Issue:  Vol. 48 / No. 11 / 15 March 2018

Tenderloin Health hurt by ‘severe’ cuts, facing decisions, director says

Tenderloin Health, a San Francisco nonprofit that provides housing and other services to some of the city’s poorest residents, including people with HIV and AIDS, appears to be in deep financial trouble.

In an email this week, David Fernandez, the agency’s  executive director, said, “We have not been doing very well.”

He said the agency had “some severe funding cuts” in September and October, and they’re “working with our funding partners to work through the situation.”

Tenderloin Health officials expressed confidence this summer that the agency’s finances were stabilizing after years of decline, and they said they were developing a strategic plan.

But Fernandez’s recent comments, which were in response to interview requests from the Bay Area Reporter, indicate whatever they’ve been trying isn’t working.

In his Monday, December 19 message, in which he declined to the interview requests, Fernandez said, “I am not in a position to share anything more with you until some actual decisions are made; decisions that will be made in the next couple weeks.”

It’s not clear what kind of decisions the nonprofit will be making, but the agency’s been troubled for years. Drops in donations and government contracts, along with financial mismanagement, have been among their problems.

Tenderloin Health’s budget is about $7.1 million, according to the most recently available data.

As of July, the agency had used up $600,000 out of $700,000 of credit they had available to them from Wells Fargo and Bank of the West. They also had about $1.2 million in short-term debt.

Despite the problems that Tenderloin Health was facing this summer, Fernandez said at the time that the agency was “pretty close” to breaking even.

He also said they were “on track to bring in a totally different donor base, in addition to what Tenderloin Health has had in the past. We’re going after private money,” because that allows more flexibility than government funds.

Tenderloin Health receives hundreds of thousands of dollars from city agencies, including the Department of Public Health.

In response to an emailed request this week to talk to Public Health Director Barbara Garcia, Eileen Shields, the agency’s spokeswoman, said, “We are not ready to discuss this as yet,” since the department is “still working with [Tenderloin Health] on the plan.”

In July, Garcia spoke highly of Fernandez, saying he’d “worked extremely hard at bringing the organization to structural strength.”

Reached by phone late last week, Tenderloin Health board Chair Andy Chen said the agency’s strategic plan hasn’t been completed, and he didn’t know when it would be done.

“We’re very busy with a number of things,” Chen said, before ending the call.

Years of problems

In July, Fernandez said that when he first joined the agency in November 2009, he was given the title interim executive director for 90 days.

“My job was to come back to [the board of directors] and tell them whether we should close the doors or not,” he said.

He said he ultimately found no reason to do that. For one reason, he said, “The population we serve can get these services nowhere else,” especially not all in one place.

Tenderloin Health was created in July 2006 when the Tenderloin AIDS Resource Center and Continuum HIV Day Services officially merged. The move was a response to the realities of reduced AIDS-related funding.

Around May 2009, a contract Tenderloin Health had with the city’s Human Services Agency was de-funded. That resulted in the shutdown of the nonprofit’s community drop-in resource center, which had served over 12,000 unduplicated clients every year.

Forms the agency filed with the IRS show its net assets declined from about $1.1 million for 2005 to negative $182,951 for 2009. More recent tax documents aren’t available.

An audit of the agency’s financial statements as of June 30, 2009 also pointed to problems. The B.A.R. obtained the document through a public records request to the health department after Fernandez declined to provide a copy. The audit, performed by PMB Helin Donovan and dated December 2010, is the most recent available for the agency.

The review indicated poor financial oversight was among the reasons for the agency’s troubles. Possible consequences included the risk that timely financial statements wouldn’t be available to funding sources and others when requested, according to the review.

“This might have adverse effects on the organization’s operations and financial condition,” the audit, which indicated that Tenderloin Health was working to address problems, said.

— Seth Hemmelgarn, December 21, 2011 @ 7:24 pm PST
Filed under: Uncategorized

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