CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DATE: JUNE 17, 2025
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: FIFTH AMENDMENT TO AGREEMENT WITH THE
SALVATION ARMY FOR EMERGENCY SHELTER SERVICES
(224 BED SHELTER)
ATTACHMENT (Y/N): YES ITEM# 14
GOVERNMENT CODE 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1. Approve the Fifth Amendment to the Agreement Regarding Homeless Shelter (Original Agreement) by and between the City of Anaheim (City) and The Salvation Army (TSA) for the continuation of shelter services, extending the term of the agreement for one additional year to expire on June 30, 2026;
2. Increase the maximum contract to a not-to-exceed amount of $48,804,000, which includes additional authority of $6,768,000 to reimburse The Salvation Army (TSA) for services rendered from July 1, 2025, to June 30, 2026; and
3. Authorize the City Manager, or his designee, to execute the Fifth Amendment to the Original Agreement, and to execute subsequent amendments or documents necessary for the continuation or administration of shelter services at 1455 S. Salvation Place, provided they are approved by the City Attorney’s Office and do not increase the total maximum reimbursement amount payable to The Salvation Army (TSA).
DISCUSSION:
The Anaheim City Council approved the Original Agreement (Agreement) with The Salvation Army (TSA) for the provision of a minimum of 200 emergency shelter beds, referred to as the Anaheim Emergency Shelter (AES), on November 13, 2018.
Under the terms of the Agreement, TSA allowed the use of its land to construct and operate a low-barrier emergency shelter consistent with defined standards and criteria, and the City agreed to reimburse TSA for construction and operating costs not to exceed $14 million. The Original Agreement expired on January 31, 2021, two years after the commencement date.
Fifth Amendment to Agreement for Emergency Shelter Services June 17, 2025
Due to the continuing need for shelter beds in Anaheim, on November 10, 2020, the City Council amended the Original Agreement to extend the emergency shelter operation by two years, to January 31, 2023, and increased the contract authority by $11 million for shelter operations that provide 224 emergency shelter beds.
The Second Amendment to the contract was effective on February 1, 2023. Based on accounting provided by TSA to city staff, it was anticipated that the first amendment provided sufficient funding to extend the contract for a short term, allowing for the contract renewals to align with the city’s fiscal year, without the need for additional funding. Consequently, the City Manager approved a six-month extension, the Second Amendment, for a term only (no additional funding), establishing a new contract expiration date as June 30, 2023.
On June 27, 2023, and June 18, 2024, respectively, the City Council approved the Third Amendment and then Fourth Amendment to the Original Agreement. To address lags in the billing process, the Fourth Amendment introduced language adding a 10% penalty for late billing. All other terms of the Original Agreement remain unchanged. The Agreement is now set to expire on June 30, 2025.
The Salvation Army remains a dedicated, steadfast City partner. As the City’s premier shelter operator, they have consistently delivered the services specified in the original contract and maintained open communication on all matters. Notably, the partnership continues to yield definitive results as performance data indicates that 27% of shelter residents have successfully moved into permanent housing, which is an increase of 4% from last year. This is the highest housing rate out of shelter in the entire county and above the national average of 16%, based on data from the National Alliance to End Homelessness.
Beyond the provision of immediate shelter and as part of ongoing efforts to evolve the Anaheim Homeless System of Care, staff are actively collaborating with TSA to identify and address gaps in services that support successful shelter exits. Together, we are focusing on key areas such as mental health care and substance use treatment.
Regular discussions between staff and TSA are helping to shape the future of shelter operations and ensure more comprehensive support for individuals experiencing homelessness. TSA is currently assessing funding opportunities through Proposition 1 to advance plans to deliver a comprehensive, service-rich campus at the current shelter site.
Staff recommends approval of the Fifth Amendment to the Original Agreement for an additional year, setting the new expiration date as June 30, 2026, and keeping the current annual reimbursable amount at $6,768,000 as set forth in the current agreement. Renewal of this agreement is essential as emergency shelter beds help ongoing city efforts to maintain safe, accessible public spaces for all while ensuring individuals experiencing homelessness receive respectful, dignified, and effective care.
Fifth Amendment to Agreement for Emergency Shelter Services June 17, 2025
Renewal of the Shelter agreement directly supports the City’s Strategic Plan Goal B:
Enhance Livability and Strategy 9: Maintain and expand services to address homelessness and its impacts.
IMPACT ON BUDGET:
Sufficient appropriation is included in the Department’s proposed FY 2025/26 General Fund Budget for City Council consideration tonight. The department will continue to pursue grant opportunities when available to offset the costs.
Respectfully submitted,
Grace Ruiz-Stepter
Housing and Community Development Director
Attachments:
1. Fifth Amendment
2. Original Agreement and First – Fourth Amendments