The Multnomah County Board of Commissioners engaged in an exercise last week most elected officials can only dream about. It discussed what to do with more than $100 million of unspent money from the Metro supportive housing services measure.
That tax, which voters approved in 2020 to alleviate chronic homelessness, has produced like a runaway oil well, gushing dollars far faster than Multnomah County can spend them.
After WW highlighted that underspending (“The Big Number: $22.3 Million,” March 22), a key player took notice: Metro, the regional government responsible for collecting the SHS tax and watchdogging its allocation.
What followed over the ensuing three months was a series of increasingly testy emails from Metro chief operating officer Marissa Madrigal to Multnomah County COO Serena Cruz.
Madrigal let Cruz know that the county’s failure to spend its 2023 allocation—it was on track to miss its $123 million budget by $69 million—represented a “material deviation” from Multnomah County’s contractual agreement with Metro. That necessitated a corrective action plan, a development that communications between the two governments show the county stiffly resisted.
The situation grew more complicated when Metro informed the county in late June that, in addition to the unspent money from 2023, Metro had collected another $50.3 million from taxpayers paying 2021 assessments in arrears.
Metro is responsible for making sure the county spends SHS dollars effectively—but the money must first get out the door. When prodded, Multnomah County first suggested rolling over most of the money into next year (when it will have even more), bristled at greater oversight, then proposed some not fully baked ideas, such as buying housing pods for the city of Portland.
It’s not clear why Multnomah County officials have struggled to spend big money on the region’s most obvious crisis. In the past, county officials have cited the pandemic, a lack of capacity among service providers, and their own procurement system. But in recent weeks, pressed by Gov. Tina Kotek and 3rd District Congressman Earl Blumenauer to appoint a drug czar and address the sky-high rates of addiction on Portland streets, Multnomah County Chair Jessica Vega Peterson cried poor, saying local governments lack the money they need.
Vega Pederson, who calls the slow spending of homeless dollars unacceptable, also says the Metro money can’t solve all ills. “The one-time-only funds alone will in no way cover everything this community needs to address the cascading crises of fentanyl and behavioral health,” she says. “We do have a responsibility, but so does the state to fund treatment and recovery services. The needs are that great.”
In any case, correspondence WW collected through a public records request shows the county’s struggle to spend its portion of the funds and its resistance to greater oversight from Metro.
Sometimes, written communications between public officials tell the story of conflict so effectively, it’s best to let the documents speak for themselves. Here are selected excerpts from the correspondence, with emphasis added:
APRIL 17, 2023
Metro housing director Patricia Rojas to Joshua Bates, interim director of Multnomah County’s Joint Office of Homeless Services
“At the current rate of spending, Multnomah County is at risk of not meeting the spending expectations set in the Annual spend down plan and could also constitute a material deviation from the County’s spend-down plan if action is not taken.”
Rojas to JOHS director Dan Fields
“We also presented potential options for one-time-only investments that could enhance the homeless services system and address some acute needs experienced at the service provider level. However, the subsequent proposal that Multnomah County submitted on April 29, 2023, did not adequately address the material deviation.”
JOHS deputy director Joshua Bates to Metro
“Multnomah County has a total SHS budget in FY23 of $123,342,534. During Q1-Q3, we spent $39,897,779 and without further action, we anticipated spending $14,251,220 in Q4.” [Editor’s note: That means the county expected to end the year with $69 million of the SHS money unspent. It later whittled that number to $58 million.]
Metro chief operating officer Marissa Madrigal to Multnomah County COO Serena Cruz
“Metro has examined Multnomah County’s June 7th CAP proposal and finds that it is insufficient to address the material deviation in Multnomah County’s spend-down plan for fiscal year 2023. While we applaud several of the specific investments proposed - such as expanded funding for service provider COLAs ($2M), provider grants ($10M) and Temporary Alternative Shelter Sites (TASS)($4.7M) - we find that too many of the proposed expenditures lack a clear concept, plan, timeline or specific alignment to goals and outcomes.
