Analysis: County politics shielded Mental Health Board from change

The “politicization” of the McHenry County Mental Health Board became too much for former member Brett Wisnauski.

When he resigned last August – one of eight members to quit or be forced out over the past 12 months – he alleged that County Board politics over the past year was hampering the board’s mission to help the county’s mentally ill and disabled. Recent upheaval comes after years of allegations that the agency has become a top-heavy bureaucracy that spends too much on itself.

But history tells a different story from the idea that the intertwining of the Mental Health Board and county politics is a new development. It has gone on for decades. And until now, the Mental Health Board very much benefited from it.

Profligacy with public money – 90 percent of the board’s revenue comes straight from taxes – has been a recurring accusation for the agency’s critics. It flared when the board gave raises and racked up questionable expenses during the County Board’s budget crisis in the late 1990s, and again in 2010 when it borrowed $4 million to almost quadruple the size of its Crystal Lake headquarters.

Accusations of bureaucratic bloating are nothing new. They arose as the Mental Health Board’s staff grew from 14 employees in the late 1990s to 50 full-time equivalents when the County Board approved the building expansion.

It was accused of negligence when domestic violence agency Turning Point faced allegations of rampant budget mismanagement in 2004, and again last year when Family Service and Community Mental Health Center went bankrupt.

Both incidents prompted efforts to oust a Mental Health Board president – one of county government’s few powers over such boards is the appointment of its members.

In both cases, the Mental Health Board was accused of trying to strong-arm its client agencies into lobbying to save the presidents. In both cases, accusations arose that the County Board chairman was trying to stop change.

People seeking reform of the Mental Health Board over the past 15 years have raised serious issues and asked pointed questions. They demanded new blood in the wake of decisions they considered the most egregious.

And until very recently, public records show, “politicization” helped the Mental Health Board by ensuring reform attempts went nowhere.

'Tired of hearing it’

The Mental Health Board came a long way between its 1967 creation by referendum to disburse tax funds to deserving agencies and the County Board budget crisis of the late 1990s.

Executive Director Dennis Smith oversaw a $400,000 budget when he became the board’s first and only employee in 1975. By 1997 the staff had grown to 14, Smith’s salary had grown to $76,835, and the board had a $9.1 million budget, $5.7 million of which came from its property-tax levy.

As the County Board grappled with balancing a massive budget deficit, members of several key committees began questioning Mental Health Board spending.

While the County Board mandated 16 percent budget cuts by all departments for the 1998 fiscal year, the Mental Health Board gave its employees two 2.5-percent raises, one of them retroactive. Criticism arose over benefit packages that were unavailable to other county employees, and over expenses such as $900 in restaurant bills in December 1997 alone.

At a contentious September 1997 meeting of the Public Health and Human Services Committee tasked with Mental Health Board oversight, several members and then-County Board Chairwoman Dianne Klemm grilled Smith and his board. But they had a strong defender in Mike Tryon, who chaired the committee and held the County Board’s voting seat on the Mental Health Board.

Committee member Wayne Kurzeja had started commenting on Mental Health Board spending when Tryon cut him off.

“I’ve heard this speech before. I’m tired of hearing it,” Tryon told him.

Kurzeja told Tryon that it was not “the chairman’s job to take people off the hot seat when we’re trying to put them on the hot seat.” A frustrated Klemm asked Tryon to “stop answering my questions” that she was asking of Mental Health Board leaders.

Tryon and the Mental Health Board had legitimate concerns with the County Board budget process. In an effort to balance its own budget, county government in past years had cut into mental health revenue because it then had power to freeze that levy in order to raise others under its budgetary umbrella.

Klemm in early 1998 tried to remove Tryon from the Mental Health Board, alleging that he was “acting like a mascot” rather than a watchdog. But Klemm dropped the idea – she was trying to remove other unrelated appointees as well – over strong protest that she was leading a political vendetta.

Tryon prevailed, and later that year defeated Klemm to become County Board chairman. The Mental Health Board prevailed as well, and lawmakers, at its behest, passed a law forbidding county boards from manipulating the mental health levy.

After Tryon’s election in November 2004 to the Illinois House, the County Board elected two-term member Ken Koehler as chairman. He held the job barely a week before he, too, was drawn into Mental Health Board politics.

