State cuts shelter funding by half; layoffs expected

Presenter: Lane County was expecting 15 million dollars to support its innovative emergency shelter system. Instead, the county will receive about half that amount. Sept. 23, Lane County’s Homelessness and Community Action Manager James Ewell:

James Ewell (Lane County): We have currently 924 shelter beds in the Lane County Emergency Shelter System. That is 574 just year-round shelter beds and an additional 350 inclement weather shelter beds.

[00:00:32] Last fiscal year, FY 2025, we had roughly $15 million that was able to be used for shelter, street outreach, unit access, and trainings for our provider network.

[00:00:45] Unfortunately, we learned just within the last few weeks that the allotment that we are being offered this year is $7.6 million so obviously a significant reduction from what we saw last fiscal year.

[00:00:59] What that means is there are going to be significant cuts to the services that we are able to offer and some internal cuts to our county staffing as well. Ultimately, that means having fewer shelter beds likely in our community. Staff at those provider programs, those shelter programs are likely to be laid off.

[00:01:19] The state has also indicated that they really want the focus to be on sustaining as many beds as possible, so they’re really moving away from the housing focus support piece and instead wanting those funds to go towards prioritizing maintaining beds.

[00:01:36] We are likely to see less exits from shelters into housing because we’re not able to have those supports offered to folks directly in the shelters. We will not be able to fund any street outreach teams with the state ‘All In’ dollars this fiscal year.

[00:01:52] Presenter: The state is also capping administrative costs. James Ewell:

[00:01:56] James Ewell (Lane County): So in addition to the reduced overall total funding, OHCS is also capping the admin percentage that’s allowed. So they’re capping it at 10% and they are designating that 8% of that is to go to the programs that we contract with, and 2% will be retained by the county.

[00:02:14] So as I’m sure you know, that’s a significant reduction in historically what we have gotten in admin. It’s, I think, a little bit more than half.

[00:02:22] So that, paired with the significant reduction in funding, just makes for a really dramatic effects to our shelter system.

[00:02:31] We’ve just determined it would be impossible to maintain the current shelter system … So the first step we have taken is advocacy with the state, both with OHCS (Oregon Housing and Community Services) and with the governor’s office, really emphasizing how significant this will be to our community to have this reduction. What we have been told by OHCS up to this point is there is no additional funding that is available. But again, we continue to advocate for our needs.

[00:02:58] In the conversations that we have had with our shelter providers, we have asked them to revise the budgets that they initially submitted when we thought that the funding would be the same. And we’ve asked them to look at areas of their programming that they can reduce while still maintaining a safe shelter both for their staff and for the participants of that shelter.

[00:03:21] And so they’re looking at those housing-focused activities. So they’re reducing case manager FTE, they’re doing away with flexible pots of money that they were using to address housing barriers, and it’s really getting down to the bare bones, what is needed on a nightly basis to provide someone immediate shelter, and it’s not those additional supports, which again is going to be incredibly detrimental when we look at outcomes to permanent housing from our shelters.

[00:03:48] So likely we will not see as much turnover in shelter. Shelters in our system are meant to act as a short-term spot for folks to be able to go and be safely while they’re working towards that goal of housing.

[00:04:01] If we have less supports for them to get into housing, it is likely that they will remain in shelters longer which will mean that there isn’t that turnover allowing for movement in and out of shelters.

[00:04:13] It’s going to reduce the number of shelter beds that are available in our system. We just can’t sustain the 924 with the amount that we have. The admin percentage being offered to agencies is incredibly low, which will have significant effects on those agencies.

[00:04:30] We have talked in this community for many years about Egan Warming Centers and our other inclement weather sheltering and much of which has historically been staffed by volunteers.

[00:04:42] As you may remember within the last year or so, we had been able to increase funding to St. Vinnie’s for Egan efforts and they were able to have paid staff members and they were able to increase some of the efforts related to warming shelters.

[00:04:57] It’s likely that we are going to see significant effects to the inclement weather shelters because of this and I think time will tell what exactly that looks like but it definitely does feel like a step back from improvements we’ve been able to make over the last couple of years.

[00:05:13] State funds were designated for the navigation center to use as emergency funds as a rainy day fund if you will and those funds are going to have to be exhausted this fiscal year for us to maintain the (Navigation) Center and our other shelters being open. So it’s just a loss of that that’s safety net of funding

[00:05:34] Presenter: Lane County Health and Human Services Director, Eve Gray.

