CAPSLO soaking up nonprofit fund pool

February 7, 2013
CAPSLO CEO Biz Steinberg and Supervisor Bruce Gibson

CAPSLO CEO Biz Steinberg and Supervisor Bruce Gibson

Keeping them homeless


(Editor’s note: This is the second in a series about San Luis Obispo County Homeless Services and the nonprofits managing the program.)

For the duration of its 48-year existence, the Community Action Partnership of San Luis Obispo (CAPSLO) has skirted public scrutiny by assigning to itself the designation of a “private” nonprofit corporation.

That has complicated, but not completely deflected efforts to peel back the layers of CAPSLO’s funding sources and annual expenditures.

California’s Public Records Act specifies that if a private entity performs a public function, was created by a public agency whether directly or indirectly, and receives public revenues, it is considered a public body, subject to California’s openness law.

Jim Famalette, chief operating officer of CAPSLO, denied a public records request in June from local attorney Babak Naficy. Naficy, acting on behalf of a private client, had requested that CAPSLO turn over documents seeking financial details from CAPSLO regarding curious grants to a Morro Bay residence house called Roandoak of God.

Famalette’s denial read in part, “Community Action Partnership of San Luis Obispo is a private, non-profit corporation, not a government agency. We are required to keep all client information in confidence and cannot release such without the written consent of the client. Our files are reviewed regularly by state and federal agencies as well as our own auditors to insure we are in compliance with all guidelines and regulations of all our varied funding sources.”

By combing public documents from other sources, CalCoastNews has pieced together an emerging picture of some of CAPSLO’s complex fiscal activities. Its programs and activities are not limited to San Luis Obispo County. It has nearly 1,000 employees and operates in nine California counties: Orange, Ventura, Santa Barbara, Fresno, Kern, Monterey, San Benito, San Joaquin and Santa Cruz.

And as CAPLSO expands, county and other local government funding for other nonprofit organizations is steadily shrinking.

CAPSLO funds have increased in recent years despite a multi-year economic downturn. CAPSLO’s tax forms show that in fiscal year 2008 the nonprofit brought in $51,499,811 in total revenue. In fiscal year 2011, CAPSLO’s total revenue increased to $59,767,661.

capsloCAPSLO’s expenses have increased proportionally over the same period, rising from $51,482,501 in 2008 to $59,675,218 in 2011.

Employees accounted for more than half of CAPSLO’s nearly $60 million in expenses, to its employees. The nonprofit, with more than 900 employees, paid out $31,479,495 in total compensation to its employees in 2011. Employee costs in 2008 totaled less than $23 million.

The agency also pays for independent contractors to do in-home child care in San Luis Obispo County. Four of their child care providers make over $100,000 a year with the highest paid $128,644.

Most of CAPSLO’s funding comes from government grants. CAPSLO received $56,388,811 in government grants in fiscal year 2011.

In comparison, Community Health Centers of the Central Coast, which offers medical, dental and mental health care for low income and uninsured residents throughout San Luis Obispo and northern Santa Barbara counties, received only $19,432,572 in government grants in fiscal year 2011.

Community Health Centers and North County Connection, which provides drug and alcohol recovery services, have suffered severe funding cuts from the county in recent years. Community Health Centers lost more than half of its county funding since Supervisor Adam Hill, first took office in January 2009. Hill has a relationship with CAPSLO executive Dee Torres, CCN has reported. Community Health Centers received $6,154,248 from the county in 2008, but only $2,783,496 in 2012.

North County Connection, which Hill described as a “racist, anti-Semitic and homophobic” organization during a 2012 board of supervisors meeting, lost nearly half of its funding as well. The county contributed $49,058 to the nonprofit in 2008, but only $27,600 in 2012.

In the same period, CAPSLO also endured a county funding cut, dropping from $4,749,254 in 2008 to $3,828,597 in 2012. But the CAPSLO funding did not drop at nearly as sharp a rate as the other local nonprofits. CAPSLO continues to receive more than $1 million more in county funds than Community Health Centers, even though Community Health Centers provides services to more people.