The county’s public health committee decided more fiscal control was needed and voted to replace Mental Health Board President Bev Thomas. Koehler stopped that from happening.

'Empire building’

Four days into Koehler’s chairmanship, the public health committee decided against appointing Thomas, an 18-year board veteran, on a 3-3 split.

The bloc opposing Thomas’ reappointment said her board operated too independently and needed new direction to bring it into more compliance with county practices.

The executive director of the county’s largest social service provider – which has also traditionally been the loudest critic of Mental Health Board spending – had much more to say.

Jeff Epstein, then executive director at Pioneer Center for Human Services, submitted a rambling 37-page report to the committee accusing the board of “empire building,” bloated administration and favoritism in funding agencies.

By 2004, the Mental Health Board’s budget had grown to $14 million – $8.6 million of it from the levy – and it had 24 employees, almost double its 1998 roster. Director Dennis Smith was now making $103,000 a year.

“An empire has been built in the county, as it is known statewide, at the expense of Mental Health, Developmental Disabilities and Substance Abuse Services [sic],” Epstein wrote in his report, obtained under the Illinois Freedom of Information Act.

He painted Smith as domineering and Thomas as unwilling to supervise him. Epstein also alleged that the board should have anticipated the 2004 financial meltdown at Turning Point, which fired its executive director amid allegations of financial mismanagement.

Appointments to the board came up for a County Board vote in January 2005. Contrary to the committee’s recommendation, Thomas was among them.

Koehler, who said Thomas had too much experience to be discarded, created a vacancy for her to fill by convincing another member to push up his planned departure a year early. The County Board approved all four Mental Health Board appointments on one 18-5 vote with no discussion.

But discussion aplenty, and more fuel for critics, would be generated several months later. Smith, who was poised to retire after 30 years at the helm, made a controversial funding request to boost his Illinois Municipal Retirement Fund pension by 6 percent by buying three more years of seniority.

After months of wrangling, a plan to allow Smith to get a 3 percent boost squeaked through on a 12-11 County Board vote. Under the plan, Smith would pay $20,142 into the system, and the Mental Health Board would pay $28,656. However, Smith said he never exercised the option and never went through with taking the pension boost.

Critics questioned whether the money could be better spent.

“My primary objection is that it’s using taxpayer money that could be going to other programs,” former County Board member Ann Kate said after the vote.

Smith this year will receive $76,784 from the IMRF, according to records. His pension will increase to $78,665 in 2014.

Smith was succeeded by Sandy Lewis, who made attempts to bring the board’s compensation decisions, though independent under state law, into greater compliance with the County Board’s wishes. But criticism mounted as the board’s size, spending – and headquarters – grew.

The County Board, over the objections of Pioneer Center and several other agencies, voted in 2009 to allow the Mental Health Board to borrow $4 million in federal economic stimulus bonds to add 22,000 square feet to its Crystal Lake headquarters. Its staff by then had grown to 50 full-time equivalents.

The Mental Health Board in 2012 spent about $1.8 million in a failed attempt to prevent Family Service, the county’s oldest mental health agency, from closing. Shortly after that, in a move the board said was unrelated, Lewis took another job and her two top deputies announced their retirement.

Lewis accepted a job in Virginia as an assistant professor of psychiatry and director of a mental health center. She had received her doctorate just months earlier – under her contract, McHenry County taxpayers paid at least $30,000 of her tuition and fees, records show.

Those spending decisions and leadership shakeup came months before an election shakeup at the County Board, which flipped the longtime trend of county politics shielding the Mental Health Board.

Winds of change

Just as his predecessor did seven years prior, Pioneer Center Executive Director Patrick Maynard implored the County Board in January 2013 to take advantage of four expiring terms to put new faces on the Mental Health Board.

There was no lack of public interest – 15 candidates applied. More importantly, there was interest on the new County Board.

The November election put nine new people on the County Board, which the following month elected Tina Hill as chairwoman, denying Koehler a fifth two-year term. Hill gave the chairmanship of the public health committee to Donna Kurtz, a longtime Mental Health Board critic.

Hill said Kurtz made clear to her that she wanted to pursue reforms.

“I wouldn’t say I support the reforms so much as I would say I supported the voice,” Hill said.

