The state agency charged with protecting Minnesota’s most vulnerable populations is imposing across-the-board spending restrictions after incurring millions of dollars in unexpected costs related to two high-profile lawsuits.

The Minnesota Department of Human Services, a giant agency with 6,628 employees and a biennial budget of $28.2 billion, is imposing limits on everything from filling vacant positions to out-of-state travel. The belt-tightening became necessary to bring the agency back on fiscal track after it racked up more than $4 million in costs from litigation over the treatment of sex offenders and the alleged abuse of people with disabilities, among other costs.

“It’s never easy to cut back spending, especially in an agency where the work is so critical,” Human Services Commissioner Lucinda Jesson wrote in a Nov. 14 memo to department employees.

The fiscal pinch sets the stage for a debate at the State Capitol this spring over spending priorities at the state’s largest agency, which serves more than 1 million Minnesotans. Already, House and Senate committee chairs who oversee health and human services are girding for a debate over how to absorb millions of dollars in court-ordered costs while sustaining programs for those who are poor, disabled or mentally ill, among other vulnerable populations served by the department.

“Unfortunately, our ineffective response to problems over the past 10 to 12 years is catching up with us,” said Sen. Kathy Sheran, DFL-Mankato, chairwoman of the Senate Health, Human Services and Housing Committee. “Now we have no choice but to act.” Lawmakers will have to wrestle with how to pay for the ongoing legal cases before considering further spending increases the agency’s programs or projects, Sheran said.

Litigation costs stand among a series of unexpected expenses that have thrown the department’s budget off track. These include $10 million in improvements to the Minnesota Security Hospital in St. Peter, the state’s largest facility for treating those who are mentally ill and dangerous; and a 3 percent salary increase for about 1,800 employees at the central offices in St. Paul.

But it’s the ongoing legal bills associated with two prolonged and complex legal cases that could pose the biggest threat to the agency’s fiscal health. One case stems from the abusive treatment of people with developmental disabilities at a state-licensed home. The other case centers on the constitutionality of indefinitely confining hundreds of sex offenders in state facilities after they have completed their prison terms. As these cases have dragged on in federal court, costs have mounted for attorneys, expert witnesses and fact-finding reports.

The department’s foot-dragging is partly to blame. In 2011, the state reached a sweeping agreement to resolve allegations that staff at a state facility for developmentally disabled people had overused seclusion and restraints, including metal handcuffs and leg hobbles. The agreement, known as the Jensen settlement, required the state to phase out the use of such punitive measures and implement an ambitious plan to move thousands of people out of segregated settings, such as group homes, and into their own homes and communities.

The reforms, however, have been slow in coming. Frustrated by the delays, U.S. District Judge Donovan Frank in 2012 appointed a special court monitor to oversee implementation of the Jensen settlement after the agency missed a series of court-appointed deadlines.

The monitor, David Ferleger, has found multiple violations of the settlement, including the continued use of restraints and seclusion in state-licensed programs for disabled people. One woman urinated on herself after being strapped to a restraint chair in a group home for up to nine hours a day without food or bathroom breaks, Ferleger found in a recent report.

The state’s costs over the past two fiscal years in the Jensen case have totaled $3.2 million, which includes $790,000 in payments to the special court monitor.

“The budgetary issues are a result of DHS’ own … failure to comply with their promises to families and loved ones of people with disabilities,” said Shamus O’Meara, a Minneapolis attorney representing families in the Jensen settlement. Roberta Opheim, state ombudsman for mental health and developmental disabilities, said, “Every dime spent on the court monitor only came about because DHS hadn’t accomplished the things they were supposed to be doing.”

The department also faces a hefty legal bill for a prolonged fight in federal court over the constitutionality of the state sex offender program. A group of sex offenders has sued the state as a class, alleging that the Minnesota Sex Offender Program violated their right to due process by failing to give them adequate treatment and a clear path for release. A jury trial begins in February that could result in the court ordering costly reforms on the program, including the development of less-restrictive treatment options in the community.

The state’s costs in the sex offender case have reached $915,000 in the past two fiscal years.

To absorb these costs, the department is now asking each of its units to limit spending on travel, hiring and discretionary expenses. “We are carefully reviewing each vacant position before it is filled to ensure it meets a critical business need or is part of a high priority agency project and that adequate funding is available,” Jesson wrote in her memo.

Rep. Tara Mack, R-Apple Valley, chair of the House Health and Human Services Reform Committee, said she applauded the agency for targeting its own spending before asking the Legislature for more money. However, she warned, “If these bills continue to ratchet up, it’s a safe guess there will be a conversation among policymakers to make sure our priorities do not get out of whack.”


Twitter: @chrisserres