Longtime Utah homeless cleanup nonprofit on brink of bankruptcy, issues ‘urgent’ call for help

Before Max Loveridge started working for Advantage Services about two years ago, he was homeless, living in and out of homeless shelters in Salt Lake City. 

He said he first came to Utah from Wyoming after the restaurant and hotel he was working for went out of business. He was not only out of a job, but also a place to live. So to avoid freezing to death on Wyoming streets during its frigid winter, he moved to Utah — also in search of work so he could get back on his feet. 

After spending about six months homeless in Utah, Loveridge said he first heard about job opportunities with Advantage Services, a “social enterprise” nonprofit that goes out of its way to employ people who need it most.

Since it was formed more than 34 years ago in 1992, Advantage Services has employed people who are disadvantaged, whether they have disabilities, are currently or formerly homeless, leaving jail or prison, are refugees, or are living in poverty. 

The nonprofit doesn’t function like a typical employer, but rather provides “supportive employment,” offering job coaching, mentoring, and other resources to help meet employees’ needs so they can not only work, but thrive.

But that work is now under threat as the organization struggles financially, in large part due to a contract dispute with its biggest customer, Salt Lake City.

Loveridge started out with the nonprofit as a part-time worker, picking up garbage around the Gail Miller Homeless Resource Center. Now he works 40 hours a week earning $10 an hour, fielding calls to help clean up trash, abandoned belongings, encampments or whatever else they come across day-to-day in between trips to the dump. 

Today, Loveridge is no longer homeless, renting a room from a family member. To him, Advantage Services has given him a second chance — in more ways than one. 

“They helped me get my (driver’s) license. I even wrecked one of their trucks, and I’m still working for them,” he said. 

That’s one example of how Advantage Services helps people on a better life path, Loveridge told Utah News Dispatch on Tuesday from the backseat of a pickup truck as he and two of his fellow crew members, Trevor Howell and Anothony Tarchick, headed to the dump to empty their trailer. 

“They’re highly acclaimed in the homeless community,” Loveridge said. “Everybody knows they’ll basically give anybody a chance. And if you do good work for them, they’ll keep giving you opportunities. … It means a chance of turning your life around, and an opportunity that’s there for people that don’t have opportunities anywhere else.” 

But like Loveridge’s past employer in Wyoming, Advantage Services is in financial trouble, threatening jobs for its about 120 employees that remain after the nonprofit was forced to layoff about 40 workers in November. 

Also at risk are the services it provides, including operation of Salt Lake City’s Transitional Storage Program, which has more than 500 bins where people experiencing homelessness can store their belongings, as well as contracts to clean up state highways and provide shuttle services for homeless resource centers. 

The threat to Advantage Services comes during a time when state Republican leaders have put heavier emphasis on “accountability” within the state’s homeless system while embracing models that push people toward “self sufficiency.” 

Financial woes

Advantage Services has been struggling financially, its CEO Rob Ferris told Utah News Dispatch, due to unexpected operating cost increases, higher insurance premiums and scaled back contracts from various customers. One of the biggest reasons is a dispute over Advantage Services’ largest contract with Salt Lake City’s Urban Services Division that was slashed in half from roughly $2 million to less than $1 million. 

Ferris said he even personally took out a loan so he could lend $50,000 to Advantage Services so it could make payroll in June in hopes that the dispute over the Salt Lake City contract would be resolved. But that hasn’t happened, and money is running dry.

Now he’s worried there won’t be enough to pay employees in mid to late October. That could mean filing for bankruptcy or closing down Advantage Services altogether. 

Between now and then, if Ferris doesn’t find a way to expand Advantage Services’ contracts or merge with other nonprofits to preserve jobs, he’s worried the nonprofit’s remaining 120 employees will be out of work. 

“We want to diversify our business. We want to have more contracts that pay more so that we can keep working,” Ferris said. “In the short term, we have run out of cash flow, and the only thing that’s really going to be able to save us right now would be an emergency fundraiser where we can fill the coffers.”

This week, Advantage Services issued an “urgent call for community support” as it works to “prevent closure at the end of October.” As part of that effort, Advantage Services is fundraising — a new venture for the nonprofit, which has historically gained the vast majority of its revenue through contract work. 

“Advantage Services must raise $750,000 through an emergency fundraising campaign in September to offset its current operating loss and meet required insurance renewal payments due by December 1,” the nonprofit said in a news release. “Without immediate support, the organization’s ability to continue serving employees, customers and community partners is at serious risk.” 

In addition to the slashed Salt Lake City contract, insurance costs alone rose by about 250% this year, from $177,000 to more than $400,000, Ferris said, noting that’s another challenge that comes from “the population we hire.” 

“There are issues. Higher workers’ (compensation) claims, more automobile accidents,” he said, adding that their previous insurer declined to renew their policy, and “we had to enter into the high-risk market.” 

Ferris, also a member of the Salt Lake Valley Coalition to End Homelessness, has made no secret of Advantage Services’ money woes while he’s been working to find a solution to preserve the nonprofit’s jobs. He and his team have been exploring opportunities for new contracts with other cities, service providers and other potential new customers. 

“However, immediate support is needed to stabilize operations and continue serving employees and the broader community through the end of the year,” Advantage Services said in its news release. 

