When an independent audit last month found that the King County Regional Homelessness Authority (KCRHA) was running a $45 million deficit, including $13 million in funds unaccounted for or overspent, the public outrage was palpable.
The forensic evaluation was damning, describing KCRHA’s internal accounting processes as “weak” and lacking many basic cost controls. Local officials from across the political spectrum rushed to condemn the agency’s poor financial management and governance.
But as the shock subsides, local politicians face the sober task of figuring out how to fix the bureaucracy of service provision without doing more harm to the Seattle region’s tens of thousands of homeless and housing-insecure residents.
The city of Seattle and King County—the two main funders of KCRHA—have put forward a timetable to evaluate possible next steps for the agency. However, policymakers are divided on what to do next: dissolution, or reform. At stake are tens of millions of dollars in federal, state, and local grants that pay for essential services to some of the most vulnerable people in the region.
Avoiding a “knee-jerk reaction”
Soon after the KCRHA audit came out, Seattle City Councilmember Maritza Rivera and King County Councilmember Rod Dembowski held a press conference announcing their intention to dissolve the agency. Rivera said the KCRHA has a “clear pattern of mismanagement of funds that cannot be tolerated.”
Much of local corporate media have echoed this reactionary rhetoric, saying the shutdown is inevitable (it’s not, and neither the county nor the city have the votes to make it happen).
But the prospect of an immediate dismantling was followed by a more cautious approach. On May 5, the King County Council passed a motion requesting King County Executive Girmay Zahilay give a thorough briefing on the agency’s challenges by June 15 and a report on a potential restructuring or dissolution of KCRHA by August 1.
In parallel, Seattle City Councilmembers Alexis Mercedes Rinck and Dionne Foster introduced their own resolution at the city level, which was heard by the council’s Human Services, Labor and Economic Development Committee today and set out the same reporting deadlines as the King County motion. Rinck said the resolution was drafted in coordination with Seattle Mayor Katie Wilson’s office; on the county level, Zahilay’s spokesperson stated he was also supportive of the August 1 timetable.
KCRHA did not respond to The Stranger’s request for comment.
In an interview with The Stranger, Rinck said she wanted the city to move more purposefully without causing any unintended negative consequences that could arise from dismantling KCRHA.
“What we saw in a media response to the news was what I would call a knee-jerk reaction that is quite brash and somewhat irresponsible, given the complexity and precarity of homelessness services,” Rinck said.
KCRHA coordinates the region’s grant application for the Housing and Urban Development’s Continuum of Care (CoC) program. This past year, the agency secured approximately $65 million which founded 4,500 units of permanent supportive housing, rapid rehousing, and transitional shelter. Next year’s funding round will open in June, and any indications that KCRHA will be unable to facilitate its obligations as a CoC member could endanger the funds.
Local service providers are already wary of the Trump administration’s past attempts to divert CoC grants away from projects that follow a housing-first model. Rinck said that if policymakers aren’t careful, the federal government could weaponize the KCRHA forensic audit to deny the region funding.
“Any immediate moves to dissolve [KCRHA] in the next couple of months could further jeopardize funding that houses 4,500 households,” Rinck said.
Apart from securing federal funding, KCRHA manages a number of key systems that homelessness service providers rely on, including the Coordinated Entry intake system, the Homeless Management Information System, and the biennial Point-in-Time Count which is in progress. These functions are all required by federal law and would need another entity to take them over if KCRHA was dissolved. The agency also runs an ombuds office, a watchdog department that is one of the only ways for homeless people to report mistreatment within the social services sector.
A constrained set of solutions
While the findings of the April forensic examination were shocking, they may not be entirely surprising. KCRHA was founded on the eve of the COVID-19 pandemic and has gone through multiple CEOs during its six-year history.
Rinck herself worked as a planning staffer at KCRHA; serious dysfunction drove her to quit without another job lined up. She said she was not involved in any of the agency’s financial matters and argued that, in retrospect, it “was not set up for success.”
If King County and Seattle were to dissolve KCRHA, they would have to figure out how to re-assign work between city and county departments as well as find a place for regional-wide functions that used to be carried out by the quasi-governmental organization All Home, a predecessor to the KCRHA.
Lisa Daugaard, the co-executive director of Purpose Dignity Action (PDA), poured cold water on the prospect such a change would save money.
“I am very confident that reassembling two separate bureaucracies at the city of Seattle and King County will be more costly,” Daugaard said. “Every time bureaucracies are broken down and reassembled, they cost more.”
KCRHA has had a mixed record, Daugaard says, with notable failures such as the Partnership for Zero scandal that resulted in a $6 million bailout from the state and brought down ex-CEO Marc Dones. But it also achieved the highest American Rescue Plan Act housing voucher utilization rate in the country. She also pointed to KCRHA’s right-of-way encampment resolution program, which PDA worked on, as another well-implemented program by the agency.
KCRHA faces the same sisyphean challenge as other municipalities across the country: managing a homelessness emergency without the adequate resources to resolve it. Changes to institutional structure may only be window dressing on the larger needs. Any future changes to the agency could be constrained by the substantial budget deficits both Seattle and King County are confronting.
But while some, such as Rivera and Demobowski, believe a different government formation is needed, Daugaard said she’s not convinced that KCRHA cannot be reformed into a well-functioning bureaucracy.
“I think that it [is] the responsibility for city and county officials to roll up their sleeves and determine what it would take to regain confidence in the administration of finances and to imbue this agency with strategic clarity—that is a challenge that they should accept,” Daugaard said.