Financial

The fiscal status of Elm City has seen several significant changes:

·         Illinois economy continues to show decline. All year long, the quarterly reports from the Comptroller’s office consistently indicate the state simply does not have enough cash to pay its bills. The net result is many providers working with the state are 6-8 months behind in collections from the state.

·         Current projections indicate Illinois has a budget hole of $13B dollars. Projections for FY 2012 indicate the hole moving to $15B-$16B. The state’s credit rating has been dropped at least 4 times in the last year.

·         Before the November election cycle, the state has started using expedited/hardship rationale to pay vendors (no cash, missing payroll, danger of closing, banks refuse loans) while vendors with significant cash/investments are simply not paid until months later.

·         At the start of FY 2011, DMH programming did not include in the DHS contract with ECC. All 830 residential funds had been cut from provider budgets statewide, but were later restored by the Governor. Part of the rationale has to be the Williams decision which will require over 4,000 people with mental illness to move from nursing homes. If the existing mental health residential system was dismantled, where would these people move to?

·         At Elm City, basic plan has existed for several years that outline staff layoffs, program closures, salary cuts and other items needed for downsizing if large funding cuts occur. The plan is reviewed by the Board several times a year. So far only Step 1 of the plan has been used at the start of FY 2010 when it appeared large funding changes were likely. Most items of that plan were reversed several months later.

·         Sales of state use products dropped significantly as budgets for various customers were cut or held back at the state level. This led to several situations where complaints were filed against ECC for non-compliance to contracts. They were all resolved when we responded by pointing out we still had bought and delivered products while the state did not maintain their part of the contractual relationship by paying the bills in a reasonable manner. The pressure to lower state use prices continues. State use customers will often search the Internet for cheaper prices and demand we meet them. We have successfully resisted this so far. Many state use product providers will only ship large volume deliveries.

·         Production work has remained steady, but pays on time. The only real down time comes when the customers simply run out of product.

·         Weighted interest rates for investments have dropped to 2.6%. In the current climate, re-invested CDs are lucky to be hitting 1.5% for 2-3 year periods. 

·         FY 2010 ended with an increase in net assets of $194,108 compared to $214,526 for FY 2009. Total Net assets for 2010 were $7,321,328 of which $3,814,699 was cash.

·         ECC is spending about $85,000-$100,000 per month to meet current bills. We have not borrowed any money for a line of credit unlike that vast majority of not-for-profits in Illinois. We have been able balance our cash pool to the $3.5M to $3.9M range by managing expenses.

Production

Remains steady. As mentioned above state use sales are down significantly. Products with Thermionics, Pactiv, Dickey-johns, and National Starch remain on going based on availability of parts. National Starch has been sold to Heigel which in turn has sold all of its tote operation to one of two tote coordinating companies in North America. The tote job is in the process of leaving ECC. Thermionics has expanded sales to Wal-Mart and other large box stores. They regularly use the fact of packing by people with disabilities to meet the new ‘greening’ emphasis.

Facility

The addition connecting Teaford and Admin buildings is complete. The new lunch room is used every day. The enclosed garden is finished and used.  A kitchen is being finished up with a 3-hole sink and grease pit immediately next to the lunchroom. Much of the CD packaging equipment has been stored in the basement for future use. The video cameras installed in Hanback have often been used as evidence of activities when accusations have been made against ECC employees or to document events that might involve OIG.

Consumers

Authorizations for service are often based on life/death status in the community setting or moving from the state facility.  Community based people are placed into the PUNS system. It almost always takes over 12 months from time of referral to funding authorization. People living in residential homes are also seeing very slow referrals based entirely on funding. Residential referrals must demonstrate a current severe need. Having any level of support is often the reason to deny authorization. JDC has seen some increases, but the pressure to move more people to the community has resulted in far more people leaving to a community setting. Our statistics are showing more physically aggressive people coming to ECC, but overall injuries remain relatively low. There is a dramatic increase in one-to-one supervisors coming with selected JDC residents.

