SYLVIA SOLEDADES looks like many women you might see waiting at bus stops, serving people at fast-food counters and walking on city streets with children in strollers. Thirtysomething, her long dark hair is pulled back into a bun; she wears a loose gray sweater over jeans and neat white sneakers. She credits the Legal Aid Society of Santa Clara County for helping keep a roof over her head.

Soledades says she called Legal Aid after her landlord threatened to evict her family of six when her youngest child was 3 days old. Speaking in English and Spanish, she says that their $850-per-month one-bedroom apartment near Alma and Vine streets in San Jose had broken plumbing and was being overrun with cockroaches. She says she called the city to complain, and the landlord was ordered to get the building up to code.

Soon afterward, Soledades says, she received an eviction notice. So she called the Legal Aid Society (LAS). She was put in touch with Alicia Carvajal, a housing counselor, who in turn found her a pro bono attorney. Carvajal coached her through the legal process and went with her to court dates. The judge gave Soledades a cash award equal to one month's rent and enough time to find a new place to live. "Had Legal Aid not helped me, the sheriffs would have put us out on the street," she says.

After this week, the nonprofit agency, which has helped low-income people like Soledades for TK years, may be out of business for good.

Each year, the city of San Jose's Department of Housing gets money from the U.S. Department of Housing and Urban Development's Community Development Block Grant Program. Nonprofits like LAS request grants from this fund for housing-related needs.

In March, the housing department issued its funding recommendations. With applications for grants at nearly four times the available funds, a dozen organizations' projects were rejected by city staff. Dwindling funding sources and low reserves forced city staffers to knock out groups like the Support Network for Battered Women, the Indian Health Center and the LAS's housing counseling programs.

Unless Tony Estremera, Legal Aid's lead attorney, can convince the City Council to do otherwise, come July 1 clients like Soledades will be turned away.

Estremera's office looks like a smaller, shabbier version of TV attorney Perry Mason's, with a lot more files piled on his wide desk and the wall-high bookshelf behind it. Estremera is a friendly man who speaks with a slight New York accent. He's heavy set, fiftysomething, wears a dark, well-cut business suit and has worry lines under his eyes.

He says that for 18 years, the city's CDBG funding has supported Legal Aid's housing counseling programs and helped more than 100,000 people resolve landlord-tenant disputes and foreclosure problems by providing them with information, counseling and legal representation.

Estremera says that LAS wasn't recommended for funding this year because the city is concerned about the agency's ability to meet its grant responsibilities. He concedes that LAS's recently audited financial statements don't show reserves or new funding sources that are required by the program. "But we've never had a problem before," Estremera says, "and our budget shows we won't have a problem over this next year or in the future." Estremera filed an unsuccessful appeal to the city, arguing that the financials value their building at $2 million less than its recent appraisal, that the city didn't consider one of Legal Aid's long-term contracts and that LAS can rent space in its building, all which provide a financial cushion.

Last year, LAS lost a $7 million county contract when the work was in-sourced to the Public Defender's Office and the Office of the County Counsel. Estremera says that because they had to lay off 16 staff members, LAS used up its reserves paying accrued benefits. In January 2009, the county's internal auditors issued a report saying the county overpaid LAS's 2007–2008 program administrative expenses by $241,425. Estremera disagrees with this finding and has requested that LAS be excused from reimbursement.

Sandra Murillo is the city's CDBG program manager. She says the city has a fair process for assessing needs and rating applicants but there isn't enough to go around this year. She says applicants had to meet a city funding priority, and perform HUD-eligible activities, to prove they're helping the people they propose to help.

In addition, they were each required to demonstrate that at least 20 percent of their funding comes from other sources. "There were several agencies who met all of the criteria, but the funding wasn't enough to go down to them," says Murillo. Speaking of LAS, she said, "Fortunately, there are others providing this service, and we were able to look at their capacity. So it's not like we're leaving these folks that would have been helped by LAS without any assistance."

Janice Carolina Noble disagrees. She has worked as an LAS Fair Housing paralegal for the past 15 years. Noble says LAS' housing counselors work evenings and weekends without pay to accommodate clients who can't visit their offices during the work day. "No one else does what we do," she says.

Many of Legal Aid's housing counseling clients are apartment dwellers that landlords want to evict so they can rent to new higher-paying tenants. Other eviction victims are renters who didn't know their homes were in foreclosure, didn't understand or ignored the notices they received and were surprised by notices ordering them to move. They come to LAS to figure out what the notices mean and to get help asking for more time to find a new place to live. LAS counselors are also seeing home owners whose homes are in foreclosure.

"There's Bay Area Legal, but because they receive federal funds their clients must be very low-income and they must be documented," says Noble. "Project Sentinel doesn't do unlawful detainers, they do mediations, fair housing and information and referrals."

Noble adds, "I want the city to realize that 37 percent of their population is tenants and they should have a say in this decision. I want this city to meet with these people and give these people the right to speak for themselves. Everybody has a right to the justice system no matter how small they are and we give this right to them."

The San Jose City Council will issue its final approval for FY 2009–2010 CDBG Funding Recommendations at its May 5 meeting at 1:30pm at City Hall.

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