An Update on the State's Fiscal Crisis

After legislators and the governor failed to reach an agreement on a revised budget, the state began issuing IOUs approximately one week ago on Thursday, July 2, 2009. This move by state Controller John Chiang is an effort to conserve cash to be able to make payments mandated by the state constitution, federal law and court orders. Democratic leaders and Governor Schwarzenegger remain at odds over how much spending California should cut in order to achieve the necessary savings to meet the budget shortfall of $26.3 billion.

Sunny Hills continues to monitor the state's fiscal crisis and remains alert to any proposed actions that could jeopardize our programs. Certainly, the cash crunch at the county level could result in a slowdown in payments for services rendered, thereby impacting cash flow. (Sunny Hills contracts with counties, not the state, to deliver services.) To weather this fiscal turbulence, Sunny Hills is able to draw down on our line of credit to even out cash flows and sustain our level of services in the community.

Proposed cuts to education could impact Sunny Hills’ nonpublic school, the Marin Academic Center, most likely resulting in weakening enrollment. Mental health funding appears to be secure for the time being, though the failure of the state to make its contribution could jeopardize federal matching funds.

Perhaps most concerning is the Department of Finance’s (DOF) response to the Democrats proposal to “borrow” $2 billion from cities and counties (allowable by Proposition 1A). In response, the DOF has countered with two alternatives, one of which would be to eliminate the state’s share of costs for the Child Welfare Services and Foster Care programs—a move that is likely more rhetoric than reality, but nonetheless would be a significant concern to Sunny Hills.

We presume that state funding for kinship programs (like Sunny Hills’ Sonoma Family Kinship Center) is safe, despite the Governor’s earlier proposal to eliminate this line item entirely. The state’s allocation for such programs is far less than other social services programs and, while it was originally part of the Governor’s “laundry list” of cuts, we have reason to believe those monies will be preserved.

In closing, we continue to be cautious; I will continue to keep you apprised of any new developments at the state-level that could potentially impact the agency.

Our Commitment to Learning and Improvement

July 1st is an important inflection point in our year at Sunny Hills. As the agency closes out the previous fiscal year and begins anew, this is typically a time for reflection and renewal in our community. This past week I assembled senior staffers to share their program’s accomplishments as well as their challenges from the previous year, and articulate their goals for 2009-2010. It is an essential phase in our organizational learning cycle and an important community-building exercise. As I listened to my staff, I was gratified to hear them speak of their successes—outreach to new communities, new offerings for specialized populations of youth, and increased capacity to deliver services--and also to hear how operational improvements are being implemented on the frontlines of our work. Mission fulfillment is the ability to deliver services that are not only effective, but also efficient from a resource utilization standpoint.

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Key Goals for 2009-2010

Adherence to Fiscal Year Budget
As we usher in a new fiscal year, our mandate is clear: we must do more with less. Like many non-profit organizations, Sunny Hills has had to tighten our belt. We were able to develop a balanced budget for FY2010 by streamlining expenditures and reducing administrative overhead, chiefly through operational improvements. This budget, approved by our board of directors in May, maintains our ability to deliver high quality services and expand our programming to serve more youth and families. Uncertainties persist around the broader economic climate; Sunny Hills continues to monitor closely the state fiscal crisis and market conditions.

Solidify Regional Service Structure
Over the past several years, Sunny Hills has expanded our geographic footprint to include Sonoma and Alameda counties, in addition to Marin. The successful integration of Bay Area Youth Centers as the East Bay division of Sunny Hills was a key accomplishment of the past year. Further, we continue to enhance our programming in Sonoma County and have now become the provider of choice for emotionally disturbed youth with involvement in the juvenile probation system. One of our primary goals for 2009-10 is to further solidify this regional structure and secure a foundation for continued growth. Innovation has always been a hallmark of this agency; we continue to research new opportunities to expand our service delivery and enter new markets.

Telling Our Story
As the profile of Sunny Hills has changed, telling our story has become even more pivotal to our efforts. This year, Sunny Hills will expand our community outreach initiatives to share the positive news of our expanded reach and impact. We are implementing new ways to reach our audiences and creating opportunities for frequent, ongoing dialogues with our stakeholders.

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As we closed our meeting earlier this week, the pride in our accomplishments—in knowing that kids and families were being served at a high level—was a feeling that was shared by all. It goes without saying none of this would be possible without the dedication and commitment of our professional staff. Please join me in congratulating them on their many achievements.

Congratulations Graduates!

As the school year draws to a close, our many programs begin the transitions of summer. Each of the children we serve will experience a commencement this year; for many, it will be a traditional graduation from high school, middle school, elementary school or even kindergarten. For others, their commencement will be less traditional; some of the children we serve will be taking the summer off before mainstreaming into less restrictive educational settings. Others are achieving goals academically or personally that allow them to commence working at another level within their current program. Still others are graduating from probationary programs within the court systems, or moving into permanent living situations, either on their own or in subsidized or supported housing programs. We even have young women in our parenting program for whom the summer will mark the commencement of parenthood. For each of these young people, and for those who care for them, their graduation into what is next will be a watershed moment, a moment they will be able to look back on for the rest of their lives and feel proud of. I am extraordinarily proud of each of the children in our programs, of their successes and their struggles and their courage in the face of their challenges. As part of the Sunny Hills community, please join me as I say to each of them: congratulations!

Leonard v. Wagner Ruling

I am pleased to announce that on June 4th, foster youth with disabilities were awarded an additional year of benefits by San Francisco Superior Court Judge Peter Busch. Judge Busch ruled in Leonard v. Wagner that California state foster care officials in the AFDC-FC program, which provides support for children in foster care, must comply with state and federal disability laws.

