Committee reviews emergency homelessness spending and Inside Safe hotel contracts; members seek fiscal plan before council vote

The Homelessness Strategies Committee examined the city's emergency homelessness account and recent spending on hotel-based shelter under the Inside Safe program, hearing staff detail expenditures and councilmembers raise concerns about cost, long-term affordability and reimbursement eligibility under the alliance agreement.

Office of the City Administrative Officer staff told the committee that from the start of the fiscal year through Dec. 31 the city had spent about $43 million from the emergency account. Of that total, $24.7 million was for fiscal-year 2024-25 spending, including $10.3 million on hotels and $14.3 million on services and supports; earlier-year spending totaled $18.6 million. Staff said more than 3,000 hotel invoices had been submitted and reconciled.

Officials reported a hotel portfolio the city is operating as part of Inside Safe and related programs. Some hotel contracts are eligible for reimbursement from the county if they meet alliance requirements; staff said several hotels and units have been or may be transitioned to occupancy agreements that would qualify for retroactive reimbursement.

Committee members pressed staff and the mayor's office on the per-bed cost of hotel shelter. Staff said the nightly per-bed cost averaged roughly $122 and that when combined with operational service fees (about $110 per bed per night for operations and case management) city averages were in the low-to-mid hundreds per bed per night. Members expressed concern that some hotel beds are far more expensive than other interim shelter models and that committing large numbers of expensive hotel beds now could squeeze future budgets and leave the city with costly sites to operate.

The mayor's office reported it is actively renegotiating hotel contracts to reduce nightly rates and to expand the number of qualifying occupancy agreements that would count toward alliance reimbursements.

The committee voted to note and file the emergency account reports (item 5), and to approve item 6 as amended; the amended motion directs staff to include a fiscal plan for the city's shelter portfolio (including Inside Safe) and to provide that plan before council consideration of large appropriations so members can assess tradeoffs and strategies for any potential demobilization or portfolio transition.

Committee discussion also covered program oversight, potential reimbursements from the county, and a request that staff report back with options for less-costly interim sites and an update on renegotiation progress prior to a full council vote on large funding transfers.