The Phoenix City Council voted June 13 to continue consideration of a contract amendment with Human Services Campus, Inc., doing business as Keys for Change, giving staff more time to negotiate oversight and transparency measures.

Vice Mayor O’Brien moved the continuance to the July 2 meeting after describing staff concerns about Keys for Change’s finances. “Staff has approached me with concerns about keys for change and their financial issues, citing a lack of continuous transparency and worries regarding operating deficits,” O’Brien said on the record. City staff told the council they had been briefed about an overall operating deficit that staff estimated at about $5,000,000 and reported a period when security guards were not paid and walked off the job.

Council members emphasized the city’s role as a major funder. Councilwoman Hodge Washington said she was concerned by provider statements that no city funds were needed and by bed closures tied to other operators: “I think they closed 110 beds in June, and they anticipate closing another 170 in the fall,” she said. Councilwoman Pastor and others asked for a nonvoting seat on Keys for Change’s board or other ways for the city to obtain timely financial and operational information because the campus sits in Phoenix and the city provides significant funding.

City staff reported discussions with Keys for Change leadership but said the organization had declined a city board seat so far. Staff said a number of operational meetings had occurred and asked for more time to reach an agreement. Council’s continuance was unanimous. Councilmembers and staff said services should not be interrupted while the city and provider seek a governance arrangement and improved transparency.