Item Description:
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Auth $9 million for emergency shelter operations with Local Affordable Housing Aid in 2025; supp 2025 budget appropriation
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Resolution:
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BE IT RESOLVED, that the 2025 interfund revenue transfer from Local Affordable Housing Aid (Fund 24) to the Housing and Economic Development department (Fund 10) be reduced by $5,700,000; and that the 2025 Housing and Economic Development department (Fund 10) interfund revenue transfer and expenditure budget be reduced by $5,700,000; and
BE IT FURTHER RESOLVED, that the 2025 interfund revenue transfer from Local Affordable Housing Aid (Fund 24) to the Housing and Redevelopment Authority (Fund 37) be reduced by $3,300,000; and
BE IT FURTHER RESOLVED, that an interfund revenue transfer from Local Affordable Housing Aid (Fund 24) in the amount of $9,000,000 to the Housing Stability division of Human Services and Public Health department (Fund 20) be authorized for eligible expenditures on a cost reimbursement basis; and that the Housing Stability division of Human Services and Public Health department (Fund 20) 2025 interfund revenue transfer budget be increased by $9,000,000 and its budgeted use of restricted fund balance be decreased by $9,000,000, for operations of emergency shelters and costs of providing related services.
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Background:
This action requests the interfund revenue transfer of $9 million in Local Affordable Housing Aid (Fund 24) revenues to the Housing Stability division of Human Services and Public Health (Fund 20) to support operations of emergency shelters and costs of providing related services in 2025 as other funding sources are pursued. The reduction in Local Affordable Housing Aid allocated to Housing and Economic Development and the Housing and Redevelopment Authority reflects previous board actions approved in committee on December 3, 2024 which authorized negotiating contracts for $17,313,956 million in Repair + Grow awards (Board Resolution 24-0524).
Hennepin County faces a well-documented ‘fiscal cliff’ in relation to the shelter and homeless response system. Sustaining new and improved programs made possible by pandemic recovery funds requires upwards of $13m per year. This includes support for operations and services at new low-barrier shelters and 24/7 operations at existing shelters.
Seeking new dedicated State funding to address this ‘cliff’ has been a priority at each of the last three legislative sessions. While this resulted in ~$13 million in one-time funds to date, those are now fully expended. Efforts to seek new dedicated funding are ongoing.
Sustaining these efforts in 2025 is included in the proposed Human Services budget. Additionally, increased demand for family shelter and Hennepin County’s commitment to no child sleeping outside has increased the annual cost of family shelter operations. In 2022, Hennepin County spent ~$12.6 million to provide shelter for all families experiencing homelessness. Hennepin County currently projects spending ~$27.5 million to provide shelter for all families experiencing homelessness in 2024.
The 2025 Administrator Amendment No. 8 authorized the interfund revenue transfer of $9 million Local Affordable Housing Aid (Fund 24) revenues to the Housing and Economic Development department (Fund 10) for use toward the one-time Repair + Grow program for 2025. This action reduces this interfund revenue transfer by $5,700,000, resulting in a total 2025 budget of $17,313,956 for the Repair + Grow initiative. The request to negotiate contracts related to the Repair + Grow award will be considered for approval through Board Resolution 24-0524 on December 12, 2024.
The 2025 Administrator Amendment No. 9R1 authorized the interfund revenue transfer of $5.5 million of Local Affordable Housing Aid (Fund 24) revenues to the Housing and Redevelopment Authority (Fund 37) for use toward affordable rental and homeownership contracts in 2025. This action reduces this interfund revenue transfer by $3.3 million, resulting in $2.2 million for these contracts along with the use of Housing and Redevelopment Authority (HCHRA) fund balance. These contracts will be fully funded through a separate HCHRA 2025 budget resolution on December 12, 2024.
Impact/Outcomes: Hennepin County supports emergency shelter across a network of providers for up to 9,800 people who are experiencing homelessness each year. This request supports these efforts.
Housing Disparity Domain: Households of color are disproportionately represented among people experiencing homelessness. This request supports county programming to reduce disparities by providing emergency shelter and services to move to housing.
* Hennepin County Housing and Redevelopment Authority (HCHRA) will make a corresponding reduction of $3,300,000 to its 2025 interfund revenue transfer and expenditure budget in the separate HCHRA budget resolution on 12/12/2024.
recommendation
Recommendation from County Administrator: Recommend Approval