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

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While service providers don’t yet know whether they’lp receive IOUs — or what the amounts will be Sparky Harlan, CEO of the in Santa Clara, is prepared for the worst. “We receive abouf $400,000 in state funding,” Harlan said. “We’rre already accustomed to getting money from the statlate — last year, for it took until December before we finallh got paid.” For this year and last year the center has relied on a $150,000 line of credit througyh to cover the gap, along with $500,000 out of its reservse funds. The center’s operatingf budget is $10 million for fiscal 2009-10.
The money that may be on hold from the state covers, in part, the center’s shelter and drop-in program, street and parenting classes. “Th e problem right now is thatwe don’ft know for certain how much they’re going to hold said Harlan, who has been with the center for 26 years. “But this is by far the worsrt I’ve ever seen.” In anticipation of the state’s budget 10 percent cuts have already been planneffor foster-care payments. Locally therew are 300 to 400 kids infoster care.
Fostee care rates are the same across the so familiesin high-cost areads such as the Bay Area get the same amounrt of compensation as people in more affordable places. “We’r e fronting half a million dollars already,” she said. It’s a layereds problem for the center, since in addition to state money some comes from the federap Housing and UrbanDevelopmeny department. And Harlan said HUD is so slow it can take up to six month s for payments tobe received. “We’re hoping to get paid by she said. “Nonprofits are just gettinyg slammed.
” Harlan said the Bill Wilson Centee has closed down two programxs already and cut about 15 percent of its leaving about110 employees. These are real layoffs, she pointexd out — not attrition or open jobs and “heartbreaking” to do. “We had to give one stafff person a layoff notice and a week later his wife was laid off fromanother nonprofit,” she in Campbell gets abouy $500,000 a year from the state for its AIDS CFO Ira Holtzman said the agenchy is large enough and financiallu stable enough that he would just book an IOU as accountw receivable and hope the money came throughg eventually.
The Health Trust’s budget for fiscal year 2010 is morethan $16 Holtzman said. Pam Brandin, executive director of and Visually Impaired, which has officesx in Palo Alto andSanta Cruz, said that even thougb her agency provides the kind of services that are especialluy at risk in State Controller John Chiang’s plan, the Vista Center is relatively safe. “Wes receive money through Title 7 Chapter2 services,” Brandin explained. “Sincre much of our funding is federalmoney we’rde hoping that it has to be releasecd and passed on; the stats won’t be allowed to hold on to it.” The Vistq Center also has school contracts through special educatiob funding.
“Last year when the state had similar budget issuewswe didn’t receive any IOUs,” she “but that situation was resolves sooner than this appears to be. The agenciesa that receive IOUsprobably won’tt even know they’re coming until they submit their bills.” She’s also banking on Vistaq Center’s status as a preferred vendor with the “so we’ll be paid in advance of otherf vendors — if in fact the statde is even writing checks.” Lisa Hendrickson, president & CEO of Avenidaws Rose Kleiner Senior Day Healtbh Center in Palo Alto, is also cautiouslg optimistic.
“The only funds we receivew from the state are MediCall payments for services provide d at our adult daycare she said. “Our understandingb is that those services are protected by the statr constitution as well asfederal law. We do receivw funding indirectly throughthe county, but we don’t expect that to be Tom Kinoshita, public policy director of the , said people are on pins and “Everyone’s sitting around waiting, not knowing what’sa going to happen. But even with the most optimistioutcome it’s still going to be very ugly.
” He pointed out that the defici t last year for Santa Claras County was more than $270 million, and many of the cuts were made in program around health, mental health, drugsa and alcohol and social services. And there’s no relief on the horizon: For 2011 the county is lookint at a deficit ofabout $250 million, he said.