This story has been updated since first published.
A new board that includes Vancouver Coastal Health chief medical health officer Dr. Patty Daly and B.C. Housing vice-president Craig Crawford is poised to assume control of the Downtown Eastside’s biggest charity.
Mark Townsend and Liz Evans, the couple that founded PHS Community Services Society in 1993, are quitting, along with policy director Dan Small, human resources director Kerstin Steurzbecher and the nine-member board. The announcement came the day before the Housing Ministry released a damning July 2013 KPMG forensic audit critical of PHS governance, management and spending. Minister Rich Coleman had threatened PHS with receivership.
“We basically said, given this stark choice, which was ‘do this or we’ll burn the village,’ we’ll do what you want,” co-executive director Townsend told the Courier on March 19. “All programs and staff are staying in place, so hopefully our departure, to the human beings that we care about most on the ground, will just be a blip they won’t even notice.”
PHS houses 1,200 people across 16 sites, employs 500 people and runs a community bank and dental clinic, but it may be best-known for operating the Insite supervised drug injection clinic with VCH.
The shakeup appeared to be a reversal of fortune for PHS, which passed a B.C. Housing operational review in December 2011 with flying colours. A year later, however, Townsend fell out of favour with VCH CEO Dr. David Ostrow over protesting the end of funding for a women’s substance abuse treatment program at the PHS-managed Rainier Hotel. Last November, B.C. Housing revealed PHS was being audited.
Financial reports provided to the Courier by PHS show it racked up deficits totaling $1,827,949 between 2009 and 2012.
It would have registered a $2,070,566 deficit in 2013 until a $6 million gain on the sale of the Stanley/New Fountain property to 23 Cordova Property Inc., a company whose sole director is developer Ian Gillespie, turned it into a $3,929,434 surplus.
B.C. Housing ($8.7 million), VCH ($8.3 million), rent ($4.12 million) and Health Canada ($2.27 million) were the top revenue sources last year. PHS received just under $100,000 in donations. It also had $30.6 million in expenses, including more than $14 million on staffing and $7.2 million combined for repairs, maintenance and residential services operations. General administration was $2.7 million, approximately nine per cent of expenses.
Ten employees were paid more than $80,000 in 2013, according to Canada Revenue Agency’s website. Townsend said his base pay was $142,000. Evans and four others were also in the $120,000 to $159,999 bracket.
None of the figures above are listed on PHS.ca. The website contains links to staff webmail and a photo blog, but no information about PHS services or finances. Townsend admitted PHS had yet to use a donation that was directed to website development.
“From our mind, websites are about promotion and customers,” Townsend said. “We don’t need customers. Our housing is full, our shelters are full, our services are stretched as it is.”
This is not the first time operations of a Downtown Eastside housing and advocacy charity have gone awry under Coleman’s watch. Downtown Eastside Residents Association was shut down after a June 2010 out-of-court settlement with the province. DERA owed $500,000 in taxes and rent at three provincial housing projects it managed and was accused of subsidizing rent for DERA directors and staff.
Outgoing PHS chair Jack Bibby did not respond to an interview request. A request to interview Coleman was not fulfilled. IntegrityBC executive director Dermod Travis said Coleman, who is also B.C.’s deputy premier, has a duty to ensure taxpayer-funded entities are accountable and transparent.
“If a government sees that there may be administrative challenges in an organization that it is funding, it should not wait to the point where it has to do an audit to get the answers,” Travis said. “It should actually be proactive and make sure the people who are in charge receive adequate training in administration and governance.”