REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize Execution of Updated Agreement with WeHOPE in an Amount Not-to-Exceed $1,788,185 for Street Outreach and Essential Homeless Services
Report
EXECUTIVE SUMMARY
On November 4, 2025, the City Council authorized the City Manager to execute an agreement with WeHOPE to provide services to unhoused adults, youth, and families in Santa Clara under three programs: (1) the Street Outreach and Case Management Program, (2) the Temporary Hotel Program, and (3) the Inclement Weather Hotel Program. The agreement provided for an initial two-year term with an annual not-to-exceed amount of $851,163 and a total not-to-exceed agreement amount of $1,702,326. The agreement was intended to expand the City’s homeless support services by creating new pathways for outreach, case management, coordinated entry system, and emergency shelter.
After Council approval of the agreement, WeHOPE requested additional terms and a postponement until the terms could be finalized. Substantial negotiations between WeHOPE and City staff ensued. The updated agreement now presented for Council consideration reflects the results of these negotiations. The following key changes are proposed: 1) an updated contract term from August 24, 2026 through August 23, 2028, with an option for the City to extend for one additional year; 2) an increase in the total not-to-exceed amount from $1,702,326 to $1,788,185; 3) inclusion of a three month Advance Payment for Year One in the amount of $222,463 to support start-up costs; 4) an increase in hourly rates of approximately 3% in the Year Two budget; 5) updated independent contractor requirements; and 6) minor updates and clarification of services and performance measures.
BACKGROUND
The City responds to and addresses homelessness through a combination of City resources, contracted services, and participation in the County of Santa Clara’s broader homeless services system. The City supports homelessness prevention and stabilization through investments in programs such as the County’s Homelessness Prevention System, tenant-based rental assistance administered by ABODE Services, intensive case management, 211 services through United Way, landlord/tenant mediation through Project Sentinel, and services for survivors of domestic violence through Next Door Solutions. In addition, the Santa Clara Police Department’s Community Response Team (CRT) conducts non-uniformed outreach, responds to behavioral health and other crises, and helps connect unsheltered individuals to partner agencies for services.
The City has also been expanding its direct homelessness response capacity. In 2022, the City entered into an agreement with WeHOPE for mobile hygiene and case management services through the Dignity on Wheels program. Staff is in the process of relocating that service to a more accessible site at Central Park to improve participation and connections to other basic-needs resources. At the policy level, the City has been developing a Draft Citywide Plan to Reduce Homelessness and Its Impacts, which identifies service gaps and strategies including street outreach, emergency shelter capacity, and an inclement weather overnight program. Staff is preparing to bring the final draft plan to the City Council in Fall 2026 and is coordinating with the County to ensure alignment with the final countywide 2025-30 Community Plan to End Homelessness.
In 2023, the City submitted State budget requests to its elected State representatives for consideration. With the support of California State Senator Aisha Wahab and former Assemblymember Evan Low, the City was awarded $1,800,000 in State funding to enhance its homelessness response through a street and encampment outreach team, a pop-up inclement weather program, and to explore partnerships with other public agencies, nonprofit organizations, businesses, and volunteer and faith-based organizations to leverage funding, facilities, expertise, and staffing to create a more comprehensive homelessness response.
On November 4, 2025, the City Council authorized the City Manager to execute an agreement with WeHOPE to provide three program services, Street Outreach and Case Management (SO/CM), Temporary Hotel Program (THP), and Inclement Weather Hotel Program (IWHP), for an initial two-year term with an annual not-to-exceed amount of $851,163 and a total not-to-exceed agreement amount of $1,702,326. The agreement was intended to expand the City’s homeless support services by creating new pathways for outreach, case management, coordinated entry system, and emergency shelter through the THP and IWHP.
After Council approval of the agreement, WeHOPE requested additional time to initiate services and proposed additional, substantive terms. The original agreement approved by the City Council in November 2025 was not executed due to the subsequent requests from WeHOPE.
WeHOPE’s requested new terms included a provision for the City to issue a Letter of Credit (LOC) to allow WeHOPE to draw directly from a City account if invoice payments became delinquent. This request was intended to help insulate the WeHOPE from financial risk given the overall funding challenges and uncertainties that are impacting the non-profit sector at this time. Staff from the City Manager’s Office, Community Development Department - Housing Division, Finance Department, and City Attorney’s Office evaluated this request and determined the City could not provide an LOC. As an alternative, staff agreed to consider an advance payment of three months and to increase the indirect costs not-to-exceed amount authorized for each invoice from 10% to 15%. These terms were agreeable to WeHOPE and on May 2, 2026, their Board of Directors approved moving forward with services for Santa Clara.
