The Baltimore City Council took city employees with the Mayor’s Office of Homeless Services to task Tuesday over $10 million in federal funds that the city forfeited and decadeslong problems with a program that is supposed to house the city’s homeless population.
The money, which is made available to the city by the U.S. Department of Housing and Urban Development, is meant to be used for the city’s Continuum of Care program, which among other things helps to fund housing for homeless residents. Baltimore contracts with about 40 vendors who in turn make payments to various landlords to ensure that people are housed.
But in fiscal year 2020, the Mayor’s Office of Homeless Services, or MOHS, was forced to relinquish $10 million in funding the organization could have tapped from HUD due to problems with accessing the funds. Baltimore lost access to the system for at least three months as employees of MOHS either left the office or were barred from access.
Pressed for answers Tuesday during an oversight hearing of the Baltimore City Council, MOHS leaders said the city’s distribution system for the funds has been critically challenged for years, causing delays in payments to vendors and subsequently landlords. As a result, residents have at times faced evictions.
“It’s extremely important that we deal with this,” said Councilwoman Odette Ramos, who represents the city’s 14th district and is a longtime housing advocate. “This issue with timely payments is critical and needs to be resolved.”
Irene Agustin, director of MOHS, told the council the problems with paying vendors are a historic issue in Baltimore because of the schedule for the contracts. Work on various projects for the Continuum of Care starts as early each year as Feb. 1, but HUD doesn’t announce awards until March. This year, the city wasn’t notified until March 28, she said.
HUD then doesn’t issue grant agreements until the summer, Agustin said. The city has struggled for years with delays in payments to contractors whose agreements start before July 1, she said.
“The biggest concern is the recurring issue,” Council President Nick Mosby said. “This is not a new issue. This happens every single year. Folks field the same calls, landlords feel the same pressures, tenants feel the same amount of stress.”
City resident Kimberly Brown is among those who have suffered as a result of the delays in payments. Brown, whose mother Sandra Jones read her statement Tuesday to the council, said she has faced eviction notices and rent court notices as a result of her rent going unpaid by Dayspring Baltimore, one of the city’s contractors.
Brown said her 15-year-old daughter has been traumatized by the fear of not knowing where she would live.
“I sincerely believe our children should not suffer for an accounting error of $10 million,” Brown said via her statement. She wiped tears from her eyes as her mother read the message to the council.
Dayspring Baltimore did not respond to a request for comment.
Several landlords who attended Tuesday’s hearing said they have gone months without payment. Some said they would no longer take on tenants from the city’s payment program for fear of not being paid.
Beth Benner, executive director of the Women’s Housing Coalition, said it’s not uncommon for landlords participating in the program to go four to five months with no payment. As delays wear on, communication from the city is infrequent, she said.
“We can find landlords, but the landlords don’t trust the process,” she said.
MOHS officials told the council they are up to date on payments to contractors through August. Ramos questioned whether that was actually the case, citing an email she received from the office last week saying the group expected to be up to date as of Wednesday.
“The information from my team is that we are on target,” said Roland Selby Jr., the office’s chief of staff.
The damage from the foregone $10 million from HUD, however, is likely a done deal. City officials missed the deadlines to withdraw the money. In June, Mayor Brandon Scott sent a letter to HUD secretary Marcia Fudge imploring her for an extension to withdraw money from the fiscal year 2020 grant. A representative from the administration said Tuesday no response has been received.
Agustin said the issue with the withdrawal was caused by staffing problems in the six-person office. At times, several people have been authorized to withdraw funds, a designation that requires the approval of HUD. But some employees have left and others have been barred from using the system. For three months, city employees went without anyone authorized to use it.
That year, Baltimore paid $5.8 million to contractors that it was unable recuperate from HUD. The remaining money of the $10 million grant was unspent and would have been returned to HUD regardless, Agustin said.
Councilman Eric Costello called the situation a “fiasco” and “wildly concerning.”
“It puts the city’s finances in jeopardy — the extent of these issues, the breadth of them across this function of city government,” he said. “And these issues have not been addressed.”
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Mosby said he was dismayed to learn of the situation from media and his constituents rather than the administration. The Baltimore Banner first reported Scott’s letter to Fudge and the unrealized $10 million grant.
“For the mayor of the city of Baltimore to write to the secretary of HUD about something like this and for council to find out about this in an open forum is concerning,” Mosby said.
Agustin said she would like to start contracts with vendors no earlier than July 1 to avoid future problems with delays in paying vendors. The city would need to cover the cost of housing during the gap from Feb. 1 until then, an expense of about $2.1 million, she said.
Councilman Zeke Cohen questioned whether there was the possibility of sanctions for contractors who receive timely payment from the city but delay paying landlords.
Agustin said the city needs to better work with providers to help correct the issue rather than washing its hands. That would leave the residents who need housing in a bind, she said.
“To end all the contracts we’ve had problems with would be chaos on our hands,” she said.
“I appreciate your point about the real people and losing services, but it does not feel like we are funding the best of the best or that services are being delivered effectively based on what we’re allocating,” Cohen said.
