Drafter
Clerk 04/30/2026
Title
A MOTION relating to the King County Regional Homelessness Authority, requesting the executive to provide a briefing and report on the authority's corrective actions, administrative funding needs, and decision framework regarding the county's continued participation in the Amended and Restated Interlocal Agreement and potential impacts.
Body
WHEREAS, on December 17, 2019, King County enacted Ordinance 19039, authorizing the executive to execute an interlocal agreement with the city of Seattle to establish the King County Regional Homelessness Authority ("the authority"), and
WHEREAS, the Interlocal Agreement was first effective December 18, 2019, and
WHEREAS, King County and the city of Seattle amended the 2019 agreement and approved an Amended and Restated Interlocal Agreement in 2024, and
WHEREAS, Article III, Section 1, of the Amended and Restated Interlocal Agreement provides that the initial duration of the agreement was for five years, through December 18, 2024, with the agreement continuing in effect indefinitely after that until terminated by either party, and
WHEREAS, the Five-Year Plan for the authority was adopted on June 1, 2023, and
WHEREAS, the Strategic Five-Year Plan Addendum for the authority, adopted on February 20, 2026, included a commitment to annually monitor spending from all sources and align financial expenditures with performance metrics established in the King County Homeless Housing Plan, and
WHEREAS, the authority's utilization of the King County investment pool has resulted in negative cash balances since inception of the authority, and
WHEREAS, audits and monitoring reports have identified concerns related to internal controls, invoicing, financial reporting, and fund balance sufficiency, and
WHEREAS, a forensic evaluation dated April 17, 2026, identified significant financial management and internal control deficiencies, and recommended numerous corrective actions to provide appropriate stewardship over public moneys, and
WHEREAS, the King County executive and the city of Seattle mayor have directed the authority to provide a written response addressing the high-risk findings from the forensic evaluation by May 8, 2026, and a corrective action plan by May 23, 2026, and
WHEREAS, the governing board of the authority passed a resolution on April 24, 2026, establishing a finance committee to strengthen financial oversight, management and internal controls, including enhanced oversight of financial reporting, audit implementation, and certain operational decisions, and
WHEREAS, the city of Seattle requested that its human services department assess the authority's administrative shortfall and propose solutions in a 2026 mid-year supplemental budget by May 31, 2026, and
WHEREAS, King County has a similar interest in assessing the authority's administrative funding but has not yet undertaken a parallel assessment, and
WHEREAS, the authority serves as the region's designated Continuum of Care collaborative applicant and is responsible for administering and coordinating tens of millions of dollars in federal funding from the United States Department of Housing and Urban Development each year, and
WHEREAS, the Continuum of Care program requires defined governance, administrative capacity, and system coordination to maintain eligibility for federal funding, and
WHEREAS, any disruption to governance, administrative capacity, or system coordination without a clearly defined transition plan could potentially jeopardize the region's ability to retain existing federal and state funding, compete for future awards, and ensure continuity of services for individuals experiencing homelessness, and
WHEREAS, ensuring the protection of federal and state funding and continuity of critical homelessness response systems is essential to maintaining services for vulnerable populations and safeguarding public investments, and
WHEREAS, Article III, Section 1, of the Amended and Restated Interlocal Agreement provides that the agreement may be terminated by a resolution of the city of Seattle council or a motion of the county council, and
WHEREAS, Proposed Motion 2026-0107 was introduced before the county council on April 28, 2026, and the motion, if passed, would provide notice of the termination of the county's participation in the Amended and Restated Interlocal Agreement and trigger a 12-month period of dissolution for the authority unless the mayor and executive jointly agree that termination can and should occur sooner, and WHEREAS, the chair of the committee of the whole, which has jurisdiction over matters relating to the authority, has expressed the intent to have the committee take up Proposed Motion 2026-0107 at the committee's August 25, 2026, meeting, and
WHEREAS, the council is considering potential approval of Proposed Motion 2026-0107 and seeks to ensure that any such decision is informed by a comprehensive analysis of corrective actions, system performance, and transition feasibility;
NOW, THEREFORE, BE IT MOVED by the Council of King County:
A. The council requests the executive provide a briefing to the council's committee of the whole, no later than June 15, 2026, that addresses the following with regard to the authority:
1. An assessment of the authority's administrative funding shortfall, including:
a. A framework that begins to address the receivables balance that could not be reconciled based on available records;
b. The total estimated administrative funding need for 2026 and 2027;
c. The share of administrative funding required by each funder, including King County and city of Seattle, to the extent such information is available, and if not certain, an estimate or range of anticipated funding needs; and
d. Options to address the administrative shortfall, including recommendations to reduce or eliminate the authority's interest expenses;
2. The corrective action plan developed by the authority addressing each of the findings from the April 17, 2026, forensic evaluation;
3. The executive's initial assessment of the authority's corrective action plan and a proposed framework for county protocols to monitor and evaluate the authority's implementation of those corrective actions, including proposed:
a. Specific performance metrics and benchmarks;
b. Interim financial management actions necessary to ensure fiscal stability and continuity of provider payments during implementation of corrective actions; and
c. Identification of any enforcement mechanisms or contingencies if corrective actions are not implemented; and
4. An assessment of actions necessary to ensure continued compliance with federal, state, and other funding requirements during implementation of corrective actions, including:
a. Identification of any critical functions, roles, or responsibilities necessary to maintain compliance with external funding requirements;
b. Assessment of risks to continued receipt of existing funding; and
c. Identification of actions necessary to maintain eligibility and competitiveness for future federal and state funding opportunities.
