STAFF REPORT
Meeting Date:
December 9, 2025
CONSENT
9 SUBJECT: SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
RECOMMENDATION: It is recommended that the City Council:
1. Approve a service agreement with Friendship Shelter, Inc. for the operation of the Alternative Sleeping Location (ASL) from January 1, 2026, through June 30, 2027, with the following financial limits:
• An amount not to exceed two hundred fifty thousand dollars ($250,000) for the operational period of January 1, 2026, through June 30, 2026.
• An amount not to exceed five hundred thousand dollars ($500,000) for the operational period of July 1, 2026, through June 30, 2027.
2. Authorize the City Manager to execute the agreement and administrative amendments that do not increase the total contract amount; and
3. Find that the action is not a project under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15378 because it does not result in a direct or reasonably foreseeable indirect physical change in the environment.
SUMMARY OF THE MATTER
The City established the Alternative Sleeping Location (ASL) in 2009 as a nightly lottery-based shelter that provided individuals experiencing homelessness with meals, hygiene access, safe overnight accommodations, and basic case management. The facility served as the City’s primary intake point for individuals living unsheltered.
In 2019, the City transitioned the program to an enrollment-based model that supported stability, sustained casework, and housing focused service delivery. This model strengthened client engagement and increased long term housing placements, treatment connections, and family reunifications.
The ASL also served as an essential legal function. During the time when Martin v City of Boise restricted enforcement of anticamping laws unless shelter beds were available, the program provided the City with lawful enforcement capacity while preserving access to safe and human services.
The shelter currently operates with thirty (30) beds. This reduction from forty (40) beds occurred during the pandemic to increase spacing within the congregate living environment. The 30-bed limit remains in place due to facility constraints.
In 2024, the United States Supreme Court issued its decision in City of Grants Pass v Johnson. Grants Pass held that the US Constitution’s Eighth Amendment does not bar local enforcement of public camping laws, even when individuals lack access to shelter. Although the decision restored certain local discretion over
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
public space management, the City has maintained its commitment to a humane, housing-focused response to homelessness.
Starting in early 2025, Federal homelessness funding has declined, State resources have contracted, and some jurisdictions have reduced rather than expanded their own homeless services, especially in regards to housing. These conditions create external pressure on Laguna Beach and require a sustainable long-term approach to service delivery.
On March 25, 2025, the City Council reviewed service options and determined that the City would not close the shelter at the conclusion of the current operator contract. The Council extended the existing contract from June 30, 2025, to December 31, 2025, to ensure continuity of service. The Council also directed staff to solicit input from qualified operators on shelter models appropriate for the post Grants Pass environment.
Friendship Shelter, Inc., was the only respondent. Staff has worked with Friendship Shelter over the past six months to evaluate operational needs, service outcomes, facility limitations, and program costs. This review supports a revised operating structure that improves client care, aligns with facility constraints, and stabilizes General Fund obligations.
The current contract expires December 31, 2025. Staff recommends approval of a new eighteen (18) month agreement from January 1, 2026, through June 30, 2027. The agreement contains two operational periods:
• Period One (January 1, 2026, through June 30, 2026): Maintain thirty (30) beds, with the Day Program changing to a Coordinated Entry Access Point.
• Period Two (July 1, 2026, through June 30, 2027): Transition to twenty (20) beds with more permanent semiprivate sleeping areas.
The City and Friendship Shelter will jointly develop the interior improvement plan during the first six months. The improvements will be funded entirely by funds assigned to Friendship Shelter via the County of Orange, and will convert the congregate sleeping area into private and semi-private spaces. The facility footprint cannot support thirty semiprivate areas; therefore, a twenty-bed configuration is necessary. This transition significantly improves client privacy, dignity, and safety while supporting stronger housing outcomes.
