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By the Numbers

ARK's annual budget three years ago:
$600,000

ARK's annual budget after the state cuts off its funding at the end of January:
less than $200,000

Number of AIDS cases reported in Knox County since 1982:
570

Number of HIV cases reported in Knox County since 1992:
618

Number of AIDS cases reported in Tennessee since 1982:
8,504

Number of deaths from AIDS in Tennessee since 1982:
4,090

State strips AIDS Response Knoxville of major funding sources

by David Madison

Fed up with what it describes as "questionable business practices" and "continued financial problems," the Tennessee Department of Health has pulled the funding plug on AIDS Response Knoxville.

The Department of Health announced the decision to cut off funds to ARK during a Dec. 8 meeting at the Rainbow Club in the Old City. Seated in the glare of dance floor spotlights, a representative from the State Health Department explained how at the beginning of January, services previously provided by ARK would be administered temporarily by the Knox County Health Department. During a six-month transition period, the state will take bids from other service providers and eventually channel funding for its Housing Opportunities for Persons with AIDS (HOPWA) and Ryan White programs to a yet-to-be named, alternative group.

In the last fiscal year, ARK received $174,000 in HOPWA funding and a $36,000 Ryan White grant. Totaling $210,000, HOPWA and Ryan White grants made up more than 60 percent of ARK's total operating budget. Most of the funds were used to prevent ARK clients from becoming homeless by providing emergency help with making the rent and paying for prescriptions.

But $50,000 of the $174,000 in HOPWA funding was supposed to go toward monthly payments to Project Hope in Kingsport. However, instead of providing Project Hope with funding each month, says Drema Mace, former director of the state's AIDS support services, ARK delayed its payments until the end of the year.

"The agency had difficulty staying current," says Mace, who continues to assist the state with its AIDS services. "They have found themselves using dollars from other pools of money—using grants for other stuff."

Mace declined to describe ARK's financial difficulties in detail. But she did say ARK still owes the state $13,345. This money, says Mace, was left over from an earlier HOPWA grant and should have been returned to the state years ago.

ARK Vice President Kevin Jeske says the missing $13,345 became an issue after the state comptroller's office audited the Health Department and discovered the missing funds, which date back to 1994 and '95.

"This created some embarrassment with some high-level officials at the Health Department," says Jeske, who adds, "It's just so ironic that for $13,000, the state would turn its back on an organization that affects so many people."

Without money from HOPWA and Ryan White, says Jeske, ARK will likely lose its three case managers. In the last year, the 13-year-old organization has cut its staff and the amount of office space it uses in half. It also raised $60,000, boasts Jeske, while providing assistance to clients in 16 counties, including those who met recently at the Rainbow Club.

Gathering in the darkened club, 30 or so ARK clients praised the nonprofit for the years of service it's provided to the HIV-infected community. In the past, other clients have been less generous to the agency, describing it as insensitive. Some have called ARK a "grant-writing machine," more concerned with fundraising than client care.

But if ARK is a grant-writing machine, then the state's recent decision may cause it to run low on gas. One ARK client contacted by Metro Pulse says the meeting at the Rainbow Club confirmed a stream of rumors that had been circulating for weeks about the agency losing state funds. Like many who gathered at the Rainbow Club, the client wishes to remain anonymous, but also speak his mind. He says that for the last three years, ARK has provided him with daily support in the form of hot meals and money to cover the cost of prescriptions and rent.

"They made sure I had the basics," says the client, who thinks the Rainbow Club was an inappropriate place for state representatives to announce its decision to de-fund ARK.

"God, I'm sitting there in the dark—literally—and I'm in a gay bar," says the client, who foresees tragic consequences to the state's action against ARK. "There is more than likely going to be suffering and perhaps a death related to this decision."

Richard Cochran, the state's director of special health initiatives, disagrees.

"We aren't closing ARK," says Cochran. "What we are doing is canceling a contract."

Cochran predicts the transition of services from ARK to the Knox County Health Department will go smoothly. The county health department already has one case worker helping people infected with HIV access necessary health care. Cochran says the county will add as many as two more case workers to handle the needs of ARK clients. Then after six months, the state will select another agency to take the place of ARK and begin administering services through the HOPWA and Ryan White grants.

"There won't be any interruption of services," assures Mark Miller, assistant director of the Knox County Health Department. Miller wants to quell the fears of those who have heard about ARK losing its state funding. He insists, "The rug is not being pulled out from underneath these people. There is a plan in place."

That may be, but constant bickering continues to undermine the working relationships between local AIDS service agencies. Kim Spoon, ARK's director of client services, insists that if her agency had financial difficulties in the past, then the county health department's assistant director is partially responsible. She says Miller served as president and vice president of the ARK board before resigning in 1997.

Miller asserts that he resigned after discovering financial irregularities at ARK and reporting them to the state. He says the county health department has "tried to stay out of the bickering, but every once in a while, someone tries to pull you back in."

"I'm bigger than that. I'm not going to go there," adds Miller, who says Spoon's suggestion that he is somehow responsible for ARK's downfall, "sounds kind of bitter. It sounds of fighting it out to the end."

The most embittered shot fired in the recent blow up over AIDS funding came in response to the meeting at the Rainbow Club. An anonymous account of the gathering began to circulate via fax and email immediately following the meeting, which was officially sponsored by the Tennessee Association of People With AIDS. The rambling and at times venomous dispatch takes several shots at Dee Crumm, who runs another local AIDS and HIV support agency called Positively Living.

"Positively Living is not a center for people with AIDS specifically," declares the anonymous dispatch, noting how Crumm's group serves anyone "faced with a catastrophic disease." (Supporters of Positively Living note that by serving anyone with a catastrophic illness, the group is able to help clients avoid any stigma that an AIDS-only facility may create.)

Sometime early next year, Positively Living may make a bid for the funding previously allocated to ARK, a move that will likely aggravate the already tense relationship between Knoxville's two most prominent AIDS support agencies.

Crumm did not return recent calls from Metro Pulse, but in April, she described ARK's ongoing financial difficulties by saying, "The reality is, the services are being given and nobody misses ARK. They (ARK supporters) perceive us as being the enemy, and we're not."

And neither is the state, says Mace, who left the Health Department to become coordinator of the nonprofit AIDS Centers of Excellence. She says ARK still has money coming in through grants from the Centers for Disease Control and Knoxville's Community Development Corporation (KCDC). Mace also points out that ARK isn't the first AIDS group to lose state funding.

Years ago, Chattanooga Cares had its grant money suspended by the state. The funding was eventually restored, but that won't happen with ARK, says Mace. Her sentiment seems to echo the findings of a 1997 audit by the East Tennessee Human Resource Agency, which raised, "serious concerns about the agency's ability to stay in business."

As Mace concludes, "They've been given ample opportunity to fix this and they have not. This has gone too far."