To: County of Sonoma Board of Supervisors
Department or Agency Name(s): Department of Health Services
Staff Name and Phone Number: Tina Rivera, 707-565-4774, Michael Gause, 707-791-8140, Dave Kiff, 707-565-4090
Vote Requirement: 4/5th
Supervisorial District(s): Countywide
Title:
Title
Contract Awards for Homelessness Programs and Continuum of Care Programs
End
Recommended Action:
Recommended action
A) Authorize the Director of Health Services, or designee, to accept $998,429 in US Department of Housing and Urban Development Continuum of Care award funding to support Sonoma County Continuum of Care programs.
B) Authorize the Director Health Services, or designee, to execute fiscal year 2023-2024 local homeless program contracts including $887,480 in already budgeted County General Fund and Reinvestment and Revitalization Funds under the purview of the Board of Supervisors and $5,766,369 in state funds under the purview of the Continuum of Care Board, for a total of $6,653,849.
C) Adopt a resolution authorizing the redesignation of $2 million in Measure O (Category #4 - Behavioral Health Homeless and Care Coordination) to Measure O (Category #5 - Transitional and Permanent Supportive Housing). (4/5th Vote Required)
D) Adopt a resolution adjusting the FY 2023-2024 Budget by increasing appropriations in the Department of Health Services’ budget allocations by $8,764,798 for homelessness services contracts resulting from the 2023-23 Local Homelessness Services Notice of Funding Availability (NOFA) and similar funding awards. (4/5th Vote Required)
E) Authorize the Director of Health Services, or designee, to execute fiscal year 2023-2024 Measure O Transitional and Permanent Supportive Housing contracts in the amount of $1,400,000 towards George’s Hideaway Permanent Supportive Housing Capital, $400,000 to Homeless Action Sonoma’s Home and Safe Village operations, and $200,000 to Sonoma Applied Village Services’ proposed Latinx Village. (Fifth District)
(4/5th Vote Required)
end
Executive Summary:
The Sonoma County Department of Health Services (hereinafter, “DHS” or “the Department”) is requesting Board approval to execute contracts within its Homelessness Division that includes multiple funding actions. An item similar to this typically comes before the Board of Supervisors annually. If approved, the Board of Supervisors would accept State and Federal funds that come to County government and to the Continuum of Care (CoC) for further allocation. The sources include:
• US Housing and Urban Development (HUD’s) Annual Renewal Demand (ARD) competitive allocation to CoCs nationwide;
• The California Interagency Council on Homelessness (ICH’s) allocation of Homeless Housing, Assistance and Prevention (HHAP) funds allocated to the County and to the Sonoma County CoC separately;
• State Emergency Solutions Grants (ESG); and
• State Partnership HealthPlan (PHP) Homelessness Housing Incentive Program (HHIP) funds (these are State funds assigned regionally to help improve outcomes for Medi-Cal clients who also are experiencing homelessness).
Local funds are allocated as well.
The US HUD CoC grants are awarded to recipients following 2022’s Notice of Funding Opportunity (NOFO). The HHAP and HHIP funds can have more local discretion, and this year are programmed via a Notice of Funding Availability (NOFA) that results from a collaboration between the County and the CoC. This NOFA received additional attention during May and June 2023 for the complexity of its process, Including review by a new committee to the CoC, the Funding and Evaluation Committee. Local funds assigned to these programs are at the complete discretion of the Board of Supervisors.
This agenda item also involves $2,000,000 in newly-identified Measure O fund balance that has been generated as a result of higher sales tax receipts than forecasted, as well as delayed program start-up times on the expenditure side, that can be awarded to key projects consistent with the Measure’s intent.
The project recommendations involved two that went through the Continuum of Care NOFA process but were not funded, and one that was funded via the County’s American Rescue Plan Act (ARPA) process in 2022 - see board item #2022-0376 on May 24, 2022.
The latter project can get off the ground faster with the recommended funds. To take this action, the Board must achieve a 4/5ths vote to move the $2,000,000 from Measure O’s Category #4 (Behavioral Health Homeless and Care Coordination) to Measure O’s Category #5 (Transitional and Permanent Housing). These recommendations have not been before the Measure O Oversight Committee, but they have been to the Continuum of Care Board for consultation.
