Legal dispute looms between Spokane, housing coordinator over unpaid costs

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(The Center Square) – A for-profit company providing homeless services is reportedly considering legal action against the City of Spokane, alleging the city unfairly terminated a contract and has not yet paid over $106,000 for costs incurred in finding housing for former residents of Camp Hope.

News of the dispute between the city and Housing Navigator SPC was reported Thursday by The Spokesman-Review and the Discovery Institute.

Daniel Klemme, Housing Navigator’s founder and chief executive officer, did not immediately reply to email and phone requests Friday for comment from The Center Square.

In social media posts Thursday, Klemme said, “This is just the beginning of a deeper dive into the systemic problems of the misuse and mismanagement of public funds that are supposed to help the most vulnerable in the community.”

“The bottom line is, it is impossible to do business with entities that don’t pay their bills. If housing is the most important aspect to people living safe and stable lives, you would figure that reimbursing contracts that do that extremely well would be critical priority,” he wrote.

Erin Hut, a spokesperson for Mayor Lisa Brown’s office, said the city’s contract with Housing Navigator “was initiated by the former administration and terminated by the former administration.”

That’s in reference to former Spokane mayor Nadine Woodward’s administration. Brown defeated Woodward in the November general election and took office Jan. 1.

Regarding any pending litigation, Hut wrote in an email Friday to The Center Square, “Housing Navigator has legal counsel representing them and the city is now working with its legal counsel, so the current administration cannot comment on the situation.”

Councilmember Michael Cathcart told The Center Square on Friday that he didn’t have much knowledge current situation with the company but remains skeptical of any anecdotal claims.

“I have not seen any data provided by them or the city that demonstrates any sort of significant successes moving people from homelessness into long-term housing,” he said.

In a Dec. 4 letter to Klemme and Housing Navigator chief financial officer Dane Jessen, Spokane Interim City Administrator Garrett Jones wrote that the company’s contract would be terminated in January due to “persistent and documented failure to adhere to the guidelines and reporting standards outlined in our contractual agreement.”

According to The Spokesman, there were disputes on whether Housing Navigator was responsible for reporting its data or whether that responsibility rested with the Spokane Low Income Housing Consortium. According to the article, the consortium is now positioned to handle Housing Navigator’s canceled contract.

Klemme told the newspaper that his company is on the verge of bankruptcy due to the city’s payment delay. There were references to the consortium being a subcontractor to Empire Health, a nonprofit that signed a contract in 2022 with the state Department of Commerce, then headed by Lisa Brown, to provide housing funding for Camp Hope residents.

Located on a barren lot owned by the state Department of Transportation on the eastern edge of Spokane, Camp Home contained hundreds of homeless persons before being shut down last June. At the time, the Department of Commerce announced that its last remaining individuals were moving into “new housing options.”

In his online posts Thursday, Klemme said he continues to have “high hopes” for Housing Navigator’s approach to “closing … the opportunity gap for difficult-to-house populations.”

“That approach was opening up housing units that likely would not otherwise have been available for low-income households,” he wrote.

Concerns have been raised by others regarding coordination – or lack thereof – between their organizations and the city in addressing services for homeless persons in the Spokane area.

State Rep. Jenny Graham, R-Spokane, has introduced a bill, House Bill 1872, in Washington’s current legislative session that would require recipients of grant funding for homeless housing and assistance programs to submit annual plans revealing their goals and targets for the next year.

Graham said her proposal would include showing the number of people expected to be helped out of homelessness, how much money per individual would be spent moving them into housing, and the time each individual remained housed at taxpayer expense. The bill has been referred to the House Appropriations Committee but no hearings are currently scheduled.

In December, Julie Garcia, executive director of Jewels Helping Hands, a nonprofit provider of homeless services in Spokane, called Graham’s measure “a much-needed policy. Homeless funding needs an overhaul.”

On Thursday, the mayor’s office released a report from five transition teams tasked by Brown to make recommendations on larger issues facing the city, including homeless services. Among the recommendations were revamping the city’s request-for-proposal process though the Community, Housing, and Human Services division and establishing a homeless task force to weave funding and support for nonprofit providers.

Investigative Reporter T.J. Martinell contributed to this story.

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