Mendo’s Confused, Redundant Scramble for Mental Health Primacy

Last month we asked the County for the paper trail on the County's buyback of a vacant parcel on Ukiah's Orchard Avenue. The property has been under consideration for a Crisis Residential Treatment facility for several years, a consideration pre-dating passage of Measure B whose revenues would do the same thing and probably more. According to several county officials we’ve spoken to, the payment of $423,000 to Redwood Community Services to buy the parcel was approved on condition that the money only covered RCS’s out of pocket expenses for the property and nothing more.

But how did Redwood Community Services, aka Timothy and Camille Schraeder, become owners of the property in the first place?

On its face, the sale looked fishy because the property was purchased by Redwood Community Services back in 2016 as part of a grant project approved and funded by the State Treasurer and Mental Health officials. 

But that project collapsed before the proposed crisis facility could be built. So why did RCS deserve to be paid back for a lot presumably purchased with state grant funds?

In response to our formal request for a clarification and supporting documents, the County provided literal reams of property acquisition paperwork and correspondence between the County and Redwood Children's Services.

The picture that emerges from our review of the paperwork is that 1) the County didn’t give Redwood Children's Services any more money than Redwood Children's spent on the property. And 2) the grant application and award process, a complicated procedure to begin with, was delayed on into bungling by the County, and the state grant was lost after almost three years of stop and start work on it.

The original grant application began in the summer of 2015 when Ortner Management Group of Sutter County still owned Mendocino County's privatized mental health contract for adult mental health services. Redwood Community Services wasn’t involved until July of 2016 when they picked up the adult mental health services after Ortner's contract wasn’t renewed because of complaints from cops and hospitals and some Supervisors about high administrative costs and underperformance of services. In other words, Ortner, a private business, was charging the County literal millions for mostly invisible services.

While Ortner was still responsible for Mendocino County's mental health services, the state approved a grant for up to $5.2 million to buy the Orchard Street land on which a 10-bed Crisis Residential Treatment (CRT) facility would be built. (Mendocino County annually spends more than it can afford on out of conty placement of its most volatile mentally ill citiens.)

After Ortner departed with a tidy profit to Sutter County for services mostly not rendered, Redwood Community Services, also a private business but one based in Mendocino County, bought the Orchard Street property with the County’s approval and got a loan from the Savings Bank of Mendocino for over $2 million to cover initial construction costs.

It wasn’t to be.

By the time Redwood Community Services got involved, more than a year had gone by because of the shift from out-of-county Ortner to in-county Redwood Community Services. The County had to re-group, re-plan, and "partner" with Redwood Community Services to re-apply for the state grant, which was duly re-approved with a new project schedule.

In June of 2017 Redwood Community Services bought the Orchard Street property as the intended site of the grant-funded Crisis Residential Treatment facility. The purchase was complicated by the fact that “the property” was actually three separate parcels, the back two of which contained an existing building. 

To clean up the paperwork for the front parcel, there ensued a complicated “lot line adjustment” so that the front (vacant) parcel could be designated for the Crisis Residential Treatment facility.

The rear parcel with the existing building to the rear of the front parcel purchased by Redwood Community Services until recently housed the County’s Employment offices. But they have since moved out to make room for Redwood Community Services making RCS right next door to whatever is done with the vacant parcel.

Complicating things further, there were now several more people and organizations involved, including at least three state agencies, the County Mental Health department with new management, the Planning Department, the County CEO's office, the Supervisors… The addition of each agency added a new layer of confusion.

Meanwhile, and also in 2017, Measure B was passed with facilities objectives which overlapped or competed with the Crisis Residential Treatment plans begun in the 2015 Orchard Avenue grant application. The slo-mo Measure B “Oversight Committee” was appointed with little to no knowledge of the still pending Orchard Avenue project, a Crisis Residential Treatment facility similar to one of the three facilities the Measure B committee was considering — the others being a “crisis stabilization unit” and a “psychiatric health facility” or PHF.

Nevertheless, in May of 2018 more Orchard Avenue delays were encountered. With all the grant turmoil, Redwood Community Services was unable to secure funding from the original grant source due to the delays, so they applied for Community Development Block Grant funds. Bear in mind here that we now had two County entities apparently unaware that they were aimed at accomplishing similar things — some form of in-County facilities for deranged persons presenting a danger to themselves and/or others. Providing this care is worth millions of state and federal reimbursement money.