Four attachments are included in this report: 1) a Summary of US HUD CoC Awards 2022; 2) Summary of the 2023 Local Homeless Program Contract Awards, 3) Measure O Fund Redesignation Budget Resolution in the amount of $8,764,798 ($998,429 HUD Funding, $5,766,369 HHAP Rd 3 and 4 funding, and $2,000,000 in Measure O Fund balance), and 4) DHS Budget Resolution. While each of the programs funded by these sources has independent value to the homelessness system of care, the Measure O funds alone will aid in the completion or establishment of 21 permanent supportive housing units and up to 40 or more interim housing units.
Discussion:
As noted, the DHS Homelessness Services division is proposing to accept and allocate almost $10 million in funds towards various programs/projects, including funding sources assigned to the County and funds assigned to the CoC.
The CoC is Sonoma County’s collaborative effort representing the homeless services system of care. Governed by a 17-member CoC Board, the countywide effort is responsible for oversight of funds designated to the CoC and planning/policy development for addressing homelessness. The CoC Board consists of local elected officials, nonprofit representatives, subject matter experts, and individuals with lived homeless experience. The Department of Health Services is the Lead Agency for the CoC.
Part 1 - Federal Funding: 2022 HUD Continuum of Care Awards
Continuum of Care funding awards are made through a competition of CoCs across the nation. For Sonoma County’s CoC, the submittal in response to the 2022 NOFO included 16 local homeless services projects as shown in Attachment 1. Please note that the use of 2022 is not a typo - these specific HUD grants’ expenditures are part of the 2022 competition, but expenditures occur starting in September 2023.
Some of the HUD CoC awards go directly to support Sonoma County and regional non-profit agencies’ work to support the CoC system, as listed on Attachment 1. As Lead Agency to the Continuum of Care Board, the DHS--in addition to rental assistance and related programming at the Community Development Commission--will receive the following CoC-supportive awards from the 2022 Competition for expenditure in our FY 23-24:
• An award supporting the Homeless Management Information System (HMIS), a HUD-mandated web-based client database that reports quality statistical information regarding the extent and nature of homelessness to HUD officials and to the US Congress, and provides invaluable information for local systems planning. The award is $327,157.
• A renewal award and expansion award for the Coordinated Entry System. More information on the Coordinated Entry System can be found at: <https://sonomacounty.ca.gov/health-and-human-services/health-services/divisions/homelessness-services/for-providers/sonoma-county-coordinated-entry>. The total amount of the two awards is $549,993.
• The annual Planning award of $121,279 is calculated at 3% of the total $4.2 million award to Sonoma County agencies to partially defray the cost of staffing the Continuum of Care.
Part 2 - State Funding (HHAP, HHIP, ESG)
Until 2018, the local homeless system of care was primarily funded by State and Local sources of funds under the purview of the Board of Supervisors totaling just under $2 million. These sources, separate from federal CoC funding discussed above, funded core operations in emergency shelter, permanent supportive housing, street outreach, and homelessness prevention.
In 2018, the State of California released the Homeless Emergency Aid Program (HEAP), a massive one-time infusion of funds available from 2018-2021 that totaled $12.1 million in funding for Sonoma County. This injection of funds, along with other new sources of funding such as the California Emergency Solutions for Housing (CESH) and new sources of State and Federal Emergency Solutions Grants (ESG) dramatically expanded the local system of care.
In 2019, the State released a 1st round of Homeless Housing, Assistance and Prevention (HHAP) funds, including approximately $3.6 million for the CoC. In 2020, the State released a 2nd round of HHAP funds in the amount of $1.6 million for the CoC with a 3rd round of HHAP in the amount of $4.4 million to the CoC in 2021-2022. HHAP-4 funds for the CoC in FY 23-24 is approximately $3.8 million (including administrative funds) with a slightly smaller award going to the County of Sonoma in the amount of $3.6 million.
