The regional homelessness agency's $16.7 million hole: what Seattle's Council has done about it so far

The King County Regional Homelessness Authority (KCRHA), the agency Seattle and King County created to run homelessness services together, has a budget hole of $16.7 million, KUOW reported on Oct. 15. That figure is up from the $14 million gap reported in the spring and includes $2.4 million in interest charges from overdrawing the agency's account with the county.

The city and county will have to cover the gap, so Seattle taxpayers are on the hook for part of it. The news has also brought back calls to shut the agency down.

What the review found

According to KUOW, an outside firm hired by the city and county, Turning Point Strategic Advisors, found no fraud or theft. The agency built budgets around about $15.6 million in administrative revenue it never earned, because that revenue depended on grant spending by service providers that came in lower than expected. The review also found that about $8 million in spending earlier flagged as unreconciled was accounted for. Seattle's city budget director said, "we have not identified any evidence of fraud at the agency."

The city and county are negotiating a repayment plan. A King County budget official recommended spreading it over a few years, KUOW reported, but no deal has been finalized. A final accounting is expected in early 2027.

Where officials stand

Seattle Councilmember Maritza Rivera (District 4) has called for dissolving the agency since April. In an Oct. 15 Council statement, she said "it's time to entirely dissolve the agency." The statement says she and King County Councilmember Rod Dembowski introduced companion resolutions to dissolve it, which are on hold while the city and county explore next steps. Dembowski called the agency "broken beyond repair," KUOW reported.

Mayor Katie Wilson and King County Executive Girmay Zahilay called the shortfall "unacceptable" but propose to shrink and restructure the agency and keep some regional functions, according to KUOW.

What our records add: the Council's paper trail this year

Seattle's Council has tracked the agency mainly through its Human Services, Labor, and Economic Development Committee. City Clerk records show:

• March 6: a committee briefing on the agency and the regional Continuum of Care (Inf 2853).
• June 2: the full Council adopted Resolution 32202, 9-0. Sponsored by Dionne Foster (Position 9) and Alexis Mercedes Rinck (Position 8), it asked the mayor to safeguard public funds, assess whether the agency could fix the problems in its forensic audit, and recommend whether it should be dissolved, restructured, or left as is. It also asked for monthly reports to the Council. The committee had approved it 5-0 on May 15 (Legistar).
• June 5: a status update on the forensic evaluation (Inf 2904).
• Aug. 7: the plan to move city contracts out of the agency (Inf 2937).
• Sept. 18: an update on the agency's 90-day corrective action plan (Inf 2969), at the committee's Sept. 18 meeting.

Rivera's dissolution resolution does not appear as a filed item in the Council's legislative records as of today.

The Council's budget analysts lay out what happens next in their Human Services Department memo for the Oct. 15 budget meeting:

• 117 city-funded homelessness contracts worth $112 million move from the agency to the city's Human Services Department on Jan. 1, 2027.
• The agency would remain the lead for the federal Continuum of Care, including the homeless data system, coordinated entry and the annual point-in-time count.
• The agency laid off 10 staff in August and cut six vacant positions, with more layoffs planned this fall.
• The city added 23 emergency positions this year to take back the contracts.
• The Human Services Department does not expect to need money beyond what is in the proposed budget to cover the agency's administrative overruns.

What's next

Councilmembers will discuss proposed changes to the Human Services Department budget at the Select Budget Committee on Oct. 29. The public can testify at the Nov. 5 budget hearing, and the final budget vote is scheduled for Nov. 20, according to the committee schedule. The repayment plan and the final accounting are still to come.