A resolution approving a proposed contract between the City and County of Denver and Denver PFS, LLC for outcome payments for a social impact bond project. (FINANCE & SERVICES) Approves a social impact bond contract with Denver PFS, LLC for five years and six months and a maximum payment of $11,571,000 for outcome payments related to permanent supportive housing for homeless individuals who have been identified as high utilizers of safety net services (FINAN-201523939-00). The last regularly scheduled Council meeting within the 30-day review period is on 2-16-16. The Committee approved filing this resolution at its meeting on 1-12-16.
integrating it into the rest of our programs. Kind of like trying to repair a moving car as it's going down the highway. I think we should pull over and make this program part of our ongoing workshops. We're having another meeting just on Wednesday, this in two days to discuss our homelessness programs. I'd like to see this fit into a system of programs that lend equity to our neighborhoods, where this particular program will be sending homeless, chronically homeless, almost exclusively from the downtown core. We already have homelessness and homeless people living along Sanderson Gulch, Bear Creek and the other neighborhoods. And it's inequitable to those neighborhoods to disperse the homeless into those neighborhoods without designing a program for the people who are already there. We've been told that we can't have geographic preferences for the housing under the Fair Housing Act, and I understand that. But for the housing that's being built in my district, we already have a geographic preference and that's been de facto constructed by how the tenants will be selected for this. The tenants are being selected from the chronic high end users. In other words, those who are being arrested the most, in detox the most, and costing us the most money under the philosophy with which I agree, under the philosophy that if we house them, they will cost us less. And this program simply borrows money from the private sector to be repaid with those savings. But I do want to point out that we have a geographic preference, because all of the effort or most of the effort to identify the people who will be on this list has gone into the downtown core, where, of course, that's where most of the homeless are. I acknowledge that we don't have as many in my district as we do downtown. I just want make sure that they're being taken care of. Mental Health Center of Denver, a very fine outfit. Doing great work is going to build 60 units at Federal and Iowa. But because all 60 units are part of this program, no one from my district currently there will be eligible for one of these likely will be eligible for any of these units. I've talked with them each CD and I see some of the folks in the audience and they've expressed agreement that this would be a good thing to do, but they just don't have a way to do it. I think, you know, you can work out anything if you really put your mind to it. In the North Colorado station where the Coalition for the Homeless is building the 100 units, 20 of which are for this program, they had no problem dedicating some of the units outside of the social impact bond program. And so I would like to I would like to put the brakes on it and and find a way that we can accommodate some of the folks in my district. The fact is, on the very vacant site where I made a CD while build these 60 units, there was a homeless camp. And those people were evicted. Now, when I worked at RTD on the airport train project, if we had to acquire a residential property, we had a legal obligation to find a place for those people to live, and we had to compensate them. And here we're evicting homeless people from the site of a homeless facility where they won't have any chance to get into that homeless facility. I do want to give a shout out to the Coalition for the Homeless, because through my outreach to them, they have proposed to me a program where they will do more outreach in southwest Denver. Mr. President, they have agreed to come down twice a month to do street outreach in Sanderson Gulch and perhaps in other areas, but mostly around where this is going to be going to be built. I also want to point out that. We're saying the repayment of these bonds, which, by the way, they're not bonds. As we understand bonds, we're borrowing money from private investors, banks and foundations, and we're going to repay them from the savings. This is what we're told, repay them from the savings that we experience by not by not being in the jail as much or Denver general as much. But that's not what we're doing. This contract, the mechanism for repayment in this contract does not come from the savings, from the jail, from less money we're spending at the jail or at the detox center. It's going to come from a general fund appropriation that we have already made. And the amounts that we're going to repay them already are fixed in the contract, for example, if they reach the minimum of 20% fewer jail days. We will pay Denver first to the vendor on this. We will be paying them the equivalent of about $1,066 a day. Per tenant. I don't think that a person in the county jail costs us $1,066 a day. If they reach the maximum repayment level of 65% fewer days in jail, we will be paying them the equivalent of 6670 $5 per person per day, $169,000 a day. If all 250 tenants in this program don't go to jail that day. I don't think we're saving $169,000. Finally, Mr. President, I would like to have. I think we need an independent auditor to track the success or the level of success of this program. I do believe we will save money doing this. We are not privatizing these services, by the way. We already do these services. We deliver these services privately. We have contracts, numerous contracts with the Coalition for the Homeless, with them, each CD with Saint Francis Center. We already have our services delivered by the private sector. What's different here is we're borrowing the money upfront from lenders and allegedly repaying them from the savings. But as I've demonstrated in the contract, we literally are not repaying them from the savings. If we believe this program saves taxpayers money, we should fund it upfront and realize that savings ourselves. If we repay the investors, the money that we say we've saved, then we haven't saved the taxpayers any money. We've just given it to the investors. Thank you. Thank you, Councilman Flynn. Councilman knew you had a question? Yes. Mental Health Center of Denver. Representative here. There are councilmen. Why don't you ask your question? We'll make sure we get the right people up there. But we do have representatives from both the organizations. Right. Right. Well, I think it's extremely important. I think we learned from our retreat on homelessness that you've got to get the homeless off the street in order to provide services effectively and to to be able to hopefully break that cycle of homelessness. So it's hard for me to disagree with with taking homeless off the street. You know, I do worry a little bit about the the the individuals we're dealing with and what services will be provided at the facility. So. So, I guess, Kyra, I just want to clarify, maybe, you know, a couple of questions again that we've had before. Again, the