DISCUSSION
Background and Program Evolution
Program Establishment (2009–2019)
The City opened the Alternative Sleeping Location in 2009 as a nightly lottery-based shelter offering meals, restrooms, showers, and basic case management. It became the primary point of engagement for individuals experiencing homelessness.
Transition to Enrollment Model (2019)
The City adopted an enrollment-based model in 2019 to provide stability and improve outcomes. This model produced greater continuity of care and strengthened housing placements. Participants would be enrolled for 30-day periods which could be renewed provided the individual was actively working towards
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
a permanent housing solution. With limited external resources, most participants have been enrolled between four and twelve months.
Legal Role During Martin v Boise
Martin v City of Boise is a 2018 decision of the United States Court of Appeals for the Ninth Circuit that limited how cities could enforce anticamping and public sleeping laws. The court held that a city may not issue citations or criminal penalties for sleeping outdoors in public spaces when individuals experiencing homelessness have no access to available shelter. The ruling interpreted such enforcement as a violation of the Eighth Amendment’s prohibition on cruel and unusual punishment. As a result, local governments within the Ninth Circuit, including Laguna Beach, were required to maintain sufficient shelter capacity or modify enforcement practices to remain compliant. The ASL ensured compliance and maintained public safety. This decision guided municipal policy across the region until the United States Supreme Court clarified the applicable standards in City of Grants Pass v Johnson in 2024.
Transition to the Post Grants Pass Era
The legal landscape changed in June 2024 when the United States Supreme Court issued its ruling in City of Grants Pass v Johnson. Grants Pass generally held that the Eighth Amendment does not bar local governments from enforcing generally applicable anticamping laws, even when an individual experiencing homelessness lacks access to alternative shelter. The decision returned certain discretion to local governments regarding management of public spaces.
This shift does not eliminate the City’s commitment to maintain humane, effective, and outcome oriented homeless services. However, it requires the City to evaluate the long-term structure of those services in a context that is more challenging than at any time since the ASL opened.
Funding and Regional Pressure
Federal funding for homeless housing and supportive service programs have begun to contract under the current administration. State resources have also tightened, and regional partners have not expanded their shelter systems. Several jurisdictions have reduced services. As a result, the City faces increasing pressure to serve individuals who may not have community ties to Laguna Beach. Without careful planning, the City risks becoming the regional pressure point – with commensurate costs - as service availability diminishes elsewhere.
The City seeks to maintain its longstanding commitment to compassionate and effective homelessness response while ensuring that its resources remain aligned with the needs of Laguna Beach residents and the scale of the community.
City Council Direction and Vendor Engagement
On March 25, 2025, the City Council extended the existing contract through December 31, 2025, and directed staff to solicit input on an updated shelter model that reflects the post Grants Pass environment.
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
Friendship Shelter was the only respondent. Staff engaged with the organization to evaluate service quality, case management practices, facility constraints, operational risks, and long-term financial feasibility. The resulting analysis supports a two-period operating structure.
ASL Program Operations: What Has Stayed the Same and What Has Changed Elements That Remain the Same
Housing Focused Program Model
The ASL continues to operate as a housing focused, enrollment-based emergency shelter for single adults experiencing homelessness. The program still applies harm reduction, strengths-based engagement, and housing focused case management as its core service model.
Quiet Hours
Quiet hours continue to apply from the late evening through the early morning, and participants may still access the facility during daytime hours. Accommodations continue to be available for participants whose work schedule or disability requires modified expectations.
Case Management Services
The program retains its focus on regular case management meetings, housing planning, assistance with documentation, benefits enrollment, and referrals to health care, behavioral health, and employment support. Transportation assistance for essential appointments remains in place.
Meals, Hygiene, and Basic Services
The shelter still provides three meals daily. Participants retain access to showers, laundry services, hygiene supplies, mail distribution, and computers for employment and housing related activities.
Safety Standards and Community Expectations
Expectations for respectful behavior, compliance with safety rules, avoidance of weapons and controlled substances, and maintaining a safe and healthy communal environment remain unchanged. Violations continue to be addressed through warnings, documentation, and exit when necessary.
