Chair Lee questions OMB on $1.86 billion hotel shelter contract renewal

Okay, really quick last round questions.

In March 2026, the admin signed a $1.86 billion contract with the city's hotel trade group for shelters over the next three years, which is a little concerning.

We know that hotel shelters come at a higher cost to the city compared to purpose-built.

shelters and can you verify that the city entered into such a contract if so was this a new contract or renewal of the of an existing one

sure chair let me turn it over to Patrick DiStefano to address that so this is a renewal of an existing contract so it renews the term

It's a three-year contract.

It can be terminated, I think, with a month's notice.

So you're just paying for the rooms that you have, and it streamlines the process when there's a shortage of rooms in the shelter system.

Obviously, we want to get out of the hotel, but in the short term, this allows us to have sites.

Okay, so after the three years, is there an option for extension?

If so, for how many?

I don't believe there's an option for an extension after this one, but we can double check.

Okay.

I will say that some of these I know were supposed to come to an end in certain areas, and so if we could re-look at some of these and look at the purpose-built shelters, that would be great.

And was this contract competitively bid?

If not, why not and how was it procured?

I would have to get back to you on that specifically.

Since it's a renewal, it was a continuation, but I'm not sure the origin of it.

Okay, and then also before you renewed it, what was that process like?

Did you look at if there were any complaints or if there were any issues with the contracts?

Again, because this is sort of a master agreement or an umbrella contract, it's really so that DHS can quickly get in and out of sites.

And it also eases the burden for the providers because they're not negotiating directly when they have to jump to a new site.

I don't know that there would be another parallel entity that could provide this service.

Okay.

And what are you doing to reduce the use of hotel shelters in the coming years?

So this is part of the cost containment plan as well, but obviously we've seen the family population decrease slightly over time.

We're doing a number of different things like we spoke about front door, making sure people don't get evicted, increasing rates of counsel.

Funding, you know, all the steps to make sure that we are providing every aspect for families and individuals so that they don't enter their shelter system.