Portland's biggest mental-health agency is eyeing massive layoffs to hold back a tide of red ink.

Cascadia Behavioral HealthCare will hand out pink slips to anywhere between 100 and 240 employees Thursday, according to spokesman Mark Schorr. The agency's workforce totals roughly 1,200 and serves many of Portland's most vulnerable citizens, ranging from schizophrenic bag ladies to shut-in depressives.

The main culprit, Schorr says, are government reimbursement rates, which plummeted from $166 per client per month to $109, a drop of 34 percent.

Peter Davidson, director of the the Mental Health and Addictions Services Division of Multnomah County, says Cascadia is receiving millions of dollars more than it did last year, but that it is also providing a broader range of services.

The product of a recent merger between Unity and Network Behavioral Health Care, Cascadia provides such services as mobile crisis teams, walk-in centers, a crisis line, addiction treatment, housing, counseling and day centers for 20,000 clients in Portland, Marion and Washington counties.

To lessen the impact of the shortfall, which is driven mainly by budget woes at Multnomah County, the agency has focused on administrative costs but expects that some of its dozens of sites will face the ax. "We're trying to distinguish the life-threatening cuts from the unpleasantly livable," Schorr says. "It's been a grueling process."

Advocates were alarmed by the news. "To hear they're about to cut up to 20 percent of their workforce is not a good sign," says John Holmes, executive director of the Portland chapter of the National Alliance for the Mentally Ill. "If they don't get things sorted out, we're in trouble."