City Ends Contract With Operator of Austin's Downtown Homeless Shelter

Front Steps has run the Austin Resource Center for the Homeless since 2004

The Austin Resource Center for the Homeless in 2017 (Photo by John Anderson)

The city of Austin is cutting ties with Front Steps, the nonprofit that has run the Austin Resource Center for the Homeless since 2004 and has provided other homeless services since 1997, due to chronic underperformance by the organization.

Multiple sources have confirmed to the Chronicle that the city began meeting with other service providers this week to identify organizations that can take on the contracts currently held by Front Steps, which include operations at the ARCH and one of the city's two bridge shelters.

"Over the past several months, City staff have been in conversation with the board of directors of … Front Steps regarding organizational challenges faced by the nonprofit, and enlisted a third-party consultant to help guide the development of an action plan," a city spokesperson said in a statement. "After much discussion, the Board has identified a need for an intensive strategy and reimagining of the organization to better prepare its staff and leaders to provide Homeless services in the wake of the pandemic." All Front Steps contracts will be discontinued no later than September 30, according to the statement.

Lagging Performance

The news has landed like a bombshell among the network of homeless service providers in Austin, though the city's decision is unsurprising. The Chronicle has learned that the move to cut ties has been in the works for months, and besides that, Front Steps has fallen under considerable scrutiny for mismanagement of the ARCH and poor utilization of other city funds.

The scorecards the city uses to track how effectively service providers are administering homelessness funds show just how far Front Steps lags behind its peers in performance. One of the scorecards, obtained by the Chronicle, tracks progress organizations are making toward annual goals around the use of Best Single Source Plus, a pool of city funds split among a dozen service providers.

The scorecard measures how much "direct client assistance" each provider has administered on a monthly basis. Caritas of Austin had hit 97% of its goal for fiscal year 2022 by July, which is 10 months into the fiscal year. Family Eldercare had hit 94% of its annual goal, spending nearly $201,000 on clients in 10 months. Meals on Wheels Central Texas had spent more than $163,000, which is 125% of its goal.

By the same date, Front Steps had only spent $3,800 – 10% of its annual goal. Another scorecard, which tracks the use of Emergency Solutions Grant dollars distributed by the U.S. Dept. of Housing and Urban Development, shows that Front Steps had only served 13 clients with the funds as of July, which is just 29% of its goal. By comparison, the same scorecard shows LifeWorks, which helps unhoused young people, and SAFE Alliance, which helps survivors of family violence and sexual assault, have hit 217% and 148% of their goals, respectively.

Front Steps has been one of the most important players in Austin homeless response for decades. According to the city's open finance web portal, the city has paid Front Steps $43,213,053 since 2008. According to data the Chronicle obtained through a public information request, the city has paid Front Steps more than $6 million through various contracts in FY 22. That includes more than $3 million that went toward operating the ARCH and providing rapid rehousing services to clients staying there, and $2.5 million in contracts to operate the Southbridge shelter – an experimental shelter in which those staying there have their own rooms and are able to more safely and comfortably work with case managers to resolve their homelessness.

The future of Front Steps as an organization, and the facilities it runs, remains unclear. How much the nonprofit relies on city funding is also unclear, though sources within Austin's homelessness response system believe that the majority of its funding comes from the city. A fact sheet released by Front Steps in 2017 says that the organization's annual operating budget was $4.7 million and that they receive funding from "individual donors, corporations, foundations, and faith-based organizations, as well as city and federal funding."

Other federal funding Front Steps receives could also be in jeopardy. They receive a $1 million Supportive Services for Veteran Families grant from the U.S. Dept. of Veteran Affairs. That grant does not fund shelter operations at the ARCH, but a VA spokesperson told us in a statement that the Chronicle's reporting will "help inform its oversight and evaluation of Front Steps. SSVF oversight activities are designed to ensure that grantees provide services in a manner consistent with SSVF's mission and federal regulations."

Replacing the ARCH Support

In a statement, Ending Community Homelessness Coalition spokesperson Chris Davis agreed that the ARCH was a "vital community resource for shelter, healthcare, housing navigation, and much more," and that they were also committed to ensuring continuity of those services for the clients that depend on them. ECHO also said they would work to support Front Steps staff impacted by the decision. Regarding the federal funding that ECHO allocates, Davis said the group would continue to work with its leadership council to assess Front Steps' performance.

"ECHO … will continue to conduct regular performance analyses for this and all [our] contracts to ensure they meet our community's standards," Davis said. "We're committed to working with the Leadership Council, Front Steps, and other community partners to re-examine this and other non-City contracts to determine an appropriate path forward."

Over the years, the ARCH has earned a poor reputation among people living on the street as being an unsafe, unclean, and uncomfortable place to stay. Many have preferred to camp out in wooded areas or under overpasses than to stay even one night at the ARCH. People who work at other homeless service agencies generally attribute the problems at Front Steps to poor leadership and less so to the front-line workers who staff the ARCH and work as case managers trying to connect unhoused people to services.

Ten months into the current fiscal year, Front Steps has hit just 10% of its goal for “direct client assistance,” having spent less than $4,000 of the funds it manages on behalf of its unhoused clients.

