Washington Blade - September 19, 2003
Laurel Faust

Steve Owen, Whitman-Walker's chief financial officer, said the clinic is committed to serving its clients and to sustaining its programs, but that it must work to close a $1.4 million gap between the costs of providing those services and the clinic's income.

He said the clinic will sell two properties that provide transitional housing to people with HIV/AIDS in Northwest D.C. Tenants at those locations will be moved at clinic expense to other accommodations, but there will be nine fewer slots for future clients.

The clinic will consolidate its U Street services to other clinic facilities and will sell its two U Street buildings by Dec. 31.

A temporary hiring freeze will take place until Jan. 1 for positions not fully funded by grants and contracts but will not impact positions needed to ensure the health and safety of clients.

A two-phase, sliding scale, fee-based system will be implemented, beginning in the first phase with the Lesbian Health Center, HIV rapid testing and counseling, and basic sexually transmitted disease screening. Clients will be asked to pay based on their self-reported income.

Many would still not have to pay

Roberta Geidner-Antoniotti, the clinic's managing director for operations, said 44 percent of Lesbian Health Center clients, 69 percent of HIV rapid testing clients, and 43 percent of STD screening clients will continue to pay no fees for their services.

Geidner-Antoniotti said at the upper range of the scale, a basic STD screening package will cost $169 for people with income over $44,900, and a basic lesbian health examination for the same income level will cost $166.

The clinic will reduce discretionary spending for contracted services and administrative overhead.

Without these changes, Owen said the clinic would face an operating deficit of $800,000 by Dec. 31 and in excess of $1.4 million by March of 2004.

Owens said a confluence of problems led to the current situation. First, the growing federal budget deficit could lead to less money available for funding the Ryan White Care Act. Second, the late approval of the 2003 federal budget by Congress caused delays in receiving funds, which required borrowing by the clinic.

In addition, public contributions to many non-profit organizations have declined in the aftermath of the Sept. 11 terrorist attacks. Also, there has been a drop in private support as a result of loss of AIDS Ride and AIDS Marathon revenue, United Way/CFC, foundation and corporate support. So there has been less money coming in while the demand for services has increased.

Owen said the clinic is raising the same amount of money in 2003 that it raised in 1993.

Cornelius Baker, the clinic's executive director, spoke of the silent epidemic of AIDS.

"People feel that [AIDS is] over or that we have enough to keep us going. And we don't. We now have this rapid drop off at a time that in fact we probably need it more, because we have more people living with AIDS than ever before."

Baker said the clinic was fortunate not to have been affected by the economic downturn sooner because of its 14-year investment in real estate. Property sold in 2001 was a factor leading to a $1.5 million surplus. The clinic drew down on this reserve in 2002 when it experienced a $200,000 deficit, and again it drew on the reserve in 2003.

"It gave us a longer period of time," Baker said.

He noted that the sale of property provides a one-time gain, which for tax reasons, can't be used for clinic operations. The money must be used to pay down the note on the property or to reinvest in clinic capital improvements and infrastructures.

"I don't think that there's any doubt that we have a strong commitment to being able to do something, but we're going to have these challenges unless government and private donors recognize that agencies such as ours are critical to the fabric of society," Baker said. "We're not going to close our doors tomorrow, but if this trend continued over five years, we would."

Owens said the restructuring changes will protect client services and jobs and ensure long-term sustainability of the organization. The changes will allow the clinic to maintain a $360,000 operating reserve in 2003 and $74,000 projected in 2004 to cushion cash flow demands. The clinic will maintain its external credit rating and will be eligible to receive lower debt payments.

Other clinics facing tough times

Program development specialist Jackie Adams of Chase Brexton Health Services in Baltimore said that her organization is also experiencing difficult times. Adams said that private donations decreased by $30,000 to $40,000 last year.

Chase Brexton serves just under 6,000 people and has an annual budget of $23 million. Whitman Walker serves 7,200 people and has an annual budget of $28 million.

"We have so many external factors. We have the economy. We have the war. There's general unrest. People have to decide - do we give money or do we wait and see what happens," Adams said.

She said that Chase Brexton is a federally qualified health center so it receives federal money to offset the costs of reduced fee and free services. Adams said that Chase Brexton gave away $2 million in free care last year.

Michael Cover, Whitman-Walker's deputy executive director of public affairs, said clinic officials will consider the option of becoming a federally qualified health center in the upcoming months along with other options. But he said that obtaining that status would not have substantially changed the present situation.

Ana Oliveira, executive director of Gay Men's Health Crisis in New York, said the organization faced a $1.7 million decline in private funding in the last year. She said GMHC implemented measures like attrition, combining jobs and selected freezes to offset the shortage in private funds.

GMHC serves 14,000 people a year. Its fiscal year 2004 budget is $20.2 million, down from $22 million in 2003.

Lee Klosinski, director of programs for AIDS Project Los Angeles, said that individual and employee giving and matching gifts stayed steady from 2001 to 2002, but that revenue from special events declined $839,000 or 10 percent, and corporation and foundation giving declined $200,000 or 29 percent.

The AIDS Project serves 10,000 people and has an annual budget of $16 million.

Redge Norton, spokesperson for the San Francisco AIDS Foundation, said the organization projects there will be a $3.4 million decline in private giving.

"The current economy is really impacting AIDS service organizations across the country, and the need for services is greater than ever before," Norton said.

He said the organization's ability to see clients has decreased. The AIDS Foundation saw 550 fewer clients than it had initially projected, for a total of 1,100.

It saw revenue of $22.5 million in fiscal year 2002-2003, but it is conservatively projecting for $18.7 million for the upcoming year.

Cover said no cutbacks are planned in the Maryland and Virginia offices of the clinic. Sally Michael stepped down this summer as director of the Whitman-Walker Clinic of Virginia, and John Devaney stepped down as associate director in the spring. Lyla Hill is filling in as interim director.

MORE INFO

Whitman-Walker Clinic

1407 S St., NW, 10th Floor

Washington, DC 20002

202-727-2500

www.wwc.org

Chase Brexton Health Services

1001 Cathedral St.

Baltimore, MD 21201

410-837-2050

030919
WB030908

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