Sound, the Tukwila-based nonprofit and King County’s largest behavioral health services provider, plans to lay off 25 administrative employees and cut an additional 31 vacant clinical positions amid shortfalls driven “by the COVID-19 pandemic and the new King County funding model,” the nonprofit’s top executive announced in an email this week.
President and Chief Executive Officer Patrick Evans revealed the grim news in an email to Sound employees on Monday, saying the nonprofit will end the year with a $2.5 million loss and a projected $9.2 million budget shortfall next year.
“Such losses are not sustainable and could put Sound’s future in jeopardy if we do not take immediate, corrective action,” Evans’ email said.
A spokesperson for Sound said this week that because the 25 layoffs involve administrative — not clinical — employees, they won’t impact services to patients.
“Our clients will continue to receive the care they need without interruption,” spokesperson Steve McLean said.
The other 31 positions targeted for cuts are clinical job slots that already were vacant. They will disappear through attrition, as Sound forgoes filling them in the coming year.
Formerly known as Sound Mental Health, Sound annually serves about 19,000 people, including many poor and homeless residents, with mental health services, family-oriented counseling and addiction treatment at 17 locations in King County. The private nonprofit currently holds four contracts with King County’s Department of Community and Human Services worth more than $53 million.
Kelli Nomura, director of King County’s Behavioral Health and Recovery Division, said Wednesday that Sound so far is the only provider of about 40 in the county’s integrated care network to confirm forthcoming staff cuts in the wake of the county’s own recent pandemic-driven cuts to behavioral health program funding. But it likely won’t be the only provider to face cuts, she said.
“Our other providers are clearly looking at how they’re going to manage these cuts and where they’re going to make some changes or adjustments,” Nomura said.
Sound and other providers are funded by a combination of patient Medicaid reimbursements and allocations generated by the county’s Mental Illness and Drug Dependency (MIDD) 0.1% sales tax. The pandemic has disrupted both funding sources, Nomura said.
“Many providers, not just Sound, offer group services and drop-in programs for treatment needs, with in-person support and face-to-face contact,” she said. “You can’t do that now with current COVID restrictions, for health and safety reasons.”
While virtual appointments have filled some of the gaps, she said, “anyone with a drop-in program has been significantly impacted to do those kinds of services, and to get paid for them.”
In addition, King County’s recently adopted $12.6 billion budget for 2021-22 is $900 million slimmer than its current budget, largely due to declining revenues driven by the pandemic. Sharp declines in state sales tax revenues resulted in a $8.7 million cut to non-Medicaid services in the coming budget.
Those cuts came on top of $18 million in reductions to programs funded by the MIDD in the next budget, as well as $12 million in cuts to MIDD-funded programs earlier this year as sales tax revenues shrunk.
The cuts to the mental health system come “at a time when the need has never been higher,” Nomura said.
In his email to employees, Sound CEO Evans noted the nonprofit over the past year had “reduced expenses and prioritized cost-cutting measures to minimize our losses” before resorting to layoffs.
“However, we cannot offset the projected loss in revenue with cost-cutting measures alone,” his email said.
Sound’s budget cuts come about four months after the nonprofit shut down the El Rey, a 60-bed residential facility for people with serious mental illness in Seattle’s Belltown neighborhood. Local mental health service providers have described the facility as a key clinic in the area’s social service safety net.
The El Rey’s closure, which came less than a year after Sound merged with Community Psychiatric Clinic, the facility’s former owner, wasn’t related to current budget issues, spokesperson McLean said.
Rather, the decision was based on “the building’s deteriorated condition and the costs associated with bringing it up to safety standards that ensured the safety of our clients and team members,” he said.
Correction: A previous version of this story inaccurately reported the amount of cuts to funding for behavioral health programs in King County’s 2021-22 budget due to inaccurate information provided by the county.