Tag: We Are In

In Last-Minute Bailout, State Provides $6 Million to Pay for Hotel Shelters That Ran Out of Money Last Month

By Erica C. Barnett

In the final days of the state legislative session, Seattle lawmakers quietly bailed out a hotel-based homeless shelter program that ran out of money in early April, using $6 million in “underspend” from a program that addresses encampments in state-owned rights-of-way to keep the hotels open while the King County Homelessness Authority tries to find places for hotel residents to go.

The KCRHA has until the end of June to spend the money, which can only be used to “maintain the operations of, and transition people out of, as appropriate, a hotel housing more than 100 people experiencing homelessness that is at imminent risk of closure due to a lack of funding,” according to language state Rep. Nicole Macri (D-43, Seattle) and Sen. Joe Nguyen (D-34, Seattle) inserted into this year’s supplemental budget.

“Generally speaking, a request of that amount coming this late would not have had the sympathy that it did. At that point, I was like, ‘I don’t want 300-plus families to be unsheltered.'”

—State Sen. Joe Nguyen[/perfectpullquote]

“[KCRHA CEO] Marc Dones reached out, saying they had discovered this crisis several weeks [earlier], saying they had been trying to figure out how to transition people” out of the hotels, Macri said. At the time, the KCRHA estimated there were more than 300 people living in rooms at six hotels, a number that has since dwindled. “They said this is an urgent need—it’s an immediate need right now.”

“Generally speaking, a request of that amount coming this late would not have had the sympathy that it did,” Nguyen said. “At that point… I was like, ‘I don’t want 300-plus families to be unsheltered.'”

Because it was so late in the session, Macri said, it wasn’t possible to just move the underspent dollars from one year’s budget to the next. A change like that would require legislation to reallocate the funds, which are earmarked for the highway encampment program. Instead, the state Department of Commerce provided supplemental budget language that allowed the KCRHA to use the leftover money, which would otherwise have gone back to the state’s general fund, to pay for the hotels.

As PubliCola reported exclusively earlier this month, the Lived Experience Coalition received a total of $1.3 million in federal grants through the United Way of King County, but the money ran out earlier this year, forcing a scramble to save the program.

The LEC, formed in 2018, is a group of people who have direct experience with homelessness or systems that homeless people frequently encounter, such as the mental health care system. Until last year, they had never been in charge of a shelter or housing program. The LEC has blamed the hotel crisis on its fiscal sponsor, a nonprofit called Building Changes, which denies responsibility for financial errors.

We Are In, the funder for Partnership for Zero, stepped up to pay for the hotels through the first week of April. (According to a spokesman, the two We Are In board members who are affiliated with the LEC recused themselves from the vote.) The KCRHA is planning an investigation into what happened with the hotels, which will be paid for by the Campion Advocacy Fund, one of We Are In’s funders. Later this month, the authority reportedly plans to discuss the hotels during a joint meeting of the agency’s governing and implementation boards.

Meanwhile, Dones has said the regional authority only recently became aware of the hotel funding crisis and had nothing to do with the LEC’s contract to run the hotels. However, the KCRHA’s own downtown outreach workers, known as systems advocates, placed dozens of people in the hotels this year as part of the Partnership for Zero, a public-private partnership aimed at ending unsheltered homelessness downtown.

It’s unclear why the KCRHA asked for so much spending authority. “I really left it to the executive branch to vet it and to determine, ‘is this a reasonable thing to do?'” State Rep. Nicole Macri said. “I didn’t get a clear accounting.”

At its peak, the hotel shelter program was spending more than $1 million a month to pay for about 250 hotel rooms, including rooms in two last-chance hotels for people who had been kicked out of other locations due to behavioral issues. If the KCRHA uses up the entire $6 million between April and the end of June, it will have spent $2 million a month.

It’s unclear why the KCRHA asked for so much spending authority. “I really left it to the executive branch to vet it and to determine, ‘is this a reasonable thing to do?'” Macri said. “I didn’t get a clear accounting. … It seems like a lot.” A Commerce Department staffer did not immediately respond to a request for comment on Tuesday.

When PubliCola inquired about the hotels this week, a KCRHA spokeswoman said “our team is continuing to match people to resources” and that it would be a day or two before they could provide details about plans to wind down the hotels and how much it will cost. “We’re still finalizing some of the locations and ensuring that everyone is taken care of,” the spokeswoman said Tuesday.

In a joint statement sent to PubliCola after this story was published, the offices of Gov. Jay Inslee, King County Executive Dow Constantine, and Seattle Mayor Bruce Harrell said, “This hotel voucher program was launched and operated independently from any city, regional, or state effort. When our teams were alerted to the situation, we worked with partners in the public and private sectors to identify potential solutions and coordinate with the King County Regional Homelessness Authority (KCRHA).”

“Without continued funding, hundreds of individuals that include families with children and seniors with significant health issues would likely return to living outside. Because of the vulnerability of this population, the Legislature approved the governor’s request for $6 million to further support this transition effort.”

