REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
PHIL SKEI, Assistant Director
Planning and Development Department
BY: CRYSTAL SILVA, Senior Management Analyst
Planning and Development Department
SUBJECT
Title
Approve the Second Amendment to the Service Agreement with Elevate Community Services (Elevate) for the continued operation of Emergency Shelter services at Valley Inn, located at 933 N. Parkway Drive (APN 449-335-32) for 106 beds for individuals experiencing homelessness. The amendment period is from July 1, 2026, through September 30, 2026, in an amount not to exceed $600,000, funded through the Homeless Housing, Assistance and Prevention (HHAP) Program (Bid File No. 12500851) (City Council District 3)
Body
RECOMMENDATION
Staff recommends that the City Council approve the Second Amendment to the Service Agreement with Elevate Community Services, Inc., for the continued operation of emergency shelter services at Valley Inn, located at 933 N. Parkway Drive (APN 449-335-32), for the period of July 1, 2026, through September 30, 2026. This action will authorize an additional allocation of up to $600,000 in Homeless Housing, Assistance and Prevention (HHAP) program funds. The amendment will ensure uninterrupted shelter operations, compliance with shelter and housing habitability standards, and continued reporting and fiscal accountability as outlined in the amended agreement and its exhibits. Staff further recommends that the City Council authorize the City Manager, or designee, to execute all documents necessary to implement the Second Amendment and to take all actions required to carry out the intent of this approval.
EXECUTIVE SUMMARY
The Department is currently awaiting notification of a Homekey funding award that, if awarded, will support the planned conversion of the Valley Inn from its current use as an emergency shelter to a Permanent Supportive Housing (PSH) project. This transition aligns with the City’s broader strategy to increase the availability of long-term, service-enriched housing for individuals experiencing homelessness, as outlined in the Fresno Multi-Jurisdictional Housing Element and related planning documents. The interim extension of emergency shelter operations at Valley Inn is necessary to maintain stability for current residents and to provide sufficient time for a coordinated transition process. This approach is intended to minimize disruption for vulnerable residents and to support positive housing outcomes in advance of the anticipated Homekey-funded redevelopment.
BACKGROUND
California’s Homeless Housing, Assistance, and Prevention (HHAP) program, established in 2019 under AB 101, provides flexible, non-competitive block grants to cities, counties, continuums of care, and tribes. Its purpose is to reduce homelessness through regional, evidence-based strategies that expand shelter capacity, prevent unsheltered homelessness, and deliver housing-focused services tailored to local needs.
Eligible uses of HHAP funds include:
1. Rapid Rehousing - Rental assistance and landlord incentives (e.g., security deposits, holding fees).
2. Operating Subsidies - Support for operations of affordable/supportive housing, emergency shelters, non-congregate shelters, interim or bridge housing, and navigation centers.
3. Street Outreach - Connecting individuals experiencing homelessness to housing and services.
4. Services Coordination - Workforce development, education, training, and other supports for housing stability.
5. Systems Support - Regional coordination to maintain homelessness response systems, especially for vulnerable populations.
6. Permanent Housing Delivery & Innovative Solutions - Development of permanent housing and hotel/motel conversions.
7. Prevention & Shelter Diversion - Crisis resolution, mediation, and light financial assistance to avoid shelter entry.
8. Navigation Centers & Emergency Shelters - Creating or operating centers and shelters with clear pathways to permanent housing.
City Funding Timeline:
• February 2020: $6,158,246.18
• September 2021: $2,911,171 (Round 2)
• January 2023: $7,524,257.15 (Round 3)
• July 2023: $11,265,425.10 (Round 4)
• October 2024: $13,096,671.82 (Round 5)
To utilize these funds, the City issued a Request for Qualifications (RFQ) on October 18, 2024, seeking proposals for operating triage centers/emergency shelters and coordinating services. The funding will be applied under the Operating Subsidies eligible use category. By the December 17, 2024 deadline, the City received five proposals, all of which met the qualification requirements.
A selection panel comprised of representatives from the City’s Housing and Community Development, Homeless Services, and Homeless Assistance Response Team (HART) divisions within the Planning & Development Department, along with a representative from the City of San Jose evaluated all submitted proposals. The evaluation criteria included the ability to meet service requirements, compliance with RFQ terms and conditions, cost-effectiveness, past performance, and relevant qualifications.
After a comprehensive review process, Elevate’s proposal was selected as the most responsive and best aligned with the City’s operational goals. On March 13, 2025, City Council approved Elevate Community Services as the operator for the Ambassador and Villa shelters, followed by approval of the Fresno Home agreement on June 19, 2025.
Since then, Elevate has demonstrated strong performance as a partner, effectively managing shelter operations and supporting individuals experiencing homelessness in their transition to permanent housing. At this time, staff is requesting City Council approval for the second amendment to Elevate’s agreement to extend shelter operations at Valley Inn.
ENVIRONMENTAL FINDINGS
This is not a project as defined by the California Environmental Quality Act.
LOCAL PREFERENCE
Local preference is not applicable because of the use of state funds.
FISCAL IMPACT
This agreement will have no general fund impact and will be funded through state funds.
Attachments:
Second Amendment - Valley Inn_Original Agreement and First Amendment attached