TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Brian Ambrose, Community Services Director
PREPARED BY: Crystal Arora, Management Analyst – Parks & Recreation
SUBJECT:
title
Budget Adjustment Request to Increase Homeless Services Budget for Contract Services
end
RECOMMENDATION
recommendation
Amend the Fiscal Year 2025/26 Operating Budget to establish an appropriation of $562,873.92 using General Fund Unassigned Fund Balance for the Homeless Services contracts.
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PRIOR ACTION/VOTE
On November 19, 2024, the City Council waived bidding requirements and approved an agreement between the City and Project T.O.U.C.H. for Emergency Shelter Services and allocated American Rescue Plan Act (ARPA) funds through Fiscal Year 2024/25 (Vote: 5-0).
On February 18, 2025, the City Council approved an agreement between the City and City Net for Homeless Street Outreach and Case Management Services (Vote: 5-0).
CITY COUNCIL GOAL
Coordinate and deliver responsive, effective community services.
DISCUSSION
Since 2017, the City has expanded the services it provides to address homelessness, including outreach and sheltering initiatives. Historically, services to address homelessness are County mandated and not a service that municipalities were expected to provide.
For the City of Murrieta, what began as a small team consisting of a single Community Services Department (CSD) staff member, their counterpart from a neighboring city, and a few Murrieta Police Department (PD) officers has grown into a dedicated Homeless Services team under CSD, a specialized Community Policing Team for street outreach, a Community Behavioral Health Assessment Team (CBAT), and a partnership with contracted teams (City Net and Project T.O.U.C.H.) providing services across four (4) Southwestern Riverside County cities. In the past, grants have provided a significant portion of the funding for these specialized services.
Back in 2019, CSD received its first donation from Kaiser Foundation Hospitals for $35,000. In 2021, the City was awarded over $992,000 through the Emergency Solutions grant (ESG) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for street outreach and emergency shelter services. Most of this original funding was dedicated to street outreach, with about 25% going towards emergency shelter. Additional ESG funding in 2022 totaling $153,035, new funding through the Homeless Incentive Program (HHIP) in 2023 totaling $225,716, and a budget reallocation of ARPA funds in 2024 totaling $313,045 have all gone to supporting emergency shelter services.
This funding has been essential in forming the professional relationships the team has built with partners at City Net and Project T.O.U.C.H. The growth in services achieved through this funding has allowed for partnerships between Riverside County Flood Control and Water Conservation District (District) and the cities of Wildomar and Menifee. The City performed clean-up efforts in the Murrieta Creek on a reimbursement basis from the District in Fiscal Year (FY) 2023/24 and FY 2024/25 and currently provides 1.5 days per week of street outreach services to the City of Wildomar through a Memorandum of Understanding (MOU).
Currently, CSD manages three (3) agreements with City Net, and one (1) agreement with Project T.O.U.C.H. The first City Net agreement is for Rapid Rehousing specific activities and is funded through the State of California Homeless Housing, Assistance and Prevention (HHAP) grants program. The second agreement is managed by City staff and supports multiple cities in Southwestern Riverside County for outreach throughout the Murrieta Creek. These activities are funded through the State of California Encampment Resolution Funding (ERF) grant. This grant supports the City’s full-time Administrative Assistant with Homeless Services and 50% of the Homeless Services Manager’s salary and benefits. The County has already provided an advance payment for ERF totaling $3,237,856. The final City Net agreement is for City of Murrieta specific street outreach and case management services. This agreement also services Wildomar for 1.5 days per week. These services to Wildomar cover approximately 30% of the total time allocated from City Net for services, which over a six-month period total approximately $90,921. Wildomar services are strictly for street outreach and case management and do not include sheltering. Staff have not discovered viable grant options for these services in the current FY.
The grant funding assists outreach efforts greatly, but it depletes quickly. In the past, CSD has received support from the General Fund to prevent a gap in services. In February 2025, staff relayed to the City Council that a potential funding source sought for these services would be through grants, but the need may arise for General Fund support. While ERF funding has alleviated approximately 20% of direct sheltering efforts from the City, additional funding is still required. In late May 2025, staff submitted three (3) additional applications for another extension of the ESG and HHAP funding from the County. The funding applied for totaled $885,830 for additional street outreach staff, four (4) additional shelter beds, and additional assistance for Rapid Rehousing. After review, the County contacted staff seeking concurrence to increase the service area in the City’s submittal while reducing funding. Due to a lack of agreement, the County will issue a new RFP for District 3 in the future. Although this award would support the existing services City Net provides for Rapid Rehousing, this is separate from the street outreach services, which still needs a funding source.
The City has ongoing agreements with City Net and Project T.O.U.C.H. which require staff to encumber the funds. Staff requests additional funding for July 1, 2025, through December 31, 2025, to maintain services while continuing to actively apply for grant opportunities. This funding is to guarantee support of services through the end of the calendar year but will require further discussion for future support of the five-year contracts the City holds with City Net and Project T.O.U.C.H. Fortunately, at year-end close, there was a remaining balance in ARPA funding designated to Project T.O.U.C.H. for FY 2024/25. This funding totaling $50,130 has been carried over into FY 2025/26 to assist with emergency sheltering expenditures.
FISCAL IMPACT
Staff requests immediate support from the General Fund totaling $303,072 for City Net and $259,801.92 for Project T.O.U.C.H. services from July 2025 through December 2025. This would increase the budget in account 1105100-60480 to $562,873.92.
Staff recommends an amendment to the FY 2025/26 Operating Budget using the General Fund's Unassigned Fund Balance for the $562,873.92. Although $562,873.92 is the amount required for the budget amendment to meet these obligations, there are three anticipated funding sources that will offset some of these expenses, reducing the combined anticipated General Fund commitment to $369,862.92 through December 2025.
Staff also recommends establishing a revenue budget for the anticipated reimbursement from the City of Wildomar in the amount of $90,921.
|
Funding Source |
City Net |
Project T.O.U.C.H |
|
Contract Value (six-months) |
$303,072 |
$259,801.92 |
|
Anticipated Off-Sets |
|
|
|
City of Wildomar Reimbursement |
($90,921) |
N/A |
|
Roll-Over of Remaining ARPA Funds |
N/A |
($50,130) |
|
Portion Potentially Chargeable to ERF (Approximately 20%) |
N/A |
($51,960) |
|
Total of Estimated Off-Sets |
($90,921) |
($102,090) |
|
Adjusted General Fund Obligation |
$212,151 |
$157,711.92 |
ATTACHMENTS
None.