However, in 2017, Redwood Community Services’ Community Development Block Grant application was “disqualified due to a section being missed due to reallocation of staffing resources towards fire relief.” (A lame excuse, we must say, because that should have been correctable rather than dropped, but we digress.) 

At that time Redwood Community Services and their loyal partner, the County of Mendocino, identified a backup source of funds (aka a loan) that might be available from the US Department of Agriculture for $6.2 million in “alternative” funding if the block grant funding didn’t materialize. Which it didn't.

Ultimately, none of the grant funds or loan approvals for future grants funds (to pay back local loans and expenses) materialized, and the Orchard Avenue project fell apart, leaving Redwood Community Services owning the parcel they'd purchased in anticipation of the grant that never came.

As Measure B funds began to accumulate, and the Measure B Oversight Committee shifted their focus away from remodeling the old Howard Hospital in Willits into a Psychiatric Health Facility, the Orchard Avenue parcel started looking like a possible site for a Measure B-funded project involving the same “Crisis Residential Treatment” facility that had been proposed for grant funding. 

A Crisis Residential Treatment facility is NOT the Psychiatric Health Facility (PHF) that was supposedly the prime reason Mendo voters overwhelmingly passed Measure B. Voters, or many of them anyway, assumed Measure B would do two things (1) provide care for the street crazies who seemed to be multiplying everywhere in Mendocino County and (2) keep our homegrown mentally ill at home, thus sparing the County huge amounts of public money currently spent on distant (and apparently ineffective) lock-up facilities.

In other words, local sales taxpayers would be tapped to replace the state grant funds lost by the grant delays and bungling.

In anticipation of Measure B funding — some day — the County then took it upon itself to buy the property back from Redwood Community Services for $423k — $380k for RCS’s original purchase price plus $43k in “improvements,” most of which paid for the complicated “Lot Line Adjustment” to rejigger which parcels were which so that the back two parcels with the existing building could be combined into one parcel and the front parcel subdivided into two pieces (perhaps one for Crisis Residential and another for Crisis Stabilization, although that too remains unclear).

As far as we can tell, Redwood Community Services never asked for nor were they paid for the substantial staff time they put in applying for the various grants and property arrangements at the Orchard Avenue property. They were only reimbursed for demonstrable out of pocket expenses.

There’s much more in the County’s data download about what the plans were to operate a grant-funded 10-bed Crisis Residential Treatment facility at the Orchard Avenue site, and how much it would cost to build it and staff it, but that is a subject for another day. (We haven't seen any evidence that the Measure B Committee has paid any attention to that now-abandoned grant application with its detailed construction and staffing plans and cost estimates which could provide a lot of background information for their new-found interest in the Crisis Residential Treatment facility, and whatever else they’re looking at. Instead, the Measure B Committee is in the process of basically starting over again, hiring a project manager and architectural firm to re-plan the entire project, presumably including a possible Psychiatric Health Facility, or PHF.)

The entire failed Orchard Avenue grant project could stand as a cautionary tale for what happens when things drag out for years and years with too many players as staffers and contractors leave and new people and new organizations enter and funding comes and goes and wheels get re-invented again and again.

But as it stands, the Measure B Committee and the Supervisors seem content to drag things out for as long as possible, increasing the likelihood of the same kinds of problems that the smaller, less ambitious Orchard Avenue grant project faced, but on a larger scale. 

Meanwhile, the County spends tons of public money on out of county "treatment" for our mentally ill.

For now, it looks like the County and the Measure B committee are placing their bets on the pending hiring of an architectural firm and a project manager/magician for the Measure B facilities (and/or services). But whoever that person/company is, they will face a larger and even more complicated set of people, processes, financing, and staffing obstacles than the Orchard Avenue project did.

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James Marmon Adds: RCS immediately moved into the building on the rear parcel after the purchase, the County’s Employment office was re-located north of town at 2550 North State Street, Suite 3. It happened real fast. The Schraeders basically kicked them out as soon as it passed escrow. What I don’t like is the fact that the Schraeders leveraged the grant money to get that building on Orchard worth 2.2 million. They’re pretty good at playing shell games, that’s why they created that shell company called Redwood Quality Management Company (RQMC).