As a result, the updated agreement with WeHOPE (Agreement) reflects the following key changes: 1) the contract term will run from August 24, 2026 through August 23, 2029, 2) the total not-to-exceed amount for the two-year agreement will increase from $1,702,326 to $1,788,185 due to the higher indirect cost allowance and increase in year two hourly rates; 3) a three month advance payment in the first contract year in the amount of $222,463 to support start-up costs; 4) an increase in hourly rates of approximately 3% in the Year Two budget; 5) updated independent contractor requirements; and 6) minor updates and clarification of services and performance measures. A clean version of the updated agreement and redline version reflecting the proposed edits are attached to the report (Attachments 1 and 2).
Since the Council’s November 4, 2025 action did not delegate authority to the City Manager to further negotiate/amend the approved agreement, staff is providing this updated agreement for the City Council’s approval. Additionally, staff is requesting for delegated authority for the City Manager to execute amendments to the agreement with WeHOPE to increase the total not-to-exceed amount of the agreement by an amount not-to-exceed $907,066 if the City identifies or receives additional funding to support the described programs for a third year.
DISCUSSION
The following changes are included in the updated agreement:
• Updated Agreement Term: Staff and WeHOPE are proposing to update the agreement term to begin August 24, 2026 and end on August 23, 2028, with an option to extend for an additional one year at the City’s sole discretion if there are remaining funds after WeHOPE’s reconciliation of expenditures for the second contract year as described in more detail below. Refer to sections 2 and 5 in Agreement.
• Increased Rate for Indirect Costs: Due to the increased cost of operations, WeHOPE requested the City to increase the not-to-exceed amount authorized for indirect costs from 10% to 15% of each invoice, which, along with the second year hourly rate increase as described below, will increase the agreement’s not-to-exceed amount by $85,859, from $1,702,326 to $1,788,185. The new rate of 15% is in line with (or below) indirect cost rates charged by local non-profits for services. Refer to section 6 and Exhibit B, Table 1 in Agreement.
• Advance Payment: WeHOPE made this request to support operational ramp-up, staffing stabilization and onboarding, and overall cash-flow management at the commencement of services and referenced similar processes they have in place with the City of San Jose and City and County of San Francisco through their respective service agreements. In response to WeHOPE’s request, staff is proposing to include a section under Exhibit B that allows for an advance payment to cover three months of services in the first contract year in the amount of $222,463. WeHOPE will provide the City with an itemized expense report evidencing the expenses incurred during that time. If the actual expenses equate to less than the sum of the advance payment amount, WeHOPE is responsible for crediting the City the difference in their invoices for the 10th, 11th, and 12th months of the agreement term (June-August 2027). Refer to Exhibit B, Section 2 in Agreement.
• Hourly Rate Increases: WeHOPE made the additional request to include an hourly rate increase in the second year of operations. The City agreed to add an approximate 3% increase to hourly rates for year two, which increased the second year budget by $8,479.
• Minor Updates and Clarification of Services and Performance Measures: Staff made minor updates and clarifying edits to services and performance measures to ensure that the scope of work captures what is needed to implement the programs and consistent language. These changes include WeHOPE assisting with the coordination of events/workshops, which may include resource fairs for people experiencing homelessness; updating a SO/CM performance measure to reflect a more realistic goal for case managed Clients completing housing plans; flexibility for the City adjust the performance measures as needed with written approval; and hotel stay extensions if a Client is engaged in case management and housing/shelter navigation service. Refer to exhibit A in Agreement. These updates reflect feedback from new City staff who have experience managing similar programs. A Management Analyst in the Community Development Department - Housing Division was hired in February 2026 to manage implementation of the City’s homelessness response strategy, build new partnerships, and seek funding for services.
• Adjustments to Independent Contractor Obligations. Updated the language to Sections 8 and 10 of the Agreement to better align with City’s updated independent contractor language for services agreements.
