QUESTION
How have budget cuts impacted shelter service providers' operations and staff, and what flexibility is provided for managing these changes?
0:58:55
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5 min
Molly Wasow Park, Commissioner of the Department of Social Services, details the imposed budget cuts, noting no layoffs but consolidations of vacant positions, with a focus on maintaining high-quality service and addressing salary issues through flexibility in fund allocation.
- Budget cuts have resulted in consolidations of some vacant positions across shelters, with no direct layoffs reported.
- Providers have been granted flexibility in managing their funds, including reallocating a portion towards improving staff salaries.
- Despite budget constraints, there has been a significant increase in clients connected to permanent housing, indicating maintained service quality.
- Deputy Speaker Diana I. Ayala emphasizes the challenges posed by delayed contract payments and advocates for prioritizing existing services over introducing new ones amidst financial difficulties.
- The department continues to work with individual providers to implement changes and address concerns efficiently.
Diana I. Ayala
0:58:55
The adopted budget of 2024 included a baseline reduction of $36,200,000 for the HSAs shelter service providers.
0:59:03
Savings were to be generated from a 2.5 percent net reduction of sheltered contracts and were permitted to reinvest half of that.
0:59:12
Or 2.5% towards staff retention costs.
0:59:15
At that time, DHL stated that shelter providers were not spending down all of the personnel service costs allowed in their contracts, and therefore, the reduction would not affect providers.
0:59:25
Providers though have stated that the only reason that they could not spend the entirety of their contract was because of restrictions placed on what they could spend the funding on.
0:59:34
Where is DHS in the process of implementing this change?
Molly Wasow Park
0:59:38
Thank you, Consumeb.
0:59:39
So just to clarify, this is a peg from the FY 24 cycle.
0:59:45
So from last year, Like all the other agencies, we had to take a peg to address the city's financial position last year And because as was noted, the overwhelming majority of our budget is passed through to not for profit contractors, we really have limited option and we couldn't entirely hold or not for profit providers harmless.
1:00:09
In the past, when we had had to take cuts and we had imposed particular types of reductions on providers.
1:00:16
What we heard back from them was they know their budget and operations.
1:00:21
Better than we ever can and that it makes more sense for them to have some flexibility in doing so.
1:00:28
So the agencies cut peg for last year was 4%.
1:00:32
We passed through 2.5% to the not for profits and then given them the additional flexibility on top of that to do some personnel realignment so that so that they were able to make some decisions that help them.
1:00:48
I I think to the point that you speak to, we heard that some of the reasons that they had vacancies, right, was because salaries were low.
1:00:55
So what we're saying is, you know, yes, we need to take some of that as savings, but some of that can also go to increasing particular salaries.
1:01:03
Lines.
1:01:04
And we thought that flexibility and individual contract management made sense for the providers.
1:01:12
We have worked with every provider to come up with with a series of changes that made sense for them.
1:01:18
I think the bulk of them are are in place at this point.
Diana I. Ayala
1:01:21
Okay.
1:01:23
So we're hearing from the providers that the cut has been quite painful.
1:01:28
And I'm I'm assuming that because of the conversations that are ongoing, has that changed?
Molly Wasow Park
1:01:35
Cut are unfortunately always painful in our virtually always painful in our area.
1:01:40
I think there's every once in a while, we can find something where we're actually improving service delivery and saving money, but it's hard.
1:01:46
We're providing essential services and serving vulnerable clients.
1:01:53
I did not wanna make that change.
1:01:55
We it was something that we had to do in order to to meet targets but we continue to work with individual providers to address particular concerns.
1:02:06
There was at the same time the work force enhancement funds that were added so that certainly didn't make providers whole, and they we understand that the intent there was to to grow, but it did provide a partial offset.
Diana I. Ayala
1:02:21
Haven't have the anticipated cuts?
1:02:23
Has it have they caused the reduction of any of service or the elimination of any positions as CBOs?
Molly Wasow Park
1:02:30
So I can't speak to individual, not for profit, individual shelter, how they have whether or not they have reduced any headcount positions.
1:02:39
Nobody was laid off, but we did think that there were some I do believe there were some vacancy consolidations that was spread out across our many hundreds of shelters, so I can't can't actually speak to the details.
1:02:53
But I feel very confident that our providers are continuing to provide exceptional service.
1:03:00
I think One of the measures that I take most seriously is the number of clients that we are connecting to permanent housing.
1:03:06
We saw a 17% increase last year and we're on track to exceed that this year.
Diana I. Ayala
1:03:10
I mean, I think that the the the what makes this more difficult and, you know, complicated is the fact that we're also not paying our contracts on time.
1:03:20
And so any percentage that we're taking away from a budget is already at a deficit.
1:03:25
You know, in the beginning of the fiscal year is problematic.
1:03:28
And I think that that's, you know, an argument that holds true.
1:03:33
And considering that the the actual baseline reduction is only 36,200,000, I mean, I I don't That doesn't you know, in the scheme of things when I was little, I thought that was a lot of money.
1:03:43
I know now better, and and I know that we can find it.
1:03:46
And I've seen plenty of of new programs that have been announced in the last month that equal to, you know, far more than that that are new and necessary.
1:03:56
But I guess in times when, you know, we're struggling, we shouldn't probably be adding a whole bunch of new programs and services so that we can keep the ones that we have intact.
1:04:07
But that's just me.
