Thurston County delays encampment aid vote after state defunds two Olympia projects 

Two Olympia shelter projects were axed from a multimillion-dollar homelessness grant by the Washington State Department of Commerce,  leading Thurston County to postpone action on two high-value contracts tied to the state’s Encampment Resolution Program (ERP). 

The Thurston County Board of County Commissioners (BOCC) voted unanimously to table both contracts until July 29 at a meeting on Tuesday, July 15.

The postponement comes after confirmation that Unity Commons and Quince Street Village, two city-run shelters in Olympia, were excluded from ERP funding. The Commerc Department amended the county’s allocation plan unilaterally after submission and without consultation from Thurston County or its Regional Housing Council (RHC). 

“We as a county didn’t recommend that, nor did we bring that to the Board of County Commissioners, and so, (I) just wanted you to be aware of that there’s quite a bit of frustration about the recommendation that came from the Department of Commerce,” said County Manager Leonard Hernandez. 

Shelter funding removed 

The affected items include a $4.08 million interagency agreement with Commerce for ERP funding and a $3.96 million provider contract between the county and local housing organizations Interfaith Works and the Low-Income Housing Institute. 

Thurston County Public Health and Social Services (PHSS) Director Jennifer Freiheit said both contracts had been prepared based on project recommendations approved by the Regional Housing Council on May 28 and forwarded to the Department of Commerce on May 29. 

The department returned a revised version of the project plan on June 16, according to Freiheit, removing the two Olympia-based shelters from the final list and rerouted the support to different provider proposals. 

Public Health had previously briefed the board on April 23 and received full support to submit the Regional Housing Council-vetted plan. The plan named Unity Commons and Quince Street Village as primary recipients of the grant money. 

Funds redirected to Lacey 

Senior Program Manager Thomas Webster said the Department of Commerce’s revisions boosted Maple Court Enhanced Shelter’s allocation under the City of Lacey. It also added $220,000 in case management funds for Lotus Court, a supportive housing that opened in 2024. 

“Commerce required us to put additional money into Maple court. … They also required us to put money into Lotus court project … that was not a project that we provided operational funds to in the past under right-of-way projects,” Webster said. 

The Department of Commerce originally financed Lotus Court with $2 million in construction dollars. The latest directive to cover case management under ERP, Webster said, forced cuts to Olympia shelters. 

Under the new plan, Unity Commons and Quince Street Village were instead awarded $50,000 apiece as transition assistance. The mentioned figure was far below the baseline operating costs required to sustain the existing program. 

Board Chair Tye Menser said the decision went against the county agreed-upon strategy. He said Olympia’s ability to house unsheltered residents would be directly affected. 

“We were going to more balance the money between the three, and they shifted, made  more front-loaded it toward Maple Court at the expense of the other two,” Menser said.  

Hernandez said the RHC had finalized a workable distribution plan that addressed all partner needs and was supported by the board before it was submitted to the Department of Commerce.  

“Commerce came back and said, ‘Well, we’re going to change the allocations, not your amount, just where the dollars are being allocated,’” Hernandez shared. 

The Department of Commerce runs ERP to help local agencies transition residents out of encampments on state or city property.

ERP funding covers case management, operational funds, and support for sites that have received prior funding from the state. 

Call to use Home Fund 

Board Vice Chair Wayne Fournier said he had earlier advocated for the county to establish contingency measures in case of a state shortfall. He pointed to the county’s local housing sales tax, the “Home Fund,” as a tool to backfill gaps like the one now facing Olympia. 

“That money is designed to backfill this kind of thing,” Fournier said. 

He added, “And we were predicting the right-of-way funding was going to be decreased. … If we’re collecting Home Fund sales tax from the whole county and we’re not preventing (closures) that kind of thing, it’s hard to figure out what else we’re doing with it.” 

Ahead of the Department of Commerce’s revisions, Fournier said the board put out a memo before the decision to RHC participants and city governments. It advised them to prepare in case the department altered budget allocation priorities. 

Commissioner Rachel Grant warned against treating ERP as the only source for case management services. She suggested the county utilize other funding streams, such as Medicaid and Thurston-Mason Behavioral Health Administrative Services Organization (BHASO). 

Grant said housing stabilization and case management are part of the behavioral health system. She said those programs are eligible for state and federal aid beyond ERP. 

She also said failures to align “blended funding sources” often lead to gaps in service delivery and budget accountability. She then inferred the department's reallocation may have been prompted by unresolved coordination issues. 

Hernandez proposed two next steps: First, convene a joint meeting with the Department of Commerce and local mayors to explain the importance of restoring Unity Commons and Quince Street Village to the ERP plan; Secondly, organize a board work session with BHASO to assess options for alternative funding that could be tapped for case management support.

“This is an environment where we want to lay out everything that’s available to the county, so we can have discussions, and so that could be a two-prong approach,” Hernandez said. 

Audit request revisited 

Amid questions over flexibility in budget allocations, Commissioner Carolina Mejia had previously requested an audit of Home Fund allocations. 

Menser said the request should now be expedited to inform potential recovery actions. 

“Maybe we need to expedite that sort of conversation. … If there were dollars that could go to Quince Street and Unity Commons, where were they coming from? What have we spent? What have we put them toward?" Menser asked.

"That would have to be then shifted away from, and what would be the impacts of that?"

Hernandez said although Maple Court was prioritized in the reallocation, the facility is still under construction. He said it is not yet equipped to handle increased referrals.

“We don’t want to put premature pressure on Maple Court, who is in the process of building out its capacity with the City of Lacey because of this environment,” Hernandez said. 

The board requested that Public Health set up a meeting with the Department of Commerce and city officials, and begin planning the BHASO work session. 

The ERP contracts will be revisited July 29, once the Department of Commerce has responded, and the board reviews fiscal alternatives.