Pueblo to seek nonprofit operator for shelter as staff outline $600K first-year funding gap for partner model

Pueblo City Council on Feb. 3 directed staff to publish a request for proposals to find a nonprofit operator for the city’s shelter and asked staff to continue developing cost estimates for running the shelter as a city department.

The recommendation from Melissa Cook, CDBG HOME housing administrator, came after staff shared results of a three-year pro forma and comparisons with other Colorado municipalities. Cook told council that if a nonprofit partner operates the shelter the city should budget a first-year gap of about $604,000; if the city ran the shelter as a department, the first-year gap rises to roughly $1 million because of fringe-benefit costs. Cook said the shelter’s baseline monthly operating cost is about $50,000.

Cook said the land for the shelter transferred to the city in November and the former operator, Pueblo Rescue Mission, dissolved at year-end. The shelter on the Porchlight campus is open nightly 7 p.m. to 7 a.m.; average nightly counts at the main residential program (728 W. Fourth) are 20 to 40 residents and 30 to 40 in the emergency shelter. During a January extreme-cold event, the city operated 24 hours and saw roughly double those numbers.

Why it matters: Council must decide how to sustain emergency sheltering after temporary arrangements funded by prior grants run out. Staff said anticipated state and federal grant cycles create a long ramp-up time, which makes near-term city funding or an interim operator necessary.

Staff recommended publishing an RFP that would allocate up to $604,000 for an initial 12-month contract and require applicants to provide a detailed fundraising plan, a description of which grants they will pursue, and measurable key performance indicators. The city would retain ownership and maintenance responsibility for the facility and would hold the successful respondent to a subrecipient agreement that includes mandatory budget reviews, audits and regular operational inspections.

Cook said city HR analyzed the nonprofit staffing profiles and produced comparable civil-service salary equivalents; the primary driver of the higher city-run cost is fringe benefits. She said the budgeted gaps assume minimal, “bare bones” nightly operations and do not presume additional services.

Council reaction split. Councilor Martinez said she supported issuing an RFP and committing the suggested one-year funding to give experienced nonprofit shelter operators time to ramp up fundraising. "I would be in favor of moving forward with the RFP," Martinez said. Councilor Maestri and President Mark Aliff questioned whether outsourcing would ultimately cost more because the city has repeatedly subsidized outside providers; Maestri said the city may already be spending millions annually on homelessness-related services and that consolidating operations could reduce total costs. President Mark Aliff said the city should press the county for funding participation.

Several councilors raised operational concerns about nonprofit capacity and continuity. Cook said SafeSide Recovery is operating the shelter on an interim basis and that the city has funds to cover approximately 3.5 more months of interim operations. Staff warned that if the city directly converted the operation to a civil-service department some current nonprofit employees might not apply or be approved to transfer into city employment, risking staff turnover.

Next steps: Council generally favored issuing an RFP while staff simultaneously develop a detailed city-department cost and staffing model. Staff said they will post the RFP promptly to allow time for proposals and return with more detailed budget scenarios for council consideration.

Ending: Council asked staff to include clear oversight terms in any contract if a nonprofit is selected and to return with refined numbers on how a city-run shelter would fit into the 2025 budget timeline.