Seattle has said it would hold homeless shelters accountable for performance. But with financial penalties pending, officials now say they’re on the fence about enforcing them.

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Under pressure to show progress in its fight against homelessness, Seattle said it would hold local shelters to performance goals, and hit those that don’t meet them with financial penalties.

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After two years of lead-up, some programs are still struggling to meet the minimum targets, and city officials now say they’re still considering whether to enforce penalties for those that are underachieving.

Of the 86 shelter and sanctioned encampment programs in King County funded by Seattle, the county or the United Way, 61 did not meet the minimum benchmark for the rate of “permanent exits” out of homelessness in the first quarter of 2018, according to data compiled by The Seattle Times.

Seattle waived the financial penalties in the first quarter of 2018 to give its contracted providers more time to adjust. But the second is now in the books. Now, amid lobbying from shelter providers who say the benchmarks are “unrealistic,” the city will have to decide whether to take a hard line on enforcement.

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Seattle Mayor Jenny Durkan did not immediately respond to questions about the pending financial penalties for underachieving programs. Interim city human-services director Jason Johnson declined an interview request.

In a statement, Johnson said the city’s Human Services Department is analyzing recent performance figures.

The city “is keeping a close eye on both the results of the funds we are investing in and the crisis at hand,” Johnson said.

For Seattle, which contracts with over a dozen of the shelters whose outcomes fell short, it’s been a long and sometimes rocky shift toward a strategy that ties pay to outcomes and performance.

In 2016, Seattle hired consultant Barb Poppe, the former director of a federal homelessness agency under the Obama administration, to analyze its response. Her report, which cost the city $102,000, recommended that the city move spending from overnight shelters to 24-hour, low-barrier shelters, and shift toward performance-based contracting.

Several of the consultant’s recommendations were adopted in the city’s own plan, Pathways Home, which called for judging programs by the number of people they move into stable housing and only funding the ones effective at doing so.

At the same time, Seattle joined with the county and United Way to establish a set of performance benchmarks for contracted service providers.

Programs are required to meet benchmarks in five separate categories, including what are formally called “exits to permanent housing” — a stable, affordable home, subsidized or not. The minimum standards vary by the population served. Programs that serve young adults have the lowest benchmark for permanent exits, while family shelters have the highest.

The city reaffirmed its reform pledge last November, when it awarded $34 million in new contracts to nonprofit agencies for shelter and other homeless services. Along with the awards, officials detailed a plan, based on projections from the nonprofit agencies, to nearly double the number of people leaving homelessness for permanent housing to 7,400.

Through the first quarter, the city said its contracted providers have logged around 3,000 exits, according to data from county’s homeless-management information system. But individual shelter programs, through the first quarter, continue to struggle.

Programs that miss the benchmarks can face a 3 percent reduction in pay, which some providers argue could severely reduce their ability to operate.

Melinda Giovengo, president of the nonprofit YouthCare, which holds several city contracts for homelessness services, is urging the city to “reassess” the performance benchmarks. According to recent data, four of YouthCare’s six shelter programs missed the target for permanent exits in the first quarter.

“High outcomes are great, and we all want those,” she said. “But we’re in a learning period and they have to be realistic and aspirational.”

Last week, Giovengo and the directors of three other youth and young-adult shelter providers sent a letter to Johnson protesting how “exits” are being calculated after a recent change in methodology. Their concern is that they are being penalized for people who spend nights in shelter whom they cannot immediately move into stable housing, or who decline offers of help.

Even when shelter clients are mentally, physically and financially ready to move into housing, there often isn’t a place for them to go, Giovengo said. More than 8,300 households are on the county’s centralized intake list for homeless housing, and they typically wait months, according a report by the county auditor earlier this year.

Sara Levin, vice president of the United Way of King County, acknowledges the challenges facing the providers, but said the system needs accountability.

“It’s a tough road to walk, but these standards aren’t new,” she said. “The system is set up so that we invest in programs that are effective and can achieve the outcomes they agreed to when they entered into contracts. I’m afraid if we unravel the benchmarks now it will set us back.”

The first-quarter data shows that all eight of the “basic” emergency shelters — mats-on-the-floor operations that are only open at night — receiving funding from the city did not meet the benchmarks, including two run by DESC, one of the city’s largest contractors.

For the “enhanced” shelters — those open longer hours with more services — it’s a mixed bag. Only nine of the roughly 23 enhanced shelters funded by the city met the permanent exit benchmarks in the first quarter, including the Seattle Navigation Center, also operated by DESC.

Seattle’s sanctioned encampments and tiny-house villages are not subject to the performance targets, but the available figures show that all six did not meet the standard.

John Barbee, who manages emergency-service programs for Compass Housing Alliance, said agency officials are making strides to improve the exit numbers, but remain anxious about the potential loss in operating funding.

“We’re all waiting on a model for how this is supposed to work,” he said. “Until that happens the city’s going to continue to have these conversations about whether in this environment the requirements are realistic.

“In the meantime, we’re trying to build the plane while we fly it.”