Bail-Out Rescues Center for Poor

The Board of City Directors has agreed to bail out the financially strapped Consumer and Community Action Center, but city officials warned that the move should not be construed as a precedent for programs facing federal budget cuts.

In a 5-1 vote allocating $34,000 in emergency funding this week, city officials said that giving money to one program should not be interpreted as a sign that the city’s other social service organizations can expect financial help from the city.

“We as a society are going to face some wrenching choices,” said City Director Rick Cole of the federal funding cutbacks cities can anticipate in the wake of deficit-reduction legislation recently passed by Congress. “People have no idea of the range of services that are in jeopardy.”

Faced March Closure

Without help from the city, the nonprofit center would have closed next month because the umbrella organization that administers it, Foothill Area Community Services (FACS), drastically cut the consumer agency’s budget.

After deliberating over the matter for several weeks, the city directors voted Monday to allocate the $34,000 to the center so it can keep its doors open until June 30. City directors said they hope the money will give the center’s three-member staff time to solicit enough corporate and individual support to make it an economically independent program.

Headquartered in the city-run Jackie Robinson Center in the predominantly low-income and minority northwest area of the city, the program has provided a range of free services, including help with income tax preparation and consumer complaints and legal advice for about 600 people a month.

Staff Reaction

“We’re very delighted they voted the way they did,” said center Director Gilbert Moreno. “The staff has already started making contacts with individuals and corporations to get the thing going.”

He said the city’s decision to fund the center means that FACS will no longer administer the program. Instead, the center’s employees will work under contract with the city as they begin efforts to incorporate themselves into an autonomous nonprofit organization.

FACS had decided last November to reduce the center’s budget from $104,270 in 1985 to $13,066 this year. As a result of the cuts, two of the center’s five staff members were laid off on Jan. 1. They will be rehired. Funding for Moreno’s position was scheduled to run out at the end of March. The remaining two center employees have been hired by FACS for other jobs.

Although city officials said that the program’s merits were never in doubt, many expressed fears that coming to the center’s rescue would set a dangerous precedent in the light of the funding cuts Congress is expected to make this year.

Funding Crisis

Predicting a funding crisis of Proposition 13 proportions, City Director Loretta Thompson-Glickman argued before the vote that funding the center would encourage other social service agencies to seek city help in bailing out programs affected by cuts that may arise out of the Gramm-Rudman legislation, which mandates that the federal budget be balanced by 1991.

Passed by Congress last December, the law creates an automatic mechanism for cutting funds to federal programs. The Reagan Administration and Congress have until Oct. 1 to come up with a plan to balance the budget before the bill sets into motion an estimated $38 billion in program cutbacks next year.

“I think that you’re announcing (to the agencies), ‘Go ahead and give it your best shot and maybe they’ll feel sorry enough’ ” to provide the funds, said Thompson-Glickman, a former Foothill Area Community Service board member. Thompson-Glickman cast the only dissenting vote on the six-member board.

Other directors shared Thompson-Glickman’s concerns, but argued that short-term help to the center does not represent a precedent to restore funding cuts to other Pasadena-based social programs.

Echoed City Manager

But Thompson-Glickman, who echoed the recommendations of a report prepared by City Manager Donald McIntyre, said that city should have developed guidelines for bailing out financially troubled nonprofit programs before voting to fund the center.

Moreno said that Thompson-Glickman’s argument does not apply in this case because the center’s problems were the result of a FACS management decision to restructure its use of funds, not the potential cuts feared under the Gramm-Rudman bill.

The city directors agreed, however, to begin discussions in the near future of a policy for determining which social programs should receive financial help from the city.

Some of the discussions, Cole and Thompson-Glickman said, should focus on efforts to establish a more aggressive city lobbying stance against the federal cuts and ways to help agencies develop new revenue-generating strategies.

‘Hard-Nosed Effort’

“There needs to be a hard-nosed effort to face up to a painful reality,” Cole said. “To date, I don’t think we (city officials) have been very creative in this area. That’s the case for most cities.”

Raymond Loftin, FACS’ executive director, said that all of his agency’s programs, including its preschool and senior citizens programs, can expect to suffer the impact of the cuts next year.

City officials said, however, that they could not accurately predict how city or local social programs would fare under the potential federal cuts.

Under the worst possibility, federal funding to Pasadena could drop by $900,000 from $4.2 million to $3.3 million next year, said Bruce Philpott, an assistant to the city manager. The funding covers such programs as community development grants, child care, support for senior service programs and job training, he said.

Should Have Prepared

Rather than waiting for the cutbacks to come, agencies like FACS should have started preparing for the loss of federal funds as early as three years ago, said Ralph Schloming, president of Urban Planning Associates, a Pasadena-based planning and research firm.

Loftin said he had tried to prepare both FACS and the center for the impending cuts, but that the increasing competition has made getting corporate and private funds much more difficult.

Laying out his formula for surviving the 1980s, Schloming, a consultant to community service organizations, said the programs that succeed will be those that can, among other things, raise as much as 60% of their funds from non-governmental sources, 20% from clients, and 20% from traditional government sources.

Still, he said, the center has already developed its most important survival skill: the ability to identify and provide a needed social service, and build for itself a strong base of public support.

Schloming predicted, however, that the center’s staff will need at least a year, not five months, to attain its goal of becoming financially independent from the city.

Moreno said, however, that by June he and his co-workers could raise the $50,000 to $75,000 needed to fund the center for the rest of this year.

“I’m going to be working 10 to 12 hours a day, weekends too,” he said, “but we’re going to make it.”