The State’s HHAP program - issued in rounds - is a block grant program (i.e., a region is awarded a block of funds with some local discretion). HHAP spending must be informed by best practices focused on moving homeless individuals and families into permanent housing and ensuring those individuals and families maintain their permanent housing. HHAP funds closely follow a Local Homelessness Action Plan submitted to the State of California in 2022. Board members will recall that Governor Newsom held back HHAP funds statewide, asking Counties and CoCs to be more aggressive in their Local Homelessness Action Plan goals and strategies.
State Homeless Housing Incentive Program (HHIP) funds are a new source of funding from the State Department of Health Care Services (DHCS) via Partnership HealthPlan of California (PHC). Up to $19 million in HHIP funding is available to the County of Sonoma, with a portion of funds dedicated to support local homeless programs following consultation and involvement with the CoC. The amount can vary depending upon how successful we are in achieving HHIP metrics. HHIP funds are designed to mirror the HHAP process with similar metrics and are awarded on an Incentive basis by PHP.
State Emergency Solutions Grants (ESG) is a state funding source of just under $180,000 and can be used for emergency shelter and rapid rehousing services.
Part 3 - Combining State and Local Dollars: 2023 Homeless Program Contract Awards
HHAP is now the primary funding source for the CoC’s annual Homeless Program Contract Awards (different than the HUD awards). The addition of HHIP this year increased available funding (with additional funding set to go out in another NOFA later this year when additional HHIP is received).
For the past few years, the CoC Board elected to keep funding level due to the impacts of COVID-19. In 2022-23, however, funds for existing projects were put out in a new NOFA in March 2023 with new projects also eligible to apply. Projects were scored based on performance and alignment with the Strategic Plan. This process received the attention of many, including service providers and local media, in part because of its newness (the process included a new Funding and Evaluation Committee), the amount of recusals needed to finally approve the funds, and a constructive tension at the CoC that related to the goals and strategies of the 2023-2027 Homelessness Strategic Plan (and which ones to focus on and how quickly).
Included in these funds, as usual, are $887,480 in local funds that support projects and also provide key administrative funds for agencies to administer projects. Local funds include County General Fund and Reinvestment and Revitalization funds already allocated to DHS. In Attachment 2, please note that “RRH” means Rapid Rehousing, “ES” means Emergency Shelter, “PSH” means Permanent Supportive Housing, and “SO” means Street Outreach.
Part 4 - Measure O Fund Balance. The local ¼ -cent sales tax for housing and homelessness (Measure O) passed in November 2020 continues to generate significant revenue to support homelessness programs. In the year ended June 30, 2022, Measure O provided $31,392,245 to be used in five categories of funds:
• Behavioral Health Facilities ($6.9M)
• Emergency Psychiatric and Crisis Services ($13.8M)
• Mental Health & Substance Use Disorder Outpatient Services ($5.65M)
• Behavioral Health Homeless and Care Coordination ($4.4M)
• Transitional and Permanent Supportive Housing ($625K)
In recent months, DHS leadership identified $2 million in Category #4 that could be used quickly for homelessness housing and supports. The newly available funds are the result of the local sales tax revenues coming in higher than initially budgeted, as well as planned expenditures coming in lower than estimated due in part delayed program start-up times (often due to challenges in hiring staff).
Similarly, DHS staff identified at least three projects that could benefit from the funding relatively quickly:
• $1,400,000 for the George’s Hideaway Project Homekey effort, which would add 21 units of permanent supportive housing to the system. This project has a construction related shortfall that would be eliminated by this contribution. A request similar to this went through the Local Homelessness Services NOFA process, and was not awarded funding (in part because it was a capital “ask” versus an operational one);
• $400,000 towards the operational needs of Homeless Action Sonoma’s (HAS) Home and Safe Village, a 20-bed site under construction now in the Sonoma Valley. HAS will serve up to 100 clients at the site. DHS Staff anticipates that this funding would combine with up to $200,000 from the City of Sonoma to help support operations at the Village. A larger request for this support went through the Local Homelessness Services NOFA process, and was not awarded funding (in part due to its newness); and
• $200,000 towards the Sonoma Applied Village Services (SAVS)’ ARPA-funded project that is intended to provide up to 40 units of safe parking or interim housing and supportive services to Sonoma County’s Latinx homeless community, with a site under consideration for purchase in Santa Rosa. The $200K would support infrastructure improvements on the site should it be acquired. This project went through Sonoma County’s ARPA funding process and was awarded about $1.9M in funds. It needs additional support to be operational.