[00:05:37] Eve Gray (Lane County Health and Human Services, director): You all have seen dashboards. We’ve come and reported on the number of people who move from shelter into permanent housing in our community—a community that has very little available housing, especially for people in the incomes that we’re talking about in the unhoused communities.

[00:05:52] Why is that? It’s because of the case management services and the housing focus services that we provide. And we have certainly received criticism in our community around the cost of shelter beds here.

[00:06:04] And why are the shelter beds costing as much as they are? What you will find is if you look shelter by shelter, the ones that cost more are the ones where we provide more services. And those ones where we provide more services are the ones where we assign the people of the highest acuity who will have the hardest time finding housing.

[00:06:23] What I anticipate with these reductions in case management services is we will see more kind of equalization of the cost of beds aside from just the different costs of operating different facilities. But what we’ll see is that those people who are more difficult to house will end up on the street and staying on the street and we will not be able to move them through the system. So that is the likely impact of pulling away all of these additional supports.

[00:06:53] Presenter: She also commented on the cap on admin costs. HHS Director Eve Gray:

[00:06:57] Eve Gray (Lane County Health and Human Services, director): Best practice in nonprofit management is about 80% going to direct care and about 20% being administrative expenses. So to cut those administrative costs down to 8% for our nonprofit providers means they have to fundraise that other 12 (percent) in order to stay solvent, and that is very, very difficult. There’s a cost of doing business, right, whether you’re a nonprofit or not and this appears to be ignoring the real cost of doing business.

[00:07:32] The other thing that I would just say associated with this is it is unprecedented that the state would wait until the end of August to tell us what our allocations are when the funding was started on July 1. That we funded contracts under the assumption that we would have the dollars we needed. And so we’ve been spending all that money and now the cuts have to be deeper because we weren’t told right from the beginning that there was going to be a reduction.

[00:08:06] So that is the other piece that we’re facing and the other opportunity for us in working with our state partners is to help them understand the impact to not having contracts ready at the beginning of the fiscal year. We know that it takes a minute, and yet it’s a huge impact to the community when we find out months into the fiscal year that this is the case.

[00:08:31] Presenter: Commissioner Laurie Trieger.

[00:08:33] Laurie Trieger (Lane County commissioner): And I just want to point out in the memo how you talk about the studies that show us that one year of homelessness without shelter, unsheltered homelessness, equates to a 17-year reduction in life expectancy.

And so when we talk particularly for example about the Navigation Center where we’re talking about the people with the highest level of need, they have been living unhoused and unsheltered for several years. And so just what what this is really translating to, these cuts. It’s a budget problem but it’s not really about the budgets…

[00:09:06] It’s really a step back we’ve been innovating and doing all these really great— I mean, maintaining shelter beds is like such a bare minimum thing to do in this system. And we’re not even able to do that. It just flies in the face of everything we’ve been trying to do and have been building and that the governor has been leading on. It’s just sort of astounding.

[00:09:29] When you said about the bed cost, I just want to really make sure we’re really understanding the problem with that. I mean, that’s basically like, a bed is not a bed is not a bed: An ICU bed is not an outpatient physical therapy bed, any more than a Navigation Center bed is a pick-any-other-shelter-provider bed, right?

[00:09:47] Presenter: Commissioner David Loveall:

[00:09:49] David Loveall (Lane County, commissioner): So are you anticipating a number of beds that you’re going to have to cut overall from the 974? Are you thinking we’re going to go down to , do we even know at this point?

[00:09:59] Presenter: James Ewell:

[00:10:00] James Ewell (Lane County): So we’re still waiting for all of the providers to submit their revised budget. So, we don’t have the clear picture right now. What I can say is it’s looking like there will be the closure of at least two shelters that have, I believe, a total of 14 beds between the two of them.

[00:10:19] Those were something that those providers identified as a part of their budget reduction process, that that’s how they were going to be able to reduce their budgets. Beyond that, until we have the full picture of where providers can reduce, you know, it’s not something that we can provide at this point.

[00:10:39] Presenter: Lane County commissioners hear that the state is cutting shelter funding and allowed admin costs by about half. That will mean layoffs at the county and local nonprofits, fewer people moving from shelter into housing, and more human beings living on the streets.