In addition to surveying the needs of Palo Alto's low-income residents, the report considers ways in which the city can help. In recent years, Palo Alto has provided grants to local nonprofits for providing safety-net services. Last year, the city handed out $1.1 million through what is known as the Human Services Resource Allocation Process. The Human Relations Commission, which relied on focus groups, data research, interviews with stakeholders and responses from 495 survey participants, had estimated that these grants serve about 7,000 people annually.
This year, almost three-fourths of the grant funds went to two nonprofit organizations. Avenidas, which provides a wide range of services for seniors, received $402,224 in 2012, accounting for 36.2 percent of the funds. Palo Alto Community Child Care received $407,491, or 36.7 percent of the total pool. Recipients of the next-largest grants include Adolescent Counseling Services ($87,571), Abilities United ($37,642) and the Downtown Streets Team ($33,666).
The report, which the City Council Finance Committee discussed Tuesday night, argues that the city needs to do more. Its most significant recommendation is a call for the city to increase its spending for grants by about 5 percent a year, until the amount reaches $1.5 million in 2016. But the report also argues that the city needs to change the way it assesses which nonprofits get funding. The wide array of needs and the limited pool of money makes it impossible for the city to allocate funds for new recipients without taking them away from existing ones.
"This zero-sum game is not only disheartening to the agency losing the funds, but it suppresses the desire of potential applicants to apply, knowing that their success will punch a hole somewhere else in the social safety net," the report states. "Our recommendations need to deal with this issue. If they don't, it's not clear to us what else we might propose beyond administrative arrangements that might produce some small synergies that enable existing funds to stretch a little bit further."
The Finance Committee praised the report Tuesday, with Vice Mayor Greg Scharff sharing the commission's frustration about the lack of flexibility in the funding-allocation process.
"You see a need in the community but your hands feel tied because we have previous recipients and we have to cut from those (recipients)," Scharff said.
The committee stopped short of recommending an increase to grant funding, though it directed staff to explore ways for doing so. One possible mechanism is funds from the city's development agreement with Stanford University Medical Center, which allocated $4 million to the city for "community health and safety programs." Stanford offered these funds as part of a broad package of public benefits in exchange for the city's permission to greatly expand Stanford Hospital and Clinics and the Lucile Packard Children's Hospital.
The committee was more receptive to the report's "alternative recommendation" for modifying the grant process. Under this alternative, the city would reduce grants to all recipients who get more than $10,000 by 3 to 5 percent per year, with the freed funds supporting new programs and agencies.
"Such an arrangement gives agencies lead-time to respond to the series of cuts; and it gives the overall HSRAP program some flexibility to reallocate the freed funds to increasing or emerging needs," the report stated.
The committee unanimously recommended that staff discuss this plan with stakeholders and explore this alternative further. The committee also backed a proposal by Councilman Pat Burt to reach out to Avenidas and see if the city's allocation to the nonprofit group could target low-income seniors rather than the senior community at large.
Ray Bacchetti, who serves on the commission, told the committee Tuesday there's a "disconnect between the haves and the have-nots in Palo Alto." Though the city is wealthier than most in the county, 10.7 percent of the households in Palo Alto have household incomes below $25,000, the report notes. The problem is worse for seniors. One-third of Palo Alto residents older than 75 had incomes of less than $25,000 per year in 2000, according to data from Avenidas, which the Human Services Needs Assessment cites.
"Faltering economic conditions of recent years have only exacerbated these trends," the new report states.
Bacchetti said he spoke to a friend recently and mentioned the large number of residents in the city who have a hard time getting by. The friend asked, "Where are they?"
"I can think of no better operational definition of 'invisible' than that," Bacchetti told the committee, referring to those in need.
Once staff returns with more information, the committee will resume the discussion and forward a recommendation to the full City Council.
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