Thurston County outlines right-of-way (ERP) funding priorities as state budget remains uncertain

Thurston County staff on Wednesday presented scenarios for how federal and state right-of-way initiative (also described in the meeting as the Encampment Resolution Program, ERP) funds could be allocated locally if the Legislature and Department of Commerce finalize a proposed state allocation.

Staff said the state-level proposal includes $45 million for the program statewide, which would translate to about $5.5 million for Thurston County if the allocation remains as projected. County staff said the region currently supports roughly $9.5 million in operating dollars across multiple projects funded under previous right-of-way/ERP allocations and other homelessness funding streams.

Tom (county staff) told commissioners that, if the $5.5 million county share materializes, staff and regional partners would likely prioritize projects where the state already invested capital: Sandy's Flats (the former Olympia Inn, a 26-unit hotel used for permanent housing operated by Interfaith Works), Maple Court (acquisition funded directly; Lehigh is named as owner/operator in staff remarks) and Friends Anderson Tiny Home Village (operated by Olympia Mutual Aid partners). City of Olympia staff have expressed interest in using some funds to sustain outreach staff who engage people living on state rights of way.

Staff cautioned that some projects face funding gaps if the county receives less than the projected allocation. Commissioners and staff singled out Unity Commons (a congregate project) as likely to face a shortfall if right-of-way funding is reduced: staff said Unity Commons had a larger overall ask in RFP submissions and that the combination of right-of-way and other homeless system dollars created braided funding for some projects. Plum Street Village (a tiny-home site) was reported as sold by the City of Olympia and likely to close at year-end, which would reduce tiny-home bed capacity regardless of ERP funding.

Commissioners asked how the RHC reconciled priorities while the final state budget remained unknown. Staff said the Regional Housing Council would develop a local allocation proposal after the state announces the final number and that any contract the county signs with the Department of Commerce and any subrecipient contracts would come back to the board for approval.

Several commissioners praised staff coordination and monitoring across multiple funding streams and asked staff to return with a clearer account of which state and local funding streams are at risk. "We are working on an overview of all the different funding streams in public health, so that we can lay that out and have that conversation," a county staffer said, noting some state and document-recording revenues appear likely to decrease.

Why it matters: the ERP/right-of-way funds support ongoing operations for shelter, tiny-home villages and outreach services used by people living on or near highway rights of way. Reduced allocations would force the region to reallocate funding across capital and operating needs and could reduce bed capacity or outreach coverage.

Next steps: staff will monitor Department of Commerce guidance and the state budget. When Commerce issues allocation notices and an RFP, the Regional Housing Council will prepare recommended local allocations and staff will return to the board for contract approval. Staff said they will continue coordination with city partners (Olympia, Lacey) and service providers while preparing proposals.