When Austin Public Health made the decision last month to award contracts for operation of the Austin Resource Center for the Homeless and the Southbridge shelter to Urban Alchemy and the Austin Area Urban League, respectively, following its abrupt decision to take those contracts away from Front Steps, part of the justification was expediency. The health department said signing the contracts by Aug. 15 was critical, because UA (a San Francisco-based nonprofit with little presence in Austin) and AAUL (which has never run a shelter) would need time to work with the city, Front Steps, and other service providers on a transition plan for handing over operations of the ARCH and Southbridge. But two weeks beyond that date, negotiations between APH and the two nonprofits continue.
“The contracts are in the final stages but have not yet been signed,” an APH spokesperson told the Chronicle in a statement. The spokesperson noted that, on average, contract negotiations with vendors take about 45-65 days after Council authorization, and that APH “has been working diligently to accelerate the process to have the new vendors in place as soon as possible.” Council authorized staff to negotiate the two contracts on July 28 and as we went to press Wednesday, Aug. 31, the contracts had not yet been signed.
Sources close to the negotiations say that the primary concern is an unsurprising one: money. Council authorized spending about $4 million for each contract, if needed, but the goal has been to spend less than that – something closer to the $2.4 million Front Steps received to operate the ARCH and the $1.3 million annual contract it negotiated to operate Southbridge, one of two city-owned transitional bridge shelters.
But UA and AAUL have recognized that that’s not enough money to run those shelters successfully, which contributed to the shortfalls of Front Steps. Primarily, that money is needed for wages – UA, in particular, wants to offer a base wage higher than the $15 per hour offered to ARCH shelter staff by Front Steps. Turnover at all levels of Front Steps was a huge problem, but particularly at the shelter, where the work is hardest and pay lowest. UA hopes that they could better retain staff, in part, by offering higher pay.
It’s reasonable for UA and AAUL to negotiate for a better contract with APH, but it may be a bit of a frustration for the eight other homelessness service providers who were invited to consider applying for either contract. Some of the eight were interested in principle – but not for the amount the city had been paying Front Steps. At the time, some providers complained that the information APH provided about the new contracts was unclear – specifically, how much funding would be available. When Council’s July 28 agenda posted, revealing that staff could negotiate contracts with UA and AAUL up to $4 million, some operators who had considered applying were surprised; had they known that much money was on the table, they might have applied.
Meanwhile, the process to hand over another city-funded Front Steps contract is going relatively smoothly. At their Sept. 1 meeting, Council is set to award a $1.04 million permanent supportive housing contract held by Front Steps to Family Eldercare. The PSH contract is managed, in part, by the Downtown Austin Community Court’s Intensive Case Management Team; the DACC case managers will continue to serve their clients following a frantic notification process aimed at ensuring those working toward housing that their service would not be interrupted.
Representatives for AAUL and UA declined to talk with the Chronicle about either contract until after they have been signed.
This article appears in September 2 • 2022.