Council approves substitute to advance LAHSA funding as state HAP award is delayed

The Los Angeles City Council voted on a substitute motion Sept. 26 to authorize short-term advances to the Los Angeles Homeless Services Authority (LAHSA) to cover provider payments while the state’s HAP (Housing Assistance Program) award is delayed. The motion, introduced by Councilmember Jurado and co-sponsored by Councilmember Hernandez, passed 11-0 after a prolonged exchange about timing, repayment and fiscal safeguards.

Council members said the action aimed to keep time-limited subsidies and other provider payments flowing while the HAP 6 regional application and award process proceeds. Councilmember Monica Rodriguez stressed the city’s exposure, saying the council had been put in “a situation where we now have to figure out how we’re gonna cover the costs” after LAHSA committed funds before the state disbursed them.

The City Administrative Officer, Ed Gibson, told the council the short-term advance would not trigger state rules against supplanting because HAP guidance allows retroactive reimbursement to the beginning of the fiscal year when allocations are declared. “No, we will not,” Gibson said in response to a question about supplanting. Gibson outlined an expected timeline in which the HAP regional application would not produce cash until early 2026 (with initial cash possibly arriving in March 2026), and he described a schedule of county and city advances already under discussion.

Key numbers discussed in the meeting: the county offered a $6 million advance for the first quarter; the city was being asked to provide roughly $9 million in October to cover immediate provider payments; and DPH/LAHSA staffers and the CAO estimated final HAP reimbursements would not arrive until late 2025 or early 2026. Gibson said the city and county were aiming to keep advances below 50% of anticipated HAP proceeds so that reimbursement would be feasible once state funds begin to arrive.

Councilmember Rodriguez and others pressed for stronger guardrails to ensure LAHSA repays any city advances and to limit the city’s exposure. The substitute motion was amended verbally on the floor to require CAO follow-up; councilmembers asked the CAO to return with recommendations on repayment sources and protections within 60 days.

Outcome and next steps: The substitute motion (Jurado/Hernandez) passed 11-0. The council directed the CAO to identify potential special funds or other mechanisms to repay the housing department if advances are needed and to recommend guardrails to ensure repayment. The CAO said staff would continue to work with LAHSA and the county to limit risk and to monitor HAP cash-flow timing.

Why it matters: LAHSA’s contracts pay shelter and rental subsidies for providers across the city; delays in reimbursement or in setting repayment terms could interrupt payments to service providers and escalate fiscal risk for the city budget if advances are not repaid.

Ending: The council’s action is a stop-gap to maintain provider payments while the HAP award process is unresolved; the CAO will report back with recommended repayment sources and safeguards within the timeline directed by the council.