Recent Trailer Bill Reveals Details Regarding the Proposed $500 Million for the Encampment Resolution Funding Program

Trailer Bill highlights regarding the Encampment Resolution Funding Program include:

  • Round 2 funds ($500 Million) shall be immediately available to fund eligible applicants from Round 1, as determined by the Council, that were not initially funded. 
  • A program recipient shall not use funding from the program allocated under this section to supplant existing local funds for homelessness services under penalty of disallowance or reduction, or both, of future program funds, as determined by the Council. 
  • The Council shall make an application for Round 2 of the program no later than September 1, 2022, and will accept applications and award funds on a rolling basis until June 30, 2023, or until a total of four hundred million ($400,000,000) of the funds 
  • No less than one hundred million dollars ($100,000,000), shall be allocated to eligible recipients of the program for bonus sustainability funds. 
  • These funds shall only be available to recipients who meet their program goals and shall be used to increase permanent housing placements and sustain the housing stability and supportive services provided to individuals that have been relocated from encampments. 
  • The Council shall begin accepting applications for these sustainability funds no earlier than July 1, 2023, and will continue to accept applications and make awards to eligible applicants until all funds have been allocated.

The Trailer Bill consists of amendments to sections in Chapter 7. Encampment Resolution Funding Program under Division 31. Housing and Home Finance [50000 – 54913] of the California Health and Safety Code.

Chapter 7. Encampment Resolution Funding Program (ERFP) consists of five sections, which are Sections 50250 – 50254.

Two of the five sections reveal details regarding the proposed $500 million for the Encampment Resolution Funding Program—Section 50252.1 and Section 50253.

Section 50250 in Chapter 7. ERFP and in the Trailer Bill are identical.

Section 50251 in Chapter 7. ERFP and in the Trailer Bill are nearly identical. The Trailer Bill added that the California Interagency Council on Homelessness “may designate a state agency or department to support the administration of the encampment resolution program.”

Section 50252 Chapter 7. ERFP and in the Trailer Bill are identical.

Section 50252.1 is new because ERFP Round 2 is new. Only ERFP Round 1 existed when Chapter 7. ERFP was approved under Division 31. Housing and Home Finance. The new section states:

(a) Upon appropriation by the Legislature, five hundred million dollars ($500,000,000) of the funds administered pursuant to this chapter shall be made available for implementing Round 2 of the program, as follows:

(b) Round 2 funds shall be immediately available to fund eligible applicants from Round 1, as determined by the Council, that were not initially funded.

(1) The Council will work with eligible applicants on any programmatic improvements to the application as needed, as determined by the council, prior to allocating these funds.

(2) Any funds not allocated pursuant to subdivision (b) will be allocated as described in subdivisions (c) and (d).

(3) A program recipient shall not use funding from the program allocated under this section to supplant existing local funds for homelessness services under penalty of disallowance or reduction, or both, of future program funds, as determined by the Council.

(C)After funds are allocated pursuant to subdivision (b) above, the Council shall make the remaining funds available to eligible applicants on a rolling basis, as described below.

(1) The Council shall make an application for Round 2 of the program no later than September 1, 2022, and will accept applications and award funds on a rolling basis until June 30, 2023, or until a total of four hundred million ($400,000,000) of the funds appropriated pursuant to subdivision (a) have been allocated, whichever occurs first.

(A) Any funds not allocated pursuant to this subdivision shall roll into the sustainability funds, as described in subdivision (d).

(2) Applicants may submit an application for a program grant to the Council in a form and manner specified by the Council. The application shall include, at a minimum, all of the following:

(A) Information on the number and demographics of the individuals living in the encampment that the applicant is requesting funding to help resolve.

(B) A description of why this specific encampment is being prioritized for resolution support.

(C) A description of how the applicant intends to collaborate with state and local partners to:

(i) Mitigate risk and address safety concerns of individuals living in encampments,

(ii) Provide a pathway for individuals living in encampments to move into safe and stable housing, and

(iii) Support connections to supportive services, including mental, behavioral, and physical health care services.

(D) A description of how the applicant intends to use these funds to connect all individuals living in the encampment to services and housing.

(E) A description of other local resources and funding streams that will be used to ensure the ongoing availability of services and housing support for people who are moved out of encampments into permanent housing.

(F) Numeric goals regarding how many individuals living in encampments this program will support transitioning into temporary shelter and permanent housing.

(G) A description of how the applicant would spend additional sustainability funds, as described in subsection (d) below, to provide:

(i) Individuals that have been transitioned into temporary shelter options are connected to programs and resources to connect them to permanent housing,

(ii) Individuals that have been transitioned into permanent housing options are supported to maintain their housing stability, and

(iii) Individuals the connection to sustainable supportive services, including mental, behavioral, and physical healthcare services for the individuals that have been served by this program.

(d) All of the remaining funds available pursuant to this section that are not allocated pursuant to subdivisions (b) and (c), no less than one hundred million dollars ($100,000,000), shall be allocated to eligible recipients of the program for bonus sustainability funds. These funds shall only be available to recipients who meet their program goals and shall be used to increase permanent housing placements and sustain the housing stability and supportive services provided to individuals that have been relocated from encampments.