Josh Leonard, Executive Director of Bay Area Youth Centers, filed the lawsuit alleging the State of California discriminates against foster children with disabilities through what is commonly known as “the completion rule." The completion rule states that foster children who have not completed high school by age 18, but have a strong possibility of doing so by age 19, may continue receiving foster care benefits until age 19 and their completion of high school. But children who school administrators do not think have a strong possibility of graduating by the age of 19 – including most children who suffer from mental disabilities and are receiving special education - lose their benefits, including their housing, at age 18. The lawsuit charged that the state’s policy of cutting off foster care funding to youth who can't meet the completion requirement because of a disability violates state and federal disability laws.

Congratulations to Josh, and to foster children around the state who will benefit from this ruling! We will keep you updated as the state works to propose and implement procedures to correct the discrimination of the completion rule.

Giving USA Foundation 2008 Report: Charitable Giving Is Down

According to a recent New York Times article, “Charitable giving fell last year by the largest percentage in five decades, according to a new study by the Giving USA Foundation.” It was the sharpest drop in the history of the survey, and confirms what those of us ‘on the ground’ in the fundraising world already know; private donations are down, and human services organizations are taking the biggest hit. While giving overall is down just over 5%, giving to human service agencies fell almost 16%.

While 16% is a very high number, donors held back most significantly in funding their own charitable foundations. The Chronicle of Philanthropy reports that donations to charitable foundations were down 22%. This means that the biggest hits in fundraising will most likely actually be felt in years to come, as those charitable foundations face increased demands and lowered capacity for giving. These statistics are daunting, and we take very seriously the challenges they illustrate. I am ever thankful in these times that we have so many loyal supporters. It is thanks to each of you that we are able to continue expanding services to vulnerable children even in the face of these tremendous challenges. We will continue working as hard as we can to make sure that each child we serve has a better and brighter future. Thank you now as always for your help in making that work possible.

Happy New Fiscal Year: Board Members and Budgets

As we near the end of our fiscal year at Sunny Hills, we prepare for the annual transition in the leadership of our Board of Directors. Deborah Hoke Smith has provided exemplary leadership over her term as President this past year, and she will continue serving on the Executive Committee of the board in the 2010 fiscal year as Vice President. We are lucky to welcome Lydia Cameron as Board President. Lydia has been involved with Sunny Hills for over forty years, and is an integral member of our community. The executive committee will also include Jennifer Gotti as secretary and John Woldrich as Treasurer. We are extremely appreciative of the hard work, leadership and commitment that all four of these individuals provide to Sunny Hills and our Board.

State Fiscal Crisis

The new fiscal year is also a time when we examine even more closely than usual our own agency budget. Sunny Hills is continuing to monitor the state fiscal crisis very closely, and also continuing to examine strategies related to that crisis. Given that the mental health funding streams represent ~50% of our revenue budget we have reason to believe the impact on the agency will be minimal. Our greatest concerns fall into two areas: special education funding, particularly for the Marin Academic Center (MAC) program, and Kinship services.

For MAC, we are concerned because the state is considering discontinuing funding for mental health services to special education students (known as 3632 funding). This means that the burden will fall to counties to fund entirely these programs. (In the past, counties were reimbursed by the state for the majority of these programs' costs). The California Alliance of Child and Family Services (of which Sunny Hills is a member agency) noted in a recent memo that "Since 2001-2002 ... county mental health departments have struggled to provide pAB 3632 services] without receiving adequate resources ... According to the California Mental Health Directors Association, counties are currently owed over $500 million in back payments for AB 3632 services, so the proposed 'deferment' of funds would be of grave concern."

For our Kinship programs, concern stems from the additional budget cuts being proposed. The programmatic cuts that the Governor and Legislature began speaking publicly about after the special election, which are intended to redress the better than 24 billion dollar budget deficit that California now faces, would eliminate funding for Kinship support services.

We are hopeful that the state legislature will be able to find ways to address the fiscal crisis without cutting funding for these programs, which serve many of the most highly vulnerable children and families in California. As we continue working to help these families and young people, we are especially thankful for the private support we receive from the Sunny Hills community of donors. Summer is normally a time when people vacation with their families and the inflow of private contributions to Sunny Hills typically slows down. This summer, with the state fiscal crisis on everyone's mind, we hope you will consider supporting our agency in whatever way you can: our upcoming golf tournament is a wonderful way to enjoy the summer weather while supporting children who really need your help. Every gift of every size matters to the children we serve.

Thank you, as always, for your continued support of Sunny Hills.

French Laundry Reception and Tour

On May 28th Patti Faraday and the Glenwood Guild took a small group of Sunny Hills friends for an exclusive, behind-the-scenes tour of Thomas Keller’s French Laundry. Attendees sipped champagne and sampled delicious hors d’oeuvres, and participated in a lively discussion with the restaurant’s popular maitre d, Lawrence Nadeau. After meeting the chef and master gardener during a private tour of the pristine kitchen and gardens, everyone enjoyed a fabulous three course lunch at Keller’s Bouchon restaurant up the road. As is always the case with this spectacular fundraiser, everyone who attended had an extraordinary time. Special thanks to Patti, the ladies of Glenwood Guild, and of course Mr. Nadeau and Mr. Keller for making it all possible!

* Note: this popular event sells out every year. Watch the Sunny Hills eNews for your chance to reserve a spot on next year’s tour!