Much of the money the county gives to CAPSLO comes as part of a yearly grant program administered by the federal Department of Housing and Urban Development. Each year HUD provides three different grants as part of a program called the Urban County. The program is supposed to bolster community development, affordable housing and emergency shelters in low income areas. HUD oversees implementation of the grants based on income levels in areas of counties.

The county poverty map compiled by the planning department on behalf of HUD shows that there are six tracts, or areas, in San Luis Obispo County where more than half of the residents have low to moderate income. Yet, since the 2010 census, HUD lists the city of San Luis Obispo as the only location in the county where more than 50 percent of the residents have low to moderate income.

The county map, used in both the 2011 and 2012 Urban County Action Plans, lists the San Miguel, Shandon, Paso Robles and Oceano tracts, in addition to the two San Luis Obispo city tracts as low to moderate income areas. HUD figures, however, show that other than the city of San Luis Obispo, only the Paso Robles tract is even within 10 percentage points of having a majority low to moderate income residents.

Planner Dana Lilley

Planner Dana Lilley

Supervising Planner Dana Lilley, who oversees the creation of the Urban County Action Plan, placed the blame on HUD, saying the county received its income data from HUD.

Another inconsistency appeared on the 2012 action plan. The community development project titles did not match their descriptions. Several projects that did not involve CAPSLO, like sewer and water repair at a Los Osos mobile home park and operation of an Atascadero food pantry, listed CAPSLO as the recipient of the funds.

After CalCoastNews asked Lilley about the inconsistencies, county planners changed the 2012 action plan so that it no longer listed CAPSLO as the agency receiving the funds for the mismatching projects.

In 2012, San Luis Obispo County received $2,641,037 in Urban County funding. Under the umbrella of the Urban County HUD program, CAPSLO received grant money for the Maxine Lewis Homeless Shelter, the Prado Day Center and its proposed new homeless campus, as well as for community development projects ranging from teen academic parenting to minor home repair. CAPSLO also receives $10,000 annually from the county for its tattoo removal program.

Five cities in the county also participate in the HUD grant program, and four of the five dispersed gave HUD funds to CAPSLO in 2012. San Luis Obispo, which gives CAPSLO more money than any other city in the county, also makes regular practice of giving the organization general fund money on top of the grant funds.

It did so again Tuesday when the council authorized a combined total of more than $200,000 to CAPSLO in grant and general fund money. City staff recommended the council to give CAPSLO additional general fund money because CAPSLO requested more for its existing and proposed homeless shelters than HUD allows the city to allocate/give for those purposes.

Though HUD is currently dispersing less money in its Urban County program than in previous years, CAPSLO is not expected to take a cut in funding. HUD is requiring greater transparency with the projects it funds, so the county plans to issue larger grants to fewer organizations. CAPSLO would be among the organizations receiving larger grants.

Hill supported that idea at a December 2012 board hearing on the 2013 action plan.

“If we’re trying to get our administrative costs down, having less grants to administer is just one of the obvious ways to do so,” Hill said. “But, that’s not necessarily a bad thing.”

CAPSLO originated as part of the ‘60s “War on Poverty” and the Economic Opportunity Act of 1964. It now lists its activities as services to low income residents, seniors, and people dealing with daily challenges.

The act was amended a year later to facilitate the creation of offices of economic opportunity at the state level. And thus was born CAPSLO. Its programs now include Head Start, an Adult Day Services Center, Energy Services, a Senior Home Repair Program, a Utility Assistance Program, Senior Health Screening, and Forty Wonderful-Health Screening for Women.

Keeping Them Homeless, the series.

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Isn’t Famalette a lawyer? Surely, he must know that in terms of the California Public Records Act, CAPSLO is considered a public entity, and must comply with public records requests. Yet, he claimed that CAPSLO is a private entity. How did he think he would get away with that without being challenged?

I think Famalette understands CAPSLO needs to provide records pursuant with the California Public Records Act.

