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Valley Mental Health has found a new leader.

The private nonprofit, which treats mentally ill residents covered by Medicaid in Salt Lake, Tooele and Summit counties, named Gary Larcenaire as its CEO Monday. His start date is not set — he has signed a letter of intent with Valley and is negotiating a contract — but it will be no later than March 1, according to Valley spokesman Chris Katis.

Larcenaire is the current CEO of El Paso Mental Health and Mental Retardation agency in El Paso, Texas. As El Paso County's authority for the mentally ill and mentally disabled, the agency administers $42 million in public funding for mental health care and education.

"I firmly share Valley's vision and commitment to helping the severely and persistently mentally ill find relief, recovery and rediscovery," Larcenaire said in a prepared statement. "Valley is in an exciting stage of its evolution and I'm enthusiastic to be a part of the team."

He replaces Debra Falvo, who announced in September she would retire, saying the organization needed new leadership. She has been with the organization for more than two decades and was named CEO in 2004.

Larcenaire will inherit an embattled agency. Under Falvo, Valley lost its decades-long contract with Salt Lake County to oversee $50 million for mental health services. For-profit company OptumHealth took over administration of the money in July, contracting with Valley and others to provide services.

Valley has struggled under the new system. From July 1 to Nov. 1, the company laid off 23 employees and has considered selling property. That's on top of the 100 people Valley let go earlier in the year — changes it said were necessary to compete for an Optum contract.

Larcenaire "brings the management experience, compassion and business acumen we require to guide Valley into the future," Dean Hunger, chairman of Valley's Board of Directors, said in a prepared statement.

The board didn't choose someone who has experience running a behavioral health agency that is a contractor under a fee-for-service model. Larcenaire comes from a system that mirrored Valley before it lost the Salt Lake County contract. His system also offers services for residents with developmental delays, care Valley does not provide.

In an interview, Hunger said he wasn't sure how the El Paso organization worked but said Larcenaire would help Valley, referring to his experience in operations management.

"We know this is a new environment for Valley Mental Health," he said. "We felt his skill set was very much in tune with that."

Hunger also downplayed controversies that have recently dogged Larcenaire and his agency in El Paso.

According to the El Paso Times, county leaders dissolved the board overseeing the mental health agency after the board signed a new contract with Larcenaire that would give him $170,000 if he were fired, among other perks. His "lavish" travel expenditures were also under fire, the newspaper said.

Nevertheless, the new leader of the board of trustees defended Larcenaire in the Times — and to Hunger, who called him while Valley's board was choosing a leader.

"We felt like the new board, after a period of time of looking at the operations, gave Mr. Larcenaire a steady vote of confidence," Hunger said.

He said the board does not plan to release Larcenaire's salary at Valley.

Larcenaire has a bachelor's degree in psychology and a master's degree of public administration, according to a Valley news release. The release said he was named Humanitarian of the Year in 2010 by the League of United Latin American Citizens El Paso for advocating for the mentally ill.

Hunger also praised Falvo, who remains at the helm until Larcenaire arrives. "She has provided exemplary leadership to Valley during her tenure with us."

Earlier this year, a group of Valley employees asked the board to fire Falvo, citing cuts in staff and services that left patients with less access to doctors and therapists. But in May, Valley's board expressed its confidence in Falvo.

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