In July, in response to the City of San Bernardino’s application for a $26 million grant to cover the cost of constructing a comprehensive and full-service homeless shelter, the State of California came across with $17 million.
The following month, however, interim City Manager Rochelle Clayton declined the state’s offer.
At this point, with members of the city council having learned of what occurred within the last few days, the question remains why Clayton did not take the final steps to actuate the grant.
Indeed, inexplicably at this point, Clayton on August 23, Clayton wrote a letter to Connor Leahy, the homeless housing program manager for California Department of Housing and Community Development’s Homekey Program, informing him the city did not want the money.
On May 17, 2023, the San Bernardino City Council voted unanimously to enter into a partnership with North Hills-based Hope the Mission for the development of a 224-bed so-called navigation center for the homeless. Under that agreement, the city committed to converting the former School of Hope building at 796 6th Street and the surrounding property into what was to be the SB HOPE Campus, a facility that was to provide interim housing and supportive services to homeless men and women. The city initially slated $7 million to be used in constructing the project and thereafter devoting $3.5 million to it on an annual basis to defray the cost of operations.
The city ventured into the project with Hope the Mission substantially on the strength of the work that organization had engaged in previously, which included having conducted various homeless missions in Chatsworth, Los Angeles, Woodland Hills, Bakersfield, Lancaster and Van Nuys, reaching over 2,600 homeless individuals in the prior year.
In signing onto the joint venture, both the city and Hope the Mission, headed by its founder and CEO Ken Craft, agreed that they would jointly apply for a $20 million Homekey grant from the California Department of Housing and Community Development.
In the meantime, Hope the Mission dug right into the situation in San Bernardino, where the San Bernardino County Point in Time Count of the region’s homeless population conducted in January of that year had tallied 4,195 homeless countywide, with 1,502 in the City of San Benardino, the largest indigent population among all of the county’s cities. It immediately sent an eight-person team to San Bernardino to initiate a homeless outreach program, surveying not just the number of homeless but the homeless themselves and their immediate situations. Among the team were the program manager, two social workers, two case managers, two counselors and a data coordinator.
Ultimately, as further discussion and planning for the facility at the Hope Campus continued and evolved, a decision to up the application to $26 million made and the application was completed, augmented with documentation and data and filed.
In July, the California Department of Housing and Community Development informed Clayton and Searcy that while it would not be able to supply the $26 million the city had requested, it had earmarked $17 million for San Bernardino in the form of a Homekey grant, with the only strings attached being that the money be utilized to develop housing including converting hotels, motels, hostels, single-family homes and multifamily apartments, adult residential facilities, manufactured housing or existing commercial properties and other existing buildings to permanent or interim housing for the homeless.
For a reason that has not been explained, Clayton played the state’s offer of the money close to the vest. Of the city’s eight elected officials, only Mayor Tran, who inadvertantly learned of the state grant award while in Sacramento during a meeting with state officials, learned of Clayton’s decision to decline the offer, reportedly shortly after she posted the letter to Leahy. For reasons that have not been explained, Clayton did not tell the mayor or any of the city council’s seven members about the state’s provision of the state grant in July and then did not inform them either when she made what was a unilateral decision on her own, which was at a variance with the intention of Cassandra Searcy, the city’s deputy director of housing and homelessness, who was enthusiastic about the city receiving the grant.
On August 23, Clayton dashed a letter off to California Department of Housing and Community Development’s Homekey Program Manager Connor Leahy, stating, “The City of San Bernadino and HOPE Mission would like to formally withdraw its request for Homekey Funds for the SB HOPE Campus project. The city has identified a path forward that would provided cost savings and the highest and best utilization of the site to maximize interim housing and services for the target population. The city is fortunate to have the necessary funding sources in place to complete the campus such as ARPA [American Rescue Plan Act], HOME ARPA [Home Investment American Rescue Plan Act] PLHA [Permanent Local Housing Act], county donations, private donations and CDBG [Community Development Block Grants].”
Clayton continued in the closing paragraph, “The city wishes to express its sincerest gratitude to you and your team for all the support provided and we look forward to future projects together.”
