State moves to drop contract with Seven Counties Services

07/19/2014 09:13 AM

The Finance and Administration Cabinet Secretary Lori Flanery said she “understands the issues and concerns” raised by a legislative panel earlier this month and directed a state agency to cancel the contract with Seven Counties Services within 100 days.

Eleven days ago the Government Contract Review committee voted not to approve a $3.7 million two-year contract for Seven Counties Services to provide in-home family services to 300 families through the Health Cabinet’s Department of Community Based Services.

The moves was retribution meant to send a signal that lawmakers are “not happy with an agency that contracts with the state that gave us a bill for $90 million and still tried to do state business,” said Rep. Brent Yonts, D-Greenville, referring to the mental health agency’s bid to escape the Kentucky Employee Retirement System.

The Cabinet for Health and Family Services sent Flanery a letter asking that they keep the contract in place until October 31, so that they can put a contract in place with an alternate provider.

Click to download the letter the Cabinet for Health and Family Services sent the Finance Cabinet requesting extra time here: Seven County Ltr from CHFS 7-17-14.pdf

On Friday, Flanery sent a letter to the Government Contract Review Committee informing legislators that she was keeping the contract in place citing a minimum amount of time necessary to contract with another provider and transition services.

Read the letter the Cabinet sent the committee here: Seven Co Ltr from Flanery 7-18-14.pdf

The contract the lawmakers revoked is the Family Preservation Program which Seven Counties said, provides intensive in home and family services designed to keep families together and preserve home placements for children who are in crisis.

“The children served in this program have emotional and behavioral disabilities, and/or have been victims of abuse and neglect,” Gwen Cooper, the vice president of external affairs for Seven Counties said in a statement after the decision was made in early July.

There are 14 other mental health agencies in the state who also provide similar services in other parts of the state, and lawmakers contended that those agencies should get the contract.

At the end of May a judge ruled that Seven Counties Services based in the Louisville region could get bankruptcy protection, thus, allowing the agency to exit the Kentucky Employees Retirement System and leave the costs of the center’s retirees behind for the pension fund to cover. The Kentucky Retirement Systems board is appealing the ruling.

Leaders for Seven Counties have argued that the move was necessary because the center couldn’t afford the rising retirement contribution rates, which would eat up 40 percent of the payroll budget starting next month. Lawmakers see the move as an additional burden which could cost the pension system an additional $90 million if the judge’s ruling is upheld.

The Kentucky Retirement System is trying to move the case to the 6th Circuit Court of Appeals.


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