Terminate Homelessness Response System Intergovernmental Agreement with Multnomah County, initiate orderly wind-down process, and build an improved agreement between the City and County (terminate Contract 30008898)
The City of Portland ordains:
Section 1.The Council finds:
- Since 2016, the City of Portland and Multnomah County have attempted to address the homelessness crisis in our community using an intergovernmental agreement creating the Joint Office of Homeless Services (JOHS IGA).
- The JOHS IGA was amended multiple times over the past eight years. These amendments extended the agreement and also made changes in an attempt to better address the homelessness crisis by promoting a more effective working relationship between the City and Multnomah County.
- Most recently, in July 2024, the City and Multnomah County entered into the Homelessness Response System Intergovernmental Agreement (HRS IGA). The HRS IGA replaced the JOHS IGA in an effort to once again try to better address the homelessness crisis by promoting a more effective working relationship between the City and the County.
- In approving the HRS IGA in July 2024, the City Council expressed concern about whether the new contractual relationship would adequately assist the City and County to act with sufficient urgency, collaboration, and effectiveness to implement the Homelessness Response Action Plan (Action Plan), which is a central element of the HRS IGA.
- As a result of those concerns, in Ordinance 191810 approving the HRS IGA, the City Council established a set of 12 contract milestones to assist the City Council in evaluating whether the City and County could effectively implement the Action Plan contemplated by the HRS IGA.
- To facilitate this evaluation by City Council, Ordinance 191810 specifically provided: “City Council will meet by October 15, 2024, to receive a progress report from the City Administrator on the Homelessness Response Action Plan.If the plan has not met the following contractual milestones, City Council will decide whether or not to terminate the Homelessness Response System Intergovernmental Agreement."
- On October 8, 2024, the Portland City Council and Multnomah County Commission met in a joint session to receive an update from City and County staff on their progress toward meeting the contract milestones established by the City Council.As noted by Portland’s Interim City Administrator on October 8th, that briefing was intended to provide the City Council the progress report required by Ordinance 191810.
- On October 16, 2024, the Portland City Council met to receive a further briefing from the Interim City Administrator regarding the specific milestones of concern to the City listed in Ordinance 191810.
- Based on the information provided to City Council at the briefings on October 8th and 16th, 2024, the City Council concludes that insufficient progress has been made to meet the milestones. Further, City Council concludes that this insufficient progress demonstrates that the HRS IGA does not provide the appropriate framework and governance structures to adequately address the community’s homelessness crisis with the urgency, collaboration, and effectiveness required.
- Based on the long experience of the City Council with the JOHS IGA, and now the new HRS IGA, the City Council believes that the current contractual relationship is not effective and should be terminated, to make room for an improved agreement.
- The HRS IGA provides that a party wishing to terminate the agreement will give at least a 90-day notice in advance of the termination. Further, the HRS IGA provides an orderly wind-down process, and the City Council expects City and County staff to engage in that process using reasonable efforts to prevent undue harm to the regional homeless services system, structures, and those receiving funding at the time of the termination.
- The community expects the City and County governments to address our collective homelessness crisis, but the current HRS IGA is not the way forward. Instead, future City and County leadership should be free to explore new methods of cooperation and new contractual relationships to address this crisis moving forward.
NOW, THEREFORE, the Council directs:
- Immediately upon the effective date of this ordinance, the City shall begin the termination procedures of the HRS IGA (Contract 30008898), adopted by Ordinance 191810, by proceeding with the 90-day notification.
- The City Council directs the Office of the City Administrator, the City Budget Office, the Portland Solutions Office, the City Attorney's Office and any other required City staff to begin discussions with the County to begin orderly wind-down procedures as provided in the agreement, Contract 30008898.
- The effective date of the termination specified by the City will be June 30, 2025.
Impact Statement
Purpose of Proposed Legislation and Background Information
This ordinance will terminate the existing Homelessness Response System Intergovernmental Agreement (HRS IGA) between the City of Portland and Multnomah County, which was established in an attempt to address the complex homelessness crisis throughout our community.