DHS staff consulted with the Continuum of Care on the above items at the CoC meeting on June 28, 2023, and the governance board there was largely supportive of the proposed expenditure. However, some CoC members expressed concerns that other worthy programs that competed in the earlier $3 million Measure O NOFA were not considered for award for the $2 million, and that there was not a full NOFA process for the $2 million. Instead of a NOFA, DHS staff did a gaps analysis based on where other NOFAs may have left gaps for needed programs.
If approved today by the Board of Supervisors, DHS will enter into contracts for each of these three efforts. The contracts will include performance measures and timelines to ensure accountability and transparency.
Measure O requires that, to move funds from one category to another (i.e., to take $2,000,000 in fund balance from Category #4 and move it to be awarded within Category #5), a 4/5ths vote of the Board of Supervisors is required. A similar 4/5ths vote is required to adjust the adopted budget with these additional appropriations.
Strategic Plan:
This item directly supports the County’s Five-year Strategic Plan and is aligned with the following pillar, goal, and objective.
Pillar: Healthy and Safe Communities
Goal: Goal 4: Reduce the County’s overall homeless population by 10% each year by enhancing services through improved coordination and collaboration.
Objective: Objective 2: Identify gaps in the Safety Net system of services and identify areas where departments can address those gaps directly and seek guidance from the Board when additional resources and/or policy direction is needed.
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
May 24, 2022 - Contract Authorization for the Continuum of Care’s 2022 Homelessness Programs, Acceptance Authorization for US Housing and Urban Development (HUD) Continuum of Care Programs, Acceptance of Homeless Housing, Assistance and Prevention Program (HHAP) Round 3 Funds (CoC and County), and Authorization to Enter into Standard Agreements for HHAP, Item 2022-0475.
June 8, 2021 - Annual Contract Approval of Local Homelessness Programs and Continuum of Care Program Funds, Item #83, 2021-0289.
Fiscal Summary
|
Expenditures |
FY 23 24 Adopted |
FY 24-25 Projected |
FY 25-26 Projected |
|
Budgeted Expenses |
$6,829,606 |
|
|
|
Additional Appropriation Requested |
$8,764,798 |
|
|
|
Total Expenditures |
$15,594,404 |
0 |
0 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
$887,480 |
|
|
|
State/Federal |
$12,706,924 |
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance (Measure O) |
$2,000,000 |
|
|
|
Contingencies |
|
|
|
|
Total Sources |
$15,594,404 |
0 |
0 |
Narrative Explanation of Fiscal Impacts:
The Department is requesting $8,764,798 in additional appropriations based upon the item’s recommended actions. The funding for these appropriations includes Federal HUD funding of $998,429, State HHAP (round 3 and 4) $5,766,369, and use of Measure O fund balance (after transfer of funds from Cat #4 Homeless Care Coordination to Cat #5 Transitional PSH) of $2,000,000. The fund balance in Homeless Care Coordination is estimated to be $1,300,000 after the above transfer to Transitional PSH.
In FY 2023-2024, the following appropriations will be utilized under the purview of the CoC Board and included in these contracts:
• State ESG - $175,923
• HHAP-3 (balance remaining): $114,023
• HHAP-4: $3,576,423
• HHIP: $1,900,000
Funds under the purview of the Board of Supervisors include:
• General Fund: $440,000
• R&R: $447,480
• Measure O Fund Balance (Category #4): $2,000,000
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Staffing Impacts: |
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Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
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|
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|
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|
|
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Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - Summary of US HUD Continuum of Care Awards 2022
Attachment 2 - 2023 Homeless Program Contract Awards
Attachment 3 - Measure O Fund Redesignation Budget Resolution
Attachment 4 - DHS Budget Resolution
Related Items “On File” with the Clerk of the Board:
None