Risk

Risk is in several areas

·         We maintain a complete insurance package for staff coverage (health, dental, life) and agency coverage (work comp, liability, occupancy, director/officer, auto, boiler, accident, profit sharing, and contract). Roxanne Myers handles staff and Grojean Insurance with Cincinnati covers agency. Health insurance rose 35% and a second increase of 35% in May 2011 is expected. Basic usage level remains high. Many hours were spent identifying alternative options. We moved from $1,500 deductible to $3,500 deductible with ECC covering some of that deductible increase.

·         Michigan Accident Fund has dropped ECC as an account based on payout ratios. One non-injury case cost more than ECC has paid Accident Fund since becoming a client. ECC was forced to find a new work comp provider. Grojean Insurance looked for providers and simply could not find a carrier willing to take on social service organizations. As a result we were put back into the risk pool with higher rates and the associated ARAP add-ons. Work Comp for calendar year 2011 will cost $79,000.

Program

·         CARF accreditation has been maintained.

·         DHS/DDD has dropped all requirements for national accreditation while developing their own criteria with some deemed status provided to agencies who maintain CARF. Part of this change comes from the constant unfunded mandate complaints coming community providers and the state’s very real financial problems. Part of this is also a method to maintain jobs within DDD.

·          DHS/DMH has decided that all providers receiving over $250,000 must meet national accreditation.

·         The annual Developmental Training surveys scored 98% and met all criteria.  

·         DMH Medicaid post payment reviews went from 2% last year to 77% this year. Reviewers were clearly looking for any trivial excuse to deny payment. This year it was an indication in the MHA of an assessment of community awareness by the person being served. A simple check box for “Adequate” would have been satisfactory based on a ‘new interpretation’ of existing protocols. Still there was no financial payback. ECC has exceeded the performance requirements of the contract, but DMH continues to find more ways to expand what needs to be accomplished to obtain additional funding.

·         Trips to the community remain high. There are regular shopping trips for many people. There are also many trips to events and other community settings.

·         We are increasingly separating people who live together to avoid conflicts. Particularly for people living at JDC, we need to separate individuals to avoid ongoing issues that come from simply being together too much. Problems originating at JDC often become behavioral ECC.

·         More expanded programs are needed as work has decreased from where it was 3 years ago before the closure of EMI.

Staff

Staff turnover remains low (under 10%) and basic staffing levels have been maintained. Quality of staff as a whole is very good. It is hard to tell if staff do not leave ECC because they like it here of there simply are not many other employment options in the Jacksonville area. Case manager attend CU courses as needed to maintain their certification. There have been bonuses and raises in the last year based on performance... 

Public Relations

·         ECC remains very involved in community activities. The ECC tent is used by 10-12 organizations throughout the area. We are involved with Special Olympics, Relay for Life, numerous Boards, Woodhaven Christmas Tree, Salvation Army bell ringing, diapers for Haiti, golf outings, and many community groups many of who have nothing to do directly with ECC. CEO is Secretary of the Board of IARF, on the Alvin Eades Board, and President of Kiwanis.

·         The AKtion club at ECC is associated with Kiwanis and remains very active.

·         Consumers have raised over $3,000 to give to various groups in the community.

·         WSEC taped a show for Illinois Stories that has aired state wide on many public television stations during January 2010.

Board Activities

Board remains very active in policy affairs of ECC. Meetings were decreased this year by eliminating committee meetings. CEO provides a pre-Board meeting letter of ongoing issues and highlight topics are covered at the monthly meeting. This process seems to be working. Board is made up of very diverse professionals, family, and members with disabilities. Controversial topics are discussed openly and often. The Board does not micro manage daily organizational operations, but does expect performance guideline to be followed. The Board reviews and recommends all financial operations, makes policy changes as needed, and approves/edits operational plans that directly affect staff and consumers at ECC.