The proverbial handwriting is on the wall.

Now it's up to the St. Croix County Health and Human Services Board to decide how to solve the funding shortfall for St. Croix Industries and its clients. The issue was discussed in some detail at Monday's St. Croix County Health and Human Services Board meeting, but no action was taken.

County officials have less than a year to figure out how to pay for services provided to adult residents with disabilities. When 2013 is done, the county will see a significant cut in funding for such services.

For the past 39 years, the county-operated St. Croix Industries has provided job opportunities and training for those who may otherwise be unemployable due to their disabilities. But over the past few years, state funding of such vocational and rehabilitation services has declined.

Last year, when the region's managed care organization (Community Health Partners) slashed reimbursement rates, local officials worried that they'd have to dip into reserves to pay for programs.

A new MCO took over the region this year, reinstating previous reimbursement rates. But the county was given a year to adjust its programs or raise revenue, because reimbursement rates are set to be scaled back again in 2014.

According to Fred Johnson, director of the Health and Human Services Department, the expected operational loss for St. Croix Industries in 2014 could be about $340,000. This year's loss is projected to be $92,000.

Johnson urged the HHS Board members to think about possible solutions to the situation. He said the county could choose one of three options: 1) Supplement the St. Croix Industries programs with general tax levy dollars; 2) Cut programs, or wages and benefits for employees, to reduce expenses; or 3) Farm out the vocational and training program to a non-profit service organization.

Almost four decades ago, Johnson said, St. Croix County proactively set up the St. Croix Industries program for people with disabilities to improve their quality of life. He said counties are not mandated to provide the service, but it serves that particular part of St. Croix County's population well.

If other counties provide a similar service, most aren't directly involved in its operation, Johnson said. They pay money to a non-profit that runs the services.

Clark Schroeder, St. Croix Industries administrator, said the county program made a profit for many years and put funds into reserve for just such an occasion. But that fund, which sits at about $500,000, won't last long once reimbursement levels take a nose dive.

Schroeder said the county's program probably pays higher wages and has a better benefit package than a non-profit organization might pay. He said those expenses may have to be addressed if St. Croix Industries is to survive in its present form.

Another cost-cutting measure could be reducing the number of days clients with disabilities can receive services, some suggested.

HHS Board member Fred Yoerg said the state is forcing the issue, reducing payments in order to cut the Department of Health Services budget.

"They know they're squeezing this thing until eventually it can't work," he claimed. "At what time is there no blood left in the turnip? How do they think anyone can continue in this sector?"

Schroeder said he felt the cuts are a way for the state to figure out the lowest price they can pay for the services needed.

Yoerg said he'd be in favor of trying to keep St. Croix Industries operating, rather than contracting with an outside organization.

The HHS Board members were encouraged to think about the issue prior to the group's next meeting. Johnson said the county administrators would provide additional information about the situation and lay out possible options for the future, leaving the final decision to the HHS Board and the St. Croix County Board.

For the complete story, see this week's New Richmond News.