• Administrative Edits: Clean-up edits were made to the Indemnity requirements and Section 5.3.1 of Exhibit A is updated to correct the number of rooms that can be utilized per year for the IWHP. There was previously a typo. Additionally, staff adjusted the invoicing and reporting periods to align with the new agreement term.
The information below about WeHOPE and the proposed services was previously included in the November 4, 2025 agenda report.
WeHOPE
WeHOPE is a Bay Area non-profit whose mission is to help individuals become healthy, employed, and housed through innovative, dignity-centered programs. WeHOPE has proven experience in providing a variety of services to individuals experiencing homelessness, including operating three non-congregate shelters in San Francisco, East Palo Alto, and Half Moon Bay and the City’s Dignity on Wheels program. Additionally, several of the City’s neighboring jurisdictions, including Sunnyvale, San Jose, Milpitas, Mountain View, and the County of Santa Clara’s Office of Supportive Housing, contract with WeHOPE to provide various homelessness related services.
Program Services Overview
WeHOPE’s programs are based on the principles of Housing First, a nationally recognized approach that prioritizes providing people experiencing homelessness with immediate access to safe, stable housing without requiring sobriety, employment, or other preconditions. This model operates on the belief that everyone is “housing ready” and that stable housing is a critical foundation for improving health, well-being, and long-term self-sufficiency.
To implement these principles locally, WeHOPE will offer and provide the following services to unhoused adults, youth, and families in the City of Santa Clara.
Street Outreach and Case Management (SO/CM)
WeHOPE will provide street outreach and case management services on a regular basis throughout Santa Clara, focusing on locations where unhoused individuals congregate including oversized vehicle encampments. The program aims to build trust through consistent engagement and will connect individuals to shelter/housing opportunities, health care, behavioral health, and supportive services. A team of outreach workers and case managers will implement key activities that include conducting a formal intake process, administering housing assessments, and linkage to the County’s Coordinated Entry System, developing service and housing plans, assisting with benefits enrollment, providing transportation to critical appointments, and placement into the Temporary Hotel Program and the Inclement Weather Hotel Program.
The SO/CM team will also assist clients in obtaining identification and other necessary documentation to secure housing and benefits, distribute hygiene supplies, and facilitate enrollment in the County’s Coordinated Entry System for interim and supportive housing and other local resources, and collaborate with the City during City-activated inclement weather events to notify unhoused individuals of local warming and cooling centers and room availability in the City’s IWHP, provide transportation, and distribute supplies. Additionally, the SO/CM team will collect feedback from unhoused individuals on existing services and resources, as well as potential service gaps, to provide the City with real time information on how to better serve its unhoused community.
WeHOPE will coordinate its services with City departments and partner agencies, which may include participation in meetings with City departments and/or partner agencies. WeHOPE’s SO/CM services are intended to complement the City’s existing CRT services. While the CRT will continue to respond to calls for service, quality-of-life issues, and public safety crises regardless of an individual’s housing status, WeHOPE will focus on proactive, voluntary engagement with unhoused individuals, emphasizing long-term, housing-focused case management. By providing consistent support and addressing non-emergency needs, the SO/CM team is expected to ease the demand on the CRT, enabling the team to focus on other priorities.
While some of the described services may overlap with those provided by the countywide ABODE Homeless Engagement Access Team (HEAT), which conducts outreach to unhoused individuals who have moderate to severe mental health issues across 13 cities in the county on a bi-weekly basis, there is a need for more regular, localized outreach and services that the SO/CM would provide specifically to Santa Clara residents. The proposed SO/CM services will fill this gap by offering regular, housing-focused support specifically for Santa Clara residents. This will be the first time that street outreach and case management services will be one hundred percent dedicated to Santa Clara.
Estimated costs associated with the SO/CM program are approximately $276,307 annually; however, there are also additional operating and staffing costs shared across the three programs as described in more detail under the fiscal impact section. The operating costs include program supplies and client assistance, such as hygiene products, clothing, transportation, etc.
Temporary Hotel Program (THP)
Through a direct agreement with a hotel located in Santa Clara, WeHOPE will secure five rooms year-round for unhoused Santa Clara residents, with prioritized use for unhoused individuals who are actively participating in their case management program and working to transition into permanent housing, a shelter program, or another transitional housing opportunity. Participants may stay in a hotel room for up to 30 days.
