SANDY — Allegations that a nonprofit addiction treatment center in Sandy has been the personal crusade — and a big money-maker — for members of one family are continuing to swirl in the wake of state regulators putting the center on notice to change its ways.
Former clients and an academic expert in nonprofits are questioning the high salaries paid to the Boberg family running The Ark of Little Cottonwood. For unrelated reasons, state regulators moved in January to put the Ark's license in jeopardy because of allegations that clients have been exploited for the Boberg's personal gain as well as being humiliated and frightened in their therapy.
Ark supporters claim the allegations are lies, drummed up by angry ex-clients who couldn't follow through with the Bobergs' addiction treatment program.
The Ark is headquartered behind a gate on a four-acre estate near the mouth of Little Cottonwood Canyon in Sandy. It's a treatment center for many forms of addiction, including substance abuse and sexual addiction. Clients usually pay $13,000 or $15,000 a month, depending on whether they have insurance, for group therapy, counseling and even horse therapy.
"I think we have done a really good job in helping the people in this population," said Gloria Boberg, the Ark's founder and executive director.
Some clients and their families praise the Ark as a life-saver. "I would not exist without this program" said Julianne Robinson, who was treated by the Ark for drug addiction. Her stepmother echoed her sentiments. "We can never be grateful enough that Julianne came here," said Keri Robinson.
But other former clients have questioned whether the Boberg family is using the Ark's nonprofit status to generate excessive personal gain. Of eight full-time positions, four are held by Boberg and her three adult children. The Bobergs also hold three of five seats on the Ark's board of directors. The facility has 12 part-time employees.
Salaries for the Bobergs appear to be well above average for nonprofit organizations.
Surveys by the Utah Nonprofits Association show that $80,000 was the average salary in 2006 for an executive director of a comparably sized nonprofit agency. That average rose to $117,000 in 2011. According to tax records, Gloria Boberg's salary was $161,000 in 2008. Her salary declined somewhat during the recession years but stayed well above average.
"Oh, I'm very worth it," she said. "I've had a lot of education and training. I've served as the Salt Lake Community College's drug and alcohol prevention specialist. Yeah, I know addictions, inside and out."
For secondary management positions, such as those held by Jeremy and Darron Boberg, the surveys in 2006 and 2011 show average nonprofit salaries in the high $50,000 range. The brothers earned $132,000 each in 2008. They took less during the recession but are expecting raises when the Ark's revenues improve.
"We're wearing several different hats," Jeremy Boberg said. "From what our investigation with other programs shows, we feel like it's been appropriate."
Tax records show the three Bobergs also collect between $11,000 and $21,000 each, per year in "other compensation." The Bobergs describe that as reimbursement for Ark-related car and travel expenses.
Nonprofit status qualifies the Ark for several advantages, including tax breaks and deliveries from the Utah Food Bank. That means clients paying the five-figure monthly fees eat leftover food donated by grocery stores.
J. Steven Ott, professor of political science and public administration at the University of Utah, said the IRS has legal authority to crack down on nonprofit organizations with high salaries "if they aren't reasonable," Ott said. "The problem is defining reasonable."
Ott, an expert on nonprofits, believes the Utah survey is a reliable comparison. "I could not think of any better source of information."
But the Bobergs insist their pay should be compared with salaries outside of Utah at other high-quality, high-intensity residential treatment programs.
"I've had job offers for more money than I make," said Gloria Boberg, noting she and her sons work 60-hour weeks and are on call around the clock.
In addition to the salaries, critics question the more than $300,000 a year the Ark pays to a company owned by the Bobergs to lease buildings and grounds. The family says the lease payments only cover the property taxes and mortgage payments, a situation forced on them by a complicated legal dispute.
"In order for us to keep this property," Gloria Boberg said, "we had to become the owners of it."
The Bobergs say there's little chance the family would ever own the property.
"We're so upside-down in this property, it's not even a reality that any of us have ever even looked at," Jeremy Boberg said. "It's just not there. There's no equity in this place."
Ott said salary and rent decisions should be made by a truly independent board, not by people who directly benefit.
"The job of a nonprofit is not to support a high mortgage," he said.
The Bobergs said their board does make those decisions and the Bobergs abstain on such matters. They said the board once had 10 members but lately it has shrunk to five.
Compounding the controversy is the unrelated action by state regulators in January. A notice from the Utah Department of Human Services placed The Ark's license on "conditional status" giving the Bobergs 120 days to make reforms and to give all staff members outside training in ethics. The document noted numerous violations, saying clients were exploited for personal gain and were embarrassed, humiliated and even frightened as part of their treatment.
But Gloria Boberg, while not formally contesting the violations in the state's notice, disputed them in an interview. She said the controversy is driven by angry ex-clients spreading lies.
One of those raising concerns is a former client and recovered drug-addict who asked for anonymity. He said clients are often put to work maintaining the building and property. "We were made to shovel the manure out of the stalls," he said, "and shovel the snow, and do whatever yard work needed to be done."
The ex-client said he believes there was a selfish motive for Boberg's family. "Free labor, you know," he said. "Get your stalls cleaned? They don't have to pay to have that done or do it themselves."
Boberg defends the work by clients as a legitimate part of therapy designed to help clients learn responsibility.
However, the January notice from the state specifically cites Boberg for "improper use of clients for manual labor for personal gain to Boberg Family," adding that it involved "moving family members' residences."
Boberg said that was a one-time occurrence to help a widowed relative. She said clients volunteered to help and she's "never made a dime" off client labor.
The state document also says, "There are many ethical violations by staff at The Ark."
"Clients (were) shamed, embarrassed and verbally abused due to actions of Gloria Boberg" and staff members used methods "designed to humiliate or frighten a consumer," the document states.
Ken Stettler, director of the office of licensing for the Utah Department of Human Services, said the state has information to back up those charges, but some of it cannot be made public. "I wouldn't be able to share that," Stettler said, "but we do have evidence that that was the case."
The state documents list other violations though, including improper dispensing of medication and interference with client rights to interact with their families.
"It's not a life-threatening type of thing," Stettler said. "But, yeah, they (the violations) are serious in how people are treated."
In the January document, state regulators ordered a number of reforms the Ark must implement to keep the license. The deadline for compliance is next month.
The Bobergs pointed out that they donate more than $500,000 worth of free care each year. They also argued that everything they've done has been reviewed by lawyers and professionals in the nonprofit arena.
Email: hollenhorst@desnews.com