Homeless services budget hearing touches on Kensington sweep, new ‘wellness’ center

Advocates hold up signs Monday, May 6, during a City Council budget hearing about the Office of Homeless Services.

Representatives from the Office of Homeless Services were back before City Council on Monday, trying to convince lawmakers why they should approve $16.1 million in additional funding when the department is under investigation for its past financial practices.

Council was not as combative as they were during an initial budget hearing last month, when Majority Leader Katherine Gilmore Richardson memorably asked OHS officials to testify as to whether they had ever stolen any government money.

But members did ask multiple questions about a planned sweep of a homeless encampment later this week in Kensington and the use of a former city-run nursing home in Fairmount as a shelter for people struggling with addiction.

And OHS leaders indicated that preliminary data from Philadelphia’s annual homelessness census shows a significant increase among those living on the streets

On Wednesday, Mayor Cherelle Parker’s administration is planning to clear out groups living near Kensington and Allegheny avenues. City Managing Director Adam Thiel, during Monday’s hearing, disputed the use of the term “sweep,” referring to the operation as an “encampment resolution.”

Notices have been posted around the area, and Thiel said homeless outreach workers have already placed two dozen people into residential treatment programs.

“We don’t have enough beds currently with enough capability to address what we believe is the unhoused population of the city in Kensington or anywhere else,” Thiel acknowledged.

The administration is using the former Philadelphia Nursing Home, located near Girard College, to help fill that gap while developing larger “wellness” facilities for those battling homelessness and addiction, officials said.

Parker’s team said last week that the site had just under 50 beds; Thiel told lawmakers Monday that the building can now accommodate 90. Now known as the Philadelphia House at Girard, the facility has been partially used as an emergency shelter for about a decade, according to Thiel.

By the end of the month, he said, the administration will present a $100 million plan for a series of triage centers throughout the city, as part of what he described as a first-in-the-nation wellness ecosystem.

“We are hopeful that, as we build it, they will come,” Thiel added.

From left: Deputy Managing Director Crystal Yates-Gale, Managing Director Adam Thiel and OHS Interim Executive Director David Holloman testify in front of City Council on Monday, May 6.JACK TOMCZUK

The need for emergency housing appears to be rising, OHS Interim Executive Director David Holloman told Council, according to results from the city’s annual Point-in-Time Count.

Data is still being finalized for submission to the U.S. Department of Housing and Urban Development later this week, Holloman said, but it appears surveyors in January counted 900 to 1,000 unsheltered individuals, compared to 706 in 2023.

Holloman’s team is requesting a $16.1 million boost just to maintain current service levels, and he said the department has drawn up several contingency plans if the money is not approved. In the worst-case scenario, OHS would cut 400 to 500 shelter beds, he said.

Council members, in general, have been skeptical, with multiple probes looking into how the office, over a period of a few years, overspent its budget by nearly $15 million.

However, Councilmember Jamie Gauthier said at Monday’s hearing that OHS still needs to have enough resources to address homelessness.

“It is important that we don’t allow the most vulnerable population in our city – the unhoused – to suffer through no fault of their own,” she said.

The Inspector General’s Office, in a preliminary report released April 22, found that OHS carried debt across fiscal years and green-lit contracts it did not have funding to cover. Parker in February hired an outside accounting firm to assist with the inspector general’s audit.

Following the release of those findings, the City Controller’s Office announced an investigation into city contracts that utilize a special exemption that allows certain municipal departments, including OHS, to bypass the normal public bidding process for deals with nonprofits.

City Council Majority Leader Katherine Gilmore Richardson questions Office of Homeless Services officials during a budget hearing Monday, May 6.JACK TOMCZUK

Gilmore Richardson last week introduced legislation that would get rid of the exemption. Holloman said Monday that OHS wants to stop the practice and begin issuing requests-for-proposals.

“At no time do I think we should underfund the Office of Homeless Services, but what I do believe is that we don’t know what it takes to fully fund a fully functioning Office of Homeless Services,” Gilmore Richardson said.

The overspending occurred during Mayor Jim Kenney’s administration under former OHS head Liz Hersh, who resigned in October. Holloman, her chief of staff, was appointed to serve in an interim capacity, and he said the office has made changes to prevent any further fiscal issues.

During a budget hearing last month, Holloman was flanked by top OHS administrators; on Monday, he testified alongside Thiel and Deputy Managing Director Crystal Yates-Gale.

Thiel initially attempted to field questions from lawmakers. When Council President Kenyatta Johnson tried to address questions to Holloman, Thiel said the interim director’s days are numbered, at least in his current role.

He said the Parker administration is conducting a “national search” for a new director and also bringing on independent consultants to “look at how we can change and rebuild the fiscal and management practices” of OHS.

“We are changing essentially everything about how OHS does business, except for its final mission,” Thiel added.

‘Housing For All’ is a two-year project in which Metro Philadelphia will investigate the city’s affordable housing crisis. It is made possible by The Lenfest Institute for Journalism’s Philadelphia Local News Sustainability Initiative grant.