In relatively short order, Craft learned from California Department of Housing and Community Development that the Homekey grant was being withdrawn at the city’s request.
On August 27, 2024, he emailed Clayton.
“As your partner and co-applicant in the Homekey 3.0 submission, it would have been nice for you to have notified us before sending the email to HCD [the California Department of Housing and Community Development],” Craft wrote. “Our team spent countless hours preparing the application, initial site plans and fostering our relationship with HCD to be in a position to be awarded the grant. I am sure you thought through your decision but, in light of the current court case against the City of San Bernardino, I cannot understand why you would walk away from $17 million. That is now $17 million you will not have to fight homelessness in the city. That $17 million could have been used to house and care for a lot of people in need. Most cities are fighting to obtain funding and you just said no to $17 million and you have a homeless crisis in your city.”
The lawsuit Craft reference was one lodged by the American Civil Liberties Union in U.S. District Court in 2023 on behalf of the social action group SoCal Trash Army and two individuals – Lenka John and James Tyson, who were living in Meadowbrook Park, and Noel Harner, who was living in Perris Hill Park. The suit alleged the city violated John’s, Tyson’s and Harner’s constitutional rights when it destroyed or jettisoned their personal property, including medicine, vital documents medical equipment and tents in closing down the parks and forcing them to leave. In January of this year, Federal Judge Terry Hatter Jr. issued a preliminary injunction preventing the City of San Bernardino from removing unsheltered people living in its parks and on the city’s sidewalks and public areas.
Craft’s letter continued, “I intentionally did not send this email to anyone but you and Cassandra [Searcy], as I think it could be PR [public relations] nightmare if the courts and community understand what you just walked away from. As your partner and co-applicant of these awarded funds, now rejected, funds, a courtesy explanation would really be appreciated.”
The council did not get confirmation of the state offering the city the grant nor of Clayton turning the grant down until Councilman Theodore Sanchez, having heard the city had obtained and then turned down a substantial state grant to pay for homeless services, filed a public records act to get access to Clayton’s letter.
On October 2, the city council discussed in closed session appointing Clayton, who has been serving in the capacity of interim/acting city manager since May, to the full-fledge city manager’s post. The council did not make the appointment at that time, but the matter was again scheduled for discussion in closed session at this week’s November 6 council meeting. Additionally, Clayton’s promotion to the actual city manager’s post was scheduled as a discussion item during the meeting’s public session. The agenda for the November 6 meeting included a staff recommendation that “the mayor and city council…
approve and authorize the mayor to execute an employment agreement for the position of
city manager with Rochelle Clayton, with an effective date of October 2, 2024, as decided by
the city council and reported in public on the same date.”
That employment agreement called for conferring upon Clayton an annual base salary of $325,000, Another $11,619.95 in perks and pay add-ons and $115,693.41 in benefits, for a total annual compensation of $452,313.36.
Reportedly, however, when the city council opened discussion of the matter during Wednesday’s closed session, the matter of Clayton having unilaterally surrendered back to the state the $17 million Homekey grant was brought up. The Sentinel is reliably informed that only Mayor Tran and Councilman Sanchez knew of Clayton’s action prior to the onset of the closed session, with Sanchez having learned of it definitively only a few days prior to the meeting, when he had received a response to his public records request. Tran, it is said, knew of Clayton’s action in August. A well-placed source highly knowledgeable of communications between individual council members told the Sentinel that going into the closed session, Second Ward Councilwoman Sandara Ibarra, Third Ward Councilman Juan Figueroa, Fourth Ward Councilman Fred Shorett, Sixth Ward Councilwoman Kimerly Calvin and Seventh Ward Councilman Damon Alexander were favorably disposed toward Clayton and were inclined to support her promotion, as was Mayor Tran. Councilman Ben Reynoso was not in attendance at the November 6 meeting. Learning of Clayton’s August 23 letter to Leahy for the first time when Sanchez presented it, the Sentinel is told, convinced at least four of the council members present that it would be prudent to hold off on extending the contract to Clayton.
