JJ Hensley
The Arizona Republic
Feb. 18, 2008 12:00 AM

Valley non-profit faces budget woes
Charity cutting positions, employee pay

One of the Valley's largest non-profit agencies is experiencing a severe enough budget crunch that employees are being asked to accept pay cuts, reduced or unpaid vacation time and other cost-cutting measures to help the charity reduce its deficit.

The directors at Valle Del Sol say they have cut an unspecified number of staff positions and mandated employees take less pay - on a sliding scale to ensure fairness - through the end of June so that the agency can come in $100,000 to $200,000 under budget for the fiscal year.

Valle Del Sol serves more than 20,000 people with behavioral health and substance problems.

The agency's president and CEO, Luz Sarmina, attributes the budget shortfall to a host of factors, including the state's financial woes and Maricopa County's decision to switch to a new provider for behavioral health-care services.

The provider, Magellan, has referred fewer patients to Valle Del Sol, Sarmina said.

"There are cutbacks in state funding as we all know. It rolls down hill and we're down the hill," she said. "My concern is that people will read into this and say, 'Oh no, the agency's going under.' That's not the case."

Board members have confidence in the charity's leadership and consider the current situation a result of the change in behavioral health-care providers and a reflection of the state's funding issues in general, said Maria Morales Spelleri, the board's vice chair.

"Luz and our (chief financial officer) have set up the organization with the board's review to withstand times that we're going through," Spelleri said. "Valle's been around for a long time and will continue to be open to providing services for those in need. We have great employees and it's just a hard time."

Beyond the organization's employees, adults with behavioral-health and substance-abuse problems who aren't covered by government programs are likely affected the most by the state's budget woes, Sarmina said.

Those issues are trickling down to Valle Del Sol, where Sarmina estimated that population makes up 15 to 20 percent of the 20,000 clients the charity contacted last year.

In times of economic uncertainty, it's those at-risk populations who need help the most and feel the pinch first, Sarmina said.

"One of the ironies is that when the economy is strong, the need for services tends to go down," she said. "When the economy is not strong, the need for services goes up but the money is not available because the economy is not as strong."

Patricia Lewis, the senior professional in residence at Arizona State's center for non-profit leadership and management, says these are difficult times for non-profits.

"I think we'll hear more of it through this year. They're going to have to tighten their belts because non-profits always run so close to the bone," she said.