Johnson County wants and needs a homeless shelter. But who will pay $500K a year?

Operating the proposed homeless shelter in Lenexa would require annual funding not only from Johnson County but also its cities, under a new plan, totaling almost $500,000 in public money, presented to county commissioners on Thursday.

The idea sparked a heated discussion among commissioners, as leaders work to push forward the long-needed shelter, but have yet to secure any financial commitment from cities to help run it. The board voted 4-3 to move the discussion forward about a fund that would require $62,000 a year from the county.

The plan also asks for varying amounts from each city, based on population, totaling nearly $420,000 a year. The commission in the coming months will vote on whether to approve the funds, while cities in the meantime decide whether to participate as well.

Johnson County has begun the process of purchasing the shuttered La Quinta Inn and Suites off of Interstate 35 in Lenexa to convert into a year-round shelter, a major milestone for the county where advocates have long pushed for such a resource.

Officials this spring selected Kansas City nonprofit reStart Inc. to operate the shelter. Stephanie Boyer, CEO of reStart, said the $1.7 million needed annually to run the shelter would be funded mostly by grants and private donations, as well as revenue generated from services, but would need money from municipalities.

“Having some structure of that base sustained funding helps us actually to leverage more private dollars,” Boyer told the commission, saying that donors are more willing to pitch in when there’s a commitment from municipalities.

She said the money also would help sustain the shelter as grant dollars and donations fluctuate, emphasizing that it’s critical to have diverse funding sources.

Under the proposed funding plan, it would be up to each city to decide whether to contribute. The county’s most populous city, Overland Park, could provide $150,000 a year. Olathe would be asked for $112,000, Shawnee for nearly $53,000, down to Mission Woods for $150.

Lenexa would be excluded from providing annual funding, because Assistant County Manager Joe Connor said the city anticipates a loss in tax revenue as the property changes from a hotel to shelter.

“This is a recognized community need. At the end of the day, it requires a community-wide solution,” Chairman Mike Kelly said.

Commissioner Jeff Meyers agreed that cities “need to have some skin in the game,” as homelessness rises countywide. He said the county committing its share will further show it has taken on a “leadership role” in finally addressing the problem.

It remains to be seen whether city councils will agree to the request, in a county where neighborhood opposition has stalled progress on shelters in the past. The uncertainty caused some tension among commissioners on Thursday.

“What happens if a third of these cities say no?” Commissioner Becky Fast asked. “Who makes that up?”

Boyer said any funding gap would be filled by alternate sources, including private donations and applying for grants. But knowing the commitment from municipalities, she said, “helps us to refine our strategy.”

Both Fast and Commissioner Charlotte O’Hara said they were worried whether the shelter would be sustainable and that a larger burden could fall on the county.

“My residents think this is a need that needs to be met, but they don’t want the county to be subsidizing it year after year,” Fast said, later adding that, “Supporting the vulnerable, to me, is providing a shelter that is financially sustainable and has community support.”

But Commissioners Janeé Hanzlick and Shirley Allenbrand said they are confident that Johnson County’s faith-based community and other organizations would step up to fund the shelter, possibly enough to reduce the share coming from municipalities in coming years.

Commissioner Michael Ashcraft said he would like to see a clearer business plan, including what the fundraising goals are, saying the numbers are “a little bit squishy.”

“The challenge is based on the best information we have now, what decisions should we make,” he said.

Kelly said the county’s portion of the annual cost, $62,000, could come from reserve funds, calling it a relatively small amount to help get the shelter started.

“In the grand scheme of things this is not a huge amount to the county, but it shows our intent,” Kelly said.

The site would be purchased with $6 million in federal Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act in 2021. Another $850,000 is going toward other work related to the sale during an ongoing 270-day period, including the county negotiating a buyout of hotel franchise fees, obtaining a private appraisal and conducting a title review.

Commissioners also previously approved using nearly $4 million in federal dollars for establishing and developing a shelter, plus the costs of renovations needed to comply with the standards of the U.S. Department of Housing and Urban Development, which administers the American Rescue Plan grant funds.

Boyer has previously said the the goal is for the 106-room hotel to be transformed into an emergency shelter with as many as 50 beds, with the other half dedicated toward transitional housing for up to 40 people. She said Thursday that reStart is working on applying for vouchers for the transitional housing, which she anticipates would generate about $400,000 a year for the shelter.

Officials envision a homeless services center, not just a shelter, that provides an array of resources for residents, including mental health support, housing assistance, workforce development and more.

There is much to do before anything is finalized, including the county obtaining a special use permit from the city of Lenexa to operate the shelter. Connor said the county plans to submit its application next month.

The county is still working on assessing the site before closing on the sale, and then renovations would take well into 2025, he said.