services. There will be provided. Mental health services, drug addiction services, job training services. Will they be provided at the facility? That where the where the homeless will be housed. Good evening, Mr. President. Members of Council thank so much Kerry Kennedy and the Chief Financial Officer for the city. And I think your question is probably most appropriately addressed to John Providence, the head of the Colorado Coalition for the Homeless, who will actually be providing services at the facilities themselves. If you would like, Mr. President, I'm happy to give some remarks about the program in general, or I can ask John to come up to address the question. Well, I only have John answer the question, and then if there's if there needs to be more, you certainly can be able to do that. Thank you. Hi, John. John, thank you for coming up. Jump. John Kavinsky, the president of the Colorado Coalition for the Homeless. Mr. President, Councilman knew this social impact bond program targets 250 chronically homeless individuals who are currently on the streets. There's no differentiation in terms of which of these individuals will go into the new developments that the coalition is building or that the mental health center of Denver is building. So there's a total of 160 dedicated units, and the rest will be housed in scattered site housing throughout the city. So your question as to whether this the services will be provided on site or off site? The answer is yes. They'll be provided in both locations. It'll be determined by the needs of the individual resident, and it will be done in accordance with the individualized treatment plan. This developed in conjunction with that individual. So whether the services mean the core of the assertive, modified, assertive community treatment approach is that it's based on the needs of a particular resident, that the team is mobilized to be able to provide whatever services the individual needs and be responsive to that on a 24 seven basis. But the way that those services are provided, if it's job training, not necessarily best provided in the home, but rather in a location that the individual is introduced to the services from outreach to engagement, getting them housed and keeping them housed is the core of the services that will be provided where the individuals are by a trained team. But the individualized services will be provided through a range of mechanisms throughout the community. And you you've done this effectively with your current programs, right? We've been doing this housing first. We have 360 people currently in housing throughout the city, in both housing that's owned by private landlords that we support through grants and other services, as well as housing that we own and manage. And we have a 95% success rate and keep keeping these individuals in housing, even though they've have a history of about eight years of homelessness prior to entering the housing. So you have a disruptive or abusive person that is in the group there. How will you be able to handle that individual? Are we excluding for the program and and take another candidate to take his place? All right. So both the goals of this social impact bond program is to keep people housed. We work as hard as we can to encourage the individual to change the behavior that might jeopardize their continued housing. Many times that will require that we relocate that individual to another housing unit. That may be more appropriate to what they need. And so but in continuing to house them, continuing to engage, continuing to counsel them and how they can change their lives in response to issues that might jeopardize their housing, that's the key to the engagement. The key to the success of the program. If we have that continuing engagement, working with folks, helping them from where they are to where they want to become, where they want to go, we find that that's the most successful approach for this population. Will you be providing 24 hour, seven day a week supervision at the sites? So on the fixed sites that we we manage, we do have an on site managers and we will have 24 hour staffing to be able to ensure that the property is well maintained and well managed. When we rely upon private landlords to provide the housing, we rely upon their own management and supervision of those facilities. We provide the services, they provide the housing. What about transportation to services? Will you be able to provide transportation to make sure they get to the services offsite? Yes, we have a fleet of vehicles that we use to engage in to move people, get them to appointments. We have case managers whose job it is to do that. Many times they will transport individuals in their own vehicles, but we have vans available and will be assigned to each of the housing developments that we have in this program. All right. Thank you very much. Thank you. Thank you. Councilman, you. Had a question about selection, Carrie. Can you. Selection of the candidates to go after the housing. Q Tell me a little bit more how they will be selected again. Sure, I'm happy to do that. I may call Tyler up to address that question as well. But I just wanted to make a point on your last question. From the city's perspective, we only pay if the program is successful. So the outcome payments you will make, the city will make going forward. Well, you'll only make those payments if these folks are stably housed for long periods of time. And if they stay out of jail, the the investors are at risk of losing their principal of losing the funding they are going to put in to provide these services if they aren't successful at accomplishing those objectives. So the providers have some discretion here and how they work with these individuals, but the incentive is in the right place. The incentive is to help the individual heal, to stabilize them, to make sure they don't cycle back through the criminal justice system. And that to me, is is a really important component and why using social impact bond financing makes so much success because that incentive is placed in the right place for the providers now. To your question about how individuals are selected, the eligible population for social impact bond financing to cover supportive housing is individuals who have are homeless and have been arrested at least eight times over the last three years. What we know is we have more than 250 individuals who are going to fit that criteria. And yet this funding provides new supportive housing units for up to four 250 individuals. So there will be more people who fit that eligibility criteria who won't be selected. This will be a lottery. It will be a randomized trial in order to to have these individuals moved into housing. And long term, hopefully, if this program demonstrates and it will have one of the most robust evaluations ever done on permanent supportive housing , if it shows that it's successful and individuals can be served better through supportive housing at less cost than the taxpayers are currently spending on them through the criminal justice system. Then, of course, the city could expand the program to serve more individuals. I think we're all impressed with the financial arrangement, and I think we're hoping for a great success. I think hope it will be a great success. Let me ask David Broadwell