(1) The Council shall begin accepting applications for these sustainability funds no earlier than July 1, 2023, and will continue to accept applications and make awards to eligible applicants until all funds have been allocated.

(2) Recipients may submit an application for sustainability funds to the Council in a form and manner specified by the Council. The application shall include, at a minimum:

(A) Data on the number and demographics of the individuals that have been transitioned from living in the encampment into temporary shelter and permanent housing with these program funds.

(B) A description of how these sustainability funds will be used to increase permanent housing placements and sustain the housing stability and supportive services provided to individuals that have been relocated from encampments with these program funds.

(C) Verification that the recipient has met fiscal requirements and programmatic goals, as determined by the Council.

(e)The Council retains the right to conduct program monitoring on grantee performance and if grantees are not meeting their goals, the Council may require the grantee accept technical assistance and may limit the allowable uses of these program funds, as determined by the Council.

(f) Of the moneys available pursuant to subdivision (a), the Council may expend up to five (5) percent for administration of the program, including capacity building and technical assistance activities in support of program goals.

Section 50253 in Chapter 7. ERFP and the Trailer Bill include nearly the same information about ERFP Round 1. This section in the Trailer Bill includes additional information about ERFP Round 2, which includes

(c)Recipients of Round 1 funds, as described in Section 50252, and recipients of Round 2 funds described in subdivision (b) of Section 50252.1, shall expend all program funds no later than June 30, 2024. Any funds not expended by this date shall be returned to the Council to be reallocated as sustainability funds for current recipients, as described in Section 50252.1(d).

(d) Recipients of Round 2 funds, to be allocated on a rolling basis as described in subdivision © of Section 50252.1, shall expend at least 50 percent of their allocation by June 30, 2024.

(1) Recipients who fail to expend their allocated funds in compliance with this subdivision shall return to the Council no less than twenty-five (25) percent of their total allocation amount to be reallocated as sustainability funds for current recipients, as described in Section 50252.1(d).

(e) Recipients of Round 2 funds, as described in subdivision © of Section 50252.1, shall expend all program funds no later than June 30, 2025. Any funds not expended by this date shall be returned to the General Fund.

(f) Recipients of Round 2 sustainability funds, as described in subdivision (d) of Section 50252.1, shall expend at least fifty (50) percent of their allocation by June 30, 2025.

(g) Recipients of Round 2 sustainability funds, as described in subsection (d) of Section 50252.1, shall expend all sustainability program funds no later than June 30, 2027. Any funds not expended by this date shall be returned to the General Fund.  

Section 50254 in Chapter 7. ERFP and the Trailer Bill include identical information until the very end of the section. The Trailer Bill adds the following information about contract exemptions:

(h) For purposes of implementing this chapter, contracts entered into or amended shall be exempt from all of the following:

(1) Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code.

(2) The personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code.

(3) Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and the State Contracting Manual.

(4) Notwithstanding Section 11546 of the Government Code, from review or approval of any division of the Department of Technology, upon approval from the Department of Finance.

(5) From the review or approval of any division of the Department of General Services

Final Approval is Next

The fact that the Governor’s FY 2022-23 proposed budget, Legislative Analyst’s Office Budget Overview, and new 2022 proposed legislation are in sync bodes legislatively well regarding the funding for, and initial implementation of, the Encampment Resolution Funding Program (ERFP) Round 2 before the end of this year.

Governor’s FY 2022-23 proposed budget: Housing and Homelessness

The Budget prioritizes funding to reduce the number of people who live in public spaces not intended for human habitation in communities throughout the state, including under or along freeway overpasses and vacant lots.

As noted on page 147, Building on the $50 million of Encampment Resolution Grants to local jurisdictions that will be awarded in Spring 2022, the Budget includes an additional $500 million one-time General Fund to deploy a substantially expanded program for jurisdictions to invest in short- and long-term rehousing strategies for people experiencing homelessness in encampments around the state.

Legislative Analyst’s Office: Overview of the Governor’s (2022-23) Budget

Page 21 states that the Governor proposes $500 million for the Encampment Resolution Grants Program in 2022-23 administered by the California Interagency Council on Homelessness to provide targeted grants to local governments to rehouse individuals living in encampments.

Page 22 states that the Governor’s budget reflects his commitment to addressing homelessness and housing affordability by once again proposing significant state resources toward these issues, the Governor’s response continues to focus on one-time, rather than on-going, funding.

AB 1624 Budget Act of 2022

AB 1624 was introduced on January 10,2022 and includes $500 million to provide grants to address encampments for persons experiencing homelessness, in accordance with applicable laws and to fund the support and administration of resolving critical encampments and transition individuals into permanent housing.

SB 840 Budget Act of 2022

SB 840 was also introduced on January 10,2022 and also includes $500 million to provide grants to address encampments for persons experiencing homelessness, in accordance with applicable laws and to fund the support and administration of resolving critical encampments and transition individuals into permanent housing.

This Trailer Bill will be enacted by simple majority legislative votes during the coming months and will take effect immediately upon the Governor’s signature unlike other policy bills which usually take effect January 1 of the following year. Thus, funding for, and initial implementation of, the Encampment Resolution Funding Program (ERFP) Round 2 before the end of this year bodes well.

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