Spokane extends Salvation Army contract to operate largest homeless shelter, but questions linger

The Salvation Army will continue operating Spokane’s largest homeless shelter, possibly through April, amid ongoing dispute over breakdowns this summer in a process to potentially choose a different operator.

On Thursday, the Spokane City Council approved a $750,000-per month contract extension with the Salvation Army to operate the Trent Avenue homeless shelter effective through the end of April, though the city can opt to cancel the month-to-month contract earlier.

If the contract isn’t canceled, the extension will cost $3 million, of which around $2.1 million will be paid with federal COVID-19 relief dollars. The remaining nearly $900,000 will be paid for through the state Department of Commerce’s Right of Way program, meant to get homeless people living on state property into shelter and housing. The Trent Avenue shelter was created to provide beds for those living at the Camp Hope homeless encampment, which was located on state property in Spokane’s East Central neighborhood and was once the largest encampment in the state.

Several months ago, it seemed unlikely the Salvation Army would retain its contract to continue operating the Trent Avenue shelter. Amid consternation with cost overrides and an unusually high 25% administrative fee the Salvation Army could charge under the existing contract, the City Council had called for a request for proposals from providers in hopes of cutting the cost to operate the shelter for 2024.

The Salvation Army and Jewels Helping Hands, which managed the closure of Camp Hope, applied for that new 12-month contract, as did Hillyard Veterans of Foreign Wars Post 1474, whose commander, Mike Fagan, previously served on the Spokane City Council. The VFW post was considered too inexperienced for serious consideration by the committee reviewing proposals.

Jewels came out on top, according to members of a committee tasked with reviewing the proposals, in large part due to the breadth of its relationships with other organizations and service providers. Jewels Helping Hands also emphasized the dignity of those they served in their application and included money in its budget for addiction and mental health treatment, according to Karen Ssebanakitta, a member of the city’s Community, Housing and Human Services Board, which was tasked with forwarding the committee’s recommendation to the City Council.

Shortly before that recommendation was made public, however, Mayor Nadine Woodward’s administration called for a pause in the process, citing uncertainties in funding sources. The administration stated at the time that former Council President Breean Beggs had indicated the City Council would be willing to use federal COVID-19 relief funds to fund the shelter through the end of 2024 if other funding sources couldn’t be identified, but since his departure, the appetite for such a use of one-time funds had waned.

“We thought we had an agreement with council,” Woodward said in late August. “Those discussions need to continue.”

City spokesman Brian Coddington said in a Monday interview that the city had hoped other funding sources, including state Right of Way funding, could be secured at the same time a new operator was being considered.

“But by the time of the pause (in August), it was very apparent that we were not where we needed to be to identify a consistent funding source for that contract,” he added.

After Woodward’s defeat in the November elections to Brown, who has called for the Trent shelter to be wound down by the end of next year, the city decided to change gears, Coddington said.

“We still hadn’t resolved how to pay for the totality of the 12-month contract,” he said. “We felt it was prudent to offer another option, this four-month option, to get past the winter months and give the new administration time to come on board and have flexibility for her to implement her vision on the homeless shelter system.”

The timing of the pause and the organizations involved have raised questions of other motivations, however.

“The subtext to this situation is the belief that the mayor doesn’t like Jewels Helping Hands, so there’s questions here if there were efforts in the administration to find problems so they couldn’t move forward,” Councilman Zack Zappone said in a Monday interview. “Is that true? I don’t know; I don’t have any proof of that.”

Coddington said this accusation was unequivocally false.

“Pure and simple, there’s only one reason: We had to have the dollars to meet our contractual obligations,” Coddington said.

Woodward has repeatedly clashed with the organization’s founder, Julie Garcia, accusing her of coordinating with her election opponent, Lisa Brown, to both create the encampment and keep it open. Garcia has often criticized the shelter, a former trucking warehouse that has struggled with unsanitary conditions and infectious outbreaks, including an ongoing outbreak of a diarrheal illness, according to a recent report from the Inlander.

In an October post to the social media platform X, formerly known as Twitter, Woodward wrote that it was “UNBELIEVABLE” that Garcia wanted to operate a shelter she previously called inhumane.

In a recent interview, Garcia said she sought the operator contract because she wanted to oversee closing the shelter, comparing it to the work she did to manage the closure of Camp Hope. She believes the city handled the proposal from Jewels Helping Hands unfairly, saying the administration appeared to have used procedural arguments as a means to an end. Garcia added that she would not seek to operate the shelter in the future and called for the city to reform its processes so that other requests for proposals couldn’t be similarly derailed.

Council President Betsy Wilkerson agreed that reforms are needed, and said it was disappointing that Jewels Helping Hands wouldn’t put forward proposals in the future. Only three providers offered to operate the homeless shelter during the recent request for proposals, and there are few local organizations willing or able to do it, Wilkerson said. Like Zappone, Wilkerson said she had no evidence the process was derailed by Woodward’s personal motivations, but added that she understood the concerns and believed the end result was unfair to Jewels Helping Hands regardless.

$15 million and growing

Salvation Army took over management of the Trent Avenue shelter in October 2022 amid concerns of financial mismanagement and poor accounting practices by the Guardian Foundation, which was the original operator when the shelter opened that September. While there were reports of possible embezzlement by a Guardians employee, it was the broader accounting concerns that prompted an emergency changeover of operators last year, Coddington said.

While a criminal investigation into the alleged embezzlement is ongoing, an audit of the broader concerns over the Guardians’ financial controls found only minor discrepancies, Coddington added.

The Guardians were initially expected to charge $6.6 million to operate the shelter from September 2022 through the end of this year. By Dec. 31, the Salvation Army will have charged nearly $9.9 million in the 14 months since taking over operations in November 2022, up from the $5.6 million originally agreed to, with the costs for 2023 having been bumped up by $3.5 million in late August and another $730,000 Thursday.

Not long after the Trent Resource and Assistance Center’s operator changed, so too did the services the facility provided, which city officials have pointed to account for the substantial increase in costs.

“The scope of the work at that location and the operations have significantly changed,” Jenn Cerecedes, then-director of Spokane’s Community, Housing and Human Services Department, said in August. “The biggest, most obvious change is the number of folks being served.”

Initially, the facility that provides nightly emergency shelter and some services to help transition people out of homelessness was expected to regularly serve up to 150 people, with some capacity to shelter more in limited circumstances. Less than two months after the Salvation Army took over, the former warehouse had 350 beds and was often at or near capacity as the weather cooled. That capacity and demand have remained relatively consistent in the year since.

On average, the Salvation Army has charged roughly $705,000 per month to operate the shelter. If the contract extension runs through the end of April, the organization will have been paid nearly $12.9 million to operate the facility for 18 months.

Revive Counseling Spokane, which provides support services, will have been paid an additional nearly $1.7 million. The city rents the former warehouse for $26,100 per month, plus a 2.5% lease management fee. That lease has a five-year term ending in 2027 and can by terminated early at the cost of eight month’s rent.