Mayorproposal trims homelessness budget while counting Inside Safe motel rooms toward Alliance targets

The mayorproposed homelessness budget for fiscal 2025-26 totals roughly $904 million, City Administrative Officer Matt Szabo told the Los Angeles City Council Budget and Finance Committee on May 1.

Szabo said the figure is lower than the adopted FY24-25 total of $951 million mainly because of reductions in other departments and changes to the Bureau of SanitationCare+ program. He said the proposed budget relies on about $300 million from the general fund and more than 20 other sources including grants and special funds.

The proposal assumes the city will report many Inside Safe motel rooms as compliant with the Alliance settlement and bill Los Angeles County for services. "We are starting to count and report to the court all of the Inside Safe beds as compliant," Szabo said. He said the city will begin billing the county for services for those beds in January 2025 and that the county reimbursement recognized in the FY25-26 budget is about $39 million.

Why it matters: counting motel rooms toward the Alliance obligation reduces net long-term costs for the city if the county reimburses services, but it leaves the city on the hook for front-end payments. Council members focused questions on how the shift changes outreach and hygiene services and on whether reductions in street outreach would leave gaps in coverage. Councilwoman Rahman told the CAO she wants memos showing the effect on outreach teams and on time-limited subsidy slots.

Key details brought out in committee - Beds and Alliance accounting: Szabo said the city is counting 1,111 motel rooms and 273 Mayfair beds toward the Alliance obligation; the Inside Safe portfolio also includes rooms under occupancy or booking agreements that the CAO now judges sufficiently stable to report as compliant. He said the city currently reports 11,002 of 12,915 beds as open or in progress, leaving about a 2,000-bed delta. - Funding mix and timing: the CAO said the budget anticipates county reimbursements to lag and counted $39 million of county revenue for FY25-26; the citymust front the costs and seek reimbursement on a quarterly basis. - Outreach and hygiene reductions: Szabo confirmed the budget reduces LAHSA-funded outreach positions and some care/hygiene items; he and council members warned the cuts will require closer management to preserve coverage. - Time-limited subsidy (TLS): committee members asked for counts and the CAO said 772 TLS slots are funded under the proposal (672 LOSA slots plus 100 for a downtown womenwomencenter) and that these are existing continuing slots rather than new beds.

Council requests and next steps: multiple council members asked the CAO for memos analyzing whether Inside Safe costs can be reduced through operational changes (e.g., converting single motel rooms to doubles in some sites), the status and spending plan for the Mayfair hotel, and a district-by-district assessment of outreach and hygiene reductions. The committee also requested a memo detailing the city's remaining Alliance bed gap and options to close it (e.g., using Measure A/La Casa funds or other sources).

Speakers - Matt Szabo, City Administrative Officer - Matt Hale, Deputy Mayor for Finance, Operations and Innovation - Councilwoman Rahman, Housing & Homelessness Committee chair (first reference) - Councilmember Blumenfield - Councilmember Hutt - Representatives from the CAO and Mayor

Authorities referenced - Alliance settlement (court-ordered settlement referenced by staff and council members in budget briefing)

Actions - action: {"kind":"budget_proposal","motion":"Consideration of FY25-26 mayor's proposed homelessness budget","outcome":"none","notes":"Committee requested multiple memos and follow-ups; no final appropriation vote recorded in transcript"}

Provenance - topicintro: {"block_id":"block-3048","local_start":0,"local_end":300,"evidence_excerpt":"The proposed budget for 2526, all items, related to homelessness, totals 904,000,000, just over 904,000,000.","tc_start":"00:50:48","reason_code":"topicintro"} - topfinish: {"block_id":"block-3789","local_start":0,"local_end":200,"evidence_excerpt":"So just again, just wanted to make sure everyone was, aware of these constraints as we move forward.","tc_end":"01:03:09","reason_code":"topicfinish"}

Topics - {"name":"homelessness","justification":"Budget hearing focused on homeless services funding, Inside Safe and Alliance reimbursement; primary topic for finance and service delivery","scoring":{"topic_relevance":0.98,"depth_score":0.90,"opinionatedness":0.05,"controversy":0.65,"civic_salience":0.95,"impactfulness":0.90,"geo_relevance":1.00}}

Sections - lede: "The mayorproposed homelessness budget for FY25-26 is roughly $904 million, CAO Matt Szabo told the Budget Committee on May 1, and includes policy shifts that will count many Inside Safe motel rooms as compliant beds under the LA Alliance settlement while reducing some outreach and hygiene services." - nut_graf: "Counting Inside Safe motel rooms as Alliance-compliant lets the city claim reimbursement from Los Angeles County for service costs, but it also requires the city to front payments and presents tradeoffs: committee members pressed staff on reduced outreach teams, the status of the Mayfair, and how the city will close a roughly 2,000-bed gap under the settlement." - ending: "Committee members asked multiple budget memos from the CAO and mayorstaff on bed accounting, Inside Safe costs, outreach cuts, and the Mayfair property; the committee left a raft of follow-ups to be reported back to shape final FY25-26 appropriations."