“Additionally, the county’s proposal to move nearly half of its projected underspend to contingency and reserves ($34M) is unacceptable. Homeless service providers have recently communicated to the Metro Council that they can spend additional rent assistance and client assistance dollars today. Multnomah County must make every effort to do so.”
Madrigal to Cruz
“We are happy to see that funding grants and advances are incorporated into proposed strategies and encourage the county to expand those opportunities as you did during the COVID-19 emergency. However, while getting funds into the hands of providers is an important step toward satisfying the CAP, the endgame is delivering services with those dollars.
“While allocations or awards made to other governments or service providers will be considered indicators of real progress, the milestone used to determine satisfaction of corrective action plan requirements will be actual expenditures for services rendered.
“Yesterday we also discussed the county’s desire to be given a chance to show that it can make progress on the CAP without being burdened by unreasonable reporting requirements or interference in Multnomah County’s operations. I shared that I was sympathetic to Multnomah County’s position and also that Metro must have a level of detail sufficient to monitor the county’s progress toward its CAP goals. Therefore, Metro will require that the county increase financial reporting from quarterly to monthly, and report specifically on the projects listed in the CAP.”
Madrigal to Cruz
“As shared during our last discussion, the general areas of focus you’ve identified in the CAP feel responsive to immediate needs, but the document doesn’t provide a level of specificity necessary to confidently monitor progress.”
Cruz to Madrigal
“The JOHS has had a challenging year marked by uncertainty and transition.
“Additionally, the County as an enterprise, spent this last year reviewing our procurement processes from purchasing through contract administration. In the budget just passed by the Board of County Commissioners a couple of weeks ago, the Department of County Management was awarded funding to establish a new countywide procurement program that will mirror the County’s purchasing strengths with centralized and decentralized approach to contract management.”
Cruz to Madrigal
“While the County very much supports and understands Metro’s interest in monthly reporting of the underspent funds, we do not support monthly reporting of our FY24 SHS expenditures.
“It makes sense for us to report monthly on those funds we committed to spending that went unspent this year, but given our leaning into this situation, we do not think it calls for monthly reporting of all of our SHS spend for FY24, as that would be overly burdensome to our team.”
Madrigal to Cruz
“We are close to agreement, but, in response to your last correspondence, there are a few key areas where Metro must remain firm.
“1. Financial reports must be monthly and include all SHS expenditures.
“2. Progress toward completion does not equal completion.
“3. Purchase of PODs does not advance the goals of the LIP if there is a significant doubt by the county that they will not be used. We greatly appreciate the county’s creativity in working with the city of Portland to purchase PODs and other materials for shelter spaces. However, from our limited information, we understand that Portland is still waiting for a response from the county regarding whether the county will provide services at these sites. If the county declines, then the likelihood that the PODs will be purchased and/or used significantly declines.”
Cruz to Madrigal
“While we have come much closer toward an agreement, we remain some distance apart at this time.”
Cruz to Madrigal
“Multco will report to Metro monthly on all SHS spend, both the CAP and our spending plan for FY24. MultCo will develop the reporting tool. As MultCo reaches 75% completion of all CAP categories reporting will move to quarterly.”
County commissioners got their first chance at last week’s board meeting to weigh in on a tentative agreement the two governments have negotiated(that plan allocates $40 million of the underspending from 2023). Commissioners Sharon Meieran and Julia Brim-Edwards suggested some of the remaining one-time money could pay for bricks and mortar, such as replacing the sobering center that closed at the end of 2019 (“Surprise Intervention,” WW, July 19).
Or it could buy some of the low-cost hotels around town for shelters and services. One example Meiran pushed: the 241-room Crown Plaza at 1441 NE 2nd Ave. That hotel, well served by transit, is close to a city of Portland safe rest village and Hooper Detox Stabilization Center.
Moving toward such purchases seemed to gain support from the board. “Underspending is not OK,” Commissioner Susheela Jayapal said. “Capital investments are one of the best and most logical uses for this one-time-only money.”
The board is expected to vote on a final allocation of the one-time funds in late August.