Seattle, King County announce sweeping changes to homeless service system

Seattle and King County are taking back control of millions of dollars' worth of homeless service contracts and responsibility for strategies to get people into housing.

This will leave the region's homelessness agency, started in 2019, with only federal and state funds to manage. It is the most dramatic extension of a slow retaking of homelessness services that started just a few years after the authority's creation.

King County Executive Girmay Zahilay and Mayor Katie Wilson said in an interview Tuesday they want their respective governments to again bear the political weight of solving homelessness. The city and county provide nearly all of the authority's funding and sit on its governing board.

"Part of this, for me, is really about taking political responsibility," Wilson said.

The original intentions for the agency's creation were good, Wilson said, and it still has a useful role. But she said the agency had "structural challenges" and wasn't performing as well as she and Zahilay need it to.

They said their concerns with the agency's ability to deliver on a shared vision for solving homelessness predated the most recent financial audit.

"I was very aware of deep structural challenges with the [King County Regional Homelessness Authority] in the way that it was performing," Wilson said.

The transition will take place over the next six months, with the city and county resuming control of local contracts by January of next year. The two could not say yet how much the transition will cost. Both the city and county will have to put up funding to rehire staff to manage the contracts again. Zahilay said the county estimates it will need 10 to 12 new staff members. The city has not shared an estimate.

The regional homelessness authority said it did not yet have an estimate for how many of its employees would lose their jobs. However, King County Chief Operating Officer Hyeok Kim said 20 to 25 staff members at the regional homelessness authority could be laid off. In a recent budget document, the agency reported about 80 full-time employees.

The city and county promise to release more details about staffing and the costs of the transition by Aug. 1.

Zahilay and Wilson said they want to retain some of the benefits of the regional model, such as the county and city coordinating so the nonprofits that are paid to deliver homelessness services could easily apply for funding from both. They also promised a "stakeholder process" for preserving regional collaboration that would include the county's suburban cities.

In the meantime, the city and county brought in a financial consultant to help strengthen financial controls at the authority. That consultant is also expected to help determine how much administrative support the city and county should continue to provide to the agency, even after they resume control of local contracts.

Those consultant fees are expected to not exceed $1 million, county officials said.

This is a crucial time for the regional authority's work managing federal homelessness grants. The Trump administration has pushed new rules that could jeopardize roughly $65 million in funding for the region and altogether reshape the Seattle area's approach to helping homeless people.

The mayor and county executive said they didn't make this decision solely to appease federal funders. But Zahilay said he thought it was important to take decisive action now to address any potential mismanagement at the authority. The Trump administration recently used fraud allegations in Los Angeles to justify freezing millions in federal homelessness dollars.

"We think this is the path that is less risky than the status quo," Zahilay said.

Some county and city councilmembers applauded the decision. Seattle Councilmember Maritza Rivera and King County Councilmember Rod Dembowski - both of whom have pushed for the agency's dissolution - called it a step in the right direction."

But Seattle Councilmember Bob Kettle called the announcement a "disappointment." The plan to shave away the agency's responsibilities is coming ahead of schedule and without consulting members of the council, he said, which risks imploding the homelessness authority without a strong plan for its replacement.

"We have to remind people that we have a co-equal branch of government here in the City of Seattle, and we have the power of the purse, so good governance would suggest that they would do it in partnership" with the council, he said.

The most recent blow to the authority was a damning evaluation that criticized the agency's financial practices. The findings spurred council members with both Seattle and King County to introduce motions to dissolve it entirely.

Under Zahilay and Wilson's plan, the regional homelessness authority would oversee databases that track people who receive services, the biennial count of people staying in shelters and outside, as well as other functions required to receive federal funding. It would also continue to lead the region's severe weather response and administer funding from the state.

But the city and county would take back roughly $160 million in contracts. Those include emergency shelter beds, long-term housing programs and short-term rental assistance, and more, by January.

Kelly Kinnison, CEO of the King County Regional Homelessness Authority, said she understood and respected the decision.

"I think it's challenging for any Seattle mayor to not have the resources that they are investing in homelessness be directly under their control," she said, "and I respect the decision-making of those leaders to want to have a closer and direct relationship, and not have a third party controlling those resources."

At the same time, the shift will be a logistical challenge, Kinnison said. Authority leadership has tried for years to reexamine contracts inherited by the city and county to make sure nonprofits aren't duplicating work and are delivering services in the most efficient way. This change means that work will pause.

"This stalls progress that [King County Regional Homelessness Authority] has been making since I arrived," she said.

For service providers, the shift could engender concern about added process and cost, said Nicole Macri, representative for the 43rd district and deputy director for strategy at the Downtown Emergency Service Center.

But she said it was a positive step toward improving trust in the region's homelessness response.

"The workers who show up every day, it's hard work," she said. "We need to make sure we're doing it right and we're getting the results that the public expects."

Karen Lee, CEO of Plymouth Housing, similarly said it was important to get the process right.

"We can't allow this transition to come at the expense of people, because people sleeping outside cannot wait, she said.

The authority began as an agency that would consolidate city and county resources and set homelessness policy for the entire region. Officials and others argued at the time the region's approach to homelessness was too splintered to drive any meaningful change.

But the city and county never gave up full control over their homelessness services. The county, in particular, has held onto a large portion of its Department of Community and Human Services. That department has been under intense scrutiny this year because of internal and external reports showing weak financial oversight and potential fraud, waste and abuse by contractors.

Executive Zahilay said measures he took this year to improve accountability within the department, including new financial controls and higher standards for invoicing, have already transformed it. He also noted the division that handles homelessness services has never had issues.

"I'm confident that the [Department of Community and Human Services] of today will be ready to handle the influx of contracts and administer them effectively," Zahilay said.

The city has already taken back control of some of its homelessness response. Former Mayor Bruce Harrell removed Seattle's funding for its homelessness prevention and outreach so the city could administer those services directly. Then Mayor Katie Wilson took office and led her effort to expand shelter by 4,000 units in four years entirely outside of the purview of the authority. That has yielded 175 units so far.

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