As City Council Prepares to Vote on Budget, Allocation for One Top Priority Absent

Just days away from the City Council voting on the FY 2027 budget, one of the council’s top priorities is still absent from the Housing Department’s budget.

At a workshop in December, the council established five budget priorities that take precedence over general fund cuts: expanding transitional housing and building a year-round homeless shelter, upgrading Fire Department facilities and fire prevention, improving roadways with pedestrian and bike safety strategies, achieving a 100% carbon-free energy future, and supporting local economic development.

But six months later, the shelter is not part of the Housing Department’s budget. The City Council is scheduled to vote on the budget one week from Monday. The other four items are accounted for in departmental budgets.

Assistant City Manager Jennifer Paige told the committee that an interdepartmental team has begun evaluating what would be required to establish a shelter and is expected to return later this summer with information on potential locations, operating models, costs and populations to be served.

The omission drew sharp criticism Wednesday from members of the Housing, Homelessness and Planning Committee, who questioned why no dedicated funding has been identified for a year-round homeless shelter.

Frustration unfolded during a review of the city’s Annual Action Plan, which allocates federal Community Development Block Grant (CDBG), HOME and Emergency Solutions Grant funding.

“We want to prioritize one of the top five things in the whole city, funding for a year-round emergency shelter,” Councilmember Rick Cole said. “Six months have passed and we have not a dime allocated to it.”

Cole argued that the City continues to fund longstanding programs and capital projects while failing to identify resources for one of the council’s most visible policy goals.

“It’s morally indefensible that we say we fix potholes and we leave people out on the street,” Cole said. “We fix cracks in the sidewalk, but we leave people out on the street.”

Councilmember Justin Jones said the city should focus first on establishing a 24-hour shelter, transitional housing and supportive services before moving residents into permanent housing.

“I think right now we should be looking at our 24-7 shelter and then also going further and looking at transitional housing and the supportive services for the shelter and then eventually roll into permanent supportive housing,” Jones said.

Councilmember Jason Lyon echoed concerns that the city’s spending priorities have not kept pace with the council’s policy direction and said staff should begin aligning future recommendations with the council’s stated goals.

“I do want to say you’re on notice that we’ve set the priority and the priority is to create a year-round shelter is step one for the unhoused,” Lyon said.

Lyon also called for “a wholesale reexamination” of how federal housing dollars are allocated to determine whether the city is making the most effective use of limited resources.

The criticism comes as the Housing Department is proposing a $58.02 million Fiscal Year 2027 budget, an increase of approximately 18% over the current year. Much of the increase is tied to affordable housing development projects, including the Ramona Street Apartments, Centennial Place and Caltrans housing initiatives.

Mayor Victor Gordo agreed that a year-round shelter remains a critical goal and reiterated his support for exploring the Rose Palace property as a potential location.

“I agree that we need to move swiftly, but I think we need to be strategic and thoughtful about it,” Gordo said.