BEACH, N.D. - Home on the Range, a working, therapeutic ranch for children located near Beach, recently laid off 17 workers as a consequence of a dramatic drop in referrals, which the ranch's director said are due to the passage of new federal legislation.

This legislation, the Family First Prevention Services Act, was placed within the recent 2018 Bipartisan Budget Act, which was passed in February.

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"The bottom line is ... there are sweeping changes taking place in North Dakota and nationwide, for that matter, in the mental health service delivery system. The changes that are currently reverberating around the state are really a direct offshoot of the federal legislation that passed, the Family First Prevention Services Act," Dr. Mel Rose, director of Home on the Range, said in a phone interview. "It really places a huge emphasis on putting a lot more energy and services into prevention."

The act limits the amount of federal reimbursement available for placements in non-foster family homes, among other things. The result, according to Rose, is that what had once been a gradual decline in enrollment has now become a precipitous drop.

"All of the (congregate care facilities) in North Dakota are experiencing what we are experiencing, which is a marked decrease to the number of kids being referred to this level of care," Rose said. "You are only going to refer kids to (residential child care facility) levels of care after you have exhausted all the other less restrictive options of care. That means putting them with their families, in foster care and repeating failed foster care placements several times before a referral to this level of care would be entertained."

With fewer children being referred to Home on the Range, the program faces a challenge in sustaining its revenue. They use previous years as a metric to guess at the average number of kids they'll get, which allows them to determine how much revenue they'll be generating. Fewer kids means less revenue, and that requires cutting into the highest expense - salaries.

"You factor in how much revenue will be generated through that projected census number. So what happens is, if you start to fall below that census number, you start to lose tremendous amounts of projected revenue," Rose said. "Eighty percent of revenue that comes in goes to pay salaries ... that's the most costly line item in every organization's budget. It's this domino effect."

In the past six months, Rose said, "the bottom has kind of fallen out."

For the town of Beach, the sudden layoffs will definitely have an impact, according to the City Auditor Kim Gaugler

"Anytime there is a layoff in a small community, it's unfortunate and the number is too big. It doesn't matter if the number is 1 or 17, there will be impacts. What does matter is we live in a resilient community that has strong support for each other," Gaugler said in an email. "Hopefully, individuals being affected by layoffs will be able to fill job openings that do exist within the area. Home on the Range has been a vital employer to our community since 1949 when they were first established."

Rose said that despite the layoffs, which included employees with years of experience, the quality of the programming on offer will not decrease. As there are fewer kids enrolled in the program, there is a need for less staff to care for them-although this all speaks to a need, Rose said, for Home on the Range to look into diversifying itself.

"We're certainly not going to lobby against the legislation because that would be like a salmon swimming upstream. I think across the board we're going to be wiser in how we diversify so that we can be here many years from now," Rose said, noting that the decline in enrollment prior to the federal law taking effect had already raised these questions. "The question of how are we going to figure out how remain viable, alive and provide first-rate services was going to come at us anyway."

For now, Home on the Range is looking at a few options.

"I think a couple of things I would say is we are working on ... developing some new programming, we're also looking to ... expand our evaluation and stabilization unit to accommodate a different age group of kids," Rose said. Currently, they are open to children aged 12 to 18. "We are in the process of identifying other programs that will fill service gaps that are out there in the various communities that will ensure our long-term sustainability."

Rose said she wanted to clear up what she considered a "big misperception" of the cause behind the layoffs.

"This doesn't have to do with poor internal business planning," Rose said. "This has to do with external situations which we don't control at all."