Bay Area Reporter - May 22, 2008
Seth Hemmelgarn, s.hemmelgarn@ebar.com

In response to a May 7 request from Mayor Gavin Newsom that the Department of Public Health make an additional $16 million in cuts from the 2008-09 budget, the department responded with an amount that included just over $3 million in cuts to HIV/AIDS services.

The Health Commission had already approved $46.1 million in cuts, including about $2.2 million in reductions for HIV and AIDS services.

The most recent cuts were part of about $10.9 million in reductions proposed by the health department, which also include general personnel and overhead reductions, substance abuse treatment, and primary care services.

The proposals were not shared with the Health Commission before being sent to the mayor's office.

"This really did happen completely without any public input," said Mike Smith, executive director of the AIDS Emergency Fund and president of the HIV/AIDS Providers Network.

With the most recent announcement, AEF is losing a total of $249,544, which Smith said wipes out its general fund contract.

"We cannot find $250,000 of new money. This will mean cuts," Smith said.

The agency has about $600,000 for 2008-09 from all government sources remaining.

Smith said the reductions were proposed by Gregg Sass, the health department's chief financial officer, and Dr. Mitchell Katz, the health director. Sass did not directly confirm this.

Asked why the cuts had not gone through the Health Commission, Sass wrote in an e-mail to the Bay Area Reporter , "We were notified to make additional cuts a couple days after the last [commission] meeting and only had three days to respond."

But Jim Illig, the commission's openly gay president, wrote in an e-mail to the B.A.R., "The commission could have held an emergency meeting and given some policy direction as to where to cut further."

He wrote that the commission would hear the budget update and listen to public testimony about the cuts at its May 20 meeting, but no action was planned on the item.

Smith expressed disappointment with the cuts.

"We all understand the city's having a bad fiscal year," Smith said. "AIDS organizations are willing to do our part and take part of the cuts. It's this new funding cut, the $3 million, that really seems to be punishing people with AIDS and AIDS organizations."

But Sass wrote, "I would say that the opposite is true." San Francisco has backfilled cuts to Ryan White HIV/AIDS Treatment Modernization Act (formerly the Ryan White CARE Act) funding "in the millions of dollars each year, and as federal support has declined, city [general fund] has made up 100 percent of the difference."

Ryan White reductions required over $8 million in general fund support to housing and health services in the 2007-08 city budget, he wrote.

"As a result, many services have become dependent on continued general fund support," Sass wrote. "In a tough budget year that puts those programs more at risk. If additional funding can be identified as the budget process continues with the mayor and [Board of Supervisors], perhaps some (perhaps all) of these cuts and other cuts to community programs can be restored, but as it stands right now, based on the information available to us, the general fund is not there."

Another agency that's being hit is Project Open Hand, which provides food services for people with HIV, seniors, and the homebound critically ill in San Francisco and Alameda counties.

Besides being health commission president, Illig is also Project Open Hand's director of government relations. The agency had already expected a cut of $106,768, but after the mayor's request, it's losing another $375,166, for a total of $481,934.

Illig wrote that the cuts translate to 426 San Franciscans with HIV/AIDS not receiving meals through the contract. He wrote there could possibly be another source of funds for the meals, if the agency could raise private funds.

However, he wrote, "POH already matches every dollar from the government with two dollars from private sources to fund our meals and groceries. Finding additional private revenue to cover this loss would be very difficult."

Project Open Hand's total 2007-08 fiscal year budget is $10,493,000, Illig wrote, "but with changing revenue sources, the 2008-09 budget hasn't been finalized."

Mark Molnar, director of HIV services at Shanti, said the agency stands to lose about $400,000, including about $200,000 in cuts that were known before May. Half of the $400,000 comes from joint contracts Shanti has with other agencies, such as the San Francisco AIDS Foundation, and helps provide volunteer services, care navigation, a drop-in center, and other activities.

Molnar said cuts will have to be made. He said Shanti's total budget is $3,150,000.

Asked why the cuts were just now happening, Joe Arellano, the mayor's deputy communications director wrote, "The mayor's office has been unable to secure very much of the 3 percent ask from labor unions, which would have contributed $57 million to balance the budget."

On Wednesday, however, the mayor's office issued a statement announcing the first agreements with labor to help balance the budget. That agreement, with the Municipal Executives' Association, will generate budget savings of nearly $4 million. It is unclear what part of the city's budget will be affected by the agreement.

Arellano continued, "Given the difficulty with closing the shortfall without this giveback," additional ideas for balancing the budget were needed. He wrote that, "We have asked everyone to give something."

He wrote the projected budget deficit for next year is at least $338 million. However, because the mayor has to submit a balanced budget, he has to close this shortfall before June 1. The budget is due to the Board of Supervisors by June 2, and the board has to approve the budget by the last working day in July, according to Arellano.

Asked to confirm the dates of the mayor's request and when he expected a response, which the B.A.R. obtained from the Health Commission's Web site, Arellano wrote, "The whole process is very fluid and we speak to departments many times during the day as we work to get into balance. So, its hard for us to pinpoint exactly when certain requests went out."

Openly gay Supervisor Bevan Dufty said he's meeting with AIDS service groups and plans to take an active part in trying to work through next year's budget for AIDS services.

Dufty said part of his interest in speaking with community organizations and the leadership of the health department involves the fact that so far, HIV/AIDS-related prevention and housing funds have been kept off the table.

He said, "I do support not making any housing cuts ... you can't have good outcomes for people who are not housed." However, he indicated prevention funds can't be sacrosanct.

"I don't want to start the discussion saying, 'We've got to cut prevention,'" Dufty said, but he said he also didn't want to have a conversation where categories of services such as alternative therapies are eliminated.

Dufty also said consideration should be given to combining agencies. He said he recognizes issues that include cultural competency and unique client needs, "but I don't think it's impossible to keep the integrity of the programs while reducing overhead and administrative costs." Dufty said there aren't any quick fixes and the idea should not be to "just go out and mash groups together."

In any case, the situation this year doesn't look good.

"Even in the most difficult years we've been able to restore AIDS funding, and that is obviously my top priority," but it's going to be an uphill battle, Dufty said.

In an e-mail to the B.A.R., openly gay Supervisor Tom Ammiano wrote, "Pretty much every year we have the same situation for HIV/AIDS funding, and we have been able to restore most of it by working collaboratively with the mayor's office as well as with state and federal sources. My hope is that this year we can accomplish the same."

Illig, the health commission president, wrote, "The HIV community needs to tell the mayor and supervisors that these cuts to essential health and support services are unacceptable. They need to find cuts outside of the health and human services budgets, and/or additional revenue."

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