Less than 24 hours before the state’s nonprofit community providers were to rally Wednesday morning to draw attention to an “already frayed safety net,” Gov. Dannel P. Malloy announced a new plan to help fund their efforts.

According to sources, Malloy plans to join them at the rally to announce plans to establish a new state bond pool specifically designated for nonprofit community-based providers. The $20 million pool is expected to enhance opportunities by allowing nonprofits to invest in capital projects that will lower administrative costs and improve the delivery of services.

Sources who were briefed on the plan said there have been small pots of state bond money available to these community nonprofits in the past through various state agencies, but the funds came with restrictions and sometimes took more than a year to access.

“It’s an amazing thing for the governor to try and partner with us,” Barry Simon, executive director of Gilead Community Services, said Tuesday in a phone interview.

Simon’s organization provides housing and support services to individuals with mental illness. He said that if Gilead was able to receive bond money from the state it would help free up more operating funds for direct services to clients. It would also help with some sorely needed capital projects.

For starters, Simon said that if his organization was approved for some of the funding, he would use it to patch “roofs, fix windows, and install generators” at some or all of Gilead’s group homes.

“We haven’t been able to think about doing those things because we’re been so crisis oriented,” Simon said, adding that there has been little, if any, money available for infrastructure improvements for several years.

CTNewsJunkie file photo
Heather Gates, president of Community Health Resources (CTNewsJunkie file photo)

Heather Gates, president of Community Health Resources, called the news a “great first step.”

In the past, nonprofits would have to seek commercial financing if they wanted to undergo a large capital improvement like creating an electronic medical record system. While interest rates are low now, Gates said that wasn’t always the case. But there were other pitfalls associated with borrowing money from a bank. Obtaining a commercial loan means the organization is taking money out of its operating budget to pay off the debt at the expense of services, she said.

Asked where the money would be spent, Gates said her organization is building a new facility in Manchester and would look to apply for state bonding to help complete that project. But Gates said she would also like to use some of the funding to create an electronic medical records system and to install electric generators at all of its facilities. Many nonprofit providers scrambled during the power outages in 2011 to make sure their clients were safe.

A source familiar with the plan said priority will be given to proposals under $1 million within each bonding cycle to assure that funds are available to an array of nonprofit providers.

The Connecticut Community Providers Association and Connecticut Nonprofit Association are planning to rally at the state Capitol at 10 a.m. Wednesday.

“The previous budget rescissions and recent modifications continue to put enormous pressure on community care providers’ collective ability to provide quality programs and services,” a press release promoting the rally reads. “With the state’s legislature and the governor working to balance the budget, the importance of protecting and investing in the safety net needs to be at the forefront of state budget discussions.”

The state flat-funded nonprofit community providers for years until Malloy proposed — and the legislature approved — a 1 percent cost-of-living increase in last year’s budget. The increase went into effect Jan. 1, but as recently as last month was in jeopardy of being cut during negotiations over the deficit mitigation plan.

The nonprofits mounted a public relations campaign and held onto the funding.

It’s unclear if Malloy will spare the nonprofits when it comes to their operating budgets. Most of the nonprofits who collectively serve more than 500,000 clients receive some of their funding from contracts with state agencies.