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Safety net torn

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Closing the North Country Children’s Clinic in Watertown would be a profound loss.

Officials with the clinic said earlier this week they would shutter its doors today so they can attempt to restructure the debt carried by the organization, which exceeds $1 million. But an agreement made yesterday with Samaritan Medical Center will keep the agency open for the time being.

Such a disruption would hit the agency’s clients hard. It’s one of the few places left where low-income families can receive health services, particularly dental care, by using Medicaid.

As its name implies, the clinic has catered to children since its founding in the early 1970s. And even though the agency started offering services to adults as well, children remain a special focus for staff members.

Daniel A. Wasneechak, who took over as executive director of the clinic in July, said the agency’s board of directors and staff members worked hard to avoid closing their doors. The burden of carrying such debt overwhelmed the group as it ran out of money to pay its employees and bills.

But while this development is disturbing, it’s not necessarily surprising. The clinic has experienced money problems for years.

The Watertown Local Development Corp., also known as the Watertown Trust, said Sept. 19 that it would provide the North Country Children’s Clinic with a loan of $125,000 so the agency could meet its payroll. Mr. Wasneechak and interim Finance Director Kelly Clark met the day before with Donald W. Rutherford, CEO of the WLDC, and Watertown Trust board member Donald C. Alexander to discuss how the clinic planned to put its financial house in order. Mr. Wasneechak pledged to repay this loan to the WLDC in October when the clinic received $275,000 in federal funding from a series of grants.

But the clinic already owed $184,000 to the WLDC at that point as well as $187,000 to the Jefferson County Industrial Development Agency, of which Mr. Alexander is CEO. In addition, the agency has a balloon payment of $474,000 to Community Bank due Jan. 1. Mr. Wasneechak said he wanted to meet with bank representatives to refinance this loan.

It’s uncertain how amenable Community Bank would be to a restructuring proposal, but bank officials have turned the clinic down for a line of credit to keep operating past today. If the agency needs to jump from one source to another for emergency funding, what assurance could it make that it can now conform to a newly established schedule for repaying its loan?

The North Country Children’s Clinic provides services to its clients that are essential and largely unavailable elsewhere in the region.

The agency had begun the process of transitioning itself to a federally qualified health center for people of all ages, with a planned name change to the North Country Family Health Center. But this requires more money to provide expanded services to a broader population, all the while its sources of revenue are inadequate to cover its operating expenses.

Over the years, the clinic depended upon member items from the state Senate. Those member items are gone, a victim of tight state budgets and the dramatic shrinking of funds devoted to upstate senators and members of the Assembly. The lesson from Albany is simple: Nonrecurring revenues will not support a health care agency.

So as the clinic struggles to stay open, its board should reprioritize its mission on providing health care to children. They are most vulnerable to the massive cutbacks in social services that we’ve seen over the last few years.

The agency also must figure out how to pay off its debt and identify a reliable source of revenue for continued operations. It cannot keep borrowing with no sustainable way of paying these loans back. Before the community can step in to help the clinic maintain operations, the agency needs a practical business plan showing how it will sustain itself going forward.

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