Sharon Lee, the director of the Low-Income Housing Institute, said the KCRHA asked LIHI for access to some of its tiny houses, including units that are ordinarily reserved for referrals from the city’s HOPE Team, which offers shelter to people living in encampments. Many of those living at the hotels will need shelter that can accommodate special needs, including women and families fleeing domestic violence and well as people with debilitating mental and physical health issues.

In addition to her work as a legislator, Macri works as a deputy director at the Downtown Emergency Service Center, which provides shelter, health care, and housing. She said Dones initially asked for six months to move people out of the hotels, but that she suggested a quicker time frame “because of the high cost.” However, she noted that it can be challenging to find shelter and other resources for people with high needs, especially in a city with so few available shelter beds.

In 2021, DESC had to relocate 130 people from an emergency COVID shelter at Seattle Center to other locations when that shelter shut down. “Of course, DESC does operate other shelters, so we were able to slowly refer people to beds at DESC and other providers,” but even that took three months, Macri said. To make it work, “we had to redeploy staff [and] stop taking referrals”—a tradeoff that meant people living unsheltered were unable to access those shelter beds.

The right-of-way cleanup program, originally proposed by Gov. Jay Inslee to reduce the number of encampments on property owned by the Washington State Department of Transportation, funds JustCARE, a program headed up by the Public Defender Association that shifted its focus last year to provide case management and shelter exclusively for people living on state-owned rights-of-way. According to the Department of Commerce, the program was fully or partly responsible for sheltering or housing more than 300 people in King County. The The reallocation,  reduces the KCRHA’s 2022-2023 budget for right-of-way work from $45 million to $39 million.

As Homeless Agencies Bicker Over Blame, Time Runs Out for Hundreds Living in Hotels

By Erica C. Barnett

Up to 250 people experiencing homelessness who have been living in hotels around the region could be back on the streets in the next few days now that funding for the hotels, provided through a one-year federal grant to a group of homeless and formerly homeless advocates called the Lived Experience Coalition, has abruptly run out. The people at risk of eviction include both individuals and families, and most have no housing plan in place.

Ordinarily, the LEC is not a housing or shelter provider; its primary role is advocating for policy solutions to homelessness and ensuring that people who’ve experienced homelessness have a seat at the table when policy decisions are made.

Last year, though, the LEC received a series of federal grants, including a $1 million, one-year grant to rent hotel rooms from FEMA’s Emergency Food and Shelter Program and another $330,000 to program to connect hotel residents to employment. The LEC signed an agreement with the nonprofit Building Changes to serve as its fiscal sponsor—a pass-through agency that distributes funds for new or grassroots organizations.

Over the past year, but particularly between January and March of this year, the LEC moved hundreds of people into hotel rooms funded by the federal grant. By March, cash flow was dire. As of early April, the estimated gap between the funding the LEC had on hand and what it owes various hotels totals more than $700,000, and the shortfall is ballooning at a rate of about $1.1 million a month, according to several sources familiar with the situation.

The King County Regional Homelessness Authority, which has distanced itself from the hotel program, also used the LEC hotel rooms to move people off the streets of downtown Seattle as part of a public-private partnership aimed at ending unsheltered homelessness downtown, called Partnership for Zero.

“We’ve been notifying [the LEC] about the cash issues for a year,” Building Changes executive director Daniel Zavala said. “We shared [concerns] on several occasions throughout 2022, and really in December of this last year we were more formally flagging some of the cash flow issues.”

In emails and memos obtained by PubliCola, the LEC denied this, and said Building Changes failed to provide them with information about their cash flow when they requested it.

“For a very long time, we were operating blindly which caused us to spend $370,000 more than the grant we were awarded,” LEC director LaMont Green wrote in an email detailing LEC’s grievances with Building Changes. “We consistently asked for the financial reports but to no avail. Building Changes made us aware of this gross overspend less than 2 months before year end. … Additionally, when LEC received financial reporting it was often inaccurate.”

Zavala, from Building Changes, disputes this account. “We provided financial information on numerous occasions to the LEC over the last year,” Zavala said. “We’re here because the LEC mismanaged its finances.”

 

But the crisis isn’t just about a single organization falling into arrears.

The King County Regional Homelessness Authority, which oversees the region’s response to homelessness, also used the LEC hotel rooms to move people off the streets of downtown Seattle as part of a public-private partnership aimed at ending unsheltered homelessness downtown, called Partnership for Zero.

The organization that runs Partnership for Zero, another nonprofit called We Are In, initially floated the idea of using $1 million of the remaining program funds to get the LEC out of arrears—and keep the hundreds of people living in the hotels from falling back into unsheltered homelessness.

As of two weeks ago, according to emails, We Are In planned to use $1 million of the $10 million it pledged for Partnership for Zero to pay for the hotels. “We will be allocating $1M of the remaining partnership for zero funds at KCRHA to the outstanding LEC hotel invoices,” We Are In director Felicia Salcedo wrote to Zavala on March 30.

