Issue:  Vol. 48 / No. 8 / 22 February 2018

City analyst’s office questions loaning funds to Lyon-Martin; merger discussed

A proposal to loan $150,000 to Lyon-Martin Health Services, which has been struggling for survival since January, is facing trouble as the clinic looks at merging with another agency.

The San Francisco Board of Supervisors Budget and Finance Committee had been set to discuss the loan, proposed by Supervisor Ross Mirkarimi, and possibly vote on it yesterday (Wednesday, May 11). However, committee members postponed the item. Another date hasn’t yet been set

The office of Harvey Rose, the board’s budget and legislative analyst, issued a report last Thursday questioning the wisdom of the loan.

Lyon-Martin's Eric Fimbres

Lyon-Martin, which serves women and transgender people, has faced closure since late January, when the clinic’s board made the surprise announcement that the agency was more than $500,000 in debt and would have to shut down in days. They made the announcement despite not having made plans for where the clinic’s 2,500 patients would go.

As proposed, the loan from the city would be made free of interest. The report notes that the city itself faces a deficit of more than $300 million, and says the analyst’s office “questions whether Lyon-Martin would be able to repay a $150,000 loan, even without interest,” given that the clinic is $1.1 million in debt.

Lyon-Martin is projecting a total budgetary shortfall of $500,000 and needs $200,000 of that by July 31 in order to stay open, the report says.

According to the report, Lyon-Martin interim Executive Director Eric Fimbres has identified four options to address a shortfall that’s estimated at about $150,000. (That figure comes after taking into account “undisclosed grants and private individual donations.”)

The options Fimbres put forward include merging with another organization or  closing Lyon-Martin, among other possibilities.

The Bay Area Reporter obtained a copy of a financial recovery plan summary that Fimbres had prepared. The document talks about the possibility of the clinic merging with Asian American Recovery Services.

Fimbres wasn’t available for an interview this afternoon. Messages left with AARS weren’t immediately returned.

The analyst’s report, which doesn’t name AARS, says Fimbres has estimated that a merger could take up to one to two years to complete.

However, the report says, Lyon-Martin is considering making a deal with the merger partner by the first week of June to provide management services.

“According to Mr. Fimbres, such an arrangement would provide needed budget relief by allowing Lyon-Martin to shift some of its staff from administrative functions to the provision of direct clinical services which would allow the clinic to see more patients and increase operating revenue,” the report says.

The report also says the analyst’s office had requested Lyon-Martin provide their draft financial recovery plan, but the clinic wouldn’t do it and Rose’s staff had to get the plan from the Department of Public Health.

— Seth Hemmelgarn, May 12, 2011 @ 4:39 pm PST
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