Gov. Dannel P. Malloy selected the longtime leader of a shoreline nonprofit agency that serves people with disabilities to lead the state Department of Developmental Services.

Terrence W. Macy, who has been executive director of SARAH Tuxis Residential & Community Resources since 1990, will take over an agency that serves more than 19,000 people with intellectual disabilities. Macy began his career working at the Hartford Regional Center, a residential facility the department operates, and also worked at DATAHR Rehabilitation Institute, now called Ability Beyond Disability.

“I will lead this department by putting the people we support and their families first and foremost in everything we do and how we do it,” Macy said during a press conference Thursday.

Macy said he plans to have several stakeholder groups to monitor the department’s work and will make the sustainability of the agencies that contract with the department a top priority.

Macy’s appointment drew praise from leaders of private nonprofit agencies that contract with the department, who say they are under increasing financial strain. A report released by a state commission last week warned that a large percentage of nonprofit providers that contract with the state are in a financially precarious position, operating “dangerously close to their margin” with little ability to handle unexpected increases in expenses.

“I’m extremely, extremely concerned with how fragile our private provider network is,” Macy said. “My first order of business is to make sure they are as whole as they can possibly be.”

The report by the Commission on Nonprofit Health and Human Services noted that between 1999 and 2009, the rates the state paid to nonprofit providers rose by 21.7 percent, while the consumer price index increased 27.7 percent. During the same period, health care benefit costs increased by 135 percent, and from 2000 to 2010, electrical rates rose by close to 90 percent.

The commission produced 49 recommendations. Some would require more funding for the nonprofits, while others suggested streamlining reporting and licensure requirements for nonprofits that often must report to multiple state departments. The Malloy administration is pursuing ways to streamline administrative requirements, but providers said they recognize that more funding isn’t likely to come anytime soon. Malloy’s proposed budget would provide flat-funding for the agencies.

“We understand that that’s the best the state can do at the present time,” Patrick J. Johnson, Jr., president of Oak Hill, which serves people with intellectual, developmental or physical disabilities at more than 100 sites, said this week.

But Johnson said operating at current levels of state funding is becoming unsustainable. When fixed costs like gasoline go up, flat funding is essentially cut, he said. At Oak Hill, no one has had a raise in three years and managers trimmed 10 or 15 minutes from shifts to help make ends meet.

“We’re used to living on the edge, but there is a tipping point and we’re very close,” Johnson said.

Ron Cretaro, executive director of the Connecticut Association of Nonprofits, said some providers have increased their fundraising efforts, which could help lessen their reliance on state funding.

Malloy could use his office as a bully pulpit to promote philanthropy, Cretaro said. Efforts to streamline reporting requirements and other administrative responsibilities would also help by allowing staff to spend more time working with clients, he said.

Cretaro praised Macy’s nomination and said he will bring first-hand knowledge and an industry perspective to the job. Macy has been on the nonprofits association’s board and is currently chair of its public policy council.

Macy said after the press conference that his agency has faced the challenges others have, scraping by year after year. SARAH Tuxis’ staffing levels have grown from 42 to 300, but the administrative structure today is the same it had when it began in 1990.

“We’re as lean and mean as they come,” he said.

Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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