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CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING & COMMUNITY DEVELOPMENT
DATE: JUNE 23, 2026
FROM: HOUSING & COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: SIXTH AMENDMENT TO ORIGINAL AGREEMENT WITH THE
SALVATION ARMY FOR EMERGENCY SHELTER SERVICES
ATTACHMENT (Y/N): YES ITEM# 16
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1. Approve the Sixth 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 two years from July 1, 2026 to June 30, 2028 with an additional one-year option to expire on June 30, 2029;
2. Increase the maximum contract to a not-to-exceed amount of $74,204,000, which includes additional authority of $25,400,000 to reimburse The Salvation Army (TSA) for services rendered from July 1, 2026, to June 30, 2029; and
3. Authorize the City Manager, or designee, to execute the Sixth 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:
On November 13, 2018, the City Council approved an agreement (Original Agreement) with The Salvation Army (TSA) for the operation of the Anaheim Emergency Shelter (AES). Under the Agreement, TSA provided the use of its property for the construction and operation of a low-barrier emergency shelter meeting established standards and criteria, and the City agreed to reimburse TSA for eligible construction and operating costs in an amount not to exceed $14 million. The Agreement established a minimum operating capacity of 200 emergency shelter beds and was originally scheduled to expire on January 31, 2021.
Sixth Amendment to Original Agreement for Emergency Shelter Services June 23, 2026
Due to the continuing need for emergency shelter services, on November 10, 2020, the City Council approved the First Amendment to the Original Agreement, extending the term through January 31, 2023, increasing contract authority by $11 million, and supporting the operation of 224 emergency shelter beds.
Based on financial information provided by TSA, City staff determined that sufficient funding remained available to support a short-term extension without additional appropriations.
Accordingly, the City Manager approved the Second Amendment to the Original Agreement, extending the term by six months through June 30, 2023, to align future renewals with the City's fiscal year. No additional funding was provided under the Second Amendment.
Subsequently, the City Council approved the Third Amendment on June 27, 2023, the Fourth Amendment on June 18, 2024, and the Fifth Amendment on June 17, 2025. The Fourth Amendment included provisions establishing a 10 percent penalty for late billing submissions to address ongoing delays in the invoicing process. All other material terms of the Agreement remained unchanged. The Fifth Amendment is scheduled to expire on June 30, 2026.
Separately, on May 13, 2020, the City entered into an Agreement Regarding Homeless Shelter Expansion (Expansion Agreement) with TSA to address increased demand for shelter services.
The Expansion Agreement added 101 emergency shelter beds, increasing Anaheim's total emergency shelter capacity from 224 beds to 325 beds. The Expansion Agreement was originally approved for a four-year term ending May 13, 2024.
Due to continued demand and occupancy levels consistently near the shelter system's 325-bed capacity, the City Manager exercised delegated authority to approve a First Amendment to the Expansion Agreement extending the term through May 13, 2026. No other provisions of the Expansion Agreement were modified.
To streamline contract administration and reduce administrative burden, the Expansion Agreement was subsequently allowed to expire. Because the Original Agreement establishes a minimum bed count rather than a maximum capacity, the 101 expansion beds can be incorporated into the Original Agreement without affecting operations or service levels. As a result, Anaheim will continue to maintain 325 emergency shelter beds under a single agreement with TSA.
The Salvation Army (TSA) continues to be a dedicated and reliable partner in the City’s efforts to address homelessness. As operator of the Anaheim Emergency Shelter (AES), TSA has consistently met its contractual obligations, maintained strong collaboration with City staff, and demonstrated a commitment to continuous program improvement. Shelter performance data reflects positive outcomes, with 14.36% of shelter residents successfully transitioning to permanent housing during the past 12 months. TSA and City staff also remain focused on maintaining a safe and well-managed facility through implementation of the AES Good Neighbor Policy, coordinated outreach with the Anaheim Police Department (APD), and contracted security services. These efforts have contributed to a 34% reduction in service calls related to the shelter and surrounding properties to APD over the past year.
In Fiscal Year 2025/26, City and TSA staff worked collaboratively to permanently house more than 80 individuals, including many who transitioned into the newly completed Azure Sixth Amendment to Original Agreement for Emergency Shelter Services June 23, 2026
Apartments permanent supportive housing development. TSA also continues to invest in the long-term evolution of the Center of Hope campus. On June 16, 2026, TSA broke ground on the Center for Applied Research and Innovation (CARI), a new facility intended to serve as a hub for program development, service innovation, and collaborative partnerships focused on addressing homelessness and related social challenges. As envisioned by TSA, CARI will support the evaluation of emerging service models and strategies while complementing the broader continuum of care offered at the Center of Hope campus. The facility will also provide space for supportive services, case management, and housing navigation activities that benefit shelter and housing program participants.
As part of its broader vision for the future of homelessness services in Anaheim, TSA is actively pursuing opportunities to expand services focused on stabilization, recovery, and substance use treatment. TSA recently pursued Proposition 1 funding to support these efforts and continues to evaluate additional program models that could enhance the continuum of care available to individuals experiencing homelessness. Over the past several years, the City and TSA have engaged in ongoing strategic discussions regarding the evolution of the current shelter model to better address the increasingly complex needs of shelter residents. These discussions have centered on a long-term concept that would integrate detoxification, treatment, and recovery- focused services into the existing system of care while maintaining overall service capacity.
Under one potential model, the number of traditional emergency shelter beds could be reduced and replaced with treatment-oriented beds supported by alternative funding sources. Such an approach would create a more comprehensive continuum of care, better align services with resident needs, and potentially reduce reliance on City General Fund resources by leveraging funding streams available for treatment and recovery services. While the operational details, funding structure, and implementation approach continue to be refined, both the City and TSA remain committed to exploring this direction as part of the long-term evolution of the Center of Hope campus. This work is expected to continue throughout the proposed contract term as the parties evaluate strategies to strengthen outcomes, improve service effectiveness, and create a more sustainable, service-rich model for addressing homelessness in Anaheim.
IMPACT ON BUDGET:
Sufficient appropriation is included in the Housing and Community Development Department’s proposed FY 2026/27 General Fund Budget for City Council consideration. The Department will continue to pursue grant opportunities when available to offset the costs as shown in the proposed reductions to the General Fund in this Sixth Amendment.
Respectfully submitted,
Grace Ruiz-Stepter
Director of Housing and Community Development
Attachments:
1. Sixth Amendment
2. Original Agreement and First – Fifth Amendments