June third, wow! First up, say congrats to John Duwall. Effective July 1, he will become Adelphoi’s VP of Facilities and Supply Chain Management. We have kept him very busy over his short time with us and we look forward to many more years ahead.
Last Wednesday the board of Adelphoi approved the budget for FY 2016-17 and our three year strategic plan. Many of you were involved in discussion leading up to these final proposals. They are all about planning for an Adelphoi future that provides quality services for kids, an engaged and effective workforce, and enough money to keep it all going. This year we’ve been sorely tested with this last one.
The 7 month delay in a state budget slowed us down (if you think your vote doesn’t matter please reconsider). It slowed down cash flow and referrals, contracts with counties, and required money for interest on loans we won’t get back. The contract with Philadelphia alone is $250,000 shy of what it should be. We predict that at June 30th, our fiscal year end, we will be a little under our planned margin. Throw in changes in the Fair Labor Standards Act (FLSA) and more uncertainty about the new State Budget and we have a squeaker of a budget for next year which means we will not have as much to share with all of you as we did last year.
Not where I’d hoped we’d be. There can be no quality services for kids nor money at the end of the day if the workforce here at Adelphoi is not engaged, capable and agile. Clearly pay plays a big part. But with 70.6% of our expenses tied to personnel, any change is a big number and unfortunately we’ve had a little year. So here is where we’ve landed. All full time staff will get a 2% increase beginning December 1. I know that’s late, but it’s better than getting a 1% in July; it will roll into your base going forward as 2%. We’ll keep an eye on our financials and if we are doing better than expected we’ll go back to the board.
So how can Adelphoi give bigger raises? The money available for workforce enhancements (code – raises and benefits) generally comes from two places: increased rates, and the number of kids served and how long they stay. This year both rates and program completion were issues. We served almost exactly the same number of kids this year as last. Some would say the kids were tougher and yet not as many finished their programs. We recognize that high fidelity to our treatment and education protocols directly correlates to a higher chance of successful program completion….. good for our kids. Program completion also has a direct bearing on our financials, even a few days less for kids than planned resulted in a loss for Adelphoi of $500,000+. There is work to be done, and we all play an essential role; we need to do it together.
-Nancy Kukovich, CEO