For years now, the local Area Agency on Aging has been housed under an umbrella agency that it says is requiring it to pay too much for overhead, administration and other costs.
Going out on its own could free up as much as $60,000 that it could spend directly on seniors, the agency’s former director estimated recently.
But the umbrella agency, the Mid-Columbia Council of Governments (MCCOG), has asked that a committee the Area Agency on Agency (AAA) has tasked with studying a possible move hold off while a larger overall review of MCCOG is done.
It would be up to MCCOG to decide whether to release AAA to go out on its own.
Since MCCOG just got an interim executive director who will only be here until November, it is a perfect time to get a truly independent analysis, a MCCOG board member said at a recent board meeting.
The interim director, David Meriwether, will have his analysis done by June 27.
Several factors are influencing increasing costs placed by MCCOG on AAA. One is that over the last year, a large tenant — the transportation network— moved out of the MCCOG building at 12th and Kelly and into its own building.
Another service under MCCOG, workforce development, also moved to the State Office Building in the last year.
That leaves fewer entities to share the costs of building expenses.
Meriwether will be unavailable during July, with other commitments, which will push a decision by the MCCOG board until August.
However, the upcoming budget — in which MCCOG has increased costs to the AAA — takes effect July 1. Paying those increased costs would mean less money for seniors, said Louise Sargent, who sits on the senior advisory council for the AAA.
Clients the AAA helps include people who can’t bathe on their own, or can’t cook for themselves anymore, she said. “We’re talking about interrupting vital services,” if the proposed budget takes effect, she said.
She asked that a decision be made as soon as possible on whether it made financial sense for the AAA to establish itself under its own non-profit status.
Regarding proposed increases in costs charged to the AAA, Meriwether told the Chronicle, “I don’t know that that would necessarily involve a —quote — cut in services. Obviously, that has to come from somewhere.” He said it is possible other non-service related cuts could be made.
Caroline Wood, who last week resigned as executive director of the AAA, said earlier she’d studied other rural AAA programs in Oregon, and it was typical for them to be stand-alone entities or part of non-profits.
Councils of governments are designed to provide economies of scale to house multiple government-funded programs under one roof, where they can share costs.
MCCOG has five programs, giving it limited economy of scale, Wood said earlier. In contrast, COGs in the Willamette Valley have up to 17 contributing agencies, helping disperse administrative costs more thinly.
The other four programs at MCCOG are transportation, building codes, workforce development, and Students Recycling Used Technology (StRUT).
The MCCOG board decided at its April 25 meeting it will eliminate the StRUT program by next December if it can’t become self-sufficient by July 1. It also voted to relinquish the Workforce Innovation & Opportunity Act Youth Program, with the transition process to extend through Sept. 30.
Part of Meriwether’s analysis, he said, will be whether MCCOG itself remains viable.
MCCOG Chair Steve Kramer — who is also a Wasco County Commissioner – asked if the board was willing to meet early in August instead of its usual late-August timeframe.
“I don’t want to see the services go away, so we have some tough issues to work through,” Kramer said of AAA services.
In March, the senior advisory council asked Wood to investigate whether there was a more efficient way to deliver services to seniors.
“Overhead and other expenses have really cut into our very limited budget, keeping us from adequately addressing the needs that exist,” Paul Zastrow, advisory council chair, wrote in a report presented to the MCCOG board April 25.
“Concerns that have become constant are the expenses charged to the AAA budget for rent, consumable and other goods that seem quite high, keeping money for service delivery lower than we’d like or desire,” Zastrow wrote.
An earlier report by Wood to the advisory council stated the pass-through rate of federal funds to senior nutrition programs has been between 44 percent and 66 percent over the past 10 years.
By law, the report said, indirect costs to the AAA program are to be limited to 10 percent, but they are at 25 percent of grants now, she said.
The AAA has long chafed at the overhead costs it is required to pay to MCCOG.
Zastrow said in his report, “It was pointed out that almost all equipment and machines in use belong not to the AAA, but to MCCOG. Additionally, our basic costs for rent, etc., amount to about 25 percent of the costs, while the AAA is only six percent of the overall income stream,” he wrote.
Meriwether said costs allocated to AAA are “not just rent. When you talk about the building, it includes utilities, it includes the coffee machine and all that.
It includes IT; phones. It’s a lot of the support system that is within the organization that is made available here that is affected by that.”
Zastrow added concerns over transparency exist, and “our AAA has had the greatest turnover of executive staff of all in Oregon, and that some sites offering meals delivery have pulled out, or have been cut off funding.”
He noted that a state investigation of the local AAA several years ago produced a list of 23 recommendations, only three of which have been implemented.
He said that was bothersome, as the needs of the senior demographic are increasing sharply.
A key problem is lack of participation by AAA in the MCCOG budget process, he said.
The AAA budget pays out $58,800 in MCCOG staff costs, $117,000 in materials services and $60,200 in indirect cost allocations, Wood wrote in an earlier report.
AAA represents 6 percent of the MCCOG budget, or $730,000 out of a total $12.3 million. She noted that while AAA accounts for 6 percent of the MCCOG budget, “we pay for 25 percent of the facility costs. Our cost allocation will nearly double next [fiscal year.]”
The facility allocation to AAA in the current fiscal year (FY16-17) is $13,550. The proposed budget for FY 2017-18, which begins July 1, is $22,071.