Quick Take
County behavioral health staff met this week with members of the Mental Health Client Action Network board of directors, who say they want to resume services within six months — but need to get past obligations paid first. On Tuesday, the Santa Cruz County Board of Supervisors took steps to prepare for homelessness nonprofit Housing Matters ending its day services in March, particularly the mail services that are a lifeline for many vulnerable residents.
The Santa Cruz County Board of Supervisors took the first steps in reestablishing day services, particularly mail, at its Tuesday meeting following the announcement that homelessness nonprofit Housing Matters would end its program in March.
County behavioral health staff also met Monday with members of the board of directors of the Mental Health Client Action Network (MHCAN), who said they want to resume services but need to work through various financial issues first. The organization’s board chair said she hopes to be able to resume services within six months.
Staff from the county’s behavioral health and Housing for Health divisions will participate in planning workgroups to seek ways to establish substitute day services in the coming months. They plan to return to the board no later than March 24 with recommendations for day services and an update on MHCAN’s status – and whether it’s salvageable at all.
The sudden closure of the peer-run behavioral health nonprofit MHCAN in September and the abrupt announcement in October that homelessness nonprofit Housing Matters would shutter the only drop-in day services in the county in March have caused widespread concern over a lack of resources for low-income, unhoused and otherwise vulnerable county residents.
The supervisors voted to end the county’s mail services contract with Housing Matters, given that the organization is ending that service, and also reduced the county’s North County emergency shelter services by $45,000 to reflect the halting of day services.
While the shuttering of day services means that access to showers, restrooms, rest areas and basic amenities will end next year for an estimated 50 to 80 unhoused people who use the services daily, the closure of the mail room has caused perhaps the most concern. About 1,700 people use the mail room on the Housing Matters’ Coral Street campus in Santa Cruz as their permanent address to receive government benefits.
In order to partially remedy this, Robert Ratner, the director of the county’s Housing for Health Division, said at the meeting on Tuesday that staff is working with Housing Matters to offer mail services for those who receive benefits such as CalFresh, Medi-Cal and cash aid at the Human Services Department’s Employment and Benefits Services Division offices in Santa Cruz and Watsonville.
District 3 Supervisor Justin Cummings said at the Tuesday meeting that the closure of both Housing Matters’ day services and MHCAN came as a surprise, and that it’s “really disappointing” that Housing Matters made the decision to shutter day services without input from elected officials and without having alternatives established. He said that the county is committed to working with MHCAN.
“We’re really trying to figure out how we can get them in a stable place,” he said, adding that the county is trying to find a way to get the organization insured again so it can reopen with liability insurance.
Marni Sandoval, the county behavioral health director, discussed the situation surrounding MHCAN, and said that the organization’s problems were “quite complex”; although she said that she and her staff had weekly communication with the organization’s board of directors for some time after MHCAN’s closure, there came a point where the board did not want to continue. That changed, however, on Monday, when members of MHCAN’s board met with county staff again and indicated that they want to resume services – though the organization still faces serious financial issues, including debt and outstanding payments to employees.
Sandoval said that in order to work through the financial woes, the program will likely have to receive external financial assistance, like a fiscal sponsorship from another nonprofit organization. She added that the county is also planning to work with MHCAN to develop a model that would allow its operations to continue sustainably, should it reopen.
During public comment, Tyler Starkman, MHCAN’s former executive director who was fired in August, expressed frustration with and a lack of confidence in the organization’s board of directors and said that he would be able to run the organization properly.
Documents previously provided to Lookout say the board fired Starkman for “chronic absenteeism,” insufficient “organizational transparency” and a failure to provide “invoices and financial documentation,” as well as not paying staff on time.
However, Starkman blamed the financial documentation issue on slow reimbursements from the county and difficult reporting requirements after a 2024 audit showed discrepancies between MHCAN’s expenses and the amount it was billing the county prior to Starkman’s tenure as executive director.
“[The board] didn’t realize how hard I was working,” he told Lookout. “It was a sad mistake on their part to let me go.”
MHCAN board chair Danette Lawrence told Lookout on Tuesday that the board and county are working to get past debts settled, including pay for employees who are still missing overdue checks.
She added that the board and the county are looking for other nonprofits that might be able to run the organization until it’s able to fully get back on its feet. She hopes to settle the debt and stabilize the organization in order to reopen in six months.
“If we can open any sooner than that, we’re absolutely going to do our best to do that,” she said. “It’s a great hardship on the community to not have some of these important services.”
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