The state this year abruptly shut down a program that helps low-income Vermonters spay and neuter their pets, documents show, leaving pet owners without an affordable way to have their animals fixed and inundating local shelters with calls for help.
The Department for Children and Families says the Vermont Spay and Neuter Incentive Program, or VSNIP, ran out of money because more people than ever want vouchers. The state took over the program a year ago after it had been run by two third-party contractors.
But DCF officials also admit they made mistakes administering the program, and documents show that under the prior administrator, the program significantly boosted the amount it pays vets who perform the surgeries for pet owners.
Meanwhile, another former program administrator has filed a lawsuit against the state, alleging DCF purposely prevented her from receiving a bid and instead gave it to someone else, who had a conflict of interest.
VSNIP is funded through a $3 service charge on dog license fees collected by municipalities across the state. The program only has funds to issue as many vouchers as those collections make available.
Vermonters who earn wages at 185 percent of the poverty level or less, $44,000 for a family of four, and acquired their pet for $75 or less are eligible. If a person qualifies, he or she pays $25 for the spay or neuter procedure, which at full price can cost more than $200.
State law requires a third-party contractor to administer the VSNIP program. The contractor reviews voucher applications and coordinates vet payments using money funneled through the Vermont Department for Children and Families. When the current contractor opted not to renew her contract in November, DCF took over the program.
The Legislature created the program in 2004, and it has been in operation since 2006. The annual budget of about $250,000 a year fluctuates depending on the number of dog license fees collected each year and the number of spay and neuter applications VSNIP receives.
Starting fiscal year 2013, however, the fund’s year-end balance plummeted from $154,000 to $65,000 and then plunged to negative $10,000 in fiscal year 2014.
As bills poured in, the state in February shut down the program to give the fund time to replenish. In September it started issuing vouchers on a limited basis.
There are now more than 600 people on the waiting list, representing $142,000 in requests, according to data from DCF. Some applicants will likely have to wait several months before they get a voucher.
Ken Schatz, the commissioner of DCF, also said there was a lack of understanding among DCF workers, who issued more vouchers than they should have without checking the fund balance.
Workers did not realize the program is limited by the amount collected from dog license fees, he said. Those fees come in spurts depending on when people register their dogs.
“(DCF employees) weren’t paying as much attention on a monthly basis because it’s a different kind of basis,” Schatz said.
Meanwhile, over the years, the number of vouchers issued has increased. In fiscal year 2013, there were 2,728 surgeries performed through VSNIP, up from 33 in FY 2006.
However, data from DCF also shows that in FY 2013, when fund balance plummeted, the rates paid to vets grew by more than a third.
In FY 2011, a vet was reimbursed $124 to spay a small dog, according to data from DCF. The next year the rate was $137 and then in FY2013 it rose to $198 and then to $230, data shows.
Vets who perform surgeries for VSNIP clients are paid by the state at a rate equal to the median cost of the procedure based on all participating vets. DCF said it calculates the rates by surveying participating vets, adding a cost of living increase based on the consumer price index, then calculating a median rate.
The reimbursement rate increases correspond loosely to a change in oversight of the program. From 2005 to 2012, Sue Skaskiw, the executive director of the Vermont Volunteer Services for Animals Humane Society in Bridgewater, ran the program.
In 2011 the Legislature transferred the program from the Agency of Agriculture to DCF. When DCF put the contract out to bid, it awarded it not to Skaskiw but to Vermont Companion Animal Neutering, a Middlesex low-cost spay and neuter clinic directed by Pamela Krausz.
Krausz ran the program for one year, from October 2012 to September 2013 then opted not to renew the contract.
Krausz had concerns that the median rate was too low, she said. When she got the contract, she recalculated the rates based on existing survey data from vets, she said. Those calculations resulted in the increased rates for FY 2013, she said.
Skaskiw sued the state alleging that Krausz had an inside track before the contract came up for renewal. Skaskiw also alleged that Krausz diverted customers from VSNIP to her own business.
The lawsuit alleges that Kathy Smith, who works for DCF, made defamatory statements about Skaskiw to other state employees. Skaskiw obtained more than 1,800 pages of emails from DCF through a public records request.
The emails show that Smith was asked in an email why she changed the bid form to minimize the point system that gives more credit to people who have experience in running the program. Smith replied: “There’s a method to my madness 😉 ” and “I’m getting nervous, have we covered our backsides?”
Judge Helen Toor in Washington Superior Court dismissed the case in January but Skaskiw’s attorney appealed it. The Supreme Court heard oral arguments this fall and has not yet ruled on the case.
Krausz denies that she was a favored contractor, and she says she acknowledged in her state contract that she ran a spay and neuter clinic that accepted VSNIP. She agreed to perform no more than 50 VSNIP procedures.
“I did not meet Kathy Smith (of DCF) until I hand-delivered my application the day it was due,” she said.
Krausz said if clients called VT-CAN asking for a VSNIP application, she would refer them to VSNIP but also mention her own business, which had a private grant to spay and neuter cats that she used to cover the $25 co-pay for recipients.
