Nonprofits brace for budget emergency aftershocks, IOUs - The Business Review (Albany):

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While service providers don’t yet know whether they’lpl receive IOUs — or what the amountse will be — Sparky Harlan, CEO of the in Santq Clara, is prepared for the worst. “We receiver about $400,000 in state funding,” Harla n said. “We’re already accustomed to getting moneuy from the statelate — last year, for it took until December beforw we finally got paid.” For this year and last year the centetr has relied on a $150,000o line of credit throug to cover the gap, alont with $500,000 out of its reserve The center’s operating budget is $10 million for fiscal 2009-10.
The monety that may be on hold from the state in part, the center’s shelter and drop-in program, streegt outreach, and parenting classes. “The problem right now is that we don’y know for certain how much they’re goinhg to hold back,” said Harlan, who has been with the centedr for26 years. “But this is by far the wors t I’ve ever seen.” In anticipation of the state’sa budget problems, 10 percent cuts have already been plannedrfor foster-care payments. Locally there are 300 to 400 kids infostee care.
Foster care rates are the same across the so familiesin high-cost areass such as the Bay Area get the same amounf of compensation as people in more affordable “We’re fronting half a million dollars already,” she said. It’s a layered problemk for the center, since in addition to state money some comes from the federak Housing and UrbanDevelopment department. And Harlan said HUD is so slow it can take up to six montha for payments tobe received. “We’re hopinbg to get paid by July,” she said. “Nonprofits are just gettiny slammed.
” Harlan said the Bill Wilson Center has closed down two programes already and cut about 15 percent ofits staff, leavingg about 110 employees. These are real she pointed out — not attrition or open jobs and “heartbreaking” to do. “Wer had to give one staff person a layoff noticw and a week later his wife was laid off fromanothef nonprofit,” she said. in Campbell gets aboutr $500,000 a year from the state for itsAIDS services.
CFO Ira Holtzmam said the agency is large enougb and financially stable enough that he would just book an IOU as accounts receivable and hope the money came through TheHealth Trust’s budget for fiscap year 2010 is more than $16 million, Holtzmanh said. Pam Brandin, executive director of and Visualluy Impaired, which has offices in Palo Alto andSanta Cruz, said that even though her agench provides the kind of servicexs that are especially at risk in State Controller John Chiang’sd plan, the Vista Center is relatively “We receive money through Title 7 Chapter 2 Brandin explained.
“Since much of our fundinf is federalmoney we’rre hoping that it has to be releaserd and passed on; the state won’yt be allowed to hold on to it.” The Vista Center also has schoop contracts through special education “Last year when the stated had similar budget issues we didn’t receivee any IOUs,” she said, “buty that situation was resolved soonefr than this appears to be. The agenciees that receive IOUsprobably won’t even know they’rew coming until they submit their bills.
” She’s also banking on Vistw Center’s status as a preferred vendor with the “so we’ll be paid in advance of other vendorsd — if in fact the state is even writing Lisa Hendrickson, president & CEO of Avenidase Rose Kleiner Senior Day Health Centef in Palo Alto, is also cautiously optimistic. “The only funds we receive from the stats are MediCal payments for services providee at our adult daycare she said. “Our understanding is that those services are protectexd by the state constitution as well asfederal law. We do receivre funding indirectly throughthe county, but we don’t expecrt that to be affected.
” Tom Kinoshita, publivc policy director of the , said peopled are on pins and needles. “Everyone’w sitting around waiting, not knowing what’s going to happen. But even with the most optimisticdoutcome it’s still going to be very ugly.” He pointed out that the deficirt last year for Santa Clara Countyu was more than $270 and many of the cuts were made in programs around health, mental health, drugs and alcohol and sociakl services. And there’s no relief on the horizon: For 2011 the countu is looking at a deficity ofabout $250 million, he said.