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Council approves motel‑shelter contracts; staff warns state funding shortfall will tighten budget
Summary
The council approved motel owner and service-provider agreements for the city’s motel shelter program, reduced locations while keeping room count at 200, and heard staff say a $5.4 million reduction in HAP funds will require shifting city funding to maintain services.
The Sacramento City Council approved a set of motel‑shelter agreements intended to continue the city’s family motel program while staff warned that recent state funding changes will require the city to shift local dollars to sustain services.
Brian Pedro, director of the Department of Community Response, told the council the motel program began in 2020 as a COVID‑era sheltering program and has since evolved into the city’s only family‑specific shelter model. Pedro said the current recommended contracts would reduce the number of motel locations from five to four but keep the total room count at 200, producing renegotiated annual savings of about $1.5 million compared with the prior year.
Pedro gave operational metrics for the program in fiscal 2024: the service provider Step Up served 455 households (1,440 people), 852 exits in total, and 272 exits to permanent housing — a roughly 32 percent permanent‑housing exit rate for those exits with positive outcomes. Pedro said the full program cost per unit — including services and room — is $2,580 per month, about $880 per person per month, with an average daily cost reported as $29 (the program does not provide meals). He said the median length of stay at the motels is 168 days and that some clients have stayed as long as two years.
Pedro also asked the council to withdraw 1 motel contract (Jaboom Hotel, Inc., DBA Motel 6 Sacramento Old North) from action tonight and return it at a later date; the council voted to approve the remaining motel owner contracts and a one‑year extension of the Step Up services contract for approximately $1.873 million.
Councilmembers pressed staff on the program’s role in the broader homelessness response and on alternative funding sources. Mayor Pro Tem Guerra and others noted that the city recently learned of a shortfall in state Homelessness Accelerated Program (HAP) funding; staff said the city’s HAP allocation fell about 40 percent compared with the prior round, representing a roughly $5.4 million shortfall for the current year and that staff will seek to cover service needs from other city funding sources if necessary.
Public commenters raised operational concerns at the Roseville Road motel site, including reports of no electricity in some trailers, mold, leaky structures, and safety concerns for children. A speaker who identified herself as a resident of the Roseville Road site urged the city to address conditions including lack of heat and access to laundry. Other speakers urged better data collection, quicker exits to permanent housing and stronger accountability from providers for exit outcomes.
Council approved the contracts by voice vote; a clerk recorded the measure as passing unanimously. Staff said they will continue efforts to track outcomes, pursue CalAIM reimbursement opportunities, and seek other funding avenues to preserve motel operations.