This termination will allow both parties to pursue new opportunities for improved collaboration and governance that more effectively reflect the roles and responsibilities of each jurisdiction. Following an orderly wind-down period to minimize disruption to existing services, the termination of the HRS IGA is set to take effect on June 30, 2025.
Financial and Budgetary Impacts
Terminating the Homelessness Response System (HRS) Intergovernmental Agreement (IGA) between the City of Portland and Multnomah County will have direct financial and budgetary impacts beginning in FY 2025-26. Some potential impacts are dependent on decisions made by both parties.
A summary of the impacts is as follows:
- Approximately $32 million of ongoing General Fund Discretionary resources will no longer be obligated for transfer to Multnomah County. These resources could be reallocated in the FY 2025-26 budget. (HRS IGA Section 3.2)
- Approximately $40 million in ongoing costs (see below for breakout) would be required to continue the Alternative Shelter Sites (Safe Rest Villages and Temporary Alternative Shelter Sites) at the current planned levels of service. (HRS IGA Section 3.4)
- The $40 million estimate does not include costs of wraparound services that are currently provided and funded by Multnomah County at these sites. The City does not currently have estimates of these costs for replacing those services if the County stops providing them.
Other sections of the IGA could have financial impacts, but the amount is unknown at this point:
- If the County has unobligated City General Fund at the end of FY 2024-25, those one-time resources would be required to be returned to the City within 60 days of termination. (HRS IGA Section 2.2.1)
- “Respective costs associated with wind-down planning” (HRS IGA 2.2.1)
- Potential reimbursements for allowable expenses incurred prior to the termination of the agreement. (HRS IGA 2.2.1)
- General Fund interest accruals on the $31.5 million will return to the General Fund without the annual advance required in the contract. (HRS IGA 5.5.1)
There could also be financial impacts related to decisions that the City and County make around continuity of operations for County-led activities currently supported by City General Fund. Approximately two thirds of City funds sent to the County are allocated to support adult emergency shelter in the community. The remainder are allocated to Outreach and Engagement and Specialized Transitional and Permanent Housing. It is unknown whether terminating the agreement would result in less funding for any of these activities.
Currently, the Joint Office has approximately $20 million of City funds budgeted that support 676 year-round shelter beds and 4.5 FTE of JOHS Personnel.
There is nothing in the contract that requires either party to continue any operation beyond the end of the Fiscal Year in which termination occurs.
Alternative Shelter Site Estimated Costs of Current Operations for FY 2025-26
| Outdoor Shelter Forecasted Costs | # of Sleeping Units | Fiscal Year 2025-26 |
| Included in Exhibit 6 of the HRS IGA | ||
| Clinton Triangle | 160 | $7,519,715 |
| North Portland Road | 160 | $9,092,853 |
| BIPOC Safe Rest Village (SRV) | 48 | $2,756,294 |
| Menlo SRV | 75 | $4,466,810 |
| Multnomah SRV | 100 | $5,538,551 |
| Queer Affinity SRV | 60 | $3,372,576 |
| Reedway SRV | 120 | $5,171,342 |
| Not included in Exhibit 6 | ||
| River District Navigation Center | 90 | $15,000 |
| SRV Team & County Staffing costs | $2,200,000 | |
| Total | 813 | $40,133,140 |
Economic and Real Estate Development Impacts
Termination of the HRS IGA does not directly impact the City’s economic and real estate development outlook.
Community Impacts and Community Involvement
This ordinance terminates the existing HRS IGA between the City of Portland and the Multnomah County's Joint Office of Homeless Services. The termination of the existing agreement is largely an internal activity to City government processes and will terminate the transfer of funds from the City to the JOHS.
The milestones to measure success of the Homelessness Response Action Plan were established by City Council in Ordinance 191810 on July 3, 2024. These milestones were publicly reviewed at a joint session of the Multnomah County Board of Commissioners and the Portland City Council on October 8, 2024, and in a report from the Interim City Administrator to the City Council on October 16, 2024 which was followed by extensive public testimony.
100% Renewable Goal
N/A