Contract dispute with Salt Lake City 

Though funding for contracts with other partners have also been reduced due to budget constraints or reduced work, a major hit to Advantage Service’s roughly $3.5 million annual budget came from its halved contract with the Urban Services Division under Salt Lake City’s Public Service’s Department, Ferris said. 

He pointed to a long history with Salt Lake City, which since 2011 has partnered with Advantage Services for clean up services related to homelessness issues. Over the years, in response to requests from city leaders, Ferris said, Advantage Services has grown both its workforce and its equipment to provide a variety of different types of services, including pressure washing streets of urine, feces and other biohazards.

But after the COVID-19 pandemic hit in 2020 and the city started having more problems with homeless encampments, city leaders created the city’s own Rapid Intervention Team to help clean them up. Then last year — under pressure from Republican state leaders to crack down on drugs and camping — Salt Lake City Mayor Erin Mendenhall created a “public safety plan” that, among many other measures, expanded that Rapid Intervention Team to more quickly respond. 

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Advantage Services’ contracts were also reorganized under the new Urban Services Division, created by the Salt Lake City Council last spring.

Ferris said even though city leaders previously approved about $2 million for Advantage Service’s contracts, the Urban Services Division “chose not to utilize all of our services” this year, and the division cut the nonprofit’s contract in favor of doing the work internally, now with a team called the Clean City Program. 

In response to an interview request seeking more information about why the division scaled back Advantage Services’ contract, the Public Services Department issued a prepared statement saying it was a decision to help save taxpayer money. 

“Being good stewards of taxpayers’ dollars is a core value of the Public Services Department. Every year, in a continued effort towards that goal and as an important part of the budget process the department analyzes its internal procedures, explores consolidating services and evaluates external contracts,” the department said. 

“Through this process, an internal solution was discovered that reduced external contract needs for cleaning up trash and debris in public spaces,” the department continued. “The Public Services Department proposed a restructuring of staff’s responsibilities from the external contract to that of a new division.”

The Urban Services Division’s Clean City team cleans up trash and debris in public spaces during their regular work hours, the department said, while also noting that requests for clean ups have gone down as part of city officials’ larger efforts to address homelessness issues. 

“Through the consolidation of teams and creation of the Urban Services Division, along with the concerted effort and investment from the city and the Salt Lake City Police Department to ensure impacts around homelessness are addressed promptly, has reduced the volume of clean-up requests,” the department said. 

Ferris, however, questioned whether the decision to hire more full-time city employees with benefits and purchase new vehicles and equipment for the team will actually save taxpayer money. He argued that Advantage Services already provides the same type of service at lower costs. 

He also said the decision to cut Advantage Services’ contract felt like a reversal of the city’s longstanding partnership and investment in the mission of the nonprofit, which he again noted expanded its workforce and fleet in order to respond to growing requests from Salt Lake City ever since they first started working together in 2011. 

“It ignores the history that we have where the mission was ideal to the City Council,” he said. “They loved the idea that we were hiring the homeless to clean up homeless areas … that they were playing a part in giving people back their lives.” 

Now what’s at stake, he said, “is the loss of a community partner that provides employment” to disadvantaged people, including people experiencing homelessness. 

“We are helping give them back their lives, and that’s a big investment the city has put into us over the years,” Ferris said. “And it’s not just the city, but our other community partners who rely on us for the shuttle program, for landscaping and janitorial, and giving the people that they serve employment as well. And so what could be lost is a cornerstone to the community that’s helping (those) most at risk.”

A ‘crucial’ part of Salt Lake’s homeless system

Homeless service providers including Shelter the Homeless, which owns six homeless resource centers in Salt Lake County, worry about what could happen if Advantage Services goes under. 

Ever since Shelter the Homeless’ resource centers opened seven years ago, they’ve contracted with Advantage Services for a variety of types work, including snow removal around shelters and van shuttle services to and from homeless resource centers for employment, healthcare, legal support and other needs, said Laurie Hopkins, executive director of Shelter the Homeless. 

“The (Advantage Services) employment model has been the main source of training and employment for many of our shelter clients exiting homelessness, offering jobs and resources to get people on their feet,” Hopkins said. “Those individuals are driving the shuttles, removing snow and keeping the areas around our facilities and in neighborhoods adjacent to our programs clean and garbage free.”

If Advantage Services were to go out of business, Shelter the Homeless would not only lose its shuttle drivers, but also the Salt Lake Valley’s homeless system would lose a key employer that has acted as a first step for many people needing a chance to build work experience. 

“I can’t emphasize enough how crucial they have been to our system,” Hopkins said, noting that many other Salt Lake County homeless providers have contracts with them. 

However, she said “the most crucial role they have played has been offering training and jobs” for the homeless population. 

“We have always valued them as a key community partner and it would be very challenging if they exited the system,” she said. “We encourage the community to support this organization.”

Back on the job, after taking a load of garbage to the dump, Loveridge contemplated what it would mean to not just him, but others if Advantage Services were to shut down.

“That would be horrible,” he said. “They’re deep rooted in the homeless community … it would change them overnight. It would immediately make the whole community a lot worse.” 

Tarchick, Loveridge’s co-worker, added, “the city would be a lot dirtier.” 

“You would see a lot more garbage all over the streets,” he said. “It would build up and build up, and nobody would pick it up.” 

Editor’s note: The key points for this story were written by a Utah News Dispatch journalist.