Why any of this

This is not a plan to save money. It is a plan to reach December 1st with a real choice.

• Merge with a larger organisation.
• Wind down in an orderly way, on our terms.
• Close.
• Continue independently.

Doing nothing removes three of the four. The reductions are sized to stabilise operations in about 60 days, which shows us the 90-day position with 30 days still left to change course.

Where we are

Four grants ended or are ending. Grant income falls 65 percent in one year.

Grant money is largely pass-through. A lost grant dollar costs us about ten cents of overhead recovery, as long as the cost leaves with it. The damage is grant-funded cost staying behind after the grant has gone.

Cash

We do not run out of money on a date. We run out at a payroll.

This slide carries the payroll-by-payroll calendar from now to November 30th, with the projected balance going into each period. Figures are from the accountant.

• The replacement grant is necessary and not sufficient. At current spending it still leaves us about $16,632 a month short. It cannot be presented as the answer.
• A bridge of roughly $120,000 reaches December 1st on the current model.
• We carry about $94,800 of interest a year, which implies debt of $1.0 to $1.3 million. No lender is named in any document I have been given. That is one of the three things I need help with.

What changed

Three changes, announced the same day, on purpose.

Staggering them would mean staff spending three weeks waiting for the next one. That costs more in output and departures than the changes themselves. The restructuring is an event and it is finished. The service model is a process that runs for months.

The savings, honestly

You will see $900,971 attached to that list. That is not what it saves.

Two of the nine do not save what they look like they save. One is entirely grant funded and saves nothing this year. Another is 80 percent funded elsewhere and saves about $12,620. Both are still right for other reasons, and neither belongs in a savings total.

What it costs to do

Separation cost is the largest number in this plan that I cannot yet give you.

Currently carried at a $60,000 placeholder. Depending on where it lands it moves the December 1st cash position by up to $200,000. It is being computed now.

• It has to be computed on the current leave policy, not the new one. Our leave is frontloaded rather than accrued, so a departing employee can be holding a full year's entitlement on day one.
• That is a real cash cost in the first week of September, which is the week we can least afford one.
• The state layoff notification statute triggers at 75 full-time employees. We are around 55, so the 60-day notice requirement almost certainly does not reach us. Counsel is confirming.

Revenue

The largest number in this plan is not a cut. It is what we are not billing.

Our stabilization document says we collect under 60 percent of what we bill. Our revenue cycle lead reports 99 percent of claims paid and a 1 percent denial rate. Both can be true, because that 60 percent is most likely an ordinary contractual write-off rather than lost money.

If that is right, the problem is not collection. It is under-billing, and management's own estimate is that we capture between a third and a half of what we could legitimately bill. That is larger than the entire elimination list. Settling this is the highest-value open question we have.

Six revenue items nobody has worked: credentialing gaps, a no-show policy with teeth, group versus individual therapy mix, copays collected at the desk, prior-authorisation tracking, and sliding-scale discipline.

Expenses

$1,223,960 identified that costs nobody a job. $933,500 of it is our own money.

$933,500 is a budget figure. The cash effect this fiscal year is closer to $444,250, because many are annual contracts that unwind at renewal. I would rather you had the smaller cash number.

Service integration

A third of psychiatry appointments do not happen. This is the fix, and it came from the team.

Every psychiatry client gets a named clinical contact other than the psychiatrist, watching engagement, adherence and risk between medication appointments. Integration does not mean therapy: case management and community support qualify, and those staff are not among the reductions.

A correction I am making to you directly: our stabilization plan told you psychiatry no-shows run at 60 percent. That is wrong. It is 14 plus 20.

The vote

Time off is the only item that needs your approval today.

The payroll saving from this is zero. Salaried staff are paid the same either way. The honest value is $130,000 to $175,000 in lower accrued liability, smaller separation payouts, and recovered clinician time. None of it is payroll expense, and I will not present it as a cost cut.

Every full-time employee loses at least a week. Years four and five lose two. Counsel is confirming two points before this is implemented: Illinois generally bars forfeiting earned vacation, and the state paid-leave law may make part-time sick time mandatory.

What I need

Three things only you can do.

• The lender. Identify who sits behind about $94,800 of annual interest, and let me open that conversation before a covenant problem rather than after one.
• Nine leased vehicles stranded when the grant funding them ended. This wants a director who negotiates commercially for a living.
• Employment counsel. One scoped call covering the separations, the leave policy, the retirement plan question and the notification statute.

And one thing to hold: nine people's names are not in any document you have received, and they should not appear in any reply. They are entitled to hear it from us.