After squabbling with the city council over funding for Seattle’s nationally recognized arrest-diversion program Mayor Jenny Durkan has decided to withhold a majority of the program’s funding for 2020 and hire a consultant to analyze the program and make recommendations on whether and under what conditions to fund it.

The Law Enforcement Assisted Diversion Program, created and run by the Public Defender Association in collaboration with city and King County law-enforcement agencies, provides case management and referrals to services and housing for people engaged in low-level drug and prostitution crimes. Started as an arrest-diversion program in Belltown in 2011, LEAD has expanded to cover much of the city, and now accepts referrals through “social contacts” in addition to arrest diversions. Last year, PDA director Lisa Daugaard won a MacArthur Foundation award (commonly known as a genius grant) for her work on the program.

The council agreed to provide an additional $3.5 million to LEAD last year after lengthy negotiations and a promise of $1.5 million from Ballmer Group that was contingent on the $3.5 million in additional city funding. The money was supposed to allow LEAD to reduce case managers’ caseloads and expand the popular program geographically. Last month, though, at Durkan’s direction, the city’s Human Services Department sent LEAD a contract that only includes the $2.6 million the mayor proposed in her initial budget, with the rest contingent on an evaluation by New York City-based consultant Bennett Midland, which signed an $86,000 contract with the city in late December.

“The consultants will address appropriate protocols for referrals in partnership with SPD and LEAD and surface best practices in case management, behavioral health treatment and diversion,” senior deputy mayor Mike Fong told LEAD’s senior management in an email in December. “This information will inform their recommendations of relevant performance metrics to be incorporated into an amended contract and for overall consideration of what caseload levels should be. We expect the final report and recommendations this Spring.”

“Revising the contract to add the increased funding of $3.5 million will be informed by the recommendations from an independent program evaluation,” Fong wrote.

According to Bennett Midland’s contract, the goal of the consultants’ work will be “to establish a shared understanding of LEAD’s existing deliverables, reporting capabilities, protocols, and procedures in order to develop an appropriate set of performance metrics, inform future program evaluations, and align future budget resources and contract provisions with the program’s foundational goals.”

LEAD says that if the mayor does not release the approved funding this year, LEAD will have to cancel its expansion plans and lay off staff. Currently, LEAD project director Tara Moss says, “LEAD is breaking, because legitimate demand far exceeds our capacity to provide case management. By its nature, it’s a program meant to help officers resolve new current problems, as well as provide long term support to people whose behavior has been problematic in the past.  So for LEAD to be healthy and useful, it has to take appropriate, priority new referrals from police and businesses.  Our police partners are making appropriate high priority referrals that we have no space to absorb, and even if we shut our doors to new referrals tomorrow—which would be the end of LEAD as we know it—we can’t even sustain the current caseload.”

Durkan’s decision to withhold approved funding from a city contractor is highly unusual and introduces a new uncertainty into the annual budget process. Ordinarily, the mayor proposes a budget, the council amends it, and the adopted budget becomes the budget for the following year. There is little if any precedent for for the mayor’s office to reject the adopted budget for a specific program on essentially a line-item basis. Council member Lisa Herbold, who chairs the council’s human services and public safety committee, says she can’t recall “any budget adds not being funded” after a budget was finalized and passed in the two decades she has worked as a council aide or council member. A resolution “declaring that the City is committed to ensuring that evidence-based, law enforcement-engaged, pre-booking diversion programs, such as LEAD, receive the funding necessary to accept all priority qualifying referrals” passed unanimously in November.

Funding from Ballmer Group was explicitly tied to the $3.5 million in additional city funding, although [UPDATE] a spokesperson for the group says they do not intend to rescind the funding now. In a statement, Ballmer Group said, “We are hopeful that the Mayor’s office will release the full funding. We would be really disappointed to see the nature of our grant fundamentally change from expanding a successful program to simply paying for something we thought government had agreed to fund. That would be a loss for the city.”

LEAD had already begun to expand its services to include new parts of the city, signing leases on new field offices in SoDo, Capitol Hill, and North Seattle and preparing to add staff through a nationwide search, Daugaard told key LEAD stakeholders in an email last month. “Now it’s far from clear that we should proceed with any of this.” According to Moss, LEAD’s current preference is to “act as if” the $3.5 million will come through midyear, but that’s a gamble—one that Moss says “requires City assurance that the approved funding will be made available by mid-year,” regardless of whether Durkan decides to fund the program after her consultants come out with their report.

Durkan’s decision to overrule the council has frustrated council members who negotiated to get additional funding for LEAD last year.

In a 3am email responding to Daugaard’s note to LEAD participants, former council budget chair Sally Bagshaw, who worked to get the LEAD funding in the budget after Daugaard secured Ballmer Group’s $1.5 million, expressed her frustration that the money was no longer guaranteed.

