State ex rel. Southern Hills Mental Health Center, Inc. v. Dubois County

Decision Date24 March 1983
Docket NumberNo. 1-982A255,1-982A255
Citation446 N.E.2d 996
PartiesSTATE of Indiana, ex rel. SOUTHERN HILLS MENTAL HEALTH CENTER, INC., Plaintiff-Appellant, v. DUBOIS COUNTY, Indiana; Hilda Schmitt, Dubois County Auditor; Basil Kunkel, Dubois County Treasurer; Richard Eckerle, John Sternberg, Eugene Hostetter, Raymond Hohl, Tony Denu, Jr., Othmar Demuth, Jerry Hunefeld, Councilmen of Dubois County; David Schnell, Virgil Schnaus, Gilbert Fleck, County Commissioners of Dubois County, Defendants-Appellees.
CourtIndiana Appellate Court

William C. Beckman, Chappell & Beckman, Jasper, for plaintiff-appellant.

Clemence A. Nordhoff, Nordhoff, Nordhoff & Songer, Jasper, for defendants-appellees.

RATLIFF, Judge.

STATEMENT OF CASE

Southern Hills Mental Health Center, Inc., plaintiff below, appeals from an adverse judgment of the Dubois Circuit Court upon its complaint for inadequate funding against the Dubois County Auditor, Treasurer, Council, and Commissioners. We reverse and remand.

FACTS

Southern Hills is a community mental health center within the purview of Indiana Code Sections 16-16-1-1 through 10 and serves the population of five counties: Crawford, Dubois, Orange, Perry, and Spencer. The total population of Dubois County is served by Southern Hills and for the years in question constituted, by the "A county shall fund community mental health centers, for operation, in an amount at least equivalent to that which would be raised by an annual tax rate of four cents [4c] on every hundred dollars [$100] of taxable property within the county, unless a lesser rate will be adequate to fulfill the county's financial obligations as set forth elsewhere, in the following situations:

parties' stipulation, 34.2% of the total population served by the Southern Hills. Indiana Code Section 16-16-1-3 provides generally that the board of county commissioners of two or more counties may authorize the furnishing of financial assistance for such centers and at their request the county may appropriate from the general fund assistance in the amount not to exceed an annual levy of ten cents per one hundred dollars of taxable property within the county. Indiana Code Section 16-16-1-6 is more specific with respect to the actual method to be employed in calculating the amount of such funding. The pertinent portions of this statute are the following:

(a) where the total population of the county is served by one such center,

* * *

* * *

In [situation] (a) ... above, the county's maximum appropriation for part of the total operating budget of the center shall be calculated upon the ratio that the total county population served by the center bears to the total population served by the center, such ratio to be expressed as a fraction and the amount of the maximum appropriation to be calculated by multiplying such fraction by the total operating budget of such center after it is reduced by the amount of anticipated gifts, except bequests and merchandise, fees, federal grants for direct service, except research and demonstration grants.

* * *

* * *

The maximum appropriation calculated by this section represents the county's absolute proportional share of the center or center's total operating budget. If that proportional share is less than the four cent [4c] requirement, above, the county shall be required and allowed to appropriate only the maximum appropriation amount. If the maximum appropriation is more than the four cent [4c] requirement above, the county shall be required to satisfy the four cent [4c] appropriation equivalent and may appropriate an amount in excess of the four cent [4c] equivalent appropriation up to an amount added to the four cent [4c] equivalent appropriation which would equal a ten cent [10c] equivalent appropriation, or an amount added to the four cent [4c] equivalent appropriation which would equal the maximum appropriation calculated by this section, whichever is less.

* * * "

In addition, Indiana Code Section 16-16-1-7 states that "[t]he county tax levying body shall appropriate and the county council must approve the funds necessary to carry out the provisions of this chapter [16-16-1-1--16-16-1-10]."

For fiscal year 1980 Southern Hills submitted the following letter and budget to the Dubois County Commissioners and Council:

"July 17, 1979

Crawford County Commissioners and Council

Dubois County Commissioners and Council

Orange County Commissioners and Council

Perry County Commissioners and Council

Spencer County Commissioners and Council

Ladies and Gentlemen:

Attached is a copy of Southern Hills Mental Health Center's operating budget for fiscal year 1980 as submitted to and approved by the Indiana Department of Mental Health.

