Yet to open, Salem’s homeless navigation center could be out of money by 2025

Salem leaders have invested $15.5 million and several years readying a center intended to be the “crown jewel” of the city’s homelessness response – but will open it next month without a plan to fund operations past 2025.

The navigation center is what city councilors, Mayor Chris Hoy and City Manager Keith Stahley point to demonstrate how Salem is addressing rising rates of homelessness – the top concern of Salem residents for five years in a row on a city survey.

When people facing homelessness ask for help, a safe bed to rest in, a warm shower and access to physical health care, mental health care and housing resources, service providers will refer them to the new center, which is expected to welcome its first guest in June.

The help will cost $2.4 million per year, with a contract through the Mid-Willamette Valley Community Action Agency.

Funding sources for the facility’s renovation and two years of initial operations include $3 million of federal pandemic relief money, $3 million from Marion County, $3.2 million from Oregon Housing & Community Services, $5 million from the Legislature and $1.3 million from the Mid-Willamette Valley Community Action Agency, according to the city website.

During a budget season where the sustained operations of all city services are on the line, city leaders are leaving uncertain the future of the navigation center. The continued operation will be up to either the mercy of voters, who will likely be asked to approve a new tax to fund the homeless services, or the generosity of state legislators.

If the city cannot secure funding for the shelters through an added payroll tax or money from the state government, it will stop supporting the services.

“That’s not something that I really want to do,” said Stahley, who oversees the city budget. “We’ve worked really hard to put ourselves into this position, we’ve worked really hard with the state legislature to try and convince them of the need and thus far, they haven’t provided that tool.”

Stahley said that he doesn’t consider the shelters core to city services, as they were a recent investment compared to police and fire, which the city has run for over a century.

“We are leaning into those services because, frankly, no one else was. The state, the county, the federal government are not there,” he said.

Stahley said the city got involved because of the direct impact homelessness had on city service, and that he recognizes that closing the shelter would have a significant impact on first responders,

“But again, If you’re asking me to lay off police officers or to keep those operations, I’m going to keep my police officers and close those operations down,” he said. “If that becomes the question, I’m going to keep my fire department and my fire stations open and I’m going to keep our police officers on the payroll as opposed to continuing to fund our homeless response services. For me, that’s an absolute.”

Build first, fund later

The city celebrated the navigation center’s opening on April 24 with fanfare and a visit from Gov. Tina Kotek, who has made tackling housing and homelessness a focus of her administration.

The shelter, located at 1185 2nd St. S.E., will provide 75 people a safe place to sleep and the tools to stabilize their housing, mental health and employment, starting next month. 

The city owns the property and is responsible for the facility maintenance, while the ARCHES project provides on-site services.

From the start, the city has been publicly clear about the short-term nature of its funding when the council chose to spend one-time Covid relief money to get the center up and running.

City leaders say they’re working to secure funding from the state. Ongoing money for shelter services, including $2.1 million annually for the navigation center, was a city legislative priority approved by councilors in September 2022.

Salem Reporter on April 7 requested city records related to revenue and operating costs for the navigation center, including expectations for when available money will be exhausted and operating costs won’t be covered.

Salem officials three weeks later released the city’s 27-page contract with the Mid-Willamette Valley Community Action Agency to operate the navigation center and a spreadsheet showing funding sources through 2026 – a version of a document presented to the city council September 12. The city charged $133 for rounding up the two documents.

The records showed the city does not have funding to keep the navigation center open through 2025.

By then, the city estimates $13.6 million will have been spent on the facility on the building purchase, renovation and the first years of operations. Salem officials would need another $2.5 million to continue operating the navigation center through 2025, according to the city’s revenue forecast.

City officials produced no documents showing efforts to secure additional funding.

In the next year, the city plans to spend another $425,000 to repair the center’s roof. Costs exceeded available funding during renovation and the city focused on finishing what was needed to open the center, city spokeswoman Courtney Knox Busch said. The expense will be paid with a state grant.

The nature of funding for homeless services makes the build-first, fund-later model pretty typical, said Ashley Hamilton, program director for the ARCHES Project, which is contracted with the city to run the navigation center.

