Case study SF: Too big to fail nonprofit finally asked to pay back millions in loans and Medi-Cal billing
Willy Stöwer: Sinking of the Titanic, 1912.
SF’s habit of giving cash advances to struggling nonprofits helped sink Baker Places into debt of $7.7 million, with about a million of that from an audit of the nonprofit’s Medi-Cal billing. Turns out taking a city employee off their payroll didn’t trim enough fat, so now Baker Places has to hand over $3 million in real estate and get on a 20-year payment plan. The San Francisco Standard’s Gabe Greschler explains.
A behavioral health nonprofit that faced accusations of financial mismanagement and scandal involving an employee is set to pay the city millions of dollars after officials extended a financial life raft to keep operations going.
Baker Places, which offers treatment to residents with both psychiatric and addiction problems, could end up forking over about $7.7 million to the city in a payment agreement that would run a little over two decades.
The figure is a result of debts the nonprofit has accumulated over the years with the city stemming from cash advances on its contracts. The amount also comes about from the findings of an audit, which found that the organization owes over a million dollars related to Medi-Cal billing.
“This is an organization that had been continuously propped up by the Department of Public Health,” said Supervisor Ahsha Safaí, who had previously called for a hearing about the operations of Baker Places. “It was almost one of those too-big-to-fail [organizations] … there was too much investment, too much riding on their delivery for the Department of Public Health.”
The nonprofit was also rocked by scandal in October 2022 when The Standard reported that a city employee making six figures at the Department of Public Health was also pulling in an additional salary worth over $100,000 from Baker Places. The individual, Lisa Pratt, had not received prior approval for the arrangement with the city and later resigned from her role at the nonprofit.
Read the whole thing here.
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