question, please. David, as we're selecting the candidates to go out to the homes, you know, and the city is is assuming that responsive was selected these folks and and we won't have we have any liability for for these individuals if they cause to have disruptive behavior and in cause any incidents to cause bodily harm to anyone. David Broadwell, Assistant City Attorney I'm going to defer this question to the attorneys in the room who are actually staffing the contract because there may be special provisions in the contract that are directly related to the answer to your question. So I see general burn mobilizing in the back there. Sorry. It was crowded when I walked in. Amgen Wellborn with the city attorney's office and I helped draft the contract with Tyler and his team. I don't think we're concerned about being liable for the actions of a participant in a. Program that. We are funding. We're not funding the providers directly, frankly. And the this contract is between City and Denver, which is the intermediary, which is contracting with the providers and contracting with the investors. That being said, there is indemnification language in the in the contract. So to the extent that we're sued, we're all going to be in the mix. But we feel confident that if we are sued by a property owner or someone else who's affected by the the folks in the program that we are, that we won't be found liable. So with the proper supervision, that should minimize any liability. That's right. And we I mean, we can't do anything about someone trying to sue us. Right. I mean. But and the other the other aspect of. This is that, of course, we're not liable for torts under the Governmental Immunity Act. So and there wouldn't be a contract claim between those folks. So it would be the claim would be attenuated, I guess I would say at this point, not not knowing how that might come about. Okay. Well, thank you very much. Sure. Thank you much. Councilman Brooks. Sorry. Just debating with my fellow council member over here. I just I want to make two quick points because, you know, I think I think we're deep in finances and I'm don't go back to finances. But here's the reality to Councilman Flynn's point, that we can delay this because it's not going to impact anyone. It will impact eight individuals this week if we delay this. Eight individuals who are on the street this week will not have a place to stay if we do not execute this contract. 25 in the next couple of weeks. 250 in the next year. And so that's the reality of what we're dealing with. And I'm so passionate about this because we've been dealing with this for the last four years, and we finally have data driven results and a program that Clinton Global Initiative praised this for. And all these cities have talked about, we want to implement this in our city as well. And it's because we have finite resources and we have a real challenge addressing issues in our city, and we are trying to address those issues. And every time we come up with some complex financing, we have these issues. And so I'm going to I'm going to have Tyler, if you can answer this question for me, because I actually want you to respond to Kevin Flynn's question about the 9.6 million, if you can give me that deal so quickly. Thank you, sir. So in the slide presentation, we we got the total investment amount of your housing stability payment at approximately $8.6 million, and that is including housing stability in jail. Bad days, correct? Tell me that is not including Denver cares. That is not including Denver health as well. There's other cost that the. There's other costs that the taxpayer of Denver incurs. Correct. Thank you. Council President Councilman Brooks. So when we look at kind of what are we paying for certain outcomes, we're actually factoring in kind of projected savings to the different institutions. So looking at detox, looking at arrest costs, looking at court costs, all of those different costs that go into different incidents. So if a person's arrested, they might be booked in and that's a specific cost, and then they might go to court at a specific cost and then they might go to jail. That's another specific cost. When we were looking at measures to actually monitor performance and for the city to pay out on, we picked the two measures housing stability and jail bed reductions. Housing stability is is really and John is a better person to really address this than anyone is really an indicator of whether a housing program is doing well. Are the individuals that you want to house actually staying housed? And studies have really shown that a person stays housed longer. They're less likely to be engaged in a lot of other systems and then in jail that day reduction. Well, it's not accounting just for the cost of what is a jail bad day. It's looking at all of those arrests and criminal justice costs as we're putting them together. So as we see tangible reductions in interactions with the criminal justice system, we're seeing projected benefits across the entire system. So so just let me ask my question again. I appreciate the explanation. Is the 8.6, including everything that a person would incur in the cost for a taxpayer, is paying for them? No. So we were being very conservative and only looking at Denver Health and Hospital because that's where kind of the direct connection between the city and kind of a hospital is. We did not look at the other hospitals in the area where we know individuals might go as well as we did not look at sign of kind of what is the cost of specific homeless outreach police officers. And we did not also look at ambulatory care. So when looking at national studies, usually they the cost of an individual not in supportive housing is closer to 40 or above $40,000 per year, and we estimate it here to be about 29,000. Great. You know, just the crux of some of my colleagues argument is we we don't want corporate interests profiting off of, you know, individuals in in the community. And so I completely understand that. But just your numbers showed us that there is much more costs out there. And what you were showing was condensed costs off of the data that you've been collecting over a while. And just to that point, specifically, the reason why you do pay for success contracts is because the city only wants to pay for outcomes. So if no outcomes are met, so if no one stayed stably housed, then no. We saw no reduction in jail that days and the services in Colorado coalition would still be paid for, but the city wouldn't make any payments, so the lenders or investors in this transaction wouldn't see any dollars at all on the higher end if we start to see increased outcomes. So increase outcomes that lead to benefit to the city. Yes, there is a higher rate of return and actually as you see a lot of the investors that are included as part of this project, a lot of them are foundations that are doing this out of what's called program related investments, which is actually a federal law that says it has to be below market rate of return. And then our largest investor on this has actually created an agreement under the learning loan conditions that any returns over 3% would actually be shared with the provider so made CD and CCH themselves. So we're not really talking about investors who are really trying to make quite a bit of money