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Council approves temporary rate increase for interim housing; staff warn it may limit new beds
Summary
The council approved an item to cover earlier rate increases for interim housing using non-general funds, but staff cautioned heavy use of those grant funds for services could reduce capacity to open new beds.
The City Council voted 12-1 on June 3 to approve a funding action that covers recent rate increases for interim housing providers using non-general (federal/regional/"hub") funds, a staff member said, while warning that heavy use of those funds could reduce capacity to create new shelter beds.
Staff explanation and concerns: A staff representative from the Office of the Chief Administrative Officer told the council the action does not use general-fund dollars for the immediate increase; instead, the office identified unused lines within federally linked "hub" funds (as presented in the hearing) to cover the difference. "If we use hub funds for ongoing service costs, we inhibit our ability to fund new beds," the staff member said, translated from Spanish. They said the majority of hub dollars were already committed to services (interim housing and related teams) and that a lower total allocation in the next funding period could constrain capacity for capital or new beds.
Vote and council direction: The roll call on the item recorded 12 in favor and 1 opposed. Councilmember Román registered the lone "no" vote. Councilmembers asked for clearer accounting of hub fund availability and how the action would affect bed production under the city's regional alliance for homelessness services.
Why it matters: Council approval allows providers to be paid at the higher interim-housing rate adopted earlier in the year; however, staff cautioned that the city's hub funds are limited and using them for service rate increases could reduce the dollars available to open additional capacity.
Outstanding details: Staff did not provide an exact dollar amount for hub funds available in the next fiscal year during the hearing; the transcript records an approximate comparison of prior and projected hub pool totals but not a definitive figure.
Next steps: Councilmembers requested follow-up information on projected hub allocations and how the decision will affect plans for new bed creation and service contracts.
