Council renews Keys to Change contract with oversight conditions after finance concerns

Phoenix City Council on July 2 voted unanimously to extend the city’s contract with Keys to Change, a nonprofit that runs a large homeless services campus, while imposing specific oversight measures after staff raised concerns about the organization’s recent financial management.

Vice Mayor O’Brien placed the item and described vendor payment issues staff had documented, including late vendor payments and operating deficits. He said the city needed “oversight and accountability” because Keys to Change receives a sizable share of taxpayer support. “The City of Phoenix is responsible for funding a quarter of this year's $24,000,000 Keys to Change budget. That's roughly $6,000,000 a year,” O’Brien said during debate.

Keys to Change leaders — CEO Amy Schwabender and board chair Myron Hammis — told council they preferred not to have a city representative on the full board but offered a compromise: a non‑voting seat on the nonprofit’s finance committee and monthly, formal meetings between the city’s Office of Homeless Solutions and Keys leadership. City staff said a finance‑committee seat would provide more frequent financial visibility because the committee meets monthly.

Council approved a motion that formalized that compromise. The conditions require that the Office of Homeless Solutions (OHS) be given a non‑voting seat on the Keys to Change finance committee; that OHS and a council representative meet monthly with the Keys CEO and board chair to review board packets and financial information; and that OHS be invited as a guest to board meetings when issues of mutual interest arise. The motion also sets a scheduled review of the working relationship at the end of calendar 2025 to determine whether the measures are sufficient and to discuss next steps. Council preserved a contractual right — if the city concludes the measures do not improve transparency and accountability — to initiate a bylaw amendment process to secure a non‑voting board seat or to forfeit the remainder of the contract after a notice period.

Councilmembers said the city could not allow service interruptions at a campus that supplies shelter and services, but several voiced frustration that the city required the stronger oversight because the relationship and operating problems had arisen. District 7 Councilmember K. H. Hernandez, whose district contains the campus, and others said the contract extension must be paired with specific performance metrics and the option for an audit. Staff said the city retains audit rights under its existing contracting rules and committed to ongoing monitoring.

The council vote carried 9‑0. City staff and Keys to Change leaders said they will begin the monthly finance‑committee participation and the regular information exchanges immediately. The council also directed staff to return with a status update after the scheduled review.