The council was yet scheduled to discuss her promotion in that evening’s open session. At that juncture in the public portion of the meeting when the matter was to be considered, Mayor Tran, without hinting that anything was amiss and instead suggesting that there were still some details to be ironed out in the contract agreement with Clayton announced, “This item we are going to pull, as we do need a little more time to negotiate.” The mayor left the impression that the city is yet on track to hire Clayton as its top administrator on a lasting basis. “It will come back in the future,” Trans said of the discussion to promote Clayton.
In a phone call to Clayton’s office, the Sentinel asked for her version of events. The Sentinel followed that call up with an email to the city’s spokesperson, Jeff Kraus, inquiring, first, if it was solely Clayton’s decision to decline, on behalf of the city, the California Department of Housing and Community Development’s offer of a $17 million Homekey grant to be applied toward homeless services? Secondly, the Sentinel asked Kraus if he could provide the rationale for turning the grand down.
The Sentinel asked Kraus to elaborate on the circumstances relating to the grant award and the city’s reaction to receiving it. The Sentinel sought from Kraus whether the grant come with certain conditions that the city either could not, or was unwilling to, meet and, if so, what those conditions were.
Insofar as Kraus had any knowledge about which he is at liberty to respond, the Sentinel asked him what the city council’s reaction to Clayton’s decision to have the city forego reception of the grant.
Kraus did not respond to the Sentinel’s inquiries. Nor did he venture to answer whether Clayton’s giveback of the grant displeased the council and resulted in suspending or postponing the decision on whether to promote her, if her action relating to the grant had reduced the likelihood that Clayton will accede to the post of a fully-installed-and-tenured city manager and if there is tension between the majority of the city council and the mayor on issues that have led to differences over whether it is advisable to promote Clayton to the official post of city manager.
An individual, one deeply immersed in politics and governance in San Bernardino, indicated that Clayton had exercised reasonable judgment in rescinding the Homekey grant application on three grounds. One of those, that person said, was that San Bernardino was going to need something on the order of $23 million to complete the homeless facility and the grant fell $7 million short of that.
Additionally, it was pointed out, the California Department of Housing and Community Development’s requirement for the co-applicants who are seeking a Homekey grant jointly with a municipality is that they have five years’ experience in carrying out homeless assistance program. The applicant in this case, Hope the Mission, it was pointed out, has only two years’ such experience.
Moreover, since the $17 million was less than it would take the city to complete the project and fully undertake the program associated with it, San Bernardino would need to apply for other funding, in particular money from the federal government. This presented an intractable problem, it was explained to the Sentinel, because the federal government requires that cities undertake an open bid process on the contractor that is to do the construction work on the project for which the federal money is to be applied and Hope the Mission is a sole-source vendor.
The individual the Sentinel spoke with did state that while Clayton did have the discretion, in her capacity as acting city manager, to rejecting the Homekey grant, it would have been preferable if she had disclosed her action to the council as a whole at the time she made that decision.
Sanchez went well beyond that to say Clayton’s error exceeded failing to inform the city council, to whom she is answerable on all policy matters involving the city, after making such a decision but by making the decision without conferring with the council and getting its direction before the decision was made.
The First Ward councilman questioned the wisdom, logic, rationale and intent of Clayton’s decision altogether.
“San Bernardino has an immensely challenging problem with homelessness,” Sanchez said. “It is so serious that the city council more than two years ago passed a resolution stating that our foremost priority is its eradication. I cannot understand her reasoning in returning $17 million to the state that would have made a huge difference in our effort to meet that challenge head on. That she did that and then didn’t tell us about it is just unacceptable in the person we have entrusted to run this city.”
Sanchez rejected the claim that the city could forego the $17 million grant because it had alternative sources of money available to build the homeless facility such as the American Rescue Plan Act funding. He said the city is continuously scrambling to make ends meet and looking the Homekey grant gift horse in the mouth defies all common sense.
“We are committed to that project and the $17 million we will now have to make up for is money that we will have to take away from hiring more police officers or paving our streets,” he said. “I am just reeling in trying to make sense of this.”