for themselves off of this transaction. Last question, how long have you been working on this project? I always say that I'm three years into a one year fellowship. All right. Thank you. Thank you. Councilmember Brooks, Councilwoman Canete. Thank you, Mr. President. I will pick up where my colleague left off on the savings question, and then I have some some comments and responses on the bigger picture questions that my colleague raised. But so I heard one very big clarification, which is that you can't just compare the price, the cost of what we are paying per day for staying housed with the cost of what you would have spent in a night in jail. We're including the cost of the night in jail, the cost of the court, the cost of all kinds of other things. Another thing, though, that I just want to clarify is it sounds like my colleague just divided, you know, the total payment by the number of nights, but you don't get paid till there's already 365 nights of being housed. So, in fact, you'd have to divide what we're paying overall, not by one night, but by that first 365 days. So the actual amount per night that you stay housed in year two includes having stayed housed for an entire year prior to that. So I just want to clarify that I'm doing I'm thinking about the math correctly. You can't you can't ignore that there's 365 days that precede the first night of payment. So I think there's a couple of things that I think with the math, it was probably, I think, trying to take we're. Building these into two outcomes one, jail that day reductions in housing stability. And I think it was trying to look more at jail day day reduction. So I'm not sure how those calculations came out. I think it might have been trying to look at what you would be paid for a certain percentage threshold and then dividing that. I think maybe by what we've seen in jail, bad days among the population looking backwards on housing stability because we want to pay for success. We have a threshold that in order for anyone to be eligible for any days to be eligible for payment, an individual has to be stable house for at least 365 days. Right. Thank you very much for that clarification. I want to talk for a minute about this concept of savings, because I think this is really important for the public. Two things. One is that we have an overall annual growth in costs that occur even if you don't serve a single additional person. Right. So it costs more every year to light a building. It costs more every year to provide health care for employees, all the things that we pay for. Those costs go up over time. We also then in Denver have population growth. Right. So so even if, you know, it costs more to serve the same number of people. So you have a cost curve that looks like this and then you have more people coming in. So you have a cost curve that looks like this. One of the questions that my colleague has asked is, well, this isn't really savings because we're not actually cutting the jail budget. We're not actually cutting the hospital budget. Right. Can you talk for a minute about the idea of changing the curve of cost increase versus OC? Yes, we're not cutting the budget, but it would have grown by this much. Can you just talk a little bit about what savings means in this context? Because because I think people are thinking, oh, the jail budget is, you know, $40 million this year and with this program, it'll be 39 million. And that's that's not really I don't think what you're proposing. Yeah. Councilwoman, it's a great question. And if Denver's population was staying static, if it was going to be exactly the same over the next five years and the demographics weren't going to change then, yes, you could look at translating these savings into line item budget reductions. These 250 individuals right now living on Denver's streets are spending 14,000 nights in Denver's jail. They're being arrested over 2200, over 1500 times, 2200 visits to detox. So a lot of costs for Denver taxpayers, over $7 million a year for Denver taxpayers for these 250 individuals. And if we weren't seeing a growing population, then that would be real savings. If you cut the number of detox days in half, if you cut the number of jail beds and half, you cut the number of E.R. visits in half. It would be real savings to Denver taxpayers. You would be able to reduce budgets by that amount. But we are growing. To your point, we're adding 10,000 people a year right now to Denver's population. So there's pressure on Denver jail to provide additional beds for additional people who are being arrested. There's pressure on all of these systems. So in essence, what you're doing is you're freeing up capacity. What we know about this population of chronically homeless individuals is that they aren't being well served in the criminal justice system. These individuals are being arrested for public nuisance, for public alcohol consumption, for panhandling, for trespassing. And so it's really not the best use of Denver's taxpayers money for those individuals to be spending 60 or 70 or 100 nights a year in the Denver jail. It's much more effective to free up that jail bad day for somebody who needs to be in jail. So the saving comes in the form of cost avoidance. And if if it's okay, Mr. President, I just want to jump back on the on the previous question related to the rates of return for these private investors. These are primarily philanthropic investors. And I just wanted folks to understand that baseline that if less than 75%, 75% of these individuals are housed over a long period of time, meaning they're in their housing for more than a year, the investors start to lose money. And if we don't actually see jail bad day reductions of more than 30%, then the investors start to lose money. If we see what we're expecting to see based on national outcomes, study for this population being moved out of the criminal justice system and into supportive housing, that would mean 83% of them are stably housed and experience a 40% reduction in the nights they spend in the Denver jail. The return that investors will receive is 3.4%. That is before the commitment that Tyler just announced, which I think we want to take a minute and recognize the significance of the largest investor in this project has said they won't actually keep any returns over 3% even . Best case scenario, they won't keep anything over 3%. They're going to return it back to the Coalition for the Homeless and MHC to continue to serve this population. So just a couple of comments to close it out. Mr. President, thank you for allowing me the questions. You know, having started my second term, I remember a time on this council when our employees were furloughed. Our libraries were closed several days a week, and we were laying off police officers and other critical safety personnel. It's very easy to today imagine that we could just pay for this program out of our budget because we are in such good economic times as a city. But the truth is that we very recently were not. And unfortunately, history tells us that economic cycles will come and go again. And so I think this is a really critical program to understand this model, to test it, to see if it works because these resources might not be available in future budget years. I hope that we continue steadily to invest in the kind of preventative