Coordinated Entry System Participation
The ASL continues to function as a closed Coordinated Entry System (CES) access point for adult individuals experiencing literal homelessness. Friendship Shelter staff still assist with documentation and CES enrollment during the early phase of each participant’s stay.
Elements To Change with New Contract
Revised Day Program
The revised program will shift from a daily, in-person drop-in model to a regional call-in and coordinated referral system. Individuals seeking assistance during daytime hours will contact shelter staff by phone to complete a brief screening and determine eligibility for services, including potential enrollment into the ASL or connection to resources within their communities of origin.
Elimination of the Emergency Bed Program
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
The prior five bed Emergency Bed Program used by the Laguna Beach Police Department has been discontinued. The ASL now operates a single program model with no separate emergency beds or overnight drop-off placements.
Updated Hours and Quiet Hours
The new contract policy eliminates the curfew language and relies solely on quiet hours. Quiet hours begin at 10:00 p.m. rather than 10:30 p.m. Participants may still arrive after quiet hours unless their behavior poses a safety risk. With the new contract, it is explicitly authorized that ASL clients can remain at the ASL during daytime hours, versus being directed to leave the ASL during the daytime (the latter has not been an enforced practice).
Revised City Preference and Eligibility Criteria
The new contract expands and clarifies the criteria for Laguna Beach preference. New qualifying categories include attendance at Laguna Beach schools, verified family ties, employment in the city, or long-term documented presence within the Laguna Beach homeless community. These requirements are more specific and require verification.
Revised Admission and Denial Standards
Denial procedures are more formal. All denials must be documented in writing. The updated manual adds a more detailed appeal process and places stronger emphasis on safety limitations and the need to ensure that participants can be safely served in a congregate environment.
Strengthened ADA and Reasonable Accommodation Processes Revised policies improves the accommodation process. Staff may approve common accommodations, but more complex requests require written documentation and Program Manager review. Appeals now go directly to the City’s ADA Coordinator. This structure is newly formalized and expands the City’s oversight responsibility.
Updated Property Storage and Abandoned Property Rules
The new policy strengthens storage documentation requirements, including recording locker assignments, documenting abandoned property immediately, and transferring property to the Laguna Beach Police Department after established retention periods.
Removal of Pandemic Based Provisions
References to pandemic driven operational changes, including adjustments to van services and shelter operations. The new policy version removes all COVID related provisions and transitions the shelter to a permanent twenty four hour model.
Expanded Documentation and Reporting Requirements
The updated manual expands requirements for incident reporting, documentation through the electronic log system, after hours notification standards, and performance measurement. Quality assurance expectations are strengthened to align with County and City requirements.
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
Proposed Program Structure (January 1, 2026 – June 30, 2027) Period One: January 1, 2026 – June 30, 2026
• Maintain thirty beds under the enrollment model.
• Continuing housing focused case management.
• Transition of the Day Program to a call-in Access Point with appropriate CES enrollment. • The City and Friendship Shelter jointly develop the interior improvement plan. • Install permanent semi-private sleeping areas.
• Interior improvements are funded entirely by the County of Orange’s assigned funding sources.
Period Two: July 1, 2026 – June 30, 2027
• Maintain housing focused case management
• Reduce enrollment to twenty beds.
• Eliminate the congregate sleeping environment.
• Improve privacy, safety, dignity, and program outcomes.
The building cannot accommodate thirty semiprivate spaces. A twenty-bed configuration is required to complete the improvements.
More About the Revised Daytime Program
The City intends to revise the daytime program at the ASL to ensure that daytime services remain accessible to individuals experiencing homelessness while reducing the external pressure that has developed as surrounding jurisdictions have scaled back their own service systems. The revised program will shift from a daily, in-person drop-in model to a regional call-in and coordinated referral system. Individuals seeking assistance during daytime hours will contact shelter staff by phone to complete a brief screening and determine eligibility for services, including potential enrollment into the ASL or connection to resources within their home communities.
This change reflects evolving regional conditions. Over the past several years, reductions in federal and State funding, combined with limited investment by neighboring jurisdictions, appears to have increased the number of individuals arriving in Laguna Beach seeking services that are no longer available elsewhere.
In some cases, individuals have been encouraged or directed to come to Laguna Beach because the City maintains a stable shelter program. This dynamic has created growing concern about Laguna Beach becoming a de facto day services outlet for the region without corresponding programs in other cities.
The revised daytime program preserves access to essential services for individuals who are homeless in Laguna Beach while establishing a more orderly and equitable system for managing demand. A call-in intake process allows staff to assess whether a person has meaningful ties to the community, determine whether the individual can be better served through resources located in their city of origin, and avoid unnecessary transportation of individuals into Laguna Beach solely to access limited daytime services. This approach protects the integrity of the ASL’s housing-focused model, aligns with the shelter’s enrollment criteria, and ensures that the City’s resources remain proportional to the needs of Laguna Beach residents and the scale of the local community.
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
Community and Service Impacts
The recommended agreement focuses on a trauma informed care model which improves safety, privacy, and dignity for shelter participants and preserves a humane and effective service model. The combined support of County funding, CalAIM (California Advancing and Innovating in Medi-Cal) reimbursement via Friendship Shelter, and federal Community Development Block Grant (CDBG) funding reduces the City’s fiscal burden and aligns our homelessness services programming with long term sustainability needs.
FINANCIAL ANALYSIS
The cost to operate the shelter will increase January 1, 2026. The annual cost to operate a 30-bed program is $1,089,186.00. The prorated cost for 6 months is $544,593.00. The City’s contribution is capped at $250,000.00 for this 6-month period. The County of Orange and Friendship Shelter will subsidize the remaining cost through County contract funding and CalAIM reimbursement.
The annual cost for a 20-bed program for Fiscal Year 26-27 is $792,062.00. The City’s share of this will not exceed $500,000. The remaining cost will be fully subsidized by the County and Friendship Shelter.
The City receives a CDBG allocation of $144,000 each year. This reduces the City’s General Fund obligation in both fiscal years.
General Fund Contribution Summary
• Jan 1, 2026 – June 30, 2026: $250,000 (General Fund) less $144,000 (CDBG) = $106,000 • July 1, 2026 – June 30, 2027: $500,000 (General Fund) less $144,000 (CDBG) = $356,000 No additional appropriation is required. Interior improvements will be funded in full by the County of Orange.
ENVIRONMENTAL ANALYSIS
The recommended action does not constitute a project under the California Environmental Quality Act.
Under CEQA Guidelines Section 15378, a “project” refers to an activity that has the potential to result in a direct or reasonably foreseeable indirect physical change in the environment. Approval of the proposed service agreement does not authorize construction, physical improvements, or changes to the existing use of the site. The agreement solely governs the operational structure of the Alternative Sleeping Location and the financial terms under which services will be provided during the contract period.
The recommended action maintains the current operational use of an established shelter facility and does not expand capacity beyond existing conditions. Although the City and Friendship Shelter will jointly develop a plan for interior improvements to transition from a congregate sleeping environment to semi private living areas, no physical improvements are authorized at this time. Any future construction or interior modifications will undergo separate review for compliance with CEQA and applicable building and permitting requirements before implementation.
SERVICE AGREEMENT FOR SHELTER MANAGEMENT SERVICES AT THE
ALTERNATIVE SLEEPING LOCATION
December 9, 2025
For these reasons, the recommended action does not meet the definition of a project and is exempt from CEQA review.
ATTACHMENTS
1. Service Agreement with Friendship Shelter (Pgs.
Submitted By:
.
Approved: .David A Kiff
Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Jeremy Frimond, Assistant City Manager