Indiana Law IC 16-16-1-6 requires that 'A county shall fund Community Mental Health Centers, for operation, in an amount at least equivalent to that which would be raised by an annual tax rate of four cents (4c) on every hundred In accordance with this law and the attached budget, our request is for an amount equal to 4c per $100 of taxable property in each of the five counties served.

dollars ($100) of taxable property within the county ...'

Respectfully submitted,

SOUTHERN HILLS MENTAL

HEALTH CENTER, INC.

/s/ Robert C. Flick

Robert C. Flick

Executive Director"

(Defendants' Exhibit A) Record at 65.

                                  "Southern Hills Mental Health Center, Inc
                                               OPERATING BUDGET
                                         July 1, 1979 to June 30, 1980
                Revenues
                --------
                    Service Revenue (Patient fees)       $ 1,856,910
                    Deductions from Revenue               (1,408,929)
                    State Contract                           235,200
                    Department of Health, Education
                      & Welfare                            1,076,647
                    County (Crawford, Dubois
                      Orange, Perry & Spencer)               110,172 *
                                                         ---------------
                            TOTAL Revenues               $ 1,870,000
                Expenditures
                ------------
                    Employee Compensation                $ 1,123,987
                    Fringe Benefits                          143,871
                    Purchased Services                       198,262
                    Building & Equipment                     141,880
                    Operating Supplies                        49,600
                    Operating Expenses                       212,400
                                                         ---------------
                          TOTAL Expenditures             $ 1,870,000
                

Note FN* Estimate only--actual revenue based on 4 cents per $100 taxable property."

(Defendants' Exhibit B) Record at 66.

The Dubois County Commissioners budgeted the sum of $80,000 for Southern Hills for 1980, but the Dubois County Council approved an appropriation of $50,000 with a notation "total budget 3c levy." The assessed valuation of taxable property within Dubois County for calculating payments for 1980 was $155,180,210.00 giving rise to $46,544.06 at a levy of 3c per $100.00 and $62,072.08 at a levy of 4c per $100.00. For the year 1980 Dubois County actually paid Southern Hills the amount of $54,724.64.

For 1980 the letter and budget submitted were the following:

"June 19, 1980

Crawford County Commissioners and Council

Dubois County Commissioners and Council

Orange County Commissioners and Council

Perry County Commissioners and Council

Spencer County Commissioners and Council

Ladies and Gentlemen:

Attached is a copy of Southern Hills Mental Health Center's operating budget for fiscal year 1981 as submitted to and approved by the Indiana Department of Mental Health.

In accordance with IC 16-16-1-6 and the attached budget, our request is for an amount equal to 4c per $100 of taxable property in each of the five counties served.

Respectfully submitted,

SOUTHERN HILLS MENTAL

HEALTH CENTER, INC.

/s/ Robert C. Flick

Robert C. Flick

Executive Director"

(Defendants' Exhibit D) Record at 232.

                           "SOUTHERN HILLS MENTAL HEALTH CENTER, INC
                                        OPERATING BUDGET
                                             FY 81
                Revenue
                   Federal                                            1,076,647
                   State           Contract           351,000
                                   Title XX           160,919
                                                  -----------           511,919
                County
                                   Dubois              63,552
                                   Orange              25,674
                                   Crawford            10,567
                                   Perry               25,596
                                   Spencer             39,348
                                                  -----------           164,737
                Net Service Revenue
                                   Gross Revenue    1,635,871
                                   Deductions       1,399,682
                                                  -----------           236,189
                                                                      ----------
                                                               TOTAL  1,989,492
                Expenses
                   Salaries & Wages                                   1,229,210
                   Employee Benefits                                    162,392
                   Purchased Services                                   216,260
                   Program Operating Supplies & Expenses                 17,750
                   Operating Expenses                                    53,800
                   Office Supplies                                       37,000
                   Telephone                                             37,500
                   Travel & Transportation                               59,400
                   Rent                                                 133,160
                   Recruitment                                           10,000
                   Depreciation - Equipment                              14,400
                   Building Expenses                                     13,620
                   Other Expenses                                         5,000
                                                                      ----------
                                                               TOTAL  1,989,492"
                

(Defendants Exhibit C) Record at 231. For 1981 the Commissioners budgeted $66,000, and the Council again approved an appropriation of $50,000 noting "total budget 3c levy." The assessed...

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