County, ASO and regional housing council outline home fund and encampment program funding limits

Tom Webster of Thurston County Public Health and Social Services and Tara Smith, finance director for the Thurston‑Mason Behavioral Health Administrative Service Organization (ASO), summarized how local and state homeless‑response funding flows and the limitations on flexible service dollars during a July 23 work session.

Tara said the ASO’s primary contract with the state Healthcare Authority covers non‑Medicaid funding for low‑income, non‑Medicaid individuals. She described annual allocations of roughly $12,000,000 under the ASO’s main contract, with about $6,000,000 identified as GFS (state general fund) flexible dollars. Tara said those flexible dollars are constrained by three contractual obligations: population‑based crisis services, involuntary hospitalizations and involuntary treatment court costs. She described budget use in the recent year as roughly $1,200,000 for crisis services (blended with Medicaid where appropriate), $1,200,000 for involuntary treatment court costs and about $2,000,000 budgeted for involuntary hospitalization.

Webster and staff overviewed the county’s homeless system funding sources: local home fund collections (local sales tax and Olympia’s separate 2018 home fund), document‑recording fees (referred to in the briefing as a distinct recorded fee pool), the county’s human services sales tax, state Consolidated Homeless Grant (CHG) funds and the Encampment Resolution Program (ERP) grants from the state Department of Commerce. They said total funding for the system was approximately $18.5 million in 2024, rose to slightly over $22 million in 2025 with additional CHG money, and is currently just under $21 million — a decline of roughly $1.415 million from the prior year.

Webster noted the spike in funding during the COVID period (as high as roughly $35 million annually when federal emergency rent assistance and other one‑time sources were included) and said current funding has settled into an $18–$20 million annual range. He said local Home Fund rules require that 60% of county home fund receipts go to capital projects, 30% may be used for housing‑related services and 10% is reserved for administration; Olympia’s home fund contribution is handled through an interlocal agreement that directs funding and governance through a Regional Housing Council (RHC).

Staff described the RHC governance structure and the Regional Housing Council interlocal agreement, which designates the RHC to recommend allocations for affordable housing and homeless services funds and requires the Board of County Commissioners to give “substantial weight” to RHC recommendations, while retaining final authority. Staff also explained that Commerce has final authority for ERP awards and that those ERP dollars, which pay for encampment response and some temporary shelter capacity, are not always treated the same as CHG dollars in administrative requirements.

Commissioners asked whether the ASO or county had discretionary funds to backfill reductions in state ERP funding. Tara and Tom said most funding streams are targeted; some Medicaid programs and small demonstration grants can supplement case management but are not flexible general revenue. Staff acknowledged the timing challenge: the RHC and advisory board schedule runs on a cycle designed to have service contracts start July 1, but Commerce’s final awards can arrive in May or June, complicating contract timelines.

Commissioners asked for follow‑up reporting on RHC deliberations, the RFP scoring and the rationale behind specific funding recommendations, and suggested a public summary of local home fund successes and projects as the program approaches its fifth anniversary.