services we're doing here, but I don't want that to be the only way that those preventative services get provided. And so I am glad to see additional capital coming from the community. And one really important fact which Carrie didn't mention is that if these individuals succeed at a very high rate, we will both pay back those investors and spend less than we would have on the services. So there are dollars savings to the city. And the best case scenario and that's really important. So so that's how I feel about the dollars and the money. And I. My colleague raising some really important questions. I want to just acknowledge the concerns that Councilman Flynn raised about the overall system, though. I think, you know, we have spent a number of committee meetings as a council recently, and I'm very proud of this council. The level of knowledge that people want to have about housing and homelessness has has really been, I think, a testament to how important this issue is for the folks who serve up here. It's become very clear that we have gaps. We do not have an individual in a job title that is specifically responsible for setting goals, for supportive housing, for homeless individuals and getting them into it. We have pieces of programs spread across several departments. We have good intentions. We have providers who sometimes build that housing and they come to us and they propose good projects, but we are simply not leading consistently in a systematic way. And I think that that's become very apparent. And so this project is coming forward in a bit of a piecemeal fashion because we haven't figured out that big system. But I don't believe you start progress to complete that system. I believe you continue this progress. You ensure that these services are provided and then you work simultaneously to improve that system and fill that gap. That's what I hope we come out of our conversation on Wednesday when we meet as a council to follow up on the homeless retreat. I hope that we set a high expectation that we work closely with the department to say that this needs to be a systematic and integrated piece of what we do going forward. And I think the same can be said about the concerns you raised about outreach and how we reach individuals who might be homeless in other parts of the community. I expressed that, you know, we've talked a lot about jail nights and savings, but the individuals we're talking about are among the most vulnerable and they're likely to die on the streets. That's why morally it's okay to prioritize them for housing. It's not really about the rate of return. It's about the fact that these individuals are most likely to die. We know that. We survey them. And so morally it is okay and it is appropriate for us to focus really quickly on getting them into housing as the first individuals in the door. But Councilman Flynn, you are so right to say that the other individuals in different neighborhoods who may not get arrested as often and who may not come to light because they try hard to stay out of the light, we have an obligation to them. So I do think that another thing we as a council can have an impact on is we can talk about how that outreach occurs. You know, we've already, I think, started a conversation to say, how is it that outreach thinks about being more holistic, about covering the entire city? I'm so glad the coalition is going to spend time in your district. I think we need to continue to push for that throughout the city. It may mean fewer contacts in our because you have to drive further to get to people under a gulch or under a bridge. That's okay. That's okay. If we sacrifice perhaps some numbers to reach new individuals we haven't been talking to as much and we have to talk about that as a council. But I also do not believe that you stop this project from going forward to do that. This is a both and this is do this project and have much higher standards, invest much more strategic resources and do a more systematic job going forward. And I will be at the front of the line advocating for that along with you, Councilman Flynn, you are right on. I appreciate the time you took to show me your district and the ways that this project may impact and and could interact with your community. And so so I think that I've already heard some of that commitment from this council, and I am hopeful we do continue to push those envelopes, both with the administration as well as sometimes with our service providers. If that's what's needed, it may take resources and I think that that's something we're all coming to terms with. But I am very proud to support this project tonight. I believe the things that we will learn and the lives that we will save will make some of the challenges and some of the unknowns worthwhile. So thank you for the team for bringing it forward. Thank you. Thank you. Councilwoman Quinn. Each Councilman Espinosa. Yeah, I just wanted to say a few thoughts because I don't want my vote to be misconstrued as somehow being non compassionate or not wanting to support what I think is actually a very clever idea in a way, to sort of really incentivize and fuel additional focus and resources. But I have a problem with bottom line, and that's where this all ends for me, which is the structure in the bricks and mortar. There's a huge chunk of public subsidy and in the rental of that unit, there's a huge chunk of public subsidy. And then we're going to put this money in this fund. I mean, it's set aside in this well, we're going to do this contract. I'll get my terms right. We're going to write this contract to deliver these services, not unlike the way we deliver a lot of services through contracts. But this one has this incentive, this sort of carrot on the end, which is doing has the potential for doing really good. But if we're worried about how our fiscal future is on a. Five year trial. If this is wildly successful, we're going to pay significantly more out of our general fund or out of it. Kerry Correct me if my terms are wrong, but we're going to pay significantly more to the people we're contracting with for having done a good job when what we are committing to is that eight plus million dollars. So we will be on the hook potentially for that amount unless they underperform. And and so. My actually. So there. Well, no, we're actually on the hook for those varying amounts. I should correct that. So if they underperform. Yeah, we safe. But why not if we think that they're going to actually perform? Because that's what the modeling shows that they're going to perform. Why not contract out directly with these service providers for the $8 million rather than have the potential to be on the hook for 11 plus million dollars over the course of five years? We have the money set aside as the city three some odd million dollars we will be continuing to set aside so that we can cover these payments in case they are on track. So we we are making the commitment to the funds. What we're not doing is doing it. We're we're doing it in this sort of distorted way. And I would rather us, as the city sort of take on this responsibility wholeheartedly. And if we have the ability and the will to commit to $11 million, then let's commit to $11 million right now and get that stuff done. That's and that's where why I'm going to be voting against this. Thank