Columbia’s downtown center for homeless adults is having financial problems, as critics had predicted.
The privately run Transitions, a 64,000-square-foot, 260-bed facility, opened 17 months ago amid a stream of controversy at Main Street and Elmwood Avenue. Now, it’s headed for a nearly $360,000 deficit by the end of its fiscal year in June, according to the organization’s leaders.
Still, no homeless person will be turned away this winter as long as there is room, Transitions board chairman Jim Lehman said.
But as warmer weather arrives, the facility might have to cut back its services if a fundraising campaign that’s about to be launched does not bring in enough money, he said.
“We don’t want people to think we’re going to close down, because that’s not going to happen,” said Lehman, who also is managing partner at the Nelson Mullins law firm. “We’re not in a crisis situation. We’re trying to get out in front of this.”
The city has its own wintertime homeless shelter, which this year is being run by Christ Central Ministries through April 1 under a $547,000 contract.
Transitions, a year-round operation, gets $250,000 from the city to offset the cost of its private security staff. But Transitions might have to ask City Council for more money, according to Mac Bennett, the board’s treasurer and chief operating officer of United Way of the Midlands.
Pursuing federal Community Development Block Grants is yet another option that Transitions backers plan to explore, Bennett said. But those grants could be eliminated if the federal sequestration cuts go through.
Columbia banker Mike Brenan is chairman of a new development committee that will lead the fundraising drive that will target foundations as well as corporate and individual contributions.
Brenan, the newly selected director of the state Chamber of Commerce, said it’s too early to say how much the fundraising target will be or when the effort will start. The committee is to hold its first meeting early next month, he said.
Councilman Cameron Runyan has become council’s point man on the homelessness issue. Runyan said he doubts the city has money to contribute more to Transitions, citing the pressing need for $500 million in improvements to Columbia’s crumbling water and sewer system. The city also is facing a hefty environmental penalty and tens of millions of dollars in mandated upgrades from the U.S. Environmental Protection Agency.
Transitions’ budget for the fiscal year that began July 1 and ends June 30, 2013, calls for just more than $2 million in expenses, according to figures released by Lehman, Bennett and center director Craig Currey.
But projected revenue amounts to only about $1.7 million.
The difference? A bit more than $359,000.
During Transitions’ first year of operation, its original budget was $2.37 million, Currey said. But it quickly became clear to Currey, who was hired this past spring, that expenses needed to be reined in.
Currey said he cut $301,000 by scaling back expenses. The biggest single savings came from converting 14 beds that had been planned for homeless patients who required a staff of medical professionals into 14 “convalescent” beds. That means the patients are ambulatory and do not require help from professionals. Most of those patients have been discharged from hospitals and need less expensive follow-up care.
That saved about $140,000, he said.
Another large cut, $65,000, came from eliminating one of the three night-time private security guard positions, Currey said.
Three guards continue to patrol the center during daylight hours, when anywhere from 100 to 150 homeless adults use the facility’s large courtyard and the day center where they can shower, eat a meal, watch TV or do laundry rather than wander Columbia’s streets, Currey said.
The rest of the savings came from trimming salaries, cutting hours of part-time workers and other operating expense reductions, he said.
Transitions tenants are encouraged to use in-house computers to search for jobs, to take advantage of on-site counseling for drug or alcohol problems or to seek referrals to a free, off-site medical clinic.
Transitions is in better financial shape toward paying off the $12 million price tag for buying the land and constructing the center, the leaders said. They were helped by grants from the United Way and the Knight Foundation, which invests in U.S. communities, including Columbia, where the Knight brothers once owned newspapers.
Bennett said $550,000 is unpaid but the center has at least that much in pledges that are expected to come through soon.
Skeptics have complained from the beginning that Transitions would have trouble maintaining its operation.
“That is something some of us said when they built it – that they would not have the money to sustain it,” said Ellen Cooper, president of a coalition of six nearby neighborhoods.
Some critics suspect the deficit is larger than $360,000.
With a year of experience in running the center, with its 20 full-time and 30 part-time workers, Transitions’ leaders say they have a better handle on what it takes to manage. Still, there’s not enough money for the second fiscal year’s projected expenses, the trio of leaders said.
Lehman said the 22-member board that oversees the center would likely formulate its plan to cut services in late winter.
“It would be much harder to cut back services while people are freezing,” he said.
Lehman, Bennett and Currey said they have not begun to draft a contingency plan in the event the fundraising drive does not meet its goal.
“We plan to be successful on the raising side rather than the cutting side,” Bennett said.
It costs about $19 per night to provide 260 beds, according to Transitions’ figures. The leaders argue that is much cheaper than having homeless people show up in hospital emergency rooms or go to jail.
The depth of the deficit became apparent in August and September, shortly after the fiscal year began July 1 and followed Currey’s belt-tightening measures, Transitions leaders said. The internal cuts just weren’t enough.
The center’s operating money comes largely from the $1.1 million it gets from federal grants, according to the figures released.
Public support had been projected to reach $435,500, the figures show. An additional $165,000 is to come from current fundraising, in-kind gifts and income from the city for two case managers who also do similar jobs at the winter shelter, Currey said.
By October, leaders began talking about creating the development committee, which Lehman said most charitable organizations have.
Lehman and Currey attribute the deficit to a learning curve.
The larger problem is having enough big-ticket backers.
“We don’t have a large donor list,” Currey said.
When it opened, Transitions was pitched as a key missing link in addressing Columbia’s problems with homeless people roaming the city center.
The walled center was to offer multiple services in one, high-profile location along one of the primary eastern gateways into town.
During the 10-plus years it took to launch Transitions, the plan drew the ire of Main Street businesses and downtown neighborhoods, including Elmwood Park and Cottontown. People worried about crime, violence, unwanted foot traffic and public urination.
In 1999, the city granted a special zoning exception to allow the Salvation Army to open a shelter there.
Neighborhoods fumed over the zoning decision. Resistance reignited in 2008 when a coalition of business leaders and activists for the homeless, criticizing the city for not addressing the homeless issue, decided to use the building’s existing zoning to build Transitions when the Salvation Army moved out.
Five downtown neighborhoods banded together to fight the plan. They appealed the zoning decision. The Elmwood Park Neighborhood Association later filed a lawsuit.
Cooper, of the Coalition of Downtown Neighborhoods, said resistance has died down but not vanished.
“I think we have decided not to be a combative neighborhood – but not to be an active, supportive neighbor,” she said.
Behind Transitions’ brick wall, the center provides a clean, safe place for homeless adults.
Clients get their basic needs met and, with assistance from 16 service providers, get help with medical and mental health problems, substance abuse counseling, literacy and educational programs as well as job and permanent-home assistance.
Between mid-June 2011 and the end of October this year, Transitions:
Board chairman Lehman said Transitions has helped alleviate problems with homeless people.
“Has (Transitions) solved the problem? No.” he said. “Has it made it better? Yes.
“We would need to be 45 times larger to address the whole problem. We can’t be the be-all, end-all to this issue in Columbia,” Lehman said.
“We want people to know we’ve been good stewards of the money. We’re trying to be sure we’re running a good facility ... before we start asking other people to support us.”