Government contracts with nonprofits: good doing or wasteful spending?

Venice retiree Kathy Bolam doesn’t think it’s appropriate for government officials to spend taxpayers’ money on nonprofit organizations, even if it’s spent on audited contractual services. The former Sarasota County Charter Review Board candidate’s nearly two-year battle with the board may come to a conclusion this month, or it could get new life.

Bolam and a few key allies are taking on a big challenge fighting spending for a spectrum of powerful nonprofit groups, the county bureaucracy, the convention and visitors’ bureau, Charter Review Board Chairwoman Cathy Layton, and Nora Patterson, chairwoman of the Sarasota County Commission.

This fiscal year, Sarasota County budgeted $8.9 million of general revenue for redistribution to nonprofit institutions, which brings the total to more than $60 million since 2006.

For Sarasota County, the biggest share, nearly $5.1 million, goes to “contracted human services grants.” Those grants fund 31 nonprofit agencies, including well-known groups such as All Faiths Food Bank, the Boys & Girls Club, Community AIDS Network, The Salvation Army and the Sarasota Family YMCA. Four years ago, amid higher property values, the county gave nearly $9 million to these organizations.

The second biggest chunk — $3.6 million — the county budgeted for “strategic initiatives and opportunities,” which allows the county to shuffle surplus grant funds in mid-year to address new needs as they arise. Those funds have risen from less than $2 million in 2006. The major programs include the award-winning Community Alternative Residential Treatment Initiative and the Crisis Stabilization Unit.  Another $160,605 goes to neighborhood associations this year.

Those sums drew the attention of Bolam, 75, a former businesswoman turned Republican political activist intent on redefining the role of government. “It’s like picking the winners and losers,” she says about the county’s process for allocating tax dollars to nonprofits.

‘Picking and choosing’
Sarasota County is not the only Gulf Coast community contracting with nonprofits for services. The city of Tampa budgeted $3.3 million for nonprofits’ services this year, down from $3.9 million spent in fiscal year 2010.

Pinellas County’s 2011 budget includes $560,000 of general revenue for nonprofits participating in its social-action and homeless-initiative programs. But Pinellas also gets $35 million to $40 million annually from its children services tax, a dedicated property tax that Manatee County also utilizes.

In Collier County, spokesman John Torre says the county made it policy long ago not to fund nonprofits. “The issue, when it was discussed, [was] we didn’t want to get in the business of picking and choosing what nonprofit would receive county funding,” says Torre.

Collier County’s current budget, however, includes $2.2 million for grants and aid, but according to Torre in an email, the county budget only includes two items for contractual services with nonprofits totaling just $130,000. “The county contracts with the Children’s Advocacy Center for child abuse exams mandated by the state. The county also funds indigent cremations,” he writes.

Over time, Lee County has changed its approach to reflect Collier’s attitude on the issue, according to Deputy County Manager Bill Hammond. “The county used to do a great deal of that,” says Hammond about contracting with nonprofits. “Our budget this year is going to go $41 million into reserves this year. I’m not sure there’s much wiggle room for anything.”

“It’s not the job of government to give away money,” argues Bolam. “Government is responsible for providing necessary services like police, fire, schools, roadways and public utilities. Other than that, they shouldn’t get involved. It should be up to us as to what we give money to.”

Good government?
Supporters of Sarasota County’s programs see it differently. Jay Berman is a financial adviser with Professional Benefits in Sarasota, and a 10-year member and former chairman of the Human Services Advisory Council. Berman explains that county staff and the council review all grant applications and that it’s much more involved than just cutting checks for good-deed doers.

The Human Services Advisory Council presents its recommendations to the County Commission, which approves funding. County staff then prepares contracts based on the funding. The nonprofit agencies submit invoices for reimbursement after services are provided, and must produce quarterly performance reports of outcomes. Awards this year range from $10,000 to $668,000 for the Florida Center for Child and Family Development.

“I feel that the process that we use of buying services from expert providers and holding them to very high, high standards — and reviewed quarterly and annually — is the best way to take care of that part of our community,” Berman says. “I feel that the experts in those fields do a much better job than a government entity would because of the variety and expertise needed.”

