HSH presents FY24-26 budget plan and a targeted $27 million general-fund reduction to meet mayoral target

Gigi Whitley, HSH chief of finance and administration, presented the department's proposed FY24-25 and FY25-26 submission and explained that the Mayor's Office asked departments to propose a 10% ongoing general-fund reduction. For HSH that instruction equates to roughly $27 million in ongoing reductions, with an additional 5% contingency reduction option if further cuts are required.

Whitley summarized revenue pressures across multiple funding sources including the homelessness gross receipts tax (Our City Our Home / Prop C), one-time state grants (HAP), Encampment Resolution Fund grants, and CalAIM-related Medi-Cal incentives. She said the November controller forecast showed large differences from budgeted targets and that HSH's share of projected shortfalls is on the order of tens of millions over the three-year window.

To meet the mayoral target while minimizing programmatic disruptions, Whitley described a set of strategies: converting non-congregate shelter master-leases to a more typical HSH master-lease model to reduce costs (estimated ongoing savings ~ $10M), leveraging HAP5 and other state grant opportunities, tapping one-time general-fund savings where possible and realigning some contracts to other funding sources. HSH also built a 3% cost-of-doing-business adjustment for community-based providers and is proposing targeted capital investments focused on legacy PSH buildings and elevator repairs.

Commissioners and members of the public urged the department not to cut frontline services, to release Prop C funds set aside for service categories (families, youth), and to provide more transparent breakdowns of allocated vs. spent balances. Whitley said six-month actuals and updated controller projections will be presented to the Our City Our Home oversight committee later in February, and that the department will continue to refine its balancing plan ahead of the mayor's transmittal.

The commission scheduled a special meeting for Friday at 2:00 p.m. to continue the budget conversation and to consider contract approvals; commissioners asked staff to return with more granular OCO/Prop C accounting and with scenarios showing how the department would allocate funds if the mayor does not require the full reduction.