But Hill didn’t know where other people on the new committee stood. It turned out that the shakeup gave Kurtz a majority on the seven-member committee with which to enact changes with full County Board approval. Hill also appointed fiscal hawk Paula Yensen, D-Lake in the Hills, to hold the board’s voting seat on the Mental Health Board.

Mental Health Board leaders went on the offensive, just as past ones had done when faced with serious scrutiny. Board President Lee Ellis – whose term was one of those expiring – wrote a guest column defending the agency and critical of a Northwest Herald article about Maynard’s comments. Interim Director Todd Schroll addressed the County Board at its following meeting, and the board began submitting hundreds of pages of supporting documents to each County Board member.

But Kurtz’ committee two weeks later grilled Ellis and recommended rejecting him in favor of three new members.

Ellis’ statement in his column that the board spends only 6 percent of its budget on administration came back to haunt him at the hearing. The board’s own 2012 annual report later acknowledged that administrative expenses were in fact 17 percent – almost triple Ellis’ estimate – if the costs of the new building are factored in.

The full County Board overwhelmingly approved the slate of new members. But Hill, like Koehler and Klemm before her, was drawn into a political fight.

She faced allegations of politics as usual after she postponed the vote for two weeks because the agenda for the committee’s original vote did not comply with new Illinois Open Meetings Act requirements. Ellis’ supporters took advantage of the time to ask several members, as well as agencies receiving Mental Health Board funding, to fight for his reappointment.

Hill was later criticized for advancing her own candidate, who was ultimately approved by the board, after the public health committee’s controversial pick to fill another vacancy was crushed on an 18-6 vote.

Hill also considered removing Sandra Fay Salgado, who often voted with the reform bloc, from Kurtz’s committee. Hill had alleged that Salgado’s membership was a conflict of interest, because she worked for Pioneer Center. But Hill relented under pressure – critics pointed out that former committee chairwoman Virginia Peschke worked for an agency that receives about $50,000 a year in Mental Health Board funding.

Five of the seven present members of the Mental Health Board were appointed this year. They have a lot of work to do – a financial day of reckoning may have arrived.

Maxed out

Property values, not politics, are driving the Mental Health Board’s present financial woes.

Values plummeted with the bursting of the housing bubble. Most local governments have coped because they have not yet reached their maximum tax rates, and can raise them to ensure they don’t lose revenue when overall values decline.

But the Mental Health Board has no such wiggle room. Its rate of 15 cents per $100 in assessed value is the maximum that state law allows mental health boards to levy. Its $11.475 million levy request for next year is down more than $1.2 million from what it received in 2012. This is on top of flagging state revenues.

Its tentative 2014 budget keeps whole, and slightly increases to $8.7 million, what it disburses to the 24 agencies that receive its funding. But it has started taking an ax to the long-criticized administrative and staff budget.

Its staff roster for next year will decrease almost by half, from 33 to 19 full-time equivalents. It is spinning off its programs to coordinate services to client agencies. Its webpage has now been folded into that of McHenry County government. The new board sacked the long-time attorney after alleging he billed too much – the old board raised his hourly rate last year to $250 – for unnecessary services.

Concerns about the building expansion may have turned out to be prescient. Kurtz and others pounce on the fact that the board, according to its annual report, spent $801,376 last fiscal year on facility expenses such as finishing the addition and paying back the bonds.

Hill and Kurtz have differing opinions on whether county politics shielded the Mental Health Board from past restraint that would have staved off the present fiscal problem.

While Kurtz called past actions a classic example of government officials “going with the flow” to protect the status quo, Hill cited the autonomy that state law gives mental health boards.

“I wouldn’t say that there was a protective bubble per se, but that [the County Board] agreed with the direction the Mental Health Board was going, and didn’t want any change,” Hill said.

Kurtz called the past incidents missed opportunities.

“I think if the board and the previous executive directors recognized that keeping a very lean, mean administrative organization was critical to serving the needs of the public, they would have kept their organization small,” Kurtz said. “When you never have anybody trying to stop you on your administrative costs, you keep expanding. And that’s what’s happened here.”

(NOTE TO READERS: This story was updated to clarify information regarding former Mental Health Board Director Dennis Smith's pension.)

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