Funding cuts have rocked a Sonoma County program providing emergency loans to low-income parents who are struggling to stay employed.
“We are madly scrambling” for funds, said Diana Klein, Sonoma branch director of Jewish Family and Children’s Services, which administers the Step to Work Family Loan program.
Qualifying candidates, saddled with bad credit ratings or unable to get credit at all, receive low-interest loans of up to $3,000. Since its inception three years ago, Step to Work has provided about 25 loans per year, for a total of $113,300, to working parents. Roughly 83 percent of the money has gone toward car purchases and repairs, while another 11 percent has been used for housing expenses.
The loan repayment rate has been high, Klein said, attributing this to the personalized attention that the carefully selected candidates receive.
A grant for a loan guarantee fund from the McKnight Foundation in Minnesota provided the seed money three years ago, but ongoing administrative funding is in jeopardy. Those funds come from a number of public and private sources, and the economic downturn is putting the squeeze on all of them.
Already this fiscal year, which began last July 1, Step to Work took a $20,000 to $30,000 hit, according to Klein. And the Sonoma County Human Services Department — Employment Training Division, which has provided 60 to 65 percent of the $80,000 to $90,000 in administrative funding, is itself “experiencing severe cutbacks,” she said.
“It is entirely possible that they will not be able to fund our program.”
JFCS has already made adjustments, but “we’re not thrilled with cutting the program” further, she said. “We know that by cutting the program in half we won’t be able to give as much personalized attention to clients. It will not be good for them in terms of their credit and self-esteem.
“They get a lot of support — emotional support, and when necessary, they get [assistance with] their budget and budgeting priorities. We help them think through and make those kinds of decisions,” involving where their money goes and how to allocate it properly. “Also, we’re able to help people extend their loans out at the end, so they can make their payments.”
Though bracing for the worst, she said, “we’re still hoping the county will consider this worthwhile to keep — because no one else is doing it.”
Step to Work has made a world of difference to Katrina Blake of Rohnert Park. She received just less than $3,000 to purchase a car and pay her first three months’ auto insurance premiums. “I was coming off welfare, in a program where they would shuttle you to work when you started,” she said. But once the transportation was no longer provided, getting to her job as an office assistant in Santa Rosa seemed almost insurmountable.
“It would have been disastrous,” she said. The loan enabling her to purchase a $1,500 car and make the initial insurance payments “was very essential.”
In addition, Blake said, at JFCS “they give me all kinds of information — on budgeting, how to think about and arrange finances. We looked at my credit rating, and they offered credit counseling. All of that is really good to know when you start working. It’s an important component.”
A single parent with a 15-year-old son living at home, Blake has been working at the same job since December 2001 and making monthly payments on her loan.
Among the many requirements for acceptance to the program is that applicants be low-income, have legal custody of one or more minor child and be working or enrolled in an accredited educational program. The individual must also have exhausted other loan sources and be unable to qualify for conventional finances. The program’s loans are made in cooperation with Exchange Bank, and a committee of local community volunteers approves each loan.
JFCS screens and reviews all applicants and works with clients until the loan is repaid. Staff also does outreach — making presentations, for example, at low-cost housing projects or to social service agencies that work with the poor. Those efforts, plus referrals from the county, have ensured a steady flow of applicants.
“There’s probably 50 to 75 people that you’re working with on an ongoing basis,” said Klein, “plus we get about 30 inquiries a month.”
JFCS was asked to head up the program, which has helped both Jews and non-Jews alike.
And given the current economy, Klein believes Step to Work is “needed more now than ever.”
Old and new funding sources are being explored, she said, in hopes of keeping the program as effective as possible.
Terry Marshall, Step to Work loan coordinator at JFCS, said despite cutbacks that have already reduced her position from full to part-time, “we’re hanging in there. I’m trying to be optimistic.”