Minnesota disability service providers on the brink of collapse from COVID-19

For more than four decades, Options Inc. in Big Lake, Minn., has helped hundreds of people with intellectual and developmental disabilities find jobs in the mainstream workforce while serving as a refuge for people who have nowhere to go during the day.

But when the nonprofit's board recently analyzed its finances, the outlook was grim. Revenue at the day and employment service provider had plunged 80% since the pandemic began, while costs for its building and fleet of vans continued to pile up. The monthly losses had reached $100,000.

"We are in a constant state of distress," said Brenda Geldert, executive director of Options. "It's going to be impossible to survive unless we get some relief."

The coronavirus is inflicting a heavy toll on Minnesota's sprawling network of government-supported centers that provide job training, mental health therapy and other services for more than 30,000 adults with disabilities. Dozens of centers have been forced to close temporarily since March because of severe restrictions meant to slow the spread of the virus.

Now, after months of layoffs and furloughs, there are growing fears that this often-overlooked piece of the social safety net may collapse, leaving thousands in the lurch.

Advocates fear that the vulnerable populations that the centers serve — with disabilities as varied as autism spectrum disorder, cerebral palsy and Down syndrome — have become increasingly isolated and are not getting adequate therapy and daily stimulation. Many have been confined to four-bedroom group homes where the coronavirus has already struck. Statewide, more than 300 residents of group homes have contracted the virus and at least 19 have died, state health officials said.

At a legislative hearing Thursday, executives with a half-dozen of the state's largest disability service providers sounded the alarm, warning they are running out of cash and may not be able to survive the summer without emergency funding. They are supporting legislation that would give them $30 million in government grants to stay afloat until the COVID-19 restrictions are lifted and the centers can fully reopen. A relief package passed the Minnesota Senate during the special session by a 67-0 vote but never came to a vote in the House.

"Our entire disabilities services sector is on the verge of collapse," warned Sen. Jim Abeler, chairman of the Human Services Reform Finance and Policy Committee, which held the hearing.

In many rural communities, day service providers are major hubs of activity. They shuttle people to and from work and activities in the community, and provide a destination during the day for those with severe disabilities who might otherwise be isolated in group homes. In recent years, under pressure from the courts and federal regulators, they have begun providing more job and vocational services.

Yet many providers have been hemorrhaging cash since late March, when new federal guidance limited gatherings to curb the virus spread. Day and employment centers were considered especially vulnerable: People were interacting in closed environments for prolonged periods. There was also fear that they could spread the infection to their group homes, potentially exposing more people in closed settings.

In sometimes emotional testimony Thursday, one nonprofit executive after another described how the corona­virus had ravaged their operations, resulting in six-figure monthly losses, layoffs and rapidly depleting cash reserves. Many expressed frustration that, more than three months into the pandemic, the administration of Gov. Tim Walz had not come forward sooner with a rescue package.

At one point, Abeler waved a copy of the relief bill in the air and urged Walz to sign an executive order approving the money.

"Governor Walz, would you please rescue the disability service sector in Minnesota?" Abeler asked. "This is just so urgent. Clients literally will not thrive. … Some people will die."

Dawn Lamping, executive director of Floodwood Services and Training Inc., a day and employment provider about 40 miles west of Duluth, said monthly revenue has plummeted by 95% since the pandemic began. Without emergency funding, the program that serves about 60 adults with disabilities would run out of cash and be forced to close within six weeks.

"Over the last 43 years, [Floodwood Services and Training] has weathered some challenging times, but none have been as challenging or devastating as the current crisis," Lamping said, choking up during her testimony. "Unless our program receives emergency funding very soon, we will close."

Human Services Commissioner Jodi Harpstead said Thursday that she has been talking with day service providers to find creative ways that services can be provided without risking further spread of the contagion. This includes allowing services to be offered remotely via telephone or video­conference. She pointed out that job support services, for individuals with disabilities who are working in the community, have remained open.

"I have remained focused throughout this time on turning that dial as much as prudent given health risks to get the providers back in service of the people with disabilities they support," Harpstead said in a telephone interview.

Early this month, the Department of Human Services issued modified licensing rules allowing day service providers to reopen, provided they limit occupancy to half their capacity and deliver services in shorter, three-hour shifts to reduce exposure.

Yet as an additional safety precaution, people who live in group homes and other congregate care facilities were still prohibited from attending day activity centers; only those who live in their own homes or with family members were allowed back in. As a result, many day centers are still operating at less than 20% capacity.

With revenue depleted, day service providers from Fairmont, Minn., near the Iowa border, to the Iron Range are shedding staff, often by the hundreds. Late last month, Mankato-based MRCI Inc., one of the state's largest day service operators, initiated permanent layoffs of 300 staff at its seven locations, citing "unforeseeable business circumstances due to the coronavirus pandemic."

Statewide, more than 3,600 employees of day and employment service providers have been laid off or furloughed since the pandemic began, according to a count by the Minnesota Organization for Habilitation and Rehabilitation.

"We are in a world of hurt," said Sue Eisenmenger, executive director of STEP Inc., which provides employment support services to about 100 people with disabilities in southern Minnesota. She said her organization has already furloughed most of its employees and has begun to explore ways to dismantle its operations.

Many parents of people with significant disabilities said they fear their children will have no programs to return to when the pandemic finally subsides.

Melissa Winger of Bloomington said she has become increasingly concerned about the emotional and physical well-being of her 24-year-old son since his day program suspended operations on March 17.

Each morning, he would carefully prepare his backpack and wait in the lobby for the day program van, which would often take him to outings in the community. When the program closed, he became so upset by the rupture in his routine that he repeatedly banged his head against the wall of his group home, breaking his nose.

Now her son has nowhere to go during the day, except on walks around the perimeter of his group home in Plymouth, his mother said.

"This is a pretty traumatic situation for someone like my son who thrives on socialization," Winger said. "You put an abrupt end to everything they know, and they don't have the ability to understand why."

Chris Serres • 612-673-4308

Twitter: @chrisserres