REPORT TO COUNCIL
SUBJECT
Title
Approve a Reinstatement of Contract and Fourth Amendment to the Services Agreement with WeHOPE for Street Outreach and Essential Services, the Temporary Hotel Program, Dignity on Wheels Mobile Hygiene Services, and the Inclement Weather Hotel Program; Increase the Agreement Not-To-Exceed Amount to $3,243,070 for Services and $12,197.36 for Contingency, for a Total Not-To-Exceed Amount of $3,255,267.36; Extend the Term of the Agreement with WeHOPE through September 10, 2027; and Approve Budget Modification No. 7 in the Amount of $2,152,098 (F26-403)
Report
REPORT IN BRIEF
The City of Sunnyvale, through its contract with WeHOPE, provides street outreach and essential services to the unhoused community, including a mobile hygiene truck and a hotel-based shelter program.
Staff recommends approval of a Reinstatement of Contract and