Modesto housing nonprofit scraps plan to charge clients more

A Modesto nonprofit organization that houses the low income, disabled and seniors will not ask its clients to pay more for their housing.

Community Impact Central Valley notified its approximately 160 clients in May it would be charging them 10 percent of their income in what it called a program fee to cover such expenses as pest control, utilities and maintenance. That would have been in addition to the 30 percent clients pay for rent.

CICV board members decided last week not to impose the fee because it would have been a hardship for clients. CICV board President John Collins added that board members were told by interim Director Kathy Lee that the nonprofit could not charge clients more and remain in compliance with the government grants that fund CICV housing programs.

CICV is notifying clients about the board’s decision.

This is not the only major development for the agency. The proposed July 1 merger between CICV and Community Housing and Shelter Services – a Modesto nonprofit group that helps families with housing – is on hold because the agencies need more time to complete their due diligence.

Also, CHSS has laid off Aaron Farnon, who served as the agency’s executive director for about 20 months. CHSS board President Kim Martinez said it was a difficult but necessary decision because of funding cuts.

She said the U.S. Department of Housing and Urban Development recently did not renew an approximately $90,000 grant and CICV did not renew a $60,000 contract with CHSS. The contract paid for part of Farnon’s $88,000 salary because he worked part time for CICV as its grants administrator. The contract included other services CHSS provided CICV.

Farnon said he asked CHSS to lay him off because of the funding cuts. CHSS staff will assume his duties. Collins – the CICV board president – said the contract was not renewed because the state had concerns about Farnon working for both agencies.

The proposed 10 percent fee raised the hackles of some CICV tenants, who said they could not afford it. The average CICV client pays about $250 a month for rent. Collins said the fee increase caught board members off guard. He said they did not learn about it until after clients were notified.

Collins and CICV board Vice President Steve Dyer said they were concerned about the impact on clients.

“I think the most damage was done to our clients,” Dyer said. “If I’m paying my mortgage and the bank says it’s going to charge me a 10 percent fee, I’d flip out. I think the damage was done to our clients. It just caused an undue stress in people’s lives.”

Community Impact Central Valley provides affordable housing and case management for poor, disabled and formerly homeless clients, though some of its housing is for low- to moderate-income tenants. It has about 160 units in duplexes, apartment buildings, single-family homes and other housing types. About 330 people live in CICV housing.

The money for the housing comes from Modesto through the federal Neighborhood Stabilization Program, through the state’s Emergency Housing and Assistance Program and HUD’s Supportive Housing Program.

Farnon has said CICV needed to shore up its finances with a program fee and by resolving the issue of late reimbursements from HUD for case management services CICV provides clients. But Lee, the CICV interim director, said her focus is on working with HUD on the late reimbursements. She said HUD owes her agency about $214,000.

“That is what has made things so difficult,” she said. “It’s a lot of money. ... Once we get the funds released – we are not an agency that will make a ton of money, but we will be able to continue our programs.”

Progress has been made. HUD and CICV have been meeting on this issue since May 22, and a HUD official said her agency has released $51,521 in reimbursements.