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Fairbanks mental health organization cutting staff

Posted: September 15, 2013 - 12:06am

FAIRBANKS — About a third of the employees at Fairbanks’ primary mental health organization will lose their jobs next week because of budget cuts.

The staffing reduction is being made at a time when the Fairbanks Community Health Center is overhauling its operations and preparing a Chapter 11 bankruptcy filing. It’ll emerge from a short closure next week with a different name — Fairbanks Community Mental Health Services — and new oversight from the nonprofit organization that provides mental-health care in Anchorage, the Fairbanks Daily News-Miner reported.

Interim Executive Director Jake Poole, hired two weeks ago, said the need for aggressive action became clear as auditors inspected the financial problems. The organization had burned through about 45 percent of its annual budget in the past three months.

“Even though we were being optimistic and thinking things were going to fall into place, things were worse than they thought,” Poole said.

Roughly 20 jobs are expected to be eliminated, but it’s uncertain which workers will be let go. Those decisions will be made Monday, when officials from Anchorage Community Mental Health Services go through employee applications and decide which jobs should be filled.

Poole said some positions will likely be restored when the organization stabilizes under new leadership.

“That’s not a great thing, but at least it’s an opportunity,” he said.

The self-insured organization is $1.2 million in debt. It was hit by a pair of large medical claims and has struggled with a backlog of Medicaid reimbursements, board president Barbara Burch said last month.

Though the organization almost didn’t meet payroll in May, board members said they didn’t know just how bad things were until last month, when a financial review found there was only enough money to survive until mid-September.

A state audit is underway to determine why the struggles weren’t more apparent.

Poole said therapeutic services, which include regular and emergency sessions for mental-health clients, won’t be affected by the cuts. But some transitional services won’t be filled when the organization is reborn next week.

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