Nearly halfway through the year, the King County Regional Homelessness Authority has yet to finalize all its contracts with the nearly five dozen nonprofit organizations that provide homelessness services in the region. Without a finalized contract, organizations have been unable to bill the authority and receive payment, leaving most to front hundreds of thousands to millions of dollars in the first several months of this year, straining budgets.
Seven percent of homelessness contracts for 2022 remain unsigned, and most of the finalized one were completed only in April or later.
This is the first year since the authority took over administration of all of Seattle’s and King County’s contracts for homelessness services. It was a lot of paperwork to inherit: 320 contracts with 54 organizations totaling more than $110 million. Those contracts cover the terms for services like emergency shelter and outreach.
Homelessness authority leaders say they have worked as fast as possible, but have struggled with short-staffing, creating new management systems, unexpected emergencies and delays in budget allocations from the city. The mayor’s office acknowledged the delay, but did not fully accept blame.
“While it’s possible this disbursement timeline may have contributed to the delay, it’s unclear if this was the only contributing factor,” the mayor’s office wrote in an email.
The authority, which hired CEO Marc Dones in April 2021, was still understaffed as it built a new system to consolidate and manage those contracts. Its staffing shortages were exacerbated by the omicron surge of the pandemic and severe winter weather.
“It was a pretty massive set of new things to do simultaneously,” said Chief Program Officer Peter Lynn, who oversees the authority’s contracts.
Ideally, nonprofit organizations would have had finalized contracts in January, said Mary Steele, executive director of Compass Housing Alliance. Then, they could have billed the authority in early February and received their first payment of the year by the end of that month.
Instead, Compass still hadn’t received reimbursement by the end of March.
“I was holding my breath there for a little bit,” Steele said.
Compass Housing Alliance had to front more than a million dollars to pay its staff for the first few months of the year before it was reimbursed by the Regional Homelessness Authority. Steele said because Compass is a large organization, it was able to prevent any impacts on staff or services by drawing funding from philanthropy and other sources.
“But if it had gone another, you know, four to six weeks, it would have been a significant issue,” Steele said.
The city sometimes took until March to finalize contracts, said Jamie Housen, a city spokesperson, at which point nonprofits could receive back pay for those months. But Housen said he didn’t know if it had ever taken as long as it has this year.
Jerred Clouse, ROOTS Young Adult Shelter executive director, said he received a first check from the authority this week for services the nonprofit has provided since January. He said the shelter has been able to lean on cash reserves to stay afloat.
“It’s a little stress inducing,” Clouse said. “Particularly as a small agency, we don’t have some of the reserves of some of the larger agencies. And honestly, sometimes it feels like it’s harder to get people’s attention as a smaller agency.”
Clouse said it took weeks communicating with the authority to update simple language in the contract, and he wonders if the delay was exacerbated because his organization’s contract is for hundreds of thousands of dollars, not millions. Lynn, of the authority, said the Regional Homelessness Authority has been prioritizing contracts for nonprofits that indicate they are seeing cash flow issues. That was the case for Compass Housing Alliance.
But Lynn said the authority has not prioritized larger contracts over smaller ones.
“In fact, it was quite the opposite,” Lynn said. “One of our smallest providers was one of the ones that flagged cash flow issues right away. And we literally handwrote checks, and I walked them down.”
The authority attributed a large part of the holdup to the city of Seattle for being late to finalize an addition to the authority’s budget.
In December, the Seattle City Council had approved a 2.8% increase to the regional homelessness authority’s budget as a one-time “appreciation pay” for service providers. The mayor’s office acknowledged that the city did not disburse those additional funds to the authority until February due to an issue that was later resolved.
In hindsight, Lynn said, the authority could have finalized contracts without the amendment and adjusted them later.
Mayor Bruce Harrell’s office said in a statement that he is standing by to assist the Regional Homelessness Authority if asked and pointed to the many other issues the new agency is facing.
“The city would expect that, as a newly established organization, the (Regional Homelessness Authority) may face challenges and delays as processes are initiated, systems are redesigned, and staff are hired and onboarded,” the statement said.
King County Executive Dow Constantine also said that hiccups were understandable when trying to collate a complicated system for the first time.
The transfer of contracting duties was also prolonged because the setup of the authority was prolonged. The city was dissolving most of its department focused on homelessness issues in anticipation of the authority, but the new agency had no leader and no staff for more than a year after its creation. Once a CEO was hired and started growing the authority’s staff, the city saw an administration change in the mayor’s office, which meant both offices are now getting up to speed.
The Regional Homelessness Authority has nearly doubled its staff since the end of December, and its grants management team is now nearly fully staffed.
At the same time, nonprofit organizations have been experiencing their own staffing crises during the pandemic. Chief Seattle Club development director James Lovell said a nonprofit manager who has to fill in at the front desk has less time to focus on email communications regarding contracts, and situations like that “absolutely” contributed to how long it took to finalize their contracts with the Regional Homelessness Authority.
Some nonprofits are not particularly impressed with the authority’s handling of contracts this year, but they are also understanding of the circumstances, and remain optimistic about their relationship with the new authority.
“I very much understand the challenges that the regional authority is facing right now and don’t necessarily blame them for all that we are seeing,” said Clouse, at ROOTS. “And it has had an impact. And it has been frustrating.”
Seattle City Councilmember Andrew Lewis, who sits on the King County Regional Homelessness Authority governing committee, was harsher in his reaction to the delay in finalizing contracts.
“This is the most basic function of (King County Regional Homelessness Authority’s) mission. This duty must come first. The agency is well-staffed and going forward must prioritize finalizing these contracts on time to meet the crisis,” Lewis wrote in a text to The Seattle Times.
Homelessness authority programming officer Lynn said while the growing pains of transitioning management of contracts to the authority are temporary, there will be lasting gains from the consolidation of the region’s homelessness system.
“My expectation is that this year’s challenges with contracting are literally a one-time thing,” Lynn said. “I have felt like though it has been a challenge, I think it has built relationships on both sides.”