I think Famalette is just stalling so that CAPSLO has time to destroy incriminating records.

Re: Cindy’s comment: “I would like to know how the Atascadero Pantry ended up on this list? The A-Town Pantry has NEVER had anything to do with CAPSLO, NOT EVER.”

Fraud can happen a number of ways and you have picked a stong scent on one. Manipulating information, some would call it lying, results in money.

I am having a big problem with the objectivity of CCN’s reporting on this subject. CAPSLO probably should be more revealing about their financial picture but this report takes available information and presents it in a way that gives a distorted perception of the existing finances and organization.

CAPSLO receives and spends a large majority of its funds on various Head Start programs. I don’t know the exact amount but I will guess that it is probably between 70% and 95% of their total budget. Putting those total figures at the lead of the article without making it clear that only a small portion goes to the specific program being criticized is disingenuous at best. The same applies for the inclusion of the widespread geographic area stated for its operations. Almost all or all of its operations outside SLO County are related to Child Care programs.

If you are to criticize those programs, keep it separate from the criticism of the Homeless Services and other “local” programs. I can assure you that CAPSLO does so internally. (Also, see previous comments by “granola_girl” about the home child care programs as they are much more informative than your simple comments about child care providers receiving over $100,000 per year. )

Comparisons with CHC funding levels in your article is an “apples to oranges” comparison in the manner you did it. If you want an accurate comparison of spending efficiency, compare the cost per patient of CHC with the costs of the CAPSLO health centers. (I don’t know what that comparison would reveal but I suspect they are at least as cost-efficient as CHC. I have nothing against either one in terms of budgetary inefficiency.)

I have appreciated what you have done in your past reporting and reporting on this subject is a worthwhile venture. However, if you are going to do the job, do it fairly and do it right. This article seems like it was rushed through before you had enough information or enough time to verify and consider the information you did have. Please don’t let the pressures of feeding the public information on a tight schedule force you into doing a lousy job. Your reputation rests more on exposing hidden truths accurately than on being first with breaking news all the time.

As stated this organization is wide spread across the state with many other programs, fine, but where does the money from SLO go is it used here or gone elsewhere, it sounds like there are many places for monies to be spent.

who has oversight on CAPSLO? what is the path to the Governor’s office?

For anyone that missed Karen on the Dave Congalton show today, all I can say is WOW! Dan Carpenter really put it out there, owing us why there is so much corruption, waste and management in government. It was not the Council’s job to investigate complaints made to the Council. There will be no whitle blowing accepted in Paradise. Dan, you owe Dave big time for getting your dumb a$$ off the radio before you fell any deeper. Nothing is ever going to change or get better in SLO with that mentality. Dan showed us what a real idiot he was today. Thank you, Dan!

You’re right, SLO, but I think Dan had enough to say that he earns the lazy, stupitiy award. It’s not Karen who approves a 200K donation to CAPSLO, it’s Dan and his cohorts. For him/them to not be concerned enough to investigate the facts put forth by Velie is amazing. What a neglectful representative of the public!


Yep. Dave said something like “I got Dan Carpenter off the air just in time to save his political career.” Something like that anyway but it was true. Poor Dan Carpenter went off the deep end on live radio. Very telling comments, indeed! Arrogant attitude, Mr. Carpenter…not cool!

“Another inconsistency appeared on the 2012 action plan. The community development project titles did not match their descriptions. Several projects that did not involve CAPSLO, like sewer and water repair at a Los Osos mobile home park and operation of an Atascadero food pantry, listed CAPSLO as the recipient of the funds.”

I would like to know how the Atascadero Pantry ended up on this list? The A-Town Pantry has NEVER had anything to do with CAPSLO, NOT EVER. The Pantry is 100% run by the Atascadero First Assembly Church. The AFA owns the land, the building and has private sources where they procure their products. They have been running this program with many local christian volunteers for years and they feed many needy people. My friends and I volunteer for them and I know first hand what I’m talking about, in fact the head of the Pantry was not pleased to here about all this BS. It frosts my butt to think that someone (CAPSLO) claimed The Atascadero Pantry as one of their projects !! What a nerve.

