Alameda ends five-year deal with shelter after 'financial misconduct' allegation

(The Center Square) - The City of Alameda will cancel a five-year, $10.7 million contract with a management company that ran a homeless shelter after allegations of “financial misconduct.”

The city, Dignity Moves and Five Keys Schools and Programs had received a state grant to operate a 47-unit, 61-bed interim housing program for the homeless. That housing complex was known as Dignity Village.

Five Keys had a five-year agreement with the city to provide supportive housing services such as maintenance, case management and security. However, after the city stated a Dignity Village staff person was accused of financial misconduct.

The city of Alameda said in an email to The Center Square that it couldn't provide more information because it was an active police investigation. Steve Good, CEO of Five Keys Schools and Programs, said he wasn't aware of the situation in a conversation with The Center Square.

The matter will be taken up at the city council meeting on July 16.

The city is expected to sign a new contract with the City and Building Opportunities for Self-Sufficiency (BOSS), the only service provider in the area to submit a proposal. It will continue to provide operational services through Dignity Village for up to a year while staff continues to seek long term provider solutions to present to the city in the fall.

The contract details personnel and operating costs to run Dignity Village until the city finds a more permanent solution, with the highest cost being meals for residents for 150 meals per day at $8.33 each, totaling $456,067.

The cost of onsite 24/7 security for 4.5 guards will total $224,640, according to the document.

The financial impact the city is facing is the use of the American Rescue Plan Act (ARPA), stating , “There is minimal risk that if the federal government chooses to audit the City’s ARPA funds, it could determine this exemption is not applicable and not allow ARPA funds to be used during the interim period.”

Alameda was given a $12.3 million grant from the State’s Homekey Program to build Dignity Village. Alameda County also contributed $2.35 million to cover five years of operating services.

The city has seen a 3% decline in individuals experiencing homelessness, according to the 2024 Point in Time count , with a total of 9,450 homeless people.