you. Councilwoman Ortega. Thank you, Mr. President. First, I want to thank Kerry in Tyler for answering many of the questions that I had after this came to committee. I think he received several pages of questions from a number of us, and I appreciate the time you took to sit down with me and walk through just how this is going to work. So, first of all, I want to ask, do we have any idea what percentage of these folks we're talking about are men versus women? And so we don't have an exact percentage on that right now. But typically it's been around 75% men. But we have seen a rise in women that are part of the population as well. And will the development be coed to the fixed site? Yeah, they're independent units. So and I'm happy to provide John if he wants to talk about how they do units more, but it would be more coed. I'd like to ask John, if you wouldn't mind, coming up. So one of the issues that I've struggled with is the fact that as a city, we're not like other cities that have centralized intake where, you know, you're you're able to take all of the different people that we're talking about in and really identify and prioritize the folks who truly are the chronic homeless frequent fliers that go through our jail system, as well as the hospital in detox. And I'm I'm familiar with the fact that you have a separate system from the homeless management information system that other providers have. So how how do you see in your mind the prioritization happening when you have your list of people who your organization deals with on a daily basis, whether they come through the clinic or street outreach workers, versus folks that may be referred to you from street outreach workers, from a different agency. Councilwoman Ortega threw the Metro Denver Homeless Initiative Initiative MDH. There is a coordinated assessment and housing placement process where individuals are assessed using a national tool called the Vulnerability Index or the vice. That version for short and those that score over ten on that scale are judged to be in need of permanent supportive housing. There are. That instrument has been given now to over 2000 individuals throughout the metro Denver area, and people are prioritized based on the time in which they have completed that measure and the how high they score on that scale with those with high level of vulnerability being health, mental health, addictions, service interactions with the police and jail . Moving them higher on that scale, we will have a side by side process for the social impact bond and individuals will have to complete the vice cadet as they are referred through this process. And those who are judged in the end, not in the control group and the treatment group will be prioritized for. Housing through that process. Recognizing that because of the vulnerability and because of the high service utilization and the cost to the city, that the housing resources that are being brought to bear for this project will be matched with those individuals. So who's got that master list? I guess that's what I'm struggling with. I know that through our Crime Control Commission, they've got a list of the frequent fliers that go through the jail system. You all have, along with other service providers, have lists of individuals who have received various services there in the homeless management information system. So help me understand how the to interface with one another and ensure that it truly is the the chronic homeless the frequent fliers that we are going to get into these units because I'm. I was around when we did our first round of homeless housing and we said the very same thing. I worked at Denver Human Services when we came before City Council and we said, we're going to reduce costs. We're going to be able to show that we're going to save the city money. And we did not have the right tracking system that ensured we were targeting the right people. It was based on which street outreach workers were able to identify. People that were willing to go into housing, they weren't necessarily are chronic homeless, which is what we were originally trying to do. So this is where I want to make sure we get this part right. I think what we're doing is critically important and this is something that we talked about doing after we passed the camping dancing, we were committed to ensuring that we were going to have some permanent housing and, you know, wrapped around with the support services, which I'm very familiar with your programs, John. I know you guys have done an outstanding job. Keep people in their units. Folks are now back in the workforce. They're, you know, they've moved out of units. But but I'm I'm just struggling with the initial intake process and how we ensure that we are targeting, if you will, the right individuals that we want to prevent from dying in the streets. So it's important to understand the context. So I mentioned the vice, but that assessment has been given to over 2000 individuals throughout the metro Denver area. And this instrument is targeted to single individuals as opposed to families. Over half have been judged in need of permanent supportive housing, not just affordable housing within that group less. Only about 100 have actually been housed over the last two years. So we have a very critical shortage of available, permanent supportive housing. This project will create and leverage 250 units of housing, both physical through these facilities and housing assistance to allow individuals to move into private landlord housing. And we will be targeting those who are frequent users of the system. So there are currently two lists. There is an overlap of that list. But through this process, those who are referred from the Crime Prevention and Control Commission will be merged with the Coordinated Assessment and Housing Placement List. By virtue of their referral and prioritization into the treatment group. They will rise to the top of the list and therefore be prioritized to the limited housing resources available. And that's coordinated with the list through MDH II. That's correct. Okay. And that's a seven county metro list, not just a Denver list. So we're extracting out Denver people. Correct? Correct. Okay. The last question that I wanted to ask you is. I can remember when the Housing First Units your first project opened, we were looking at roughly 15,000 a person to house them with the wraparound services. Is the escalated cost a result of primarily land land prices in the city and how we have seen them escalate because we're now talking about 29,000 a year to house an individual with support services. Yeah, I think the 29,000 figure is the unintended cost of emergency services that could be avoided by providing the housing supportive housing. The actual service costs associated with supportive housing is averages about $10,500 per person. The actual cost of housing, either the rental assistance to allow someone to rent an apartment in the community or the housing that is made available by the construction of these new housing units will cost an average of about about $800 a month. So almost 10,000. So the true cost are separate, but you will have a net savings when you compare the cost of doing nothing versus the cost of this best practice. Of providing permanent supportive housing. And these are, in