photo by: Courtesy: Jeff Burkhead

Bert Nash Community Mental Health Center CEO Patrick Schmitz is pictured in June of 2019.

As questions have arisen about whether the Bert Nash Center can meet future payrolls, a new report confirms the mental health organization indeed had minuscule cash on hand this spring.

At the end of April, the nonprofit Bert Nash Community Mental Health Center had just enough cash on hand to cover 2.5 days worth of expenses, the organization disclosed in a financial report obtained by the Journal-World. That amount is far below the approximately two to three months of cash reserves that many businesses and governments strive to keep.

Bert Nash’s CEO, however, told the Journal-World on Tuesday that the center is planning more adjustments to its operations that could include changes in service hours, department restructuring and changes in which patients are eligible for financial assistance programs offered by Bert Nash.

“Those conversations are underway with union leadership and our community partners,” CEO Patrick Schmitz told the Journal-World via email. “As a result of these measures, we are now projecting a nearly breakeven budget for 2025.”

A breakeven budget would be a dramatic turnaround from earlier projections. Bert Nash leaders in February told Douglas County commissioners that they expected a $1.5 million budget deficit in 2025. Financial reports obtained by the Journal-World show that situation actually had worsened since that February meeting. Bert Nash’s March financial report projected a $2.5 million budget deficit, although it was adjusted to a $2 million loss in the April report.

The losses have fueled a number of questions from the public about whether the organization could remain viable. The organization last month warned employees and other stakeholders that the nonprofit faced “financial exigency,” which created questions about whether it was at risk of closing.

“However, this term does not mean that Bert Nash Center is at risk of closing,” Schmitz told the Journal-World via email. “We are making necessary adjustments to our operations and resources to ensure that we continue to serve the community effectively. Our focus remains on maintaining the high-quality care and support our clients rely on, and we are actively working to strengthen our financial foundation to meet the ongoing needs of the community.”

It has been no secret that Bert Nash is struggling financially, as the organization cut about 8% of its workforce — around 30 employees — last month, in addition to other select employees taking pay cuts.

But Bert Nash officials hadn’t warned that it only had enough cash on hand to pay bills for a few days. The Journal-World first noticed the low cash balance when reviewing the official minutes from the Bert Nash board of directors meeting that was held on April 29. Those meeting minutes were reviewed by the Journal-World after they recently were submitted to the Lawrence City Commission as part of a monthly reporting process. Those minutes listed that at the end of March Bert Nash had just enough cash on hand to cover 3.5 days worth of operating expenses.

The Journal-World on Tuesday morning then filed a Kansas Open Records Act request for Bert Nash’s April and May financial statements. The organization on Tuesday afternoon provided April’s financial results showing approximately 2.5 days of cash available to cover operating expenses, and noted May’s financial report has not yet been completed.

The small amount of cash on hand squares with concerns expressed by Douglas County Commissioner Gene Dorsey, who recently said he feared a financial crisis was “imminent” at Bert Nash and questioned whether the organization would be able to meet future payrolls. Dorsey unsuccessfully lobbied the Douglas County Commission to give Bert Nash an emergency cash infusion.

On Tuesday, Dorsey told the Journal-World the situation at Bert Nash remains delicate and he did not want to comment on the organization’s current financial position.

“I don’t really feel I can comment at this moment,” Dorsey said. “People can read that the way they want to, but that is all I have to say at the moment.”

The Journal-World directly asked Schmitz whether he was concerned about Bert Nash’s ability to meet future payrolls, which had totaled about $2 million per month prior to the layoffs. Schmitz didn’t specifically dismiss the possibility, but said recent budget cuts were meant to provide more stability to Bert Nash’s operations.

“These challenges have been building for some time, and our steps over the past eight months were to reduce costs, seek increased financial support for those who are uninsured, underinsured and in crisis, all while preserving care and the essential high-quality services that our community needs,” Schmitz said via email. “Still, we reached a point where immediate action was necessary to ensure we could meet payroll and remain financially stable. These were incredibly difficult decisions, but they were made so we can continue supporting both our team members and the community we serve.”

The recent financial reports also provided a glimpse at one path Bert Nash leaders are pursuing to tame the financial crisis. Both the March and April financial reports noted Schmitz was in conversations with the Kansas Department for Aging and Disability Services about obtaining “additional support” for Bert Nash.

On Tuesday, Schmitz confirmed those conversations, but did not indicate how much money could be coming from the state agency. He also said if money does come from the agency, it would not come until at least another month or more.

“Bert Nash Center is currently in discussions with KDADS regarding potential additional funding to help address the rising costs of providing care to the uninsured, underinsured and those in crisis,” Schmitz said. “However, given that KDADS follows the State of Kansas fiscal calendar, which begins in July, any new funding will be available after that time.”

Some community advocates have been lobbying the Douglas County Commission to immediately increase its funding to Bert Nash, particularly the amount the county provides Bert Nash to operate the county-owned Treatment and Recovery Center. The county’s mental health sales tax fund ended 2024 with an approximately $18 million fund balance that was not budgeted to be spent. Dorsey and others have argued the county should immediately provide some emergency funding to Bert Nash from that fund balance, but thus far commissioners have said they feel more comfortable addressing the issue as part of the 2026 budget process, which will conclude in August.

Bert Nash finds itself in financial difficulty, in part, due to changes in who is eligible for Medicaid, the federal insurance program for the poor. Medicaid had expanded eligibility during the COVID-19 pandemic, but the number of eligible residents has declined since the end of the pandemic.

As a result, the percentage of uninsured individuals Bert Nash is providing services to has increased from 22% in 2023 to 27% in early 2025. That amounts to an increase of about 200 uninsured patients per month, Schmitz previously told the Journal-World.

The financial troubles, though, also come at a time when Bert Nash has announced plans for two major expansions — a more than $10 million supportive housing facility along Rockledge Road in northern Lawrence, and a $12 million project to renovate the former LMH Health South building at Clinton Parkway and Kasold Drive into a facility for youth who are experiencing a mental health crisis.

In an email to Bert Nash employees last month, the organization’s chief advancement officer said the Youth Recovery Center remained a top priority, and was financially feasible because children are insured at much higher rates than adults.

On Tuesday, Schmitz told the Journal-World that Bert Nash still intends to complete the supportive housing project for adults as well.

“Bert Nash Center is committed to moving forward with the project and the crucial role it will play in helping our community address urgent and critical affordable and supportive housing needs,” Schmitz said. “The Bert Nash Center continues to pursue additional funding opportunities to help bring the project to completion and is assessing changes in the project design to reduce costs while maintaining the number of units that will be created.”