New revelations about Genesis Family Center have further strained relations with Fresno County, raising questions about the nonprofit's future.
In response to questions from The Bee, county officials acknowledged this week that Genesis hired former Fresno City Council Member Ken Steitz, the live-in boyfriend of the agency's embattled former chief executive, Elaine Bernard.
Genesis, which runs social-service programs for the county, also tried to overbill the county for high-rent office space in north Fresno, and leases a new BMW sedan, officials say and records show.
Stories about lavish spending by Bernard were commonplace in the years leading up to the conviction of her and her sister on charges of embezzling funds from Genesis.
Never miss a local story.
Officials at Genesis, including Steitz, declined to answer questions this week about the spending. Genesis' attorney, Linda Kollar, said she was too busy to respond.
County Supervisor Judy Case said the disclosures are further proof of why the county should not do business with Genesis. The county has millions of dollars worth of contracts with Genesis to provide counseling, foster care and other services to children.
"There's a lot of money going into things that aren't for the kids. They need administration but they don't need to be living high off the hog," Case said. "We don't need to pay for Taj Mahals for Genesis."
Case and others on the Board of Supervisors recently voted against a Genesis contract proposal and say they won't support future proposals without changes at the agency.
Because of uncertainty about future board support for Genesis, the county will no longer place children in the agency's group homes or foster homes, Catherine Huerta of Children and Family Services said. Huerta notified the agency of her decision this week.
Huerta said she can't justify placing children in Genesis homes knowing that they may have to be removed later.
The county has more than 160 children in Genesis foster homes, and six in its group homes. The county has other foster homes and group homes where children can be placed, Huerta said.
The state Department of Social Services has barred Bernard and her sister, Genesis co-founder Carol Dela Torre, from entering the agency's group homes and foster homes. The orders were in response to the sisters' embezzlement convictions last year.
Group homes and foster-care homes were the biggest parts of the Genesis operation in 2007, according to the agency's federal tax return for that year.
Meanwhile, county officials concede they have found problems in another Genesis program. The county pays Genesis $1.5 million a year to run the transitional-age youth program, which provides services to teens and young adults who have severe emotional disturbances.
County Behavioral Health director Giang Nguyen said she recently learned that Genesis hired Steitz as the program's housing director. As housing director, Steitz is responsible for providing shelter for young people in the program. About 30-35 people have received housing in the program.
County records show Genesis hired Steitz in March 2008 for the $55,000-a-year position. Steitz is the only person to hold the job since the program started in December 2007.
Nguyen said it's a potential conflict of interest for Steitz to hold the position when he's living with Bernard, and Genesis had a duty to disclose the relationship to the county.
Considering the program's goal of helping troubled youth, Nguyen said she's concerned about Steitz's record of drunken driving and will ask the agency's board about it.
Steitz and Bernard were convicted for driving drunk in separate vehicles on the same night in 2006. They were arrested at the home they share in Clovis.
Steitz had a blood-alcohol level three times the legal limit for drivers, court records say. He was sentenced as a habitual offender, having been convicted for drunken driving in 2005.
Asked in 2006 whether he was an alcoholic, Steitz said: "When you have two DUIs in three years, you've got a drinking problem."
Nguyen said she also has questioned Genesis about the location of the program. She said she recently learned that Genesis had moved the program's offices from the county-approved site at Blackstone and Shaw avenues to a location on Palm Avenue near Herndon Avenue.
Genesis billed the county almost $14,000 for January rent for the new location, or more than twice as much as the previous month in the old location, records show.
Genesis continued to bill the county the higher amount for the next two months, but Nguyen said she told Genesis on March 30 that the county will not pay the extra amount.
The county will pay Genesis the amount agreed upon in the contract, and Genesis will have to find other funds to make up the difference, Nguyen said.
The county only pays for the portion of the building used by the program. Genesis has its main office in the same building, located near luxury car dealers, a diamond merchant and other high-end retail stores and offices.
It's unclear how Genesis pays the rent for its main office, but almost all of the agency's revenue comes from government.
"It's really a first-class business park," said Bobby Fena of Colliers Tingey International, a real estate firm located across the street from Genesis. "It is in the city's premier high-rent district."
Nguyen said Genesis may end up cutting services from another program to pay for the higher rent.
That's the same reason for the criticism of other Genesis expenses, such as the use of a white 2009 BMW car. State records show the car is leased to Genesis.
Nguyen said she confirmed that the car is not leased as part of the transitional-age youth contract, but doesn't know which contract covers the lease payment.
"The county doesn't use BMWs so I don't think it's an appropriate use of taxpayers' money," said Nguyen.