While enrolled, participants will meet regularly with a case manager to review and advance their housing plan and receive meals and case management services that include all the services provided by the SO/CM team described above. A residential coordinator will also conduct regular wellness checks and room inspections to ensure compliance with program rules, including “no visitors” and "good neighbor" policies.
Estimated expenses directly associated with the THP total are approximately $300,322 annually; however, there are also additional operating and staffing costs shared across the three programs as described in more detail under the fiscal impact section.
Inclement Weather Hotel Program (IWHP)
The Inclement Weather Hotel Program provides up to ten (10) hotel rooms on a first-come, first-served basis for unhoused individuals residing in Santa Clara during City-activated inclement weather events, for up to 45 nights per year. Services include participant intake, wellness checks, meals, care coordination, and exit planning. WeHOPE staff will be on-call 24/7 during activations to ensure program rules are followed and ensure the health and safety of participants during the inclement weather event. They will have a room onsite during IWHP activations to assist with this coordination. The WeHOPE team will also conduct communications and outreach activities to inform unhoused individuals and service providers when the program is activated.
The City will determine when to activate the IWHP based on local conditions and will notify WeHOPE whenever an inclement weather event is declared. Consistent with the County’s Inclement Weather and Excessive Heat Response Annexes, the City may activate the program at its discretion whenever forecast conditions pose a serious health risk, including but not limited to, overnight lows below 40°F with at least a 5% chance of rain, two or more days of persistent or flooding-level rainfall, or National Weather Service “High” or “Very High” Health Risk alerts indicating prolonged, dangerous heat with little nighttime relief.
The proposed IWHP is based on research that City staff completed through consultations with several other jurisdictions experienced in administering similar programs. An inter-departmental team of City staff also met to identify a potential location for an overnight inclement weather location that would provide shelter during extremely hot or cold weather events, after the City’s daytime warming or cooling centers close and discuss the involved logistics. These consultations have helped staff compare various emergency shelter models and determined that a non-congregate, hotel-based inclement weather shelter program operated by a service provider is more effective than establishing and administering a “pop-up” shelter in a City facility (e.g., library). Discussions with other jurisdictions revealed that operating “pop-up” shelters presents significant logistical challenges, including securing staffing, facility setup/cleanup, meal coordination, and potential scheduling conflicts at City facilities. In contrast, a hotel-based program operated by a service provider enables faster activation, provides greater participant privacy and safety than a congregate shelter setting, and a site location that is already dedicated for residential uses.
Estimated expenses for the IWHP are approximately $94,284 annually; however, there are also additional operating and staffing costs shared across the three programs as described in more detail under the fiscal impact section.
Stewardship of Hotel Sites
WeHOPE is responsible for establishing an agreement directly with local hotel(s) for the THP and IWHP and will submit all hotel partnership agreements, including the selection of the primary hotel site, to the City for prior review and approval. While WeHOPE intends to operate both programs in a single hotel, the unpredictability of inclement weather activations may at times require a secondary hotel for the IWHP. Additionally, as part of this agreement, WeHOPE will adhere to the hotel’s requirements for room occupancy and verify that individuals sharing a hotel room are family members or otherwise have an established prior relationship. WeHOPE has identified a hotel located on El Camino Real in Santa Clara as a primary hotel site.
Importantly, although the City did not receive any reports from neighboring jurisdictions with similar programs or WeHOPE about major incidents or major damages to hotel rooms in their respective hotel programs, this agreement designates funds for potential incidents: up to $12,813 per year for THP hotel maintenance, supplies and repairs and $5,625 per year for the IWHP rooms. These funds ensure resources are available should any issues arise.
Staffing
The program services will be facilitated through a team of homeless services specialists that includes:
• 2.0 FTE Outreach Workers
• 2.0 FTE Case Managers
• 0.5 FTE Program Manager
• As Needed Residential Services Coordinators (THP and IWHP only)
WeHOPE will provide their staff regular training and development on topics, including but not limited to the County’s Office of Supportive Housing required trainings on use of the County’s Homelessness Management Information System (HMIS) and HMIS enrollment, VI-SPDAT assessments, housing navigation, de-escalation, harm reduction, motivational interviewing, trauma informed care, implicit bias, street engagement, professionalism and ethics, cultural competency, overdose prevention, overdose response including administration of Narcan, mental health coordination, and substance abuse community resources.
