Pueblo to seek nonprofit operator for city shelter; council directs RFP while staff readies city-run option

Melissa Cook, the city—9s CDBG home and housing administrator, presented a detailed update on the Pueblo emergency shelter at the Feb. 3 work session and recommended publishing a request for proposals to find a qualified nonprofit to operate the facility while the city retains oversight of the property.

Why it matters: The shelter serves unhoused residents during extreme weather and nightly operations; decisions on who operates it affect service continuity, city liability, competitiveness for grants and the general fund. Staff projected a substantial first-year funding gap and warned that some grant revenues would not be available until year two or later.

Cook said the shelter land was transferred to the city in November and the Pueblo Rescue Mission nonprofit dissolved at year-end. The shelter on the Porchlight campus is open nightly; Cook reported average nightly counts of 20 to 40 residents in the residential program and about 30 to 40 in the emergency shelter, with totals nearly doubling during the January extreme-cold event. SafeSide, a small nonprofit, is operating the interim shelter under city support; staff said SafeSide has funding to continue about three and a half months and February would be the first month the city pays operational bills out of funds set aside last October.

On projected revenue and costs, Cook laid out a three-year pro forma. Reasonable recurring revenue sources staff penciled in included an average of $50,000 from CSAC, approximately $100,000 annually from DOLA emergency solutions grants, and a potential CDBG allocation (staff estimated applying for about 7.5% of allowable CDBG shelter funds, roughly $109,000 when available). Cook emphasized these were estimates, not guarantees, and many grants have long application and contracting timelines.

On expenses, staff reported the shelter can operate at a bare-bones cost of roughly $50,000 per month when run by a nonprofit operator. If the city operated the shelter as a department, the salary cost would be similar but fringe benefits would push the monthly cost higher. Staff projected the nonprofit-run scenario would leave a first-year funding gap of about $604,000, falling to roughly $375,000 in 2026 and about $180,000 by 2027 as grants ramp up. If the city ran the shelter as a department, the first 12-month gap was estimated at about $1,000,000 largely because of fringe-benefit and civil-service cost assumptions.

Cook recommended publishing an RFP for a qualified nonprofit operator and allocating a one-year subsidy of up to $604,000 to allow a partner time to ramp fundraising and apply for grants. She said the city would require a subrecipient agreement with clear KPIs, mandatory budget reporting, financial oversight and routine property inspections; city staff would continue to maintain the asset and could seek an appointed mayoral designee or board seat for oversight.

Council reaction: Councilor Sarah Martinez (first reference used as full name per transcript pattern) said she supported issuing an RFP and committing the suggested funds for the first year. She and other council members stressed the importance of oversight language in the RFP and suggested requiring a multi-year commitment from respondents to ensure continuity. Councilor Maestri, President Mark Aliff and others said they were not yet persuaded a nonprofit partner would succeed and argued the city may ultimately save money by consolidating services under one city-run program; they requested additional analysis and comparisons to past expenditures. Interim Finance Director Dan said he could provide comparative figures and follow up for council.

Risks and limits: Staff noted the city could be less competitive than nonprofits for certain philanthropic donations and some grants; donations to a city-run program would not be tax-deductible to donors unless routed to a separate charitable vehicle. Procurement rules, liability and civil-service staffing were cited as additional obstacles if the city becomes the operator.

Direction and next steps: Council generally authorized staff to publish an RFP while simultaneously preparing detailed cost and staffing options for a potential city department. SafeSide will continue interim operations while the RFP process is launched; staff will return with refined budget numbers, grant timelines and specifics on how the city would fund the remainder of 2025 and beyond if the city assumes operations.

Ending: Council did not take a formal vote; staff left with direction to post an RFP, prepare a city-department plan and deliver additional financial detail to council in coming weeks.