She said local providers will typically launch a pilot program to prove their merit to politicians and request sustained funding.

“Every pilot project has to start somewhere. Everything starts with an idea, and you really have to take it and take that risk and be willing to bring something innovative to the community to see long lasting change,” she said, and that the program is happy to partner with the city while knowing funding for now was limited.

After launching the navigation center, the city plans to ask the community to keep it open with their paychecks, with an added payroll tax on work done within the city. 

A payroll tax is not in the proposed budget, but is part of the city’s larger revenue plan to maintain and expand services. City leaders are contemplating three different payroll tax plans, with each higher tax funding more city services.

The lowest payroll tax would not be sufficient to fund the navigation center.

With no payroll tax funding, the burden to keep the navigation center would fall to community partners who may need to reduce services or close the center. 

“We didn’t have a choice”

On April 14, Salem Reporter sat with Mayor Hoy in the Navigation Center’s lobby on new, blue, gray and green furniture, weeks before the shelter would see its first resident.

When asked why the city would open the center without identifying sustained funding, Mayor Chris Hoy said that they knew a funding search was part of the task going into the project.

“Because we’re in a humanitarian crisis. We have to do it. We didn’t have a choice,” he said. “People are dying in the streets. We can’t let that go on.”

Hoy said in a May 5 call with Salem Reporter that nobody he’s spoken to on the topic wants to cut the programs.

“I’m going to do everything I can to not cut those programs,” Hoy said, and that he believes both increased police funding and continued homeless services are possible.

“My goal is to make them both work. So I’m not at that place where I’m pitting one against the other,” Hoy said.

He also added that he’s largely in support of Stahley’s recommended budget, but there’s still work to be done to determine what revenue and funding options will look like.

Stahley said at this point, the city is looking to the state.

“That’s our option,” he said, “Continue to ask the legislature and the governor. Clearly the governor understands the need, just looking for options, but ultimately the legislature has to come through.”

Knox Busch said in an email to Salem Reporter Thursday the city has asked the Legislature for help with continuing operations, but did not specify how. There is not a bill focused on city funding at this time, said Hoy in an email to Salem Reporter Friday.

Stahley said that this week’s statewide budget forecast, which anticipates $1.9 billion in added general fund revenue – a higher amount than predicted in December – “gives us some renewed hope that there may yet be state support with new one time funding.”

Stahley said they will likely know with the November election whether they will have sufficient revenues to remain invested in the services, depending on the outcome of the payroll tax. They may know sooner if the council approves a tax without taking it to voters, he said.

The common area of the Salem Navigation Center on April 14, before its public opening later that month (Abbey McDonald)

A leap of faith

The Navigation Center expects to welcome its first guest in a few weeks. 

When it does, Hamilton of ARCHES hopes people in need will find a safe harbor where they don’t have to worry about where to find their next shower or meal.

“A client who is enrolled into the navigation center, this is their first stop. This is where they come to escape the trauma that is the experience of homelessness,” she said.

The shelter aims to move people into their own home within a few months.

The goal is that they will remain housed, which will be both a return on investment and improves the community as a whole, Hamilton said.

“Right now we’ve been focused on getting those doors open and then proving those successful outcomes both for those nav center graduates, but for the system as a whole, long term,” she said.

Hamilton doesn’t think closure is likely. There’s now a building, which is a major step. And while she can’t predict what the next few years of funding will look like, what’s more important is what it will do for the people who live there, she said.

She’s optimistic, looking to successful navigation center programs around the country.

“We have to be prepared as a community to have several tools available to us to not only fix what we see currently, but to get us ready for what could very well be a humanitarian disaster to the likes we haven’t even begun to understand,” she said. “So we have to take a little bit of a leap of faith, and we have to try.”

Contact reporter Abbey McDonald: [email protected] or 503-704-0355.

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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as the business reporter at The Astorian, where she covered labor issues, health care and social services. A University of Oregon grad, she has also reported for the Malheur Enterprise, The News-Review and Willamette Week.