Portland officials on Tuesday disclosed a gaping budget hole in the city’s homeless shelter system while insisting that serious service cuts will be avoided through “creative and efficient cost saving measures” and a “reimagination of best use of funds.”
The system, comprised of both emergency overnight and alternative shelters, faces a combined $11 million shortfall after the city failed to secure a tranche of state funding it was counting on, City Administrator Mike Jordan wrote in a budget memo to members of the Portland City Council.
That deficit is about 17% of the $65.5 million in shelter program funding sought by Mayor Keith Wilson. Councilors approved the plan in June under the assumption that the vast majority of one-time dollars wouldn’t come from city coffers.
The revelation of the shortfall comes just a week after The Oregonian/OregonLive reported that city budget officials are projecting a separate $16 million deficit to Portland’s general fund due in large part to the city receiving less business tax revenue than expected.
The financial squeeze could imperil Wilson’s ambitious pledge to offer a safe place to sleep for all homeless Portlanders by Dec. 1.
Earlier this month, the mayor sent an unusual solicitation to residents asking them to donate their time and money to some of his newly launched shelters.
City officials did not immediately respond to a request for comment Wednesday.
According to budget documents, city leaders earmarked just over $26 million for the creation of 1,500 new overnight-only shelter beds and four indoor and outdoor day centers that are the centerpiece to Wilson’s homelessness plan.
Additionally, they designated $39.6 million for continued operations of the city’s eight alternative shelters that provide tiny home sleeping pods to residents and access to an array of social services.
Money from Multnomah County, Metro and the state accounted for nearly 90% of the budgeted program costs, documents show.
In the memo, Jordan offered a broad overview of how city officials would seek to shave about $5.1 million from Portland’s overnight shelter program and another $5.9 million from its alternative shelters to make up for the loss in state funding.
To reduce overnight shelter program spending, the city plans to provide fewer storage locations and slash the amount of money it will spend on day centers by focusing on opening outdoor ones and expanding existing locations, Jordan wrote. It would also ensure that hundreds of planned shelter beds would be available only during the winter months “when they are most needed” as opposed to year-round.
For alternative shelter cost savings, the city plans to reduce program expenses by $2.7 million, primarily through renegotiating contracts with shelter operators and shifting some of the program’s administrative cost to the overnight program.
Jordan also proposed that the City Council tap into city carryover funds during next month’s fall budget monitoring process to cover the remaining $3.2 million deficit.
“The alternative shelter program is largely maintained due to creative and efficient cost saving measures, as well as rebalancing of staff time across both overnight and alternative shelter programs,” Jordan wrote. “Additionally, a reimagination of best use of funds allow (city staff) to achieve Mayor Wilson’s overnight shelter, day center, and day storage objectives.”