An 11th-hour emergency funding request from a key behavioral health services and HIV/AIDS provider in San Francisco last month left some members of the Board of Supervisors livid, but city officials are largely quiet on what actions they plan to take next.
The Board of Supervisors ultimately gave final approval by a vote of 10-0 June 28 to a total of $1.25 million in one-time limited grants to PRC and Baker Places (District 1 Supervisor Connie Chan was not present). Baker Places and PRC merged in 2016, though it is not finished.
PRC provides HIV/AIDS services and workforce development. It also provides emergency financial assistance for people with HIV/AIDS, having taken over the former AIDS Emergency Fund; legal representation for access to basic income and health care benefits; and residential treatment and supportive housing for people affected by HIV/AIDS.
PRC Baker Places provides residential housing for those with substance use or mental health issues. It also oversees Hummingbird Place, a 29-bed psychiatric respite program.
Administrators for PRC and Baker Places approached the supervisors at their June 14 meeting to request $3.2 million in emergency funding to help them meet expenses, including payroll, in providing behavioral health and detox services for 215 beds. The programs serve more than 2,000 people per year, according to the San Francisco Department of Public Health.
The money was needed desperately, Dr. Hillary Kunins, director of DPH's Behavioral Health Services and Mental Health SF program, told the board. The two organizations, because of that $3.2 million shortfall, are "at risk of insolvency," Kunins told the board, according to a video of the supervisors' meeting.
If the money is not granted, Kunins continued, "the agencies are at risk of closure as a result of their financial insolvency."
Supervisors, particularly Hillary Ronen of District 9 and Ahsha Safaí of District 11, were notably unhappy with the request, coming only one month after the board had OK'd a $65 million contract extension — double that of previous years — with Baker Places. There had been no mention of the organization's financial concerns at that time, they said.
At the June 14 meeting where the money was approved the first time (a second and final vote occurred June 28), gay District 8 Supervisor Rafael Mandelman wondered if the expansion of services was at the root of PRC's financial problems.
Addressing the supervisors, PRC CEO Brett Andrews, a gay man, told the board that "the challenges are around our legacy contracts. Not around the new contracts and so, to the second part of your question, if you treat the new contracts like you treat the legacy contracts you'll end up having the same scenario where you don't look at the full cost of what it is to provide the service, and we can see that across city departments."
PRC would not make Andrews available to speak with the Bay Area Reporter for this article.
While the board did give final approval for $800,000 for PRC and $450,000 for Baker Places to help the organizations meet payroll and to avoid displacing clients, that was nearly $2 million less than the original request. Both action items were detailed in the board's agenda with those amounts that were approved.
On July 1, Andrews emailed all 11 supervisors seeking clarification on the funds they had approved just days prior.
"While the BoS agenda and grant agreements reflect $1.2M, with a schedule of payments, the actual real-time vote read by the clerk and voted on by the BoS was for the full $3.2M," Andrews wrote, according to a copy of his letter obtained by the B.A.R. "... it was PRC's understanding the vote was for the full amount, which would eliminate the need to go back to the BoS for the remaining amount."
A statement to the B.A.R. on June 30 from DPH, however, seemed pretty clear on the matter, in addition to stating plans to hire a consultant to help understand the sources of PRC/Baker Places' financial woes.
"The $1.25 million will provide short-term funding to enable Baker Places/PRC to complete and implement a financial and business plan to assure the city of the stability of their program," said the statement from DPH's press office. "The city will retain an independent consultant to evaluate the financial conditions, including the reasons for the Baker Places/PRC financial deficit and identify all steps necessary to support Baker Places/PRC's long-term financial stability. Receipt of the full amount in the grants is contingent on Baker Places/PRC completing a financial and business plan that the city accepts."
Beyond stating that the city would take on a consultant to "evaluate the financial conditions" there were no other statements about what the city might do. Even Mayor London Breed's office was vague on the matter.
When asked if Breed was aware of just how deep the organizations' financial woes were at the time she, along with Mandelman and gay District 6 Supervisor Matt Dorsey, agreed to co-sponsor the legislation for the emergency bailout, or if her office had plans to open an investigation, press officer Jordan Wilson sent the following response.
"PRC has been a valuable partner in our behavioral health response for many years," the statement read. "We are working closely with the Department of Public Health on finding a path forward to ensure the long-term stability of these critical services, which are essential to the health and well-being of some of our most vulnerable residents."
Hints of problems
There were hints of problems, however.
The initial request for funding was not a complete surprise, said a person with knowledge of the situation who spoke on background. DPH had warned supervisors that PRC and Baker Places were having financial difficulties "a little while ago," the person said.
Still, the scope and circumstances of the request came as an apparent shock to Ronen, who was the most critical of the 11 supervisors.
"I don't even know where to begin," Ronen, the first supervisor to speak, said at the June 14 meeting. "There wasn't that much information in that presentation.
"I just don't understand how we got to this place and how this is coming to us so last minute and with such grave consequences if we don't pass it," Ronen continued. "I don't feel like we've been given enough detail about how we got to this situation... we can't just give $3.2 million without understanding how did this take place and how is this going to resolve the situation...
"Is this just a Band-Aid?" she asked.
According to PRC's IRS Form 990 for 2020, the agency had a budget of approximately $8.7 million. Andrews' salary and benefits were listed at $293,230. Six other employees' salaries were cited in the document, ranging from $71,570 to $171,282, excluding benefits.
A separate 2020 990 for Baker Places, but using the same 170 Ninth Street address as PRC, lists a budget of about $9 million, with $12 million in liabilities, resulting in a deficit of about $2.9 million. The Baker Places 990 lists five people with salaries over $100,000, including positions like medical director and clinical director.
In 2019, PRC moved its headquarters to the Ninth Street location. As the B.A.R. reported at the time, the budget to build out the 25,500 square foot space was $6 million, though Andrews would not reveal the monthly payments on the 10-year lease, saying there's a stipulation in the lease that prohibits it. About $2 million of the costs were donated, Andrews said.
Requests for comment from Mandelman, Dorsey, and Ronen were not returned.
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