Taking these funds out of Partnership for Zero, Dones responded in the same email thread, would “cause the KCRHA to pause hiring as these funds were obligated to support staffing. My team estimates that this will reduce the overall housing capacity of the project by at least 1/3 if not more.”

On Monday, We Are In spokesman Erik Houser said the organization ended up using $1 million of its own funds, separate from the Partnership for Zero, to pay the LEC’s outstanding invoices for the hotels. That money ran out on Friday, and Houser said it’s now up to “other partners,” including government funders, to address the problem.

A spokeswoman for the KCRHA said Monday that “together with public and private partners, we have been working to identify possible solutions.”

 

Last week, a frenzy of finger-pointing almost overshadowed the imminent human crisis.

In one email exchange with LEC director Green’s requests for help coordinating shelter or housing for people living in the hotels, for example, KCRHA CEO Marc Dones wrote, “As I have stated repeatedly this is not a kcrha program and funding decisions are not being made by kcrha staff. …  I am unclear how else to be of assistance.” It was a comment Dones would echo repeatedly throughout the week, and not without justification—the KCRHA was not involved in the original FEMA grant and played no part in the LEC’s partnership with Building Changes.

But the KCRHA was aware of the program. In fact, the agency’s own system advocates—outreach workers who connect people living unsheltered downtown to shelter and housing—were using the LEC hotel rooms to shelter people living downtown. Starting late last year, KCRHA staff utilized LEC-funded hotel rooms to shelter at least 90 people living in downtown Seattle, something PubliCola first reported back in February. According to an email Green sent to a group of agency and nonprofit partners last week, Green told Dones about the program in April 2022.

Green did not respond to a request for comment (in general, the LEC makes decisions and statements collectively) and the KCRHA declined to speak with PubliCola about the timeline. However, a KCRHA spokeswoman did confirm that of about 30 of the people KCRHA staffers moved into hotels through the LEC program were still in the hotels last week. The spokeswoman said all 30 were either moving into permanent housing or had housing plans in place.

Last week, with accusations flying between the LEC, Building Changes, and the KCRHA, Building Changes announced it was pulling its fiscal sponsorship from the LEC, which will be unable to receive or distribute funds until it obtains its own nonprofit status. The LEC sent a letter to Building Changes saying it would create “cruel and unusual duress” for Building Changes to drop its sponsorship without an exit strategy, but the decision appears final. “I can confirm that we have terminated our business relationship with the Lived Experience Coalition,” Zavala said.

Building Changes is also the fiscal sponsor for We Are In, which has pledged $10 million to the KCRHA for its Partnership for Zero work. That effort, which the KCRHA initially hoped to wrap up within a year, is behind schedule, in part, because landlords have been reluctant to rent to people with one-year subsidies without knowing what happens in “the 13th month,” according to an update from Dones in January.

As the program enters its second year, KCRHA is under pressure to show it’s making progress; We Are In is distributing its $10 million pledge in tranches, including an initial $4 million last year.

 

It’s unclear what, if any, funding is available to cover the hotel funding shortfall, which continues to grow every day the LEC’s clients remain in their rooms, which are distributed across several hotels in South and North King County, as well as one in Tacoma.

The implementation board includes three members (out of a current 13) who were appointed by the Lived Experience Coalition, including LEC co-founder and co-chair Okesha Brandon.

King County, which (along with the city of Seattle) is one of the KCRHA’s primary funders, says it does not have the money to pay for the LEC’s hotel bills. “We were recently made aware that the Lived Experience Coalition (LEC) is unable to maintain their temporary hoteling program, which had been used to shelter people experiencing homelessness,” a spokesman for King County Executive Dow Constantine said Friday.

“To determine how this situation occurred and ensure oversight and accountability, KCRHA is calling for a formal inquiry and audit of how the LEC program was managed and what will be done to prevent a similar situation in the future.”—King County Regional Homelessness Authority

“The hoteling program is independently run and managed by the LEC and is not a program within the KCRHA,” Constantine’s spokesman continued. “However, public and private partners are concerned about the impact on individuals currently sheltered in hotels and are working together to identify possible solutions.”

Spokespeople for Mayor Bruce Harrell and the city’s Human Services Department did not respond to requests for comments.

In a statement, the KCRHA said the agency was “recently made aware that the Lived Experience Coalition (LEC) is unable to maintain their temporary hoteling program, which had been used to shelter people experiencing homelessness.

“The LEC is an independent organization, and their hoteling program is not funded by KCRHA. However, we recognize that the closure of any shelter program has a significant impact on our communities and on the lives of the people given refuge in these hotels.”

The homelessness authority is “calling for a formal inquiry and audit of how the LEC program was managed and what will be done to prevent a similar situation in the future,” the statement concluded. Meanwhile, at press time, it was unclear what will happen to the people still staying in the LEC-funded hotels, and whether they’ll get to stay until they can move to other shelters or housing or be sent back out onto the street.

The KCRHA’s implementation board will meet on Wednesday, when Dones and the board are expected to discuss the hotel issue in public for the first time.