Bolam initiated her attempt to end the county’s funding of nonprofit community organizations in January 2010. She first took her proposed amendment to the charter (see sidebar) to the county’s 10-member elected Charter Review Board. Now, after a special committee of the board turned down the amendment in May, she’ll get to present her idea to the full board Aug. 24, according to Layton, an 11-year veteran of the board.

But that special committee has been a source of controversy in the eyes of Bolam and Richard Swier, who heads Red County Florida and Red County Sarasota, conservative political blogs, and hosts a radio talk show.

They argue that not all committee members were properly notified of one of the two meetings, that there was no substantive discussion of Bolam’s amendment or a county attorney’s opinion as to whether it met criteria outlined in the Charter Review Board’s bylaws.

“She was kind of looking for an open discussion,” says Swier, “a discussion from both sides as to what makes sense and what doesn’t make sense. It’s got to meet the criteria. It never got to that level.” Swier says that if the Charter Review Board won’t move forward to hold a public hearing on the amendment, it should refer it back to the special committee for more debate.

At the second of two meetings of the special committee nearly two dozen county staff and nonprofit representatives attended to make presentations and oppose Bolam’s amendment. Jeff Seward, the county’s recently resigned chief financial planning officer, gave a 35-slide presentation outlining all nine of the county’s grant programs. Patterson attended the meeting to express her opposition to the amendment, as did Virginia Haley, executive director of the Sarasota Convention and Visitors’ Bureau.

All the opposition can be traced to the broadness of the amendment, and some lack of clarity. For example, the amendment refers to funds for “arts” and “science.” But Bolam says it’s not her intent to restrict funding of arts or science programs that are funded with tourist taxes or other non-property tax revenue sources.

Yet, she also says she has no objection to $5,000 for “Solutions to Avoid Red Tide,” although part of its source of funds is general revenue. And she says she’s not opposed to using tourist development taxes for their authorized uses.

Bolam also admits it’s not clear what’s intended by putting “(Contracted Human Resources)” in parentheses given that some of the grant categories listed before it (homeowner, neighborhood, arts, science) are not contracted human resources as defined by the county’s grant categories.

Bolam took the three minutes she was allowed to present her proposal and expected to get some feedback as to whether it met the criteria, and if not, how it might be revised to conform. But Layton, who served on the special committee, says it’s not the job of the Charter Review Board to tell petitioners how to draft their own amendments.

And Layton, for one, says she opposes it because it’s not good government, a criteria she cites in the board’s bylaws. Layton also says she told Bolam she’d have to look elsewhere for assistance.

“This is not an item for the charter,” says Layton, stating that she believes the proper way to restrict the County Commission from funding nonprofit services is with a county ordinance.

If Bolam revises her amendment to perhaps be less broad and more specific in terms of what grant programs it would affect, Layton says Bolam would have to start over as if it were a new proposed amendment.

The Bolam Amendment:

Section 5.5 - Residents/Citizens of Sarasota County reserve the right to directly fund by means of their own personal finances non-profit community organizations whether it be for charity, education, child care, self-help, the arts, science, beautification or neighborhood improvements. Therefore, the Sarasota County Commissioners are restricted from distributing funds via grants to charitable, educational, civic, homeowner, neighborhood, arts, science, non-profit organizations through grants (Contracted Human Resources) and any other names for funding or types of organizations/groups not mentioned here in.

$8.9 million in grants awarded to nonprofits by Sarasota County for fiscal year 2011 targeted by the Bolam amendment:

• Contracted Human Service Grants — $5,093,111
• Strategic Initiatives & Opportunities — $3,644,488
• Neighborhood Initiative Grants — $160,605

Other Sarasota County grant programs not targeted by the Bolam amendment:

• Economic Development Incentives — $3,140,500
• Tourist Development Cultural/Arts Grants — $1,063,162
• Community Redevelopment Agency Storefront Improvement Program — $75,000
• Sarasota Convention & Visitors Bureau Marketing Grants — $63,290
• Sarasota Bay Estuary Program — $50,000
• Solutions to Avoid Red Tide (START) — $5,000