The River Street Shelter will close down May 1.
(Kevin Painchaud/Lookout Santa Cruz)

COVID-spawned budget woes will force shutdown of River Street homeless shelter next month

The River Street facility, located on the campus of Housing Matters, is set to close May 1, with its occupants to be moved into permanent housing or to other shelters. Still, the move is raising concerns.

A 30-bed homeless shelter on River Street run by Encompass Community Services on behalf of Santa Cruz County will shut down by the end of the month, a county official confirmed to Lookout on Monday.

Residents of the shelter — which sits on the Coral Street campus of the Housing Matters homeless-services agency — will be moved into permanent housing or to other shelters by May 1, according to an internal memo obtained by Lookout.

“Because of turnover at all of the different shelters and also the decreasing use of our COVID shelters ... we will have sufficient capacity to place these individuals,” said Erik Riera, director of the county’s behavioral health agency.

Despite that assurance, Phil Kramer, executive director of Housing Matters, said any reduction in shelter beds is a “disappointment” and “certainly will affect” people that are in crisis and looking for safe places to sleep.

“Shelter, emergency shelter programs, in general, are woefully underfunded,” he said Monday, noting the shelter close comes at a time when the community “desperately” needs additional shelters, not fewer.

Recently, county shelters have been filled to near-capacity — and officials are bracing for the closure of a large encampment for the unsheltered at Highways 1 and 9 because of a widening project that’s set to begin there.

“In the big scheme of things, though, it’s important to look not just at this one particular shelter in isolation, but to look at the county’s overall strategy for increasing shelter,” Kramer said.

County supervisors last month approved a strategic framework to tackle the county’s homelessness crisis over the next three years. Among the plan’s goals: to reduce by 26% the number of households experiencing homelessness by 2024, and to greatly expand the county’s inventory of temporary housing beds, those in emergency shelters as well as in transitional housing.

As part of that initiative, the aim is to go from the 440 temporary shelter beds the county has now to 600. The closure of the River Street shelter, however, amounts to a decrease in temporary shelter beds for now.

“It’s important to look at the shelter environment and shelter capacity overall, and not just one particular program,” Kramer said. “Hopefully we’ll see, in the coming months and years, an increase in the overall shelter beds.”

Shelter history

The shelter is owned by the city of Santa Cruz, and was leased to Encompass until June 30, 2021. However, the county and Encompass notified the city of their intent to end the lease early.

County employees were notified of the shelter’s closure in an email late last week, after months of discussions between the county and Encompass, which has been operating the shelter for several years.

The shelter has most often been used on a short-term basis, so people experiencing homelessness can have a consistent place to sleep for about 30 days before taking a step toward more permanent housing, Riera said.

The River Street facility is the only homeless shelter run under the county’s behavioral health branch, according to Riera. The unusual arrangement began when the shelter’s other funding dried up and behavioral health offered to take over the shelter and keep it funded and running.

That has cost about $750,000 per year — money that the department now needs in the wake of COVID-19 in order to continue providing other, state-mandated services.

“Beginning last year when the pandemic hit, because our funding is tied so closely to tax receipts from the state and also from our county, we lost close to $3 million in funding. And that funding hasn’t been backfilled by any of the new CARES funds or recovery fund,” Riera said Monday. “So we’ve been really struggling.”

‘All of our funding’ at risk

In order to receive state funding each year, the behavioral health department must meet certain requirements, but providing shelter is not one of those. When Riera sat down in January to begin drafting a budget for the upcoming fiscal year, he realized some budget cuts would be necessary in order to ensure the department meets state standards, “or we risk all of our funding,” he said.

Keeping the River Street shelter open “would require specific funds to continue its operations that we don’t have in behavioral health,” Riera said, but another operator — such as the county’s recently formed housing department — could take over and foot the bill.

Third District Supervisor Ryan Coonerty said there has been discussion surrounding the shelter for a couple of years because of challenges with maintaining funding for it. But he didn’t know that an agreement had been reached until Monday.

His initial reaction was one of concern, he said. But “now I’m confident there’ll be another program there, it’s just a matter of figuring out which one, and I don’t think those beds are gonna go to waste.”

A joint statement by Riera and Monica Martinez, the CEO for Encompass, pointed to “new opportunities.”

Bigger problem looming post-COVID

To Coonerty the bigger issue the county will have to solve soon is what to do with hundreds of people in shelters that were expanded during the pandemic — but where federal funding is expected to wind down as the virus-induced crisis begins to ebb this summer and fall.

“I think we have 650 people in shelter for COVID, mostly in motels and others, and you know that funding is disappearing and so in terms of what we’re worried about that continues to be the major issue,” he said.

County supervisors last month allocated about $8 million to help with that transition from emergency shelters into more stable housing.