That saved money for needy Vermonters as well as sometimes for the VSNIP program, she said, and she was often able to perform the surgeries sooner than waiting for the VSNIP application to be processed. She could also accept clients who for some reason did not qualify for a VSNIP voucher, Krausz said.
DCF was not aware that VT-CAN, while it administered the program, provided other discount spay and neuter services under a separate grant and did not refer all clients to VSNIP, Schatz said. DCF was aware, however, that VT-CAN did provide spay and neuter services.
State law requires the administrator of the program to monitor and collect data and submit quarterly reports about the program. DCF now collects broad data about the program. It has not produced reports issued by Skaskiw and Krausz when they oversaw the program.
Skaskiw’s contract was for $43,235 annually. Krausz’s was for $44,294, according to DCF.
An accounting spreadsheet about the VSNIP fund from DCF, obtained by Skaskiw and reviewed by VTDigger, reveals DCF’s attempt to put a Band-Aid on the fund and pay vet bills, even as bills continued to pour in earlier this year.
Notes in the spreadsheet show that in December 2013 DCF officials realized that receipts and expenditures were both running higher than last year and expenses were increasing faster.
“AP brought a stack of vet invoices to pay in excess of $14,475 and the current spending authority balance…is only $418.00,” one note said.
At that time, DCF projected that the state would not have enough money to pay May and June 2014 bills unless dog license fees are increased or expenditures are reduced.
“The VSNIP program must run within the limits of its annual receipts. Carry forward funds have been depleted,” the notes say.
In February officials decided to shut down the program and not pay a state temp salary out of the special VSNIP fund, the spreadsheet shows. The person hired to administer the program would work instead from the deputy commissioner’s office and use only the special fund for spay/neuter vouchers, the notes say.
In March, the state freed up $10,000 in special funds to be able to keep the program on track, the spreadsheet shows. DCF workers also appear to have discovered several unrelated salary, fringe and printing payments paid in error from the VSNIP fund.
As bills continued to pour in, DCF in all freed up $90,000 in emergency money to cover the bills it owed vets, the spreadsheet shows.
“Program has definitely shut down and these bills are still coming in. Prior issuing of vouchers did not include a projected expense tracking. This will try to be implemented in the future. (A DCF employee) predicts more expenses will come in,” the spreadsheet says.
The notes show that DCF’s former commissioner Dave Yacovone was aware of the deficit and employees were looking for other sources of funds besides dog licenses, such as license plates.
Skaskiw is angered that the program was shuttered, and she has demanded answers from the state about how it came to become so mismanaged.
“It’s frustrating that a program important to so many Vermonters, and of course, their animals, was allowed to deteriorate,” she said.
Skaskiw maintains that DCF has distorted data that should easily identify why the program was suspended and applications were not served. It has nothing to do with an increase in demand and everything to do with the fact that the reimbursement rates to vets were increased dramatically, she said.
Her lawsuit about alleged improper bid practices is separate from her concern about the program’s closure and vet rate increases, she said. She has tried to contact lawmakers, some of whom have helped her obtain information, others whom, she said, were less helpful.
The deputy commissioner of DCF, Sean Brown, in November wrote a memo to three lawmakers whom Skaskiw has contacted about the program, to explain the situation.
VSNIP needs more than $300,000 this year to run the program and more than that in future years, according to DCF. Meanwhile, annual receipts are around $235,000, meaning an annual shortfall of around $65,000 each year.
The DCF memo invites lawmakers to offer suggestions on how the program could become sustainable in the future.
In the meantime, Schatz said the program will be careful to only issue vouchers for as many surgeries as can be paid for with money in the bank.
“Now we won’t issue out vouchers based on what we think’s coming in,” he said.
Meanwhile, animal shelters and vets say they hear from customers daily asking for the program back so they can afford to have their animals fixed.
Ann Ward, director of operations for the Central Vermont Humane Society, said they have not seen an increase in the number of animals coming in but have seen an increase in phone calls of people looking for VSNIP.
“People are really looking for it,” Ward said.
Sara White, who runs Spay ASAP Inc., a mobile spay and neuter clinic in Vermont and New Hampshire, said she has had a higher demand for dog spay and neuter surgeries since VSNIP stopped.
Last week a low cost spay and neuter clinic in Colchester run by Peggy Larson closed.
The Springfield Humane Society has seen an increase in the number of kittens, and attributes that to VSNIP’s closing. The shelter took in 48 kittens in 2012, 33 kittens in 2013 and 88 kittens so far this year.
The Franklin County Humane Society has its own low-cost spay and neuter clinics, but that costs between $45 and $220, more than the VSNIP vouchers, which require people to contribute $25.
“I don’t know for sure but that’s really the only change,” said June Howarth, the shelter manager.
Poultney veterinarian Scott MacLachlan and his wife have run a clinic since 1986. He said he loses money when he performs surgeries through VSNIP, but does it as a public service.
“I’m not quite sure what people are doing, to be honest with you,” MacLachlan said.