The two top administrators of the Casa Esperanza Homeless Shelter were laid off last week to help balance the beleaguered organization's budget, leaving a board member at the helm on an interim basis.
Executive Director Mike Foley and Associate Executive Director Imelda Loza were let go Thursday, board member Denny Bacon said.
Foley has headed the organization for about nine years, and Loza has been there for nearly that long.
“It was purely financial, it has nothing to do with a cause,” Bacon said. “They’re wonderful employees and were absolutely first-class in how they handled themselves in the aftermath of the decision.”
Casa Esperanza is in bad financial shape and eliminated its Community Kitchen lunch program and day center services last September.
The shelter moved to a sobriety-based model for programming too, a change from previous years. That includes the 200-bed winter shelter that runs through March 31.
Foley has said the housing-first model will help the shelter stay financially sustainable over the long term.
The shelter has been in the red for years, with an operating deficit above $1 million, so the board has been working on a break-even budget for the past several months.
“We tried to do too much and ended up borrowing some money we shouldn’t have borrowed, so the board has some responsibility there, too,” Bacon said.
Along with the program changes, there have been deep cuts to line staff salaries to cut the budget from $2.6 million to $1.6 million.
Foley and Loza had already taken a voluntary salary cut when they were dismissed, but eliminating the highest-paid employees will save the shelter about $200,000.
“When it was pointed out there’s still a significant deficit this fiscal year, which ends June 30, there wasn’t any more fat to cut,” Bacon said.
The only reason the board could cut the shelter’s two managers was the offer from board member Bob Bogle. He volunteered to be interim manager for as long as it takes.
“We’re extraordinarily lucky to have Bob Bogle, who has a great business background and commitment and a passion to Casa, who is acting as our executive director without any salary,” said the Rev. Mark Asman, a Casa Esperanza board member and rector at Trinity Episcopal Church.
Bogle started as a volunteer last year and joined the board a few months ago. Without Bogle and the committed staff, the shelter wouldn’t be able to do these layoffs without affecting programs, Asman said.
"We just are very grateful to these two hardworking leaders at Casa, Mike and Imelda, for their passion in what we do and people we serve," he said. "It was a very painful decision for us as a board to lay them off but a necessary one to follow through with our commitment to a balanced budget."
Eventually, the organization will need to hire a full-time executive director again, but that could be 18 months away. The board believes Foley and Loza will have moved on by the time Casa Esperanza can hire another executive director.
Casa Esperanza gets some of its funding through grants from the city and county of Santa Barbara, and had to amend its funding agreements last fall when the Community Kitchen and drop-in services were eliminated.
The city wasn’t involved in the board’s decision to lay off Foley and Loza, Mayor Helene Schneider said.
The city and county are still critical partners for the shelter, Asman said.
"The reality is, if we were to go away, there's nobody who's in the position to provide these services," he said.
Fundraising campaigns have been very successful in recent months, which is an affirmation of community support, he noted.
"We're already well under way with next year's budget. We made these layoffs with an eye on this budget year and next budget year," Asman said. "These unfortunate decisions to have to lay off Mike and Imelda would position us for the next 18 months or so to sort of have a balanced budget. We still have work to do, but it seems very doable."
Casa Esperanza still has a mortgage on the building, which the city and county helped purchase, and operational debt.
"We did everything we could to try and be everything to all people," Asman said. "We took on debt to continue to support programs and it became unsustainable, which is when cutbacks happened in the fall."