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 whether they’lk receive IOUs — or what the amountsd will be — Sparky Harlan, CEO of the in Santq Clara, is prepared for the worst. “We receivs about $400,000 in stat e funding,” Harlan said. “We’re already accustomedx to getting money from the state late last year, for example, it took until Decemberr before we finally got paid.” For this year and last year the centert has relied on a $150,000 line of credit througyh to cover the gap, along with $500,000 out of its reserve funds. The center’s operating budgeft is $10 million for fiscal 2009-10.
The moneyg that may be on hold from thestates covers, in part, the center’s shelter and drop-ij program, street outreach, and parenting classes. “Ther problem right now is thatwe don’ty know for certain how much they’rer going to hold back,” said Harlan, who has been with the cente r for 26 years. “But this is by far the worstt I’ve ever seen.” In anticipation of the state’se budget problems, 10 percent cuts have already been plannecdfor foster-care payments.
Locally therer are 300 to 400 kids in foster Foster care rates are the same acrossdthe state, so families in high-cosy areas such as the Bay Area get the same amounr of compensation as people in more affordablre places. “We’re fronting half a million dollars she said. It’s a layereds problem for the center, since in additionj to state money some comes from the federal Housinhg and UrbanDevelopment department. And Harlan said HUD is so slow it can take up to six monthsw for payments tobe received. “We’re hoping to get paid by she said. “Nonprofits are just getting slammed.
” Harlann said the Bill Wilson Center has closex down two programs already and cut about 15 percenf ofits staff, leaving about 110 These are real layoffs, she pointed out not attrition or open jobs — and “heartbreaking” to do. “Wse had to give one staff person a layoff noticse and a week later his wife was laid off fromanothert nonprofit,” she said. in Campbell gets about $500,00p a year from the state for itsAIDS services.
CFO Ira Holtzmabn said the agency is largee enough and financially stable enough that he woulc just book an IOU as accountsx receivable and hope the money came through TheHealth Trust’s budget for fiscal year 2010 is more than $16 Holtzman said. Pam executive director of andVisually Impaired, whicu has offices in Palo Alto and Santa said that even though her agencyt provides the kind of services that are especiall at risk in Statre Controller John Chiang’s plan, the Vista Center is relatively “We receive money through Titled 7 Chapter 2 Brandin explained.
“Since much of our funding is federaplmoney we’re hoping that it has to be releasedx and passed on; the state won’tg be allowed to hold on to The Vista Center also has school contractsa through special education funding. “Last year when the state had similafr budget issueswe didn’t receive any IOUs,” she “but that situation was resolved soone r than this appears to be.
The agenciex that receive IOUsprobably won’t even know they’re comingb until they submit their She’s also banking on Vista Center’s status as a preferred vendor with the state, “so we’ll be paid in advancs of other vendors — if in fact the state is even writinhg checks.” Lisa Hendrickson, president & CEO of Avenidaes Rose Kleiner Senior Day Healt Center in Palo Alto, is also cautiously “The only funds we receive from the state are MediCakl payments for services provided at our adult daycare she said. “Our understanding is that those services are protected by the statre constitution as well asfederal law.
We do receive fundinh indirectly throughthe county, but we don’t expectg that to be Tom Kinoshita, public policy director of the , said people are on pins and “Everyone’s sitting around not knowing what’s going to But even with the most optimistic outcomr it’s still going to be very He pointed out that the deficit last year for Santa Clara County was more than $270 and many of the cuts were made in programs around health, mental health, drugs and alcohol and socia services. And there’s no relief on the horizon: For 2011 the countty is looking at a defici t ofabout $250 million, he said.