the budget's presented state, they would not be able to vote yes.
An amendment to the budget to do 38 hours a week instead of 39 for all full-time employees received a motion and a second. It also failed at 6-6. This time, Citizens Advisory Committee member Sue Eisenmenger joined Koons, Rabbe, Kristenson, Loveall and Paschke in voting no, while Bleess voted yes.
Loveall proposed that instead of choosing for FMCHS, they could present a number they wanted local spending to be at or under, and then send it back to FMCHS to find the necessary cuts and adjustments. Loveall made the motion to take the percentage increase Faribault and Martin County combined would pay from 18.5 percent to 6 percent, and the motion received a second.
At that position, Bleess said jobs may have to be cut on top of hours, and he said eliminating jobs through attrition could include revenue-generating positions.
When brought to a vote, only Loveall voted in favor, and the motion failed 1-11.
Bleess asked how much would be saved if hours per week for employees were cut to 37.5. Faribault County Commissioner Bruce Anderson said it would shed around $504,000.
From previous votes, Bleess said he could sense some uncertainty or frustration with prescribing a specific way FMCHS has to cut funding. From this, Bleess made a motion for FMCHS staff to find $504,000 to cut from what they're requesting from the counties. He said this can be done in a way FMCHS pleases, through either reducing hours, finding cuts elsewhere in the budget, or a mixture.
So the process would not be dragged out further; the caveat was added that it will go to the county commissioners when the cuts are found, instead of going in front of the FMCHS board again.
This proposal was the one that ultimately stuck with a 9-3 vote, as Koons, Rabbe, Kristenson, Loveall, Paschke, Bleess, Paschke, Anderson, and Faribault County Commissioner Greg Young voted yes. Faribault County Commissioner Bill Groskreutz and Martin County Commissioner Joe Loughmiller joined Eisenmenger in voting no.
Later on in the meeting, it was discovered the 2027 fiscal year only has 25 pay periods instead of the regular 26. This is due to a technicality in the way FMCHS's January to January fiscal year works. Bleess said the addition of savings from one less pay period in the fiscal year they're budgeting for will make it easier for them to make that $504,000 in cuts to the local obligation. This change does not affect how much or how many times employees get paid.