Wichita — The new leader of United Methodist Youthville says the 74-year-old foster-care agency must focus on the bottom line to avoid the financial troubles that led to its bankruptcy filing last year.
John Francis, who began as Youthville's president and chief executive last week, said it could take years before Sedgwick County's leading foster-care provider returns to financial stability.
But Francis warned that the fiscal focus cannot distract the agency from its primary mission of providing care for 1,900 troubled children and their families. Part of the state's privatized social services delivery system, Youthville operates its own residential care facilities and coordinates the placement of children with foster families.
The agency filed Chapter 11 bankruptcy on June 22 last year while carrying about $6 million in debt. Youthville has paid off the money it owed to private agencies it used as subcontractors.
But it still owes almost $4 million to the State Department of Social and Rehabilitation Services and other government agencies, said Jeri Biehler, director of communications and development.
Between 1996 and 2000, the state allocated about $122 million for Youthville to provide foster-care services in Sedgwick County and Western Kansas.
But Youthville's expenses amounted to about $144 million, which was covered by a combination of annual financial support, the principal in the agency's reserve fund and interest on that fund.
The shortfall occurred because the state had underestimated the cost of privatizing the foster-care system, Youthville officials have said, so state reimbursements to Youthville weren't enough to cover the cost of providing foster care.
The bankruptcy didn't affect Youthville's services to children and families, Youthville officials said, but was a strategic move to allow the agency to sell off real-estate and other assets to pay off its debts.
Francis said Youthville is now in a good cash-flow position and able to meet its ongoing obligations.
Last month, the state renewed its contract with Youthville through June 30. Under the contract, Youthville receives about $2,200 a month for each child it serves.
Spokeswoman Stacey Herman said the department had confidence in Youthville and was "looking forward to working with the new CEO."
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