It sounds like someone went down a list and added any well known group that services the needy as part of their own project. This was clearly intended to mislead and not a mistake..

Cindy: From the way the article was written it is not easy to tell but, it was a County agency that listed CAPSLO as a payee for the Atascadero Pantry, not CAPSLO itself. It is apparently an error that has been corrected. You’re right to be concerned but off the mark as to who should be the target of that concern.

I understand that it was a county agency that listed CAPSLO as a payee for the A-Town Pantry. Do you think the county just pulled the Pantry out of a hat and accidentally did that? As I said, The Pantry is 100% Church OWNED & RUN. Always was, always has been. They get NOTHING from the gov or it’s agencies, NEVER DID, NEVER WILL.

The fact that they have been listed as a CAPSLO Project means that someone put the Atascadero Pantry name forward and it wasn’t us. Now who do you think did that? Did someone just magically make up the idea at the county and allocate that name to CAPSLO? If it’s up to me, I’ll be making it my business to find out but this isn’t going to get swept under the rug. In fact I’ve e-mailed Karen to put her touch with the church pastors.

I don’t think, without an audit of a church and of every funding source of the church, and the funding sources of those churches, ad finitum, that a church can state it does not receive government funds.

The Bush Jr administration started the breach of separation of church and state by its government-funded “faith-based programs” scam. The Obama administration has continued this assault on one of the most important tenets of our Constitution/BOR and, indeed, has expanded it.

This “faith-based programs” funding is insidious, and is spread by one recipient then funding second recipient. The second program may not know that part or all of the source of the funds is from the government. Indeed, there is a great risk for money-laundering in this program, by shifting federal funds from, for instance, a church-based program to a politician or political action committee.

Was it corrected before or after interaction with CCN for this article?

I cringe to think of the cooking of the books and destruction of records is going on at CAPSLO and the county now.

Cindy, CAPSLO may well be providing funding to the church which funds the pantry, and there can be no assurance–when CAPSLO is involved–that the funds are being spent appropriately.

In addition, just because CAPSLO said it provided funding to the Atascadero pantry doesn’t mean that the Atascadero pantry actually received the funds…or that the Atascadero pantry even knew that it was a supposed “recipient” of the funding. In other words, CAPSLO could have fraudulently listed funding recipients who never received the funds. In this way, CAPSLO could skim money from the program by taking that money for themselves.

In addition, a formerly honest church food-pantry program may turn dishonest if there is a change of key church personnel.

Finally, just because it is a church and they have been providing food-pantry services for a long time doesn’t mean there isn’t fraud involved. Fraud in churches often goes on for a very long time before it is outed, largely because the church members are so protective of their leaders and their public image. This was the case with an AME church in LA, the congregation of which protected a thieving pastor long past the time when action should have been taken for his theft of church funds.

If the church was receiving CAPSLO funds, all they would have to do is say YES WE DO and that would have been the end of it. But they said NO we don’t. They have no reason to say NO if in fact they do as they do run the pantry and feed many people and there would be no reason to hide the fact that they receive those donations.

They said NO, they said they have nothing to do with CAPSLO and CAPSLO has NOTHING to do with them. I’m certain that they know that by saying no, it will open a can of worms, they obviously aren’t concerned if a can of worms gets opened.

Like I said, I’m in the process of setting up an appointment for CCN to meet with Pastor Rick. There is nothing for the AFA to hide.

When is Laurel Weir going to respond? She was lobbied and courted and brought into SLO to solve all of the homeless problems and nobody has heard a word from her since. Another bureaucrat living high on taxpayers’ money? How much does she earn a year for her “oversight”?

Let’s ask her:

Laurel Weir, Coordinator:

SLO Homeless Services Oversight Council

“Contact Us” form:

Yep. Whenever you see the title “Coordinator” or “Consultant” for a government position; yes, it probably IS another over-paid, under-worked bureaucrat.

