County approves additional loans to Lifeline
Originally published February 21, 2012 at 12:43 p.m., updated February 21, 2012 at 6:24 p.m.
Clark County commissioners on Tuesday voted to loan Lifeline Connections up to $560,000 and defer a portion of Lifeline’s rent payments at the Center for Community Health.
The pledge of assistance follows a $190,000 loan made Feb. 8 so the private nonprofit could make payroll.
Commissioners Steve Stuart and Tom Mielke approved the contract with Lifeline, which calls for Lifeline to start repaying the loans in July.
Commissioner Marc Boldt, who triggered controversy by voting Feb. 8 to approve the emergency loan, abstained from voting. The controversy was prompted by the appearance of a conflict of interest because his wife was employed as an intake coordinator at Lifeline. Dawn Boldt resigned Feb. 9.
Clark County Chief Civil Deputy Prosecutor Bronson Potter said Boldt didn’t violate any laws or guidelines by voting Feb. 8, but because of the appearance of the conflict Boldt has opted to not cast subsequent votes concerning financial assistance for Lifeline.
Commissioners authorized Clark County Administrator Bill Barron to loan Lifeline up to $410,000 this week, plus an additional $150,000 if needed. The need will be determined by Barron, who will have access to Lifeline’s financial records.
Barron can also defer a portion of up to six months’ rent. Lifeline, the largest tenant in the Center for Community Health, pays the county a total of $102,154 a month for rent; Barron can defer what Lifeline pays to cover the county’s debt service payment ($60,978 a month) for up to six months.
The loans are coming out of the county’s general fund. The interest rate is 1.98 percent, which is what the county receives when it takes out loans.
Lifeline, which is in the process of finding a new executive director, will have to have an “independent organizational assessment” and prove to the county it has a sustainable business model.
“Somehow, we’re going to make it successful,” Mielke said.
Lifeline’s cash-flow crisis was attributed to billing errors made by an outside company (Lifeline now does its own billing) and growing pains triggered by Lifeline’s switch to more private-pay patients. Dr. Gilbert M. Simas, Lifeline’s medical director and interim executive director, said having more private-pay patients will allow Lifeline to subsidize publicly funded treatment,
Lifeline has had a 28 percent reduction in state funding, said John Cox, the county’s director of drug and alcohol services.
Cox said Lifeline’s long-term projections are favorable but adjusting to the length of time it takes private insurance to reimburse for services has added to the short-term cash flow shortage.
Simas told commissioners he’s very confident that Lifeline will be able to start repaying the loans this summer.
Lifeline also has to repay $395,000 it used on a line of credit from Riverview Community Bank.
Prior to the vote, more than two dozen people testified on the need for Lifeline Connections, which offers the only inpatient substance abuse treatment for adults in the county and has a contract with the county to treat defendants who are accepted into drug court.
Dr. Michael Albrich, the medical director for emergency services at Legacy Salmon Creek Medical Center, told commissioners, “I’m here for full support of whatever you can do for Lifeline.” Albrich praised Lifeline’s treatment model and said if Lifeline closed, it would increase the number of addicts who end up in the ER.
Tonya Rulli, a senior deputy prosecuting attorney, told commissioners that the county prosecutor’s office would see an increase in drug cases and property crimes if Lifeline closed, as people often steal items to sell for money to buy drugs. She said the five-year recidivism rate for drug court graduates is 18 percent; convicted felons who do not go through drug court have a five-year recidivism rate of 65 percent.
Commissioners heard from several former Lifeline patients who credited the treatment center with turning their lives around.
Stuart said commissioners understand that Lifeline provides an essential service, but the key will be how effective Lifeline can be in delivering it in a sustainable way.
Stephanie Rice: 360-735-4508 or firstname.lastname@example.org.