Fast Forward : Catching Up With 1990’s Newsmakers : Runaways: After year of tumult, stability is returning to Covenant House.

The mood at Covenant House on Sunset Boulevard seems light and fluid:

Staff wander around, joking with clients. There’s a tender farewell and lots of “good lucks” for a 20-year-old man, addicted to heroin since age 9, who is leaving after four weeks for a residential treatment program. Several young people are in quiet counseling sessions. And inside the newly opened clinic, nurse Eileen Kelly examines a young woman from Sacramento who had arrived at the shelter the night before.

Gone are the pictures of Father Bruce Ritter, posed with prominent people; likewise, the framed press clippings and proclamations. In their place, colorful posters bear messages such as “It’s OK to Be You.”

The past 12 months have been tumultuous for Covenant House, the nation’s largest shelter program for street children, which opened its Los Angeles branch with a 20-bed shelter and outreach program in 1989. Covenant House had become synonymous with Ritter, the Franciscan priest who founded it 20 years ago in New York City and expanded it to 14 other cities. He was its charismatic leader and extraordinary fund-raiser, and became a much-recognized and honored public figure.

Late last year, allegations of sexual misconduct with young men surfaced against Ritter, followed by questions of financial impropriety and mismanagement. The Franciscans ordered Ritter, who has not been charged with any crime, to resign from Covenant House last February and return to the order; he has been in seclusion since then. An investigation, commissioned by the Covenant House board and released in August, concluded that Ritter had engaged in sexual misconduct.

The scandalous atmosphere surrounding Ritter’s downfall and removal from Covenant House threatened to bring down the program as well.

But Robert McGrath, senior vice president for communications, says the national fund-raising picture has changed from bleak to encouraging. (Projections necessitated a $12.5-million cut from an $87-million national budget; Los Angeles contributions fell about 20% in 1990.)

Sister Mary Rose McGeady became president and chief executive director in September and morale is said to be high. The recent naming of Fred Ali, who served three years as Covenant’s director in Alaska, as executive director of the Los Angeles program is viewed as a message of stability.

That stability has not come easily. Program changes have been implemented and strict policies instituted regarding relations between staff and clients. Ritter’s trademark policy--”We never turn a kid away”--has been retained, but staff members describe a more serious and comprehensive approach to working with clients.

“What we’ve seen during this shakeout period over the past 12 months is we’re getting to know who our clients are and what services are available to connect them with,” Ali said recently by telephone from Alaska. “We’re much more stable in the residential area. We have good tight case management. We have a tighter staff/kids ratio.”

Brother Robert McCarthy, director of residential services, says Covenant House has plans for a permanent facility with a 60-bed shelter, and is interested in developing special programs for residential drug treatment and another for mothers and babies.

But as Covenant House develops better systems and networks, reduced funding threatens its expansion plans. Help available to street children, both locally and nationwide, has dwindled. Needs have grown.

Meanwhile, Covenant’s blue vans continue its outreach program here, cruising Hollywood streets from 4 p.m. to 4 a.m. and passing out bologna sandwiches, hot chocolate, Covenant House business cards and offers of help. On any given night, about 60% of the shelter’s residents are not from Los Angeles.

These are not runaways “who had a fight about using the family car,” says McCarthy.

Ali says the problems and numbers are worsening: “We see an increasing number of kids with real mental health (problems). They need a long-term therapeutic environment. Substance abuse runs the gamut. With crack addiction, it’s worse every time I come to Los Angeles.

“There are not enough resources to help the 18-to-20-year-olds. Homelessness is just staggering, and violence seems to be increasing on the streets. The needs of these kids are just phenomenal.”