Bills › 88th General Assembly
Relating to funding of county mental health and disability services by modifying provisions relating to the use of specified excess cash flow funds, and including effective date and retroactive applicability provisions. Effective 5-1-19
Sponsored by the House Human Resources Committee
Topics:Health careMental health & addiction
Same legislation: HF 548
Where it is now
- Done: IntroducedFebruary 27, 2019
- Done: SubcommitteeFebruary 27, 2019
- Done: House committeeMarch 6, 2019
- Done: Passes the HouseMarch 21, 2019
- Done: Senate committeeApril 2, 2019
- Done: Passes the SenateApril 17, 201950–0
- Done: To the GovernorApril 29, 2019
- Done: Signed into lawMay 1, 2019
Signed into law What’s a funnel?
What’s in it
391(4) provides that if a region is meeting the financial obligations for implementation of its regional service system management plan for a fiscal year and residual funding is anticipated, the regional administrator shall reserve an adequate amount of unobligated and unencumbered funds for cash flow of expenditure obligations in the next fiscal year. Additionally, for fiscal years beginning July 1, 2017, July 1, 2018, and July 1, 2019, that portion of each mental health region’s cash flow amount that exceeds percent of the gross expenditures from the combined account or from all separate county accounts in the fiscal year preceding the fiscal year in progress shall be used in whole or in part to fund the payment of services provided under the regional service system management plan.
Read the full explanation
This bill strikes the requirement that those excess amounts be used in that manner for those fiscal years. Under current law, for fiscal years beginning on or after July 1, 2021, based on certain population thresholds, each region’s cash flow amount is limited to or percent of the gross expenditures from the combined account or from all separate county accounts under control of the governing board for the fiscal year preceding the fiscal year in progress. The bill removes all population thresholds, delays implementation of the limitation until the fiscal year beginning July 1, 2023, and limits each region’s cash flow limitation percentage to percent. The bill makes similar changes to provisions governing the cash flow amounts held and used by individual counties within each region.424A for fiscal years beginning on or after July 1, 2023. An amount equal to the county’s cash flow reduction amount is required to be used to fund the county’s financial obligations for the payment of services provided under the regional service system management plan. Under the bill, the county cash flow reduction amount equals the sum of the county’s cash flow amount in the county services fund plus the most recent amount certified by the region for the county, minus percent of the gross expenditures from the county services fund in the fiscal year preceding the fiscal year in progress. The bill provides that to the extent necessary to implement the provisions of the bill, a county may amend that portion of the county’s budget related to cash flow amounts in the county mental health and disability services fund for the fiscal year beginning July 1, 2018.17, for the fiscal year beginning July 1, 2019, a county may recertify the county’s budget as necessary to implement the provisions of the bill. Similarly, to the extent necessary to implement the provisions of the bill, a mental health and disability services region may amend the region’s regional service system management plan or annual service and budget plan for the fiscal year beginning July 1, 2018, or for the fiscal year beginning July 1, 2019. The bill takes effect upon enactment and applies retroactively to July 1, 2018, for fiscal years beginning on or after that date.
Senate subcommittee
Named March 25, 2019. It hasn’t reported yet.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
AI summary This bill changes the amount of excess funds counties can keep for cash flow in the adult Mental Health and Disability Services system by allowing them to retain up to 40.0% of gross expenditures. Any county with a fund balance above this 40.0% limit beginning in fiscal year 2024 would be required to reduce its levy. The fiscal impact of this bill cannot be determined because it is unknown how quickly these regions will spend down their fund balances.2
Read the fiscal note
Description
House File 691 modifies the amount of excess funds counties are able to retain for cash flow for the adult Mental Health and Disability Services (MH/DS) system. Beginning in FY 2024, counties are limited to a fund balance reserved for cash flow of 40.0% of gross expenditures. Counties are required to reduce their levies by any dollar amount in excess of 40.0% beginning in FY 2024. If the Bill takes effect on or after March 15, 2019, a county may recertify its budget as necessary to implement the provisions of the Bill. In addition, MH/DS regions may amend the region’s regional service system management plan or annual service and budget plan for FY 2019 and FY 2020.
Background
Under current law beginning in FY 2018, counties were required to spend down fund balances on services required in their regional service system management plans within three years to 25.0% of gross expenditures. Beginning in FY 2022, counties are limited to a fund balance reserved for cash flow of 20.0% of gross expenditures if the region has a population equal to or greater than 100,000, or 25.0% of gross expenditures if the region has a population of fewer than 100,000. Counties will be required to reduce their levies by any dollar amount in excess of the cash flow amount.
Assumptions
Although counties levy funds individually, MH/DS fund balances are combined and calculated on a regional basis. In total, the regions had a combined ending fund balance in FY 2018 of $121.8 million, but regional fund balances varied from 5.4% of FY 2018 actual expenditures to 238.3% in the Southwest Iowa MH/DS region, which includes Polk County. It is assumed that the Bill will slow the reduction in fund balances as regions use the funds to fund current services and develop new services, as required by HF 2456 (FY 2018 Mental Health Complex Services Needs Act), instead of reducing their current levy rates to spend down fund balances.
Fiscal Impact
The fiscal impact of HF 691 cannot be determined, as it is unknown how quickly MH/DS regions will spend down fund balances, but any region that has a fund balance above 40.0% beginning in FY 2024 will be required to reduce its levy until the fund balance is below the 40.0% limit. Table 1 below details MH/DS regional ending fund balances and expenditures for FY 2018. Table 1 MH/DS Regional Ending Fund Balances — FY 2018
Sources
- Department of Human Services
- LSA analysis
- Final Fiscal Note – Mental Health Ending Balance, Regional General Funds · May 15, 2019
- Mental Health Ending Balance, Regional General Funds · March 12, 2019
Iowa Code it changes
Lobbying
11 for · 0 against · 14 undecided · Who →
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88th General Assembly