San Antonio staff recommend extending nonprofit contracts, designating key providers and delaying competitive funding for FY26

City staff presented a set of recommendations on March 19 to change how the city awards consolidated human-services funding in fiscal year 2026, including designating several large providers for non-competitive awards, extending current competitive contracts through May 30, 2026, and delaying a new competitive solicitation to allow more council input.

The recommendations were introduced by Eric (city staff), who told the council the proposals are a "follow-up to a conversation you all had several weeks ago on our human services consolidated funding process." Melody (Human Services Department staff) walked the council through specific steps: separate designated and competitive funding, award designated contracts in the adopted budget and run the competitive process off-cycle, and reexamine procurement details including service priorities and contract length.

Why it matters: council members raised concerns about federal changes that could shrink nonprofit revenue and about program effectiveness. Councilmember Aldrete Gavito said "these are taxpayer dollars, you know," and urged a stronger focus on outcomes and eliminating duplicated services so funding can be targeted to priorities such as homelessness. Councilmember Courage and others asked for certainty for agencies that budget annually, questioning whether an eight-month extension would let organizations plan for a full fiscal year.

Key points staff presented

- Estimated total funding for FY26 delegate agencies: $24,800,000 (staff estimate presented). Melody said roughly $9.7 million of the pool would be designated to support a set of large providers (After School Challenge in five ISDs, Haven for Hope operations, the Center for Health Care Services and UP Partnership) and that about $15,000,000 from general fund and grants of the pool would remain in the competitive category to be awarded after a future solicitation.

- Recommendation to extend current competitive contract awards through May 30, 2026 (an eight-month extension) to give staff and council time to rework the competitive process and solicit feedback on outcomes-based priorities.

- Staff proposed releasing a revised request for proposals by December 2025 and holding a fall B-session briefing to shape outcome-based procurement criteria.

Council response and next steps

Councilmembers broadly supported the intent to provide more time for council input but pressed staff for specifics. Councilmember Courage asked why staff did not recommend extending awards for a full fiscal year; Melody responded that the eight-month extension should give staff time to issue an RFP in December and complete evaluations in time to make awards before May. Councilmember McKee Rodriguez asked staff to include North New Braunfels and other corridors in later programs (discussion tied to the separate construction mitigation briefing). Councilmembers asked staff to reduce the number of performance measures for nonprofit partners and to show how underperforming agencies are handled; Melody said monthly and quarterly reviews exist and the department escalates issues with a success plan and, if necessary, letters or procurement action.

Staff said they will return to council in the fall for an outcome-focused discussion, provide the requested breakdowns for categories such as senior independence, and present a proposed timeline and RFP approach as part of the FY26 budget process. No formal council vote on the recommendations was recorded during the B session.

Ending note

The item closed with staff agreeing to provide more detail to council members before finalizing the FY26 consolidated funding approach; staff framed the package as an effort to balance short-term certainty for providers amid federal funding shifts and a longer-term redesign of procurement so awards better reflect council outcome priorities.