B.1. The council requests the executive to transmit a report providing a recommendation, supported by a clear decision framework, on whether the county should continue, amend, or terminate its participation in the Amended and Restated Interlocal Agreement, and the potential impacts to the continuity of homelessness response systems, programs, and services.
2. The report should be developed after consultation with the city of Seattle, and to the extent practicable, in coordination with the city, entities providing homelessness response services funded through the authority, members of the governing board of the authority, leadership of the authority, and other stakeholders as identified by the executive to develop aligned recommendations.
3. The report should address the following:
a. A clear decision framework to guide the council's consideration of whether to continue, amend, or terminate participation in the Amended and Restated Interlocal Agreement, including:
(1) criteria to evaluate, and an evaluation of, the authority's ability to successfully and timely implement corrective actions;
(2) specific performance metrics related to financial management, service delivery, and system outcomes;
(3) identification of key risks and tradeoffs associated with each option; and
(4) a recommended timeline for council consideration and decision-making;
b. An assessment of the steps necessary to transition contracts and activities currently managed or carried out by the authority. The assessment should include a plan for which entities would undertake responsibility for the contracts and activities currently managed or carried out by the authority and a timeline for the potential transition. The assessment should specifically outline transition considerations with regard to the homeless management information system and the coordinated entry system;
c. An assessment of the impacts of a potential termination of the Amended and Restated Interlocal Agreement on the continuum of care board and on contracts and services funded by the federal continuum of care program, and of any potential actions to mitigate such impacts;
d. An assessment of whether the 12-month period outlined in article III of the Amended and Restated Interlocal Agreement is sufficient to complete the transition of activities from the authority to a new entity or entities and, if not, a proposed timeline for such transition along with interim reporting milestones;
e. An assessment of the ability and readiness of any county departments that the executive determines should undertake activities currently carried out by the authority, including consideration of the creation of a new county department or entity that would operate separately from, but in coordination with, existing county departments, along with an estimate of the staffing and budget necessary for such transition of activities;
f. An assessment of any other steps necessary to ensure continued compliance with federal or state funding requirements during any potential transition of activities and/or contracts from the authority to other entities;
g. An assessment of any other steps necessary to ensure the continuation of homelessness response services without reduction in service levels, to the extent practicable, during any potential transition of either activities or contracts, or both, from the authority to other entities;
h. An assessment of financial risks during any transition, including:
(1) cash-flow management;
(2) continuity of provider payments;
(3) administrative funding needs; and
(4) any actions necessary to prevent disruption of contracted services;
i. An outline of any other considerations the executive determines the council should take into account regarding the potential termination of the Amended and Restated Interlocal Agreement;
j. An update on the status of the implementation of the corrective action plan; and
k. If the executive recommends against termination of the Amended and Restated Interlocal Agreement, the report should also address, in detail, any proposed reforms or changes to the authority including timelines, performance expectations, and funding alignment necessary to ensure successful implementation.
4. The executive should electronically file the report requested in this motion and a motion accepting the report by August 1, 2026, with an interim briefing provided to the committee of the whole no later than June 15, 2026. The report shall be filed with the clerk of the council, who shall retain an electronic copy and provide an electronic copy to
all councilmembers, the council chief of staff, and the lead staff for the committee of the whole, or its successor.