Greg McCormack, who currently works for the city's Homeless Strategy Office within Austin Public Health, served as Front Steps' executive director from 2018 to 2020 and as a staffer there for several years before that. While not everyone was a fan of McCormack's tenure as ED, there's broad agreement that Front Steps has been in free fall since he departed. Terra Harris, who took over from McCormack, appears to have only lasted about a year; currently, she is not listed on the Front Steps website, which does not mention an executive director.

Despite its struggles, the ARCH does provide overnight shelter beds, of which Austin has too few, along with bathrooms and showers and access to food and health care. Although homelessness service providers no longer favor the kind of dorm-style shelter that the ARCH was when it opened decades ago, it has still provided 100 people (out of the 3,000 or so living without shelter in Austin on a given night) with a relatively safe and comfortable place to be and to get help.

What Comes Next?

Austin needs a service provision center and overnight shelter Downtown, where most of the city's unhoused residents live. But who will want to take on the hard work of running a Downtown shelter? Should the building that houses the ARCH even remain an overnight shelter, or should it become something else that provides services and resources to people living on the street? City staff are planning to hold an emergency meeting with various homeless service providers next week to begin to figure all this out.

Whatever is decided, the city will have to lean on other providers who have demonstrated success to pick up the slack left by Front Steps. Organizations such as Family Eldercare, The Other Ones Foundation, Caritas, or the Salvation Army may be turned to for support. TOOF Executive Director Chris Baker, who has transformed Gov. Greg Abbott's dismal attempt at a state-sanctioned encampment into the thriving community known as Camp Esperanza, told us that the kind of service Front Steps provides at the ARCH is vital and should continue.

"My humanitarian brain say those projects need to continue and the org that takes them over needs to have a good mission, good values and I think TOOF does have all that in spades," Baker told us. "But the organization that takes it over is going to need the financial and administrative bandwidth to do that. We are not there yet, but if we could, we would be interested" in using the ARCH building in some capacity. But as of now, those discussions have just begun.

Council Member Kathie Tovo, who represents District 9 where the ARCH is located, said she had serious concerns about Front Steps' performance, but acknowledged that "they've run one of Austin's emergency shelters at a time when no one else was stepping up to do it." She recalled the organization's willingness in 2019 to respond to directives from Council to change the way they operated the shelter and that the recent leadership struggles the organization has experienced are not reflective of the commitment to serving people shown by front-line staff.

She agreed that this kind of service must continue at the ARCH, whichever agency is selected to run it. "We continue to need emergency shelter," Tovo told us. "I'm going to be in close touch with APH to make sure we are getting the interest we need from other potential providers to operate the ARCH, because we need continuity of services and we need it in that location."

"The City has been looking for other providers who can take on the Front Steps work," Council Member Ann Kitchen told us July 14. "The city has recognized that there are serious concerns related to Front Steps being able to perform up to our standards, and the city has been proactive in recognizing the issue and is taking steps to deal with it."

Haggai Eshed, the president of the Front Steps board, said in a statement that the city's decision "was difficult for all of us," but emphasized that the people who currently depend on the services Front Steps provides will continue to have access to them until Sept. 30. "In the height of the pandemic, our organization experienced multiple organizational challenges, including major staffing changes and vacancies," Eshed said in the statement. "As a former Front Steps staff member, and now as board president, it is my responsibility that, in the face of uncertainty, the continuation of client services during this transition is our top priority."

Eshed went on to say that, for 25 years, Front Steps "helped clients navigate wait lists, overcome personal setbacks, cope with negative public opinion and manage the daily stresses of being on the streets or in shelter settings." The statement acknowledges that the city's decisions "impacts Front Steps' hardworking, dedicated frontline staff," though, reportedly, staff did not learn of the decision – which could affect their future employment – until the afternoon of Friday, July 15.

Full Front Steps Statement

As of September 30, Austin Public Health will terminate all contracts with Front Steps.

This termination is difficult news for all of us. It is especially concerning because there has never been a time when the coordination and success of homeless service providers in our community matter more than now.

Most importantly, our clients will continue to have access to our services and programs. Programs for all clients will continue as usual.

"In the height of the pandemic, our organization experienced multiple organizational challenges, including major staffing changes and vacancies. The magnitude of these issues now is where we need to pivot our operations," Haggai Eshed, President of the Front Steps Board of Directors, said. "As a former Front Steps staff member, and now as Board President, it is my responsibility that, in the face of uncertainty, the continuation of client services during this transition is our top priority."

For 25 years, Front Steps has helped clients navigate wait lists, overcome personal setbacks, cope with negative public opinion and manage the daily stresses of being on the streets or in shelter settings. With our around-the-clock presence, many people experiencing homelessness in Austin would be without life-saving shelter and resources. We recognize this also impacts Front Steps' hardworking, dedicated frontline staff.

While the city begins to work with homeless service providers to absorb current contracts that include the operation of the Southbridge Shelter, our Permanent Supportive Housing programs, and the ARCH function, there are more than 250 clients are enrolled in these three programs. We are committed to continuing their services through the end of our fiscal year, September 30, 2022.

When this transition is complete, our nonprofit partners in this work – already operating at maximum capacity – will be responsible for the care of our clients. Your support for their work is crucial as the need is great and resources are thin as nonprofits are significantly impacted by the increased social and economic instability we all face.

Over the next 90 days, we are committed to working alongside Austin Public Health to maintain stability. We will work to ensure that this transition protects our clients and maintains the integrity of our organization.

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