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No-Bid Homeless Shelter Contracts Fall Outside the Usual Process

The City Council will vote Tuesday on three fast-tracked shelter tent contracts that until Monday didn’t include any goals to hold the nonprofits running them accountable.

homeless shelter contracts

Mayor Kevin Faulconer announced the sites of three temporary homeless shelters, including one in a parking lot at 14th Street and Commercial Avenue, where the press conference was held. / Photo by Lisa Halverstadt

The City Council is poised to approve three sole-source shelter contracts on Tuesday that until Monday lacked key goals to hold the nonprofits running them accountable.

The proposed seven-month contracts with Alpha Project, Father Joe’s Villages and Veterans Village of San Diego, which total $6.5 million, emerged rapidly in response to a deadly hepatitis A outbreak that’s killed 20.

The deadly health crisis, which has disproportionately battered San Diego’s homeless population, inspired Mayor Kevin Faulconer to proceed with a plan to use three industrial-sized tents to temporarily house 700 homeless San Diegans.

His team has said county supervisors’ declaration of a health emergency has given the city the option to bypass some of its usual contracting practices – and that doing so was necessary to stem the deadly outbreak. That health emergency meant the Housing Commission, which operates the city-funded homeless shelters, could pursue the sole-source contracts without violating its procurement policies.

That meant moving forward with tents absent a competitive bidding process complete with targets and frameworks for the three nonprofits to follow – and initially, key outcomes for them to meet.

The mayor’s office chose the three providers and asked them to present budgets and plans to place one tent each in Barrio Logan, East Village and Midway. They also hashed out the details in a series of meetings with city and San Diego Housing Commission officials.

Philanthropists Dan Shea and Peter Seidler, two business leaders turned homeless advocates, stepped up to pay for two of the three tents. They weighed in too.

By a Nov. 3 San Diego Housing Commission meeting, the three contracts lacked a fundamental requirement in the city’s other shelter contracts: a targeted percentage of clients who would move onto longer-term housing and permanent housing.

That is how the city measures whether its contracts are successful. The shelter contracts included no such measurements.

The deals with the nonprofits also counted on Housing Commission members signing off on a plan to use $6.5 million from a major initiative to build permanent housing for homeless people to instead operate the tents for seven months.

The Housing Commission unanimously approved the three contracts and the funding shift earlier this month despite a series of complaints from advocates concerned the city should maintain its focus on permanent housing.

Frank Urtasan, chair of the San Diego Housing Commission board, acknowledged before the vote that the plan before commissioners wasn’t ideal. He argued it was necessary.

“This isn’t our preferred approach. When you’re dealing with a huge societal problem you need to explore all options, all alternatives. The crisis is on the street today,” Urtasan said. “For us to ignore what’s being requested from us to be able to as one alternative while we pursue all others I don’t think is a responsible step forward on the part of this commission.”

Faulconer and other city officials have said they urgently pursued the tents and contracts to give homeless San Diegans refuge from the hepatitis A outbreak, and that they’d quickly replenish the housing funds used on the shelter contracts.

At the time, they also defended the lack of measurable goals in the shelter contracts. They wanted to allow the so-called bridge shelters to operate for five months and then invite a consultant to review how the programs were working and what goals might make sense. The report would come toward the end of the seven-month contracts.

After all, they said, the city and others in the region had never operated such programs before. It had only overseen traditional homeless shelters.

The bridge shelters, on the other hand, prioritize spaces for people who already have housing vouchers. Ostensibly, that means many clients entering the shelter will have a better chance to move into housing and thus an easier time finding a home.

But the city and the three nonprofits were hesitant to set targets.

“We want to make sure we do right and have enough quality data to make these determinations,” Jonathan Herrera, the city’s senior adviser on homelessness coordination, told me on Oct. 27.

Amy Gonyeau, chief operating officer for the Alpha Project, said the nonprofits were hesitant to specify any goals because they didn’t know what to expect from a new regional system the city is relying on to help move people into the shelter and onto housing.

“This is sort of a test project,” Gonyeau said.

But at least two City Council members were uncomfortable with the target-free contracts.

City Councilwoman Barbara Bry emphasized the need for performance measurements for the city-funded homelessness programs and other initiatives.

City Councilman Chris Ward, who represents the downtown neighborhoods most impacted by homelessness, had stressed the importance of measurable targets too.

“I’ve been clear since I became aware of this funding plan that these contracts must include enforceable metrics to keep us in line with housing first principles and I’m continuing to push to see enforceable performance standards included before approval,” Ward said in a Monday statement.

Faulconer began to press the issue with the three nonprofits.

Housing Commission CEO Rick Gentry issued a last-minute memo to the City Council on Monday announcing they’d be asked to sign off on revised contracts the next day.

The proposed contracts now include a provision requiring at least 65 percent of bridge shelter clients to move onto permanent housing – the same figure that’s included in the city’s other shelter contracts. They also require that no more than 15 percent of people who leave the tents return to a shelter.

And they mandate more City Council approvals to extend the tent contracts than previously envisioned.

Gentry wrote in the memo that the changes had been made following discussions with Faulconer, some members of the City Council and the nonprofits that will operate the tents.

Greg Block, a Faulconer spokesman, said the mayor recognized the importance of ensuring people entering the shelter move on to permanent housing.

“He believes it is important to document and track those outcomes so we know what is working,” Block wrote in a statement. “He made that clear to the service providers and stakeholders and it will now be reflected in the operation of the bridge shelters.”

Correction: An earlier version of this post misspelled Jonathan Herrera.

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