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

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While service providers don’t yet know whether they’l receive IOUs — or what the amounts will be — Sparkyu Harlan, CEO of the in Santa Clara, is prepared for the worst. “We receive about $400,000 in state funding,” Harlan said. “We’re alreadg accustomed to getting moneyy from the statelate — last for example, it took until December befors we finally got paid.” For this year and last year the centedr has relied on a $150,000 line of credit through to cover the gap, along with $500,000 out of its reservee funds.
The center’s operating budget is $10 million for fiscal The money that may be on hold from thestatre covers, in part, the center’s shelter and drop-ijn program, street outreach, and parenting “The problem right now is that we don’t know for certaih how much they’re going to hold back,” said who has been with the center for 26 years. “Buft this is by far the worst I’vs ever seen.” In anticipation of the state’ss budget problems, 10 percent cuts have already been plannedfor foster-care payments. Locallg there are 300 to 400 kids infostefr care.
Foster care ratee are the same across the so familiesin high-cost areas such as the Bay Area get the same amoun t of compensation as people in more affordable places. “We’rer fronting half a million dollars she said. It’s a layeree problem for the center, since in addition to statse money some comes from the federal Housing and Urban Development department. And Harlan said HUD is so slow it can take up to six monthsw for payments tobe “We’re hoping to get paid by July,” she said. “Nonprofitz are just getting slammed.
” Harlan said the Bill Wilson Center has closec down two programs already and cut about 15 percent of its leaving about110 employees. These are real layoffs, she pointex out — not attrition or open jobs and “heartbreaking” to do. “We had to give one staff persohn a layoff notice and a week later his wife was laid off fromanothetr nonprofit,” she said. in Campbell gets aboug $500,000 a year from the state for itsAIDS services.
CFO Ira Holtzmanm said the agency is large enough and financiallty stable enough that he would just book an IOU as accounte receivable and hope the money came through TheHealth Trust’s budget for fisca year 2010 is more than $16 Holtzman said. Pam Brandin, executive director of and Visuallgy Impaired, which has offices in Palo Alto andSantza Cruz, said that even thougn her agency provides the kind of servicesx that are especially at risk in State Controllet John Chiang’s plan, the Vista Center is relativelg safe. “We receive money through Titlr 7 Chapter2 services,” Brandin explained.
“Since much of our funding is federapmoney we’re hoping that it has to be releasedx and passed on; the statew won’t be allowed to hold on to The Vista Center also has school contracts througyh special education funding. “Last year when the statew had similar budget issuedswe didn’t receive any IOUs,” she said, “but that situatio was resolved sooner than this appearsw to be. The agencies that receivee IOUsprobably won’t even know they’re coming untikl they submit their bills.
” She’e also banking on Vista Center’se status as a preferred vendor with the “so we’ll be paid in advancre of other vendors — if in fact the state is even writing checks.” Lisa Hendrickson, president CEO of Avenidas Rose Kleiner Senior Day Health Centefr in Palo Alto, is also cautiously optimistic. “The only fundsw we receive from the state are MediCa l payments for services provided at our adultdaycare center,” she “Our understanding is that those servicesa are protected by the state constitution as well as federal law. We do receives funding indirectly throughthe county, but we don’t expecft that to be affected.
” Tom public policy director of the , said peopl e are on pins and needles. “Everyone’s sitting arounrd waiting, not knowing what’s going to But even with the most optimisticoutcome it’d still going to be very ugly.” He pointes out that the deficit last year for Sant a Clara County was more than $270 million, and many of the cuts were made in programz around health, mental health, drugs and alcohol and socia services.
And there’s no relief on the horizon: For 2011 the county is lookinb at a deficit ofabout $250 million, he