Program Policies
WeHOPE will be responsible for developing program policies and procedures tailored to the City’s specific needs and priorities. City staff will review and approve these policies before services begin. At a minimum, these policies address:
• Program Eligibility Requirements
• Admissions/Selection Process
• Program Rules
• Client Removal From A Program
• Client Grievance Process
• Overdose Prevention
• Crisis Intervention
• Engaging with Law Enforcement
• Good Neighbor Policy
City’s Efforts to Reduce Homelessness and Its Impacts
This agreement is a meaningful step forward in implementing the City Council priority
related to street outreach and expanding the City’s homeless services. By partnering with WeHOPE, the City will gain access to WeHOPE’s extensive regional experience and deep understanding of local conditions and available resources to effectively implement proven programs tailored to address homelessness in Santa Clara. The three programs proposed in this agreement are informed by strategies outlined in the City’s Draft Citywide Plan to Reduce Homelessness and Its Impacts, research on similar programs in neighboring cities, and input from multiple City departments.
The services proposed in this agreement support key work items outlined in the City’s Draft Citywide Plan to Reduce Homelessness and Its Impacts under Strategy Area 2: Increase availability of short-term shelter, permanent supportive housing, and Extremely Low Income (ELI) housing, and Strategy Area 3: Conduct proactive street outreach to engage people who are unsheltered and connect them to resources. Additionally, the programs fall under several categories of the County’s Countywide Supportive Housing System, such as Outreach (SO/CM), Coordinated Entry System (SO/CM), and Emergency Shelter (THP and IWHP). Lastly, there are benefits and operational efficiencies of having one vendor manage the City’s direct homeless services.
It should be noted that funding for these programs beyond the two service years has not yet been identified. As such, these are pilot programs that will be assessed for their effectiveness through performance measures outlined in the agreement. Staff will work on identifying potential funding sources to implement the programs long term if they prove to be impactful. The performance measures will be included as part of any future progress updates that staff provides to the City Council on the City’s homelessness response plan. Since the City piggybacked off of the City of Sunnyvale’s agreement, staff intends to implement a competitive procurement process for these services in the future if there is continued support and funding.
Pending approval of the updated agreement, there is $11,815 remaining in the $1.8 million State grant that will not be directly expended through the WeHOPE agreement. Staff plans to use these funds to support other homelessness-related initiatives, such as resource fairs for people experiencing homelessness and the upcoming 2027 Point-in-Time Count.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
The proposed agreement has a not-to-exceed amount of $1,788,185 for the agreement term, which will be covered entirely by the State grant that the City received to expand its homelessness response. In the updated agreement, the first contract year includes a not-to-exceed amount of $889,853 and the second contract year includes a not-to-exceed amount of $898,332 plus any remaining funds from the first year. Services can continue into the third contract year if there are remaining funds from the second contract year, at the City’s sole discretion, or if the City amends the agreement to increase the total not-to-exceed amount to continue services through the end of the agreement term. For cost details, please see year 1 and 2 service budgets in Attachment 1, exhibit B.
Hotel rooms and certain operating costs (e.g., THP and IWHP hotel rooms, THP and IWHP hotel maintenance, supplies and repairs, client assistance, staff training, insurance, program supplies, client assistance, etc.) are reimbursed based on actual usage/expenses. Additionally, the City may approve the transfer of amounts between any of the budget categories provided the total maximum compensation is not exceeded, which provides some flexibility.
Funding for this agreement is budgeted in the Other City Departments Operating Grant Trust Fund.
COORDINATION
This report has been coordinated with the Community Development Department, City Manager’s Office, City Attorney’s Office, and Finance Department.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov.
RECOMMENDATION
Recommendation
1. Approve and authorize the City Manager to execute the updated Agreement for Services with WeHOPE to provide street outreach and case management services, and emergency shelter operations and services through the Temporary Hotel Program and Inclement Weather Hotel Program, substantially on the terms and the form presented with a maximum compensation not-to-exceed $1,788,185, in a final form approved by the City Attorney; and
2. Authorize the City Manager to execute amendments to the agreement with WeHOPE to increase the total not-to-exceed amount of the agreement by an amount not-to-exceed $907,066 if the City identifies or receives additional funding to support the described programs.
Staff
Reviewed by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Final Agreement Signed by WeHOPE
2. Redline Compare with Draft Presented to Council on 11/04/2025