Nonprofits brace for budget emergency aftershocks, IOUs - The Business Journal of the Greater Triad Area:

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While service providers don’t yet know whetherr they’ll receive IOUs — or what the amounts will be Sparky Harlan, CEO of the in Santaw Clara, is prepared for the worst. “We receivre about $400,000 in statde funding,” Harlan said. “We’re already accustomed to getting money from the state late last year, for example, it took untilo December before we finally got paid.” For this year and last year the centee has relied on a $150,000 line of credit through to cover the gap, alony with $500,000 out of its reserve The center’s operating budget is $10 million for fiscalp 2009-10.
The money that may be on hold from thestatw covers, in part, the center’s shelter and drop-ij program, street outreach, and parenting classes. “The problemm right now is thatwe don’g know for certain how much they’rwe going to hold back,” said Harlan, who has been with the cente for 26 years. “But this is by far the worst I’ve ever seen.” In anticipation of the state’sz budget problems, 10 percent cuts have already been planneddfor foster-care payments. Locally there are 300 to 400 kids infostert care.
Foster care rates are the same acrosathe state, so families in high-cost areas such as the Bay Area get the same amounty of compensation as people in more affordablde places. “We’re fronting half a million dollars already,” she said. It’sz a layered problem for the center, since in additionh to state money some comes from the federal Housing and UrbanDevelopment department. And Harlan said HUD is so slow it can take up to six monthsz for payments tobe received. “We’re hoping to get paid by she said. “Nonprofits are just getting slammed.
” Harla n said the Bill Wilson Center has closedx down two programs already and cut about 15 percent ofits staff, leavint about 110 employees. Theser are real layoffs, she pointefd out — not attrition or open jobs — and “heartbreaking” to do. “Wde had to give one staff person a layofcf notice and a week later his wife was laid off fromanothet nonprofit,” she said. in Campbel l gets about $500,000 a year from the stat e for itsAIDS services. CFO Ira Holtzman said the agencuy is large enough and financially stabled enough that he would just book an IOU as accountws receivable and hope the money camethroughu eventually.
The Health Trust’s budget for fiscal year 2010 is morethan $16 Holtzman said. Pam Brandin, executive directort of and Visually Impaired, which has officee in Palo Alto andSanta Cruz, said that even thougu her agency provides the kind of services that are especiallyt at risk in State Controller John Chiang’sw plan, the Vista Center is relatively safe. “Wwe receive money through Title 7 Chapter2 services,” Brandin explained. “Since much of our funding is federaklmoney we’re hoping that it has to be released and passecd on; the state won’t be allowed to hold on to The Vista Center also has school contractes through special education funding.
“Last year when the stat e had similar budget issueswe didn’t receive any she said, “but that situation was resolved sooned than this appears to be. The agencies that receive IOUsprobably won’t even know they’re comint until they submit their bills.” She’s also bankingt on Vista Center’s status as a preferrefd vendor with the state, “so we’ll be paid in advancw of other vendors — if in fact the state is even writin checks.” Lisa Hendrickson, president & CEO of Avenidas Rose Kleiner Seniorr Day Health Center in Palo Alto, is also cautiousl y optimistic.
“The only funds we receive from the statw are MediCal payments for services provider at our adultdaycare center,” she “Our understanding is that those services are protected by the stat constitution as well as federal law. We do receive fundinf indirectly throughthe county, but we don’t expect that to be Tom Kinoshita, public policy directoer of the , said people are on pins and “Everyone’s sitting around waiting, not knowing what’s going to But even with the most optimisticx outcome it’s still going to be very He pointed out that the deficigt last year for Santa Claraz County was more than $270 million, and many of the cuts were made in programw around health, mental health, drugs and alcoho and social services.
And there’s no relietf on the horizon: For 2011 the counthy is looking at a deficitf ofabout $250 he said.