Laurel Weir is also policy director of the National Law Center on Homelessness and Poverty in Washington, DC.

I’ve found that if one sends snail-mail letters to folks on boards, councils or in administrative positions of other agencies or companies there is a good chance notice will be taken. It’s kind of “taking it to their home turf.”

One example is, following surgery and a 4-day stay at a local hospital, I wrote letters to every member of the board of directors for that hospital, as well as the medical director. I sent the letters to their places of business. The letter was in regards to the unsafe conditions in the surgical ward of the hospital, the disregard of HIPPA requirements, nurses sleeping on duty, etc. Because of that, a compliance audit was performed and changes were made.

Here is Ms. Weir’s info:

Laurel Weir, Policy Director

National Law Center on Homelessness and Poverty, Washington, DC

1411 K Street NW, Suite 1400; Washington, DC 20005

Phone: (202) 638-2535

Fax: (202) 628-2737

At the very least, CAPSLO’s computers and records should be seized to prevent destruction of records by CAPSLO staff.

P.S. Please note that this email goes to the county’s server. Considering the legs-in-the-air alliance between at least one of the supervisors and at least one of the leaders of CAPSLO, I doubt these contacts will produce much…except tip off CAPSLO and the county of potential problem spot-fires they have to stamp out.

The thing I’m starting to worry about CAPSLO is that has just gotten to big. The services that it is trying to provide are much needed in this county. But it looks like all the money and energy is going into building an empire. When you have an organization this big, there are going to be pockets of corruption, lots of waste and bureaucratic overhead.

I’m sure there are a lot of very good and hard working people at CAPSLO, but I think it’s time to break it up and let the parts get back to their original purpose.

I really think you hit the nail on the head. The American Red Cross is a perfect example of too big and failing. I remember when Elizabeth Dole was their Director, worked 100 plus or minus days a year and was paid a couple of millions dollars, in those days. From the news reports I got, they had so many problems in providing services during Hurricane Sandy that the National Guard finally got bottled water in to the victims 34 days after the storm. Excellentcomment SLOthinker!

Another problem is where politicians belong to many, many boards and committees, some of which never actually meet, or meet once or twice a year, yet receive pay (or “reimbursements) which can really inflate the politicians’ incomes.

This was a big issue in the City of Bell scandal, where they were paid to attend committee meetings, when the committee meetings weren’t even held or were token-held (i.e., at the end of a city council meeting, they would open and close a committee meetings within one minute, and collect pay for it).

This practice of belonging to many community committees and/or organizations also horribly cronyfies a local government.

Question: Are the local tax monies that are being given to CAPSLO earmarked to stay in SLO County or can they be spent in one of the other eight counties that CAPSLO serves?

Sorry, taxpapyer, it’s government accounting, we will never know. Just ask Jerry Brown and his balanced budget approach because the budget is already in the hole because the projected income for the State, already fell short in January. All of it is a joke!

The answer to your question is that CAPSLO funds most programs from government grants specifically for a given program and maintains separate accounting for each one. The out-of-county Head Start programs are funded by and audited by the state and federal government agencies responsible for them. If there are any SLO County tax monies sent out-of-county, it would have to be done on a very small scale in a very discreet way to avoid detection. I doubt it would be worth the trouble and I suspect that, if anything, the opposite would be more likely to occur.

Thanks. So we won’t know whether or not it’s been done without seeing those separate accounts. Where exactly are the local tax dollars and individual donor”s money being spent and for what? Those are valid questions and need to be answered.

Hello? Just because grant money is supposed to be spent in a certain way does not mean it is spent that way.

Government audits are a nice concept, but government audits didn’t turn up the homeless-funding scam run by CAPSLO, did they?

Audits are not the Baby Jesus many dishonest government workers would like the public to believe they are.

I’ve worked in a local government agency, and it is very easy to screw around with an audit. They rely on the information presented by the agency and, IMO, would not find an scams like CAPSLO’s off-budget accounting for homeless funds, charging homeless for services they did not receive, etc.