fact, units that already have low income tax credits and other subsidies that allow you to write down the cost of the unit to be able to bring the price down to that 800 a month. That's right. And in this project is leverage leveraging that resource from from the Section eight program administered from the Denver Housing Authority and from the Colorado Division of Housing. So these are costs that will not be bear borne by the investors or by the city, but are being leveraged through this project from other resources. So as soon as this passes City Council, how quickly would we see folks housed in the scattered site units? If this passes city council tonight, we would begin to house people tomorrow. Oh. And it's 20 units that she would be providing to individuals through these social impact bonds. Correct. A total of 165. Over the in the immediate units that would be available. Immediately there. There are nine that will be released immediately, another 25 that will be available at the end of next week. And you have a project that's coming online. How how quickly will that project be available? So the as soon as the building department gives us a certificate of occupancy, we understand there's some scheduling issues around that. We'll be able to begin moving people in the next day. When we opened the Start Street Lofts a year and a half ago. It took just three weeks to move 100 or 75 individuals into that housing. And it wasn't because we couldn't find the individuals, but it just took that much time to get them leased up. Do you have a hard time finding the individuals? Now we have many more individuals than we have housing resources for. All right. How can you stand that? I guess? I mean, when somebody has been identified as one of the individuals, they've been through the process and then it's time to actually get them into their unit. Is it is it difficult finding them to let them know their unit is now available? You know, because of the great outreach work that our street outward workers do, and if you haven't had a chance to visit with them and to go out and outreach, these folks know just about everyone who is on this list. And so the trigger will be that they will be a recent interaction with a police outreach officer or or a citation. And that will then focus the attention to be able to immediately outreach, get them connected to that housing resource. Thank you, John. Mr. President, I just wanted to make a couple of comments. I do concur with my colleague, Councilman Flynn, that when we are building units in neighborhoods that have homelessness, we should be setting aside a percentage of those units to be able to serve those folks who are also chronic homeless individuals. I often talk about a woman that I see on a regular basis who actually lives under a bridge at Sloan's Lake, who is one of these individuals and I don't know her frequency with the jail system. I would imagine she's probably been in and out of the hospital on on many occasions. But this is an example of somebody who is more than likely going to die on the streets. Who I would want to see be served in a project in her neighborhood rather than say she's got to just get put on some wait list that has to wait for some of the other units that we're going to learn about later this week when we meet and talk about how we're trying to address some of our other low income housing needs, which will also serve homeless individuals as well. I think this is an important program. I will be supporting it tonight and I think it is important that we always get our questions answered, that we know exactly what we're voting for, what the financial implications are to the taxpayers. And I'm just looking forward to seeing some of these people who. Have been in and out of our hospital system, in and out of our jail system that hopefully can get their lives back on track. Thank you. Thank you. Councilman Ortega, Councilman Lopez. Thank you, Mr. President. You know, I have tremendous respect for my for my colleague, Councilman Flynn, when it comes to this issue, especially when there is a. New tool. As untested in this city. But. Here's where I absolutely concur with my colleague. We've talked about this in the past. And as the Sanderson Apartments. And as we look at creating units all over the city, we want to see that all over the city. Number one, I want to see that all over the city. Second, because it works when you are able to contact the individuals who are either at risk of being homeless or are indeed homeless in those areas and be able to create a priority and to create that that that place in that geographic area, it's important. It's important to realize that we have a lot of homeless folks who are not necessarily under a bridge, but they're in a backyard. In a shed, in a garage, in an alley, in a gulch throughout West Denver. You do see a lot of it. There's ways that we can go about by doing this. You know, it was, I think, in August when I visited in Los Angeles and really had an opportunity to really to meet with the L.A. Homeless Authority, L.A. County Homeless Authority out there, and to really understand and see how just how much Skid Row has grown. It's no longer the row. It's the whole area. Right. And one of the things that really caught me is when they said, you know, the worst mistake we made was to centralize the services. Right? When all we did was concentrate here, when we should have gone back and we should have developed these units all throughout the city and these projects all throughout city. And we should have made sure in order for prevent for us to prevent this from happening, we had a we should have priority prioritized those folks and that or those areas. We're also going to come into the center and the city core seeking refuge. And I think that's one of the things that we've got to be mindful of. So I in that aspect, I absolutely concur. The other thing is that. I don't. I think that this is a great opportunity and I know are then Deputy Mayor Herron and. Treasurer. Kerry Kennedy had briefed me at length about how this may be a revolutionary idea. Right. And it's another tool. Now, I don't agree with some of the policies and policies in particular, you know, a couple that we have on the books that regarding homelessness. But I do believe and using the tools that that we have to be able to help resolve this issue. Now, at the end of the day, I think the best tool is paying somebody a living wage and giving them access to health care and creating affordable in affordable units and really, really creating that opportunity. That's how you solve a lot of the issues on the front end. And some of the same people who come to us and talk about some of these other policies are reluctant to do that. However, I think that we have an opportunity right here. Another tool in the toolbox that we can use with this now is. You know, is it untested? Probably. But do we have an opportunity to try this as a city innovated? Absolutely. And I don't want to fear passing this opportunity up, because we just kind of fear the change of it because it's something new. And I know that's not why my colleague is is concerned about it. But I actually I want to see this move forward because I'm very curious to see how this works. Right. And not just in theory, on paper, but in our community and in our city. Thank you, Mr. President. Councilman Lopez. Councilman Cashman. Thank you, Mr. President. This bill, if it passes, will not solve the problem of homelessness. Our Department of Public Works is looking at beginning a program called Vision Zero that aims to bring auto related deaths in Denver to zero. It's a great program. I look forward to its implementation in 2015. 