SALVATION ARMY PROGRAM ON BRINK

Drug, Alcohol Rehabilitation Has Operated At $500,000 Deficit For Past
Two Years

Randy Krenz was on the verge of suicide, homeless and lost in alcohol
and drug addiction six years ago when he walked into a Salvation Army
program he credits with saving his life.

Krenz, now a maintenance manager for the faith-based nonprofit, said
he had 4 cents in his pocket when he sought help from a state mental
hospital.

"I wanted to hurt myself," he said. "I was ready to end
it."

The hospital referred him to the Salvation Army's Adult Rehabilitation
Program, where Krenz said he learned how precious life could be. He
kicked his addictions and developed coping skills in the nationally
recognized program. He didn't have to pay a dime.

Now, Salvation Army officials say the drug and alcohol program, which
serves 120 people at any given time, could be on the brink of closure,
operating at a deficit of close to $500,000 for each of the past two
years.

"We've got to have more funding," said Gary Zielinski, Salvation Army
finance director. "We've never relied much on the client being able to
pay, and normally we've had enough through what we raise at our thrift
stores. But while those revenues have stayed flat, our costs for
running the program have gone up and up."

He said the program has not been in the black since 2001. In 2002 the
program ran a $76,794 deficit, which escalated to a deficit of
$468,034 in 2003. The deficit in 2004 jumped to $475,275.

Zielinski said the Salvation Army's Western Territory has helped keep
the program afloat, but such help isn't likely to continue much longer.

"We're in debt $600,000 to our territory for liability insurance," he
said. Zielinski said insurance premiums have increased along with
state licensing requirements, which have led to higher operating expenses.

The program in 2004 had an operating budget of about $5.6 million, but
thrift store sales generated only $3.9 million. Zielinski said the
program receives about $260,000 from the state Bureau of Alcohol and
Drug Abuse and gets $90 a day from state Mental Health Services for
clients referred from the mental hospital to the Salvation Army.

"It's simply not enough," he said.

The cost per client, for those who stay through the full 150-day
program, is about $24,000.

Zielinski said the Salvation Army plans to seek additional funding
from court systems that send clients its way. He said about 90 percent
of the Salvation Army's drug rehab clients are court referrals.

But, he said, he realizes the courts are trying to save local
governments money by avoiding the costs involved with jailing addicts
who are willing to seek treatment.

Other options Zielinski said he has explored include reducing the
caseload. But that would also reduce revenues, since the clients
provide the work force for the thrift stores that support the program.

Other nonprofit rehabilitation program officials say they hope the
Salvation Army finds alternative funds to keep its doors open. A
closure of the program, they say, would be catastrophic.

Nancy Gott, spokeswoman for WestCare, the largest nonprofit substance
abuse treatment center in Southern Nevada, said all agencies like hers
are feeling the crunch of limited funding sources.

"There aren't enough beds in the valley for treatment and if the
Salvation Army closes, it'll further exacerbate that problem," she
said.

Carol Farkas, administrator for the Treatment Services at the Clark
County Economic Opportunity Board, said her program relies almost
entirely on government funds to get by, with $800,000 from the state
and a five-year federal grant that provides about $500,000 a year for
targeting minorities for outreach and treatment.

"The problem is that available funds for drug treatment aren't
growing, but the number of people needing that kind of help gets
bigger and bigger," Farkas said.

Like the Salvation Army, Farkas said the board gets client referrals
from Nevada Mental Health and from the courts, where judges can
mandate treatment in lieu of jail time.

"We definitely get more referrals than we can handle as it is," Farkas
said. "We run about 100 percent full all the time with a waiting list."

The Economic Opportunity Board houses 36 people in its residential
program, but treats 250 others in out-patient clinics.

Terry Robinson, director of the drug rehab program, said he is
frustrated with the lack of funds, which have forced him to cut staff
and tighten program expenses where possible. Such cuts, he said, fly
in the face of his desire to expand the program to meet increasing
needs, particularly for drug-addicted youths and mothers with children.

"I believe there's got to be money out there for this, we're just not
finding it," he said.

While officials like Robinson and Zielinski seek formal funding
sources, Krenz said he has started contacting former graduates of the
program to see if they would be willing to give a little back.

"I'm hoping I can get an alumni association going to support the
program," he said. "I think there's enough of us who've gotten back on
our feet and can help out."