BEMIDJI -- Beltrami County's continuing financial woes, tied heavily to a growing number of foster care cases, won’t be solved internally. And officials are looking to the state to help out.
That determination came from elected officials and staff alike at a special meeting Tuesday, where a fiscal analysis of the county's future was presented. The analysis, compiled by CliftonLarsonAllen Wealth Advisors, summarized the county's current issues and the unsustainable path ahead.
If out-of-home placement expenses continue to increase, county officials can expect the general fund balance to go negative by either 2022 or 2023, the report said.
A model based on a five-year average of foster care cost increases shows a 12 percent rise for out-of-home placement. The model shows the county's general fund balance in the red by $3.6 million in 2022 and at a negative $15.3 million by 2024.
A model based on a two-year average for out-of-home placement inflation, shows a cost increase of 1 percent for county services and 10 percent for cases handled by the Red Lake Nation. Under this projected trend, the general fund balance could have a $500,000 shortfall in 2023 and a negative $3.9 million balance by 2024.
Beltrami County finds itself in the dire financial outlook because of the number of children in out-of-home placements has been steadily on the rise the past few years, driven mostly by the opioid crisis.
In 2008, the number of children in placement was 471. By 2014 the number was 919 and in 2017, there were 1,284 children in out-of-home placement.
At the end of 2017, the total expense for out-of-home placements was $11.9 million. The property tax levy included $4.1 million for the costs, while federal and state resources, along with third party reimbursements, covered $4.75 million. Because of the shortfall, though, more than $3 million was transferred from the county’s general fund to the county Health and Human Services Department.
Beltrami County Administrator Kay Mack reaffirmed the need to seek state support on Tuesday.
"We have to keep hammering,” Mack said. “There has to be some legislative remedy. The impact needs to fall on a much larger base than Beltrami County property taxes. I personally believe we should send a letter to the governor's office, the state Department of Human Services and key legislative committees letting them know what we're facing."
District 3 Commissioner Richard Anderson called the situation an "unfunded mandate."
"That's what's actually happening. We have statutes we have to follow," Anderson said. "If we don't follow them, we get our hands slapped. If we do follow them, we can go into debt we can't afford. We can't ask our people to come up with this kind of funding because it's not the county's issue as much as it is the mandate from the state."
Mack said a bill to provide out-of-home placement relief has been introduced in the state Senate with companion legislation in the House. Co-authors for the legislation include District 2 and District 5 Sens. Paul Utke, R-Park Rapids, and Justin Eichorn, R-Grand Rapids.
District 2 Commissioner Reed Olson noted how Minnesota is behind only Ohio where counties and/or local entities cover most of out-of-home placement expenses.
"Minnesota is one of two states in the nation where the counties take on the lion's share of the costs from out-of-home placement," Olson said. "For most states in the union, it doesn't even touch the county. We're in a unique position where we're saddled with a lot of the costs."
Along with state funding, Mack also touched on a proposed initiative by the Red Lake Nation to become more independent in out-of-home placement services.
While the Red Lake government is legally responsible for those services, the county remains financially responsible, as it reimburses the tribe for out-of-home placement costs. If the initiative went into action, Red Lake would work directly with the state and federal governments on reimbursement matters.
According to Mack, the Red Lake initiative was included in Gov. Tim Walz's budget. However, implementation could take at least two years.