60 people died from auto related accidents in the city and county of Denver. Shortly before Christmas, a bunch of us were on the front steps of the city and county building while the names were out of the 129 people, homeless people who died on the street in 2015. I'm preparing in our committee of the whole dealing with homelessness to offer the idea that we have a Vision Zero type of program aimed at ending homeless deaths on the street. I share Councilman Flynn's concerns in a number of areas. I think this program needs to have rigid auditing to be sure that the numbers justify what we're doing. But I also think this may be a good beginning, looking at the population, as Councilwoman Coolidge mentioned, as being in such jeopardy of being some of those names that get read out each year. I think this this program may help to drop that number. So I'll look forward to supporting this bill this evening. Thank you, Councilman Cashman. Councilman Flynn. Thank you, Mr. President. I'll be brief or just some final remarks. Considering all the comments that were made from colleagues, I. I really don't have any doubt that this will be a success. I really don't. I based on all the briefings I have had, I think it's going to work. And that's why I would concur with Councilman Espinosa. I think it's going to be successful. We ought to fund it ourselves. Instead of re paying back investors. In fact, for an $8.6 million investment from the lenders, if this is as successful as the contract anticipates, we would repay over the five years $11.6 million. That's a 34% rate of return over the five years. I think that's money we could well use delivering the services ourself. I have that much faith in it. I've seen Housing First. I believe that people will be arrested less than if they remain on the street. And that's why I think that this this is going to be a successful program. But I want to remind my colleagues that the savings that we are imputing is an arithmetic average. There are fixed costs at the detox center at Denver, at Denver Health, at the county jail. There are fixed costs that don't go away. Whether these 250 people are not arrested at all or not. I want to remind my colleagues that we're not actually saving the taxpayers any money until and unless we literally spend less money than we otherwise would have. Even granting that there's a natural councilwoman candidate, even in granting that there's a natural growth in other people, etc.. We are not saving the taxpayers money unless and until we literally spend less money than we would have. And I don't see us under these contracts spending less money. I can't support tonight program going forward like this without an overall fabric defined for me and for the other district council members for their neighborhoods as to how how this program will not this program, but how the rest of our programs will serve the homeless in my district. Literally, literally, we evicted five homeless people from mental health centers property last fall who had set up a camp there. And they're living somewhere now, still in my district until we find a way to serve the people already in the neighborhood where we're moving the folks from the core. I can't support this. Thank you, Mr. President. Thank you, Councilman Flynn. See no more comments. We're voting on 15 and 16 together in a block. Madam Secretary, roll call. FLYNN Now. Gilmore I. Cashman I can. Lopez All right. Knew Ortega. Black Brooks Clark. Espinosa No, Mr. President. I. Victoria Police Force heavily announced the results. Ten ice, two days. In ice two days. Resolutions 15 and 16 have been adopted in a block. All right. The next one, I believe, Madam Secretary, 927 Councilman, New Cavaney, what would you like for us to do with this? You said the question is, please. Go right ahead. Just not sure who's here about the handles, the transportation discussion. Do we have someone in the audience for 920? Okay. I think Brian. Miller is making his way up. Go ahead. Go ahead, Wayne. Good evening, Mr. President. City council members. I'm Ron Mitchell from Human Services. Right. Very, very impressed with the transportation services like Salvation Army. Get out to the Peoria Center and just wanted to ask a little question of how is the transportation services going to work with this new program for this next year, especially when we're losing the the shelter in Peoria is another host. So for this particular contract. This will provide up to 40 over. 1400 trips a year. It breaks down to about $415 per round trip. The there are several pickup points within the city of Denver, more of the downtown area. And it goes out to these outlying areas where might be rec centers, for example, that might house as overflow shelters for the homeless. My answering your question. Will they be picking up. Will be helping transportation say rescue mission. Salvation Army. The main areas of where our homeless reside. Yes. What they do is a there's a pick up time of about 7:00 and then in the morning they pick them up and they return them to those same locations. We just finished this lengthy discussion about getting the homeless off the street. And this is this transportation to me is very critical to get them to the shelters off the street. So this will be an improvement of the services we're proposing offering. This contract has actually been in effect since October of 2013, and it was it was a through an RFP from 2012. It was expanded last year as a result of wanting to begin to cover the summer months as well as the winter months. So overall, this is definitely an improvement over what we have historically had. All right. Thank you. Thank you. Thank you. Councilman there. Any other questions? 927 Madam Secretary, that was all the resolutions. We've got one bill for introduction, I believe it was 17. Councilwoman Ortega, would you like for us? There was just a couple of questions. Is Jeff Steinberg in the audience? Jeff, would you mind coming forward? This acquisition of property that's north of National Western and Japan. I had a chance to talk this afternoon. A couple of questions that I didn't get a chance to ask you are, first of all, is is the building currently occupied with a business, an operating business? I'm Jeff Steinberg. I'm director of Real Estate. The answer to that question is, yes, there are businesses. In that operation. Do we know how many jobs will be displaced as a result of this acquisition? There won't be any jobs that are displaced. The businesses that are there will continue to be there for an interim period of time. The major tenant is a company called Boulder Meats, and they're seeking to find a larger location because they're expanding their operations. Okay. So that was my primary concern was just trying to figure out you were able to address a lot of my questions related to some of the, you know, the the terms of the agreement, the price that we're paying, you know, the condition of the land that we're going to get it in.