“Very sad that we are facing this uphill battle AGAIN.  I thought we had your funding straightened out and on a smooth path; after our budget was complete, Council’s  intentions to fund LEAD expansion was clear,” Bagshaw wrote.

“I will let the Mayor’s Office know again that the Council intended for the LEAD money to be distributed beginning in January.  I genuinely hope everyone can identify the remaining issues about reporting so you can move forward.” (Bagshaw declined to comment for this story.)

Asked whether the mayor lacked confidence in LEAD’s approach, Hightower responded, “As you know, LEAD funding has grown by more than 600% since the pilot began nearly five years ago.” (LEAD, which also receives King County funding, began as a pilot in Belltown in 2011 and has since expanded to Capitol Hill, downtown, North Seattle, SoDo, and Burien.) “While a study within its first year showed some successful outcomes in recidivism, since then, the program has grown exponentially, and the scope of work and the client groups they serve have changed dramatically. We need to better understand client outcomes and engagement level to realize the overall impact on those served and the community.”

LEAD provided much of the data the mayor’s office requested in October, in a memo that highlighted more than half a dozen other ongoing evaluations of the program. Although no single evaluation has looked at every aspect of LEAD, numerous studies have found that its harm reduction- and diversion-based approach reduces arrests and improves community and individual health outcomes. For example, studies by University of Washington researchers in 2015 and 2017 concluded that LEAD reduced arrests among its clients by up to 60 percent. As the result of its success in Seattle, the program has been copied nationwide; currently, there are LEAD programs in dozens of cities across the country, including Baltimore, New Orleans, San Francisco, Las Vegas, and Albuquerque.

Hightower says that making LEAD’s full funding contingent on the outcomes of an outside consultant’s study is “consistent with our commitment to performance-based contracting,” in which homeless service providers must meet specific outcomes, including moving a certain percentage of people into shelter or housing, in order to get funding. “HSD has taken a leadership role in ensuring that City funds are allocated to programs that accept and work towards specific performance targets. This is what we are asking of LEAD.”

One problem with requiring LEAD to hit targets based on the city’s homelessness performance metrics is that LEAD isn’t really a homelessness program. Its goal is to reduce recidivism and crime, not to house people, although clients often do find housing as their lives stabilize as the result of intensive case management and referrals to services. About 30 percent of LEAD’s clients are already housed, a percentage that LEAD expects to grow if and when it expands into Southeast and Southwest Seattle.

This square-peg, round-hole problem has existed at least since 2017, when HSD announced that it would require homeless service providers to meet certain performance metrics or lose out on funding.  But it came to a head last year, when the mayor’s office directed HSD to parcel out LEAD’s funding over the course of the year instead of providing full funding at the beginning of the year as it had previously done. Each quarter, LEAD was required to report on how it was doing on a set of performance metrics that included “outreach, engagement or navigation services focused on housing placement,” referrals to shelter or encampments, and entries to permanent housing—metrics that make sense for housing or homeless service providers but are less meaningful for an arrest diversion program with many non-homeless clients.

The county, which funds LEAD through its Mental Illness and Drug Dependency sales tax, also has performance requirements, but their metrics for LEAD include things like “increased stability in treatment, employment, or other quality of life measures” and “reduced substance use” rather than specific housing or treatment targets.

The mayor’s office appears unconvinced that LEAD needs additional funding to manage its current caseloads. Hightower said the 2019 budget process was the first time the mayor’s office was made aware of LEAD’s proposed funding increase, “after our usual due diligence as part of the development of the Mayor’s budget.” Moss says that “all year, through any available channel, we tried to send a message that there was a large and growing gap between need and capacity: through the HSD analysts the Mayor’s Office asked us to meet with, through the Chief of Police … and directly to Deputy Mayor Fong in September, all before the budget was proposed.”

In his email to LEAD stakeholders explaining the mayor’s decision to hold the $3.5 million, Fong wrote that the mayor’s office would “connect with SPD about existing referral protocols and volumes.” That could mean reducing the number of referrals or prioritizing so-called “high-impact” and “high-profile” individuals over other referrals. SPD did not respond to a question about whether officers were reducing the number of referrals they make to LEAD. Durkan spokeswoman Kamaria Hightower said the mayor’s office “has not instructed SPD on any aspect of LEAD,” but added that “SPD is in the process of developing internal protocols” on referrals.

If the mayor’s office decides not to provide all of LEAD’s approved funding, the city council could decide to search in the budgetary couch cushions and come up with $3.5 million. Herbold, the human services and public safety committee chair, says, “I believe we can address the issues identified by Senior Deputy Mayor Fong [in his email] in order to adequately fund this high community priority public safety intervention.” Or they could leave LEAD to fend for itself. Either way, the mayor’s move raises larger questions about what it means for the city to adopt a budget. Historically, the balance of powers between the executive and legislative branches has dictated that once the council passes a budget and the mayor signs it, the budget process is over. Now, that balance may be in question.