Each of the organizations is financially
stable despite challenging
times, but
each realizes that it
needs the additional
muscle it can
gain only through a
merger if it wants to
keep growing.
Sound like many business mergers? It's
also the story with two nonprofit drug-andalcohol
programs in Reno, Sagewind
Family Service Clinic and Northstar
Treatment and Recovery Center.
The boards of the two treatment centers
recently approved a merger that will become
effective on Jan. 1, and Tom Murtha, chief
executive officer of the combined organization
to be known as Bristlecone Family
Resources speaks in language that any
CEO would understand.
"The bottom line is that we have to
make more money than we spend," Murtha
said a few days ago. "We plow that margin
into increased growth, better facilities or
whatever."
Northstar long has wanted to move out
its quarters at Glendale and Galletti.
Sagewind, meanwhile, operates out of a
flood-prone former monastery building near
McCarran Boulevard on the east side of
town.
After the merger, the two centers think
they will have the muscle to build new facilities.
In fact, they already have first right of
refusal on Reno-area land, and they've
launched a capital campaign.
Murtha's conversation sounds familiar,
too, when he looks at a marketplace crowded
with nonprofit agencies, each seeking
government grants or private contributions.
"There are too many of us chasing too
few dollars," Murtha said.
That, in turn, has led to a strong push by
federal and state officials for nonprofits in
the drug-and-alcohol business to find ways
they can join together.
Northstar, which as been around 38
years, treats adults and families at its facilities
in a corner of the Northern Nevada
Adult Mental Services complex.
Sagewind, meanwhile, has been treating
adolescents and families a natural fit
with Northstar's business.
The market niche for both is providing
cost-effective treatment.
Medical detoxification at Northstar, for
instance, costs $280 a day and that's for
patients with withdrawal so severe that doctors
and other medical personnel need to be
near 24 hours a day.
That's about half the cost patients
might pay at private recovery centers, but
Murtha's organization doesn't see itself in
competition with private firms.
"There's room," he said. "There are people
there who are in need. The system just
can't provide Cadillac service to everyone."
But the services of Bristlecone Family
Resources aren't used solely by patients who
count on government or charity to pick up
the tab.
About 25 percent of the clinic's revenues
come from third-party payments usually,
insurance companies or private individuals.
And that share of the center's business,
Murtha said, is increasing.
The merger will create an organization
with an annual budget of about $6 million
and a payroll of 100. It's highly unlikely,
Murtha said, that the economies that he
expects from the merger will be borne by
workers.
"Our board is a people-person board," he
said. "We're taking a strong look at achieving
economies without slashing and burning."
Murtha said, too, the staff and boards of
Northstar and Sagewind recognize that
they're not in business to turn a profit even
though they need to keep a close eye on
costs and the financial health of Bristlecone
Family Resources .
"Our ultimate goal is to improve the
quality of life of the communities where we
live," he said. That, he said, is measured one
life at a time one less drunk driver on
the road, one less former executive losing
his home and his family to alcohol, one less
worker unable to take a spot in the labor
market because of drug problems.
