Troubled S.F. nonprofit will pay city back for millions borrowed amid financial crisis
Troubled S.F. nonprofit will pay city back for millions borrowed amid financial crisis A San Francisco nonprofit, Baker Places, will begin repaying its nearly $8 million debt to the city next month, nearly two years after city leaders offered the organization a lifeline to prevent the closure of vital mental health and addiction treatment beds. The nonprofit has agreed to transfer ownership of a residential care facility at 333 7th St. to the City for $3 million of credit towards its debt, and is expected to repay the remaining $4.7 million over 23 years. Andrew Murrell of the Department of Public Health commended the organization's new leadership for working with city officials to resolve the financial issues. Despite the financial infusion, Baker Place informed the city of plans to begin winding down operations, including discontinuing multiple treatment programs. The organization, a subsidiary of PRC, provides over 200 treatment beds across the city.
Published : a month ago by Maggie Angst in Health
A financially troubled nonprofit that owes San Francisco nearly $8 million will begin repaying its debt next month, nearly two years after city leaders offered the organization a lifeline to prevent the closure of vital mental health and addiction treatment beds.
As part of the deal, the nonprofit has agreed to transfer ownership of a residential care facility at 333 7th St. to the city for $3 million of credit towards its debt. The nonprofit is then expected to repay the remaining $4.7 million over 23 years.
Andrew Murrell of the Department of Public Health called it a “first step toward normal status” for the agency, and commended the organization’s new leadership for working with city officials to find a solution.
“We wouldn’t be here today without being able to walk step and step (with the leaders of Baker Places) to ensure clients receive care and treatment, as well as preserve treatment beds,” he said during a board committee meeting.
Chuan Teng, who became CEO of Baker Places and PRC in September 2022, said she has spent the past year and a half diving into the organization’s financial challenges and trying to correct past mistakes.
“We were able to work together to target and identify root issues, address them, and then move on and continuously do that,” Teng said.
Baker Places, a subsidiary of PRC, formerly Positive Resource Center, contracts with the San Francisco Department of Public Health to provide more than 200 treatment beds across the city. The nonprofit holds four active contracts with the city and serves about 2,000 clients a year, according to the agency.
Officials at the Department of Public Health said that in October 2021 Baker/PRC notified them that the nonprofit was experiencing a solvency crisis and may be forced to reduce or ultimately close programs unless it received an inflow of cash.
The board of supervisors in June 2022 agreed to provide the nonprofit with $1.25 million, but declined to plug the organization’s full $3.2 million shortfall at that time. Despite the financial infusion, the nonprofit informed the city three months later of plans to begin winding down operations, including discontinuing multiple treatment programs.
The nonprofit instead decided to transfer two programs to HealthRight 360, the city’s largest addiction treatment provider. HealthRight 360 took over services previously provided by the Joe Healy Medical Detox Program, which primarily served people withdrawing from alcohol, and Acceptance Place, a 90-day treatment program for men who identify as gay, bisexual or transgender with substance use disorders.
The Controller's Office in December 2022 placed Baker on red flag status, meaning it was at imminent risk of being unable to offer services in its contract. As its finances stabilized, the nonprofit’s status late last year was downgraded to elevated concern status, but city officials maintained some fiscal management and organizational concerns.
Financial troubles weren’t the only issue uncovered at Baker Places. The nonprofit also was at the center of another scandal after supervisors learned that the San Francisco’s health department allowed a top employee to work a lucrative part-time job at Baker Places without receiving the necessary approval.
The Board of Supervisors Budget & Legislative Analyst, which provides independent fiscal and policy analyses, pointed out that the acquisition of the 7th Street property will cost the city an additional $7 million in rehabilitation work, including installing an elevator. A representative from the department said the cost was consistent with those associated with other similar acquisition proposals.
The department has also recommended that the city assume ownership of two additional Baker Placesfacilities at 214 Dolores St. and 2153-2157 Grove St., both of which the nonprofit has outstanding city loans on. Those acquisitions are still very much up for debate as the nonprofit and several supervisors felt the move was unnecessary.
Topics: Nonprofits