FAIRBANKS — The board of a nonprofit regional community health center that provides mental health services in Fairbanks has decided to file for bankruptcy.
The board of Fairbanks Community Behavioral Health Center voted unanimously Tuesday to protect the organization with the bankruptcy filing as it tries to find a way out of debt. The center will continue working with clients.
An audit concluded that the center, which employs about 60 people, has money to operate for only about three weeks, the Fairbanks Daily News Miner reported.
The organization has debt of $1.2 million and has struggled to make payroll since May. Board members said they were not aware of the organization’s financial problems before that. President Barbara Burch described board members as “blown away.”
“We saw financial reports that looked like everything was fine,” Burch said.
The financial problems, Burch said, were compounded by two major medical claims. The organization is self-insured.
A backlog of Medicaid reimbursements crimped the revenue flow, she said.
Board member Deben Das said no one on the board has an accounting background, which made it difficult to scrutinize financial information they were given.
“The board has always felt confident that we were looking at the right numbers,” board member Yonni Fischer said.
State auditors will review the books next week, Burch said.
Executive Director Kelly Shanklin resigned Monday. Burch and board member Craig Partyka said Shanklin had done admirable work over 2 1/2 years but the financial problems overshadow other efforts of the center.
“I think she just saw the writing on the wall,” Partyka said.
Melissa Stone, director of the Alaska Division of Behavioral Health, said the agency could terminate its working arrangement with the center and find another organization. State officials are reviewing options with the goal of maintaining services, she said.
The center treats more than 1,000 people annually. It provides emergency psychiatric care, chronic mental health treatment and residential care.
The board voted to negotiate with former University of Alaska Fairbanks administrator Jake Poole to work as interim director.