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Committee warns of cash‑flow risks after state reduces HHAP 6 allocation; asks city and county to seek short‑term advances
Summary
Staff told a City Council committee that state changes to the Homeless Housing, Assistance and Prevention (HHAP) program reduce allocations and tighten reporting requirements, creating cash‑flow risks for local providers; the committee approved staff recommendations with instructions to include the housing department in the application process.
City staff told a City Council committee that the state's HHAP (Hub) 6 allocation will be smaller than prior rounds, that reporting requirements will be stricter and that those changes create short‑term cash‑flow risks for local homeless service providers. The committee approved staff recommendations, modified to add the Los Angeles Housing Department (LAHD) to the application review, and recorded a 2-0 vote in favor with one absence.
The figures staff presented: Vianny Khan of the Office of the City Administrative Officer said the statewide distribution for Hub 6 was reduced compared with Hub 5. "Tenemos una una redistribución reducida, va a ir 164000000 de dólares, que era para Hub 5 a 144000000 para Hub 6," Khan said, noting the reduction is roughly $20 million across jurisdictions. Paul Rubenstein and other staff explained the state may not fund a Hub 7 in the near term and that a proposed supplemental allocation would be smaller and, if approved, would apply to a later fiscal year.
Staff explained practical impacts: Jenning Trejo (LASA/LAHSA representative) and agency staff said the timing of the state's application and disbursement creates a gap: Hub 6 funds may not be available for some local expenditures until March 2026, while providers must begin contracts sooner. Agency representatives described a proposed short‑term financing approach in which the county would advance funds in Quarter 1 and the city would provide cash flow in Quarter 2; a staff chart presented to the committee showed the system's short‑term cash‑flow need in the coming quarters (staff cited a figure presented as approximately "6.3" million for a set of initial cash‑flow needs).
Programs at risk and reporting changes: Staff said stricter state reporting — moving to monthly reports and closer performance reviews — is a primary change in Hub 6. Programs identified as at risk if cash flow is not addressed included access centers, interim housing bed contracts, problem‑solving services and limited‑term subsidies. Natenio Bergall, a program representative, clarified that "problem solving" payments are typically one‑time, flexible supports — for example, deposits or short moves — rather than ongoing subsidies.
Committee action: The committee voted to approve the report recommendations as modified (including LAHD in the application process) and asked staff to return next week with additional detail. The vote was recorded as two in favor, one absent. Staff and the committee requested further detail on the number and locations of access centers, the interim‑housing beds and the proposed cash‑flow plan before finalizing any interjurisdictional loan or advance agreements.
