LA City Council votes to explore pulling its funding from beleaguered homelessness agency

The L.A. City Council voted unanimously Tuesday to explore withdrawing from the troubled agency tasked with serving the unhoused just one week after L.A. County supervisors voted to end hundreds of millions of dollars in annual funding.

County supervisors voted last week to pull nearly $350 million a year in funding from the L.A. Homeless Services Authority, known as LAHSA, following a series of scathing reports on accountability and transparency.

The City Council had previously voted to explore defunding the agency, but that has taken on new urgency in the wake of the county's decision. Council members who previously supported the city and county staying with LAHSA now say they need to also withdraw or be taken advantage of.

The city currently provides more than $300 million to LAHSA each year, which the agency uses to provide homeless services across the county. LAHSA is overseen by a commission appointed by city and county elected officials.

“As far as I am concerned, LAHSA is effectively ended,” L.A. City Council President Marqueece Harris-Dawson said before the vote Tuesday.

The city’s chief legislative analyst and city administrative officer will now report to the council within 30 days on options for separating from LAHSA.

“LAHSA has continued to show themselves to be a very big part of the problem,” said Councilmember Monica Rodriguez, who added that cities such as Glendale and Long Beach have done a better job at managing homelessness with their own agencies than LAHSA has in greater Los Angeles.

The vote came hours after the Department of Justice announced it was forming a federal task force to investigate potential fraud, waste and corruption in Los Angeles County when it comes to spending federal funding on homelessness. On Friday, the agency's top leader, Va Lecia Adams Kellum, announced her resignation.

Following the county out the door?

After voting last week to pull nearly $350 million a year in funding from LAHSA, the county will now create its own department to manage homeless services, which Supervisor Lindsey Horvath said was needed to fix a broken system.

This put the city of L.A. in a tight spot because a Joint Powers Agreement still gives the county equal power in running LAHSA, even though the county will no longer provide funding.

Harris-Dawson said Tuesday that he didn’t see how L.A. could agree to that imbalance.

County funding was previously projected to make up 40% of LAHSA’s total budget for this fiscal year, and 70% of the administrative costs for the agency. If the city continues to fund LAHSA, some council members said, they were unclear how the city would ensure unhoused residents don’t see interrupted services.

“County and city dollars are mingled for providing certain kinds of services, and we don't know what will happen when one piece of that funding is pulled out,” Nithya Raman, councilmember for District 4 and chair of the city’s homelessness committee, said last month.

Councilmember Bob Blumenfield also expressed fear that along with pulling money from LAHSA, the county will take some of the agency’s most experienced employees.

“[The county] is going to gut LAHSA and take the folks that are good at contracting, et cetera, and move them into the county bureaucracy,” Blumenfield said at today's meeting.

How we got here

The county’s rapid withdrawal from LAHSA that led to the city’s vote today came after a series of scathing audits of the agency in recent months that criticized management and tracking of funds.

Federal Judge David O. Carter also rebuked the agency and city officials in a hearing last week for their mismanagement of homeless services. Carter also suggested he may put a third-party in control of L.A.’s homelessness spending if the city doesn’t conduct an additional forensic audit.