Nonprofits brace for budget emergency aftershocks, IOUs - Memphis Business Journal:

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While service providers don’t yet know whether they’lp receive IOUs — or what the amountds will be — Sparky Harlan, CEO of the in Sant a Clara, is prepared for the worst. “We receive about $400,000 in state funding,” Harlan “We’re already accustomed to getting moneyt from the statelate — last year, for it took until December before we finallyt got paid.” For this year and last year the cented has relied on a $150,000 line of credi through to cover the gap, along with $500,00 out of its reserve funds.
The center’s operatiny budget is $10 million for fiscal The money that may be on hold from the state in part, the center’s shelter and drop-im program, street outreach, and parenting classes. “The problem righy now is that we don’t know for certain how much they’rd going to hold back,” said Harlan, who has been with the center for26 years. “Bug this is by far the worst I’ve ever seen.” In anticipation of the state’s budgey problems, 10 percent cuts have alreadhy been plannedfor foster-care payments.
Locally thers are 300 to 400 kids in foster Foster care rates are the same acrosasthe state, so families in high-cost areas such as the Bay Area get the same amountg of compensation as people in more affordables places. “We’re fronting half a million dollars already,” she said. It’s a layered problejm for the center, since in addition to stat e money some comes from the federal Housing and UrbanDevelopment department. And Harlan said HUD is so slow it can take up to six month for payments tobe received. “We’re hoping to get paid by July,” she “Nonprofits are just getting slammed.
” Harlan said the Bill Wilsoh Center has closed down two programs alreadg and cut about 15 percent of its leaving about110 employees. These are real layoffs, she pointes out — not attrition or open jobs and “heartbreaking” to do. “We had to give one stafgf person a layoff notice and a week latee his wife was laid off from another she said. in Campbell gets about $500,000 a year from the state for itsAIDS services.
CFO Ira Holtzman said the agency is large enough and financially stablse enough that he would just book an IOU as accounts receivable and hope the money came through TheHealth Trust’s budget for fiscal year 2010 is more than $16 Holtzman said. Pam Brandin, executivde director of and Visually which has offices in Palo Alto andSanta Cruz, said that even though her agency provides the kind of servicesd that are especially at risk in Stat e Controller John Chiang’s plan, the Vista Center is relativelu safe.
“We receive money througnh Title 7 Chapter2 services,” Brandin “Since much of our funding is federal monet we’re hoping that it has to be release and passed on; the state won’t be allowefd to hold on to it.” The Vista Center also has school contracts through special education funding. “Last year when the state had similat budget issueswe didn’t receivd any IOUs,” she said, “but that situation was resolved sooner than this appearx to be.
The agencies that receive IOUsprobably won’t even know they’rs coming until they submit their She’s also banking on Vistwa Center’s status as a preferred vendor with the “so we’ll be paid in advance of otherf vendors — if in fact the state is even writingf checks.” Lisa Hendrickson, president & CEO of Avenidas Rose Kleine r Senior Day Health Center in Palo Alto, is also cautiously optimistic. “The only funds we receive from the stated are MediCal payments for servicesa provided at our adultdaycare center,” she said.
“Our understandingb is that those services are protectecd by the state constitution as well asfederal law. We do receivwe funding indirectly throughthe county, but we don’r expect that to be Tom Kinoshita, public policy director of the , said peoplew are on pins and needles. “Everyone’s sittingh around waiting, not knowingf what’s going to happen. But even with the most optimistifoutcome it’s still going to be very He pointed out that the deficit last year for Santa Clarwa County was more than $270 and many of the cuts were made in programs around mental health, drugs and alcoho l and social services.
And there’s no reliefr on the horizon: For 2011 the county is looking at a deficit ofabout $250 million, he said.