ST. LOUIS • The bad news about funding cuts from the St. Louis Office of Developmental Disabilities Resources arrived in people’s inboxes on Monday.
Agencies that serve the city’s developmentally disabled learned that their share of a fund supported by nearly $10 million a year in property tax revenue was being cut.
It was so deep and unexpected, one recipient thought she was reading a typo.
Some agencies were informed they were losing 15 percent to 20 percent of grant money to provide workforce development, independent living and other services.
Others saw their programs eliminated or cut to the point they would have to shut them down. In one case, an agency that expected a $25,000 increase in funding to fight obesity was instead told it was getting nothing.
Just a month ago, leaders of the agencies had thought their grants were secure. Some say they were even encouraged to ask for more money to expand services.
Now, in letters from executive director Michelle Darden of the St. Louis Office of Developmental Disabilities Resources, they were being told that the office was seeking to avoid duplication of services and to cut back on underused programs.
On Thursday, nearly 85 representatives from those agencies learned the problem likely has more to do with overspending and poor financial planning.
In a brief presentation at the United Way offices, Darden explained the grant-making office, which brings in about $9.9 million annually in dedicated city real estate taxes, had intentionally spent down more than $17 million in reserves in less than four years. Darden, who has headed the office for about 14 years, said that without immediate cutbacks the reserves would dwindle to just $1.2 million by July 2017, and that wasn’t nearly enough.
She warned more cuts would have come next year — as much as $1.5 million.
“We cannot operate that way, honestly,” she said.
During her presentation, board members stayed silent and did not look Darden’s way. Afterward, neither she nor board members addressed how these decisions about the reserves had been made. They offered no explanation even after Wendy Sullivan, CEO of Easter Seals Midwest, chastised the board.
“My question is how did this happen? Who is accountable? I just have to hope, to believe that you are asking those questions and that you are trying to figure it out,” Sullivan said.
During a break in the meeting, William Siedhoff, board vice chairman, acknowledged he and other newer board members were learning of poor management and oversight. He said the office was in an “unbelievable” financial situation.
“There didn’t seem to be any long-range plan,” he said. “And now it’s created a situation of drastic cuts and it impacts a group of people who are the most vulnerable. It was just unbelievable.”
After the meeting, board chairman Ken Franklin said decisions about the reserve were made prior to his tenure which started in 2014. He said there were red flags, but the gravity of the public agency’s current finances was not fully made clear until a few months ago. He said the board at this point was dealing with resolving the grant cycle before the new fiscal year and had yet to deal with personnel issues involving leadership.
During the meeting, Franklin acknowledged the grant-receiving agencies were in for a rocky time. He assured them that each would be contacted individually to appeal their funding recommendations and to come up with solutions.
But he was firm in the board’s resolve to scale back funding to sustain programs that met core needs for the developmentally disabled.
Sheila Suderwalla, executive director of Artists First, held back tears when she addressed the board regarding a 70 percent cut to her agency’s program that helps the developmentally disabled earn income off their own art.
She said the group was encouraged by the disabilities office to expand its program and hired extra staff. Now, she said, the entire nonprofit will likely have to shut down because of the $68,000 cut.
“We had a waiting list for clients,” she said. “I just shudder when I think of how this is going to affect so many people.”