DATE: OCTOBER 21, 2025
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ORLANDO REYES, ASSISTANT DIRECTOR
BY: KAYSHLA LOPEZ, HOMELESS SERVICES MANAGER
VINCENT MONTGOMERY, PLANNING MANAGER
TITLE: MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY OF MONTEREY, COALITION OF HOMELESS SERVICE PROVIDERS AND CITY OF SALINAS TO SUPPORT THE ENCAMPMENT RESOLUTION FUNDING ROUND 5 (ERF-5R) APPLICATION, LOW BARRIER NAVIGATION CENTER DEVELOPMENT (EL REY MOTEL), AND BUDGET APPROPRIATION RECOMMENDED MOTION:
A motion recommending that the City Council approve a resolution:
Authorizing the Mayor, or designee, to execute a four-year Memorandum of Understanding (MOU) between the City of Salinas, County of Monterey and Coalition of Homeless Services Providers (CHSP) for the purpose of collaborating on the California Department of Housing and Community Development (HCD) Encampment Resolution Funding Round 5 (ERF-5R) application and development and implementation of a low-barrier navigation center for individuals experiencing homelessness at 443 W. Market Street, commonly known as “El Rey Motel”; Authorizing the City Manager to negotiate and execute any agreements identified in the MOU and future amendments to the MOU, where amendments do not significantly alter the purposes; and Authorizing the establishment of ERF-5R appropriation and budget allocation based on any awarded ERF-5R budget and activities.
EXCECUTIVE SUMMARY
The California Department of Housing and Community Development is expected to release the Notice of Funding Availability for the Encampment Resolution Funding Round 5 (ERF-5R) by December 2025. The City of Salinas has successfully applied for and received two previous rounds of ERF funding to support encampment resolution efforts. For this fifth round, City staff recommends the approval of a Memorandum of Understanding (MOU) between the City of Salinas, the County of Monterey, and the Coalition of Homeless Services Providers (CHSP) to submit a collaborative grant application. This is the City’s first formal partnership with the County for an ERF initiative. If awarded, ERF-5R funds will be used to complete the necessary rehabilitation of the City-owned EL Rey Motel to support the operation of a 23-unit Low Barrier Navigation Center (LBNC) at the El Rey Motel, as well as to provide street outreach services to individuals experiencing homelessness along the Davis Street Corridor. Under the MOU, the County will serve as the lead applicant and grant administrator, the City will oversee site renovations and ongoing coordination, and CHSP will identify the service provider for ongoing operations.
BACKGROUND:
The City of Salinas, through the Community Development Department continues to pursue strategic and collaborative efforts to address homelessness within the City’s jurisdiction. This includes ongoing partnerships with other local homeless services providers and agencies grounded in best practices and focused on long term housing stability. Since 2022, the California Department of Housing and Community Development (HCD) has issued four rounds of Encampment Resolution Funding (ERF) and is expected to release the fifth round (ERF-5R) in FY 2025–26.
The Encampment Resolution Funding (ERF) Program is intended to strengthen collaboration between state and local jurisdictions and Continuums of Care (CoCs) to address and ensure the health and safety of individuals experiencing unsheltered homelessness in encampments and to transition residents into safe, stable housing. The City of Salinas has previously secured two ERF grants independently to address high-impact encampments within the City. These prior rounds supported the City’s efforts to resolve encampments and provide interim housing solutions. In preparation for ERF-5R, the City, County of Monterey and CHSP began discussions to submit a collaborative ERF application in November 2024. Resolving encampments located along the Davis Street Corridor was identified as the application objective. This corridor spans multiple jurisdictions, including City, County, and State land (Caltrans).
This MOU establishes the collaborative framework and partnership between the County, the City of Salinas (City) and CHSP for the submission of a County-led ERF-5R grant application and a project implementation plan. If awarded, the ERF-5R project will fund the development of a 23 unit, congregate, low barrier navigation center (LBNC) through the motel conversion of El Rey Motel, up to two years of funding for operations and services, including property site management, and the partial operations of the Salinas Outreach and Response Team (SORT). The estimated total application amount will not exceed $8,000,000. As part of this funding application, the City’s estimated request is approximately $2,300,000, which is comprised of a rehabilitation/capital improvement cost estimated at $1,300,000, including a $200,000 contingency, and partial funding for SORT street outreach operations estimated at approximately $1,000,000 over two fiscal years.
Upon completion, the El Rey LBNC will provide interim shelter and support services aimed at resolving homelessness for approximately 80 individuals residing in the Davis Street Corridor encampments. The project aligns with the ERF-5R program requirements by using Housing First, low-barrier, non-punitive and person-centered approaches to help residents transition into permanent housing and resolve their experience of unsheltered homelessness.
The table below provides a timeline of applicable activities and dates associated with the Encampment Resolution Fund NOFA and application.
HCD Encampment Resolution Fund 5R Program Timeline
Milestone
Timeframe
HCD ERF-5R NOFA Release
Est. December 2025
ERF-5R Application Submittal to HCD
Est. January 2026
HCD ERF-5R Award Notifications
TBD
County Standard Agreement Executed
TBD
County Funding Agreements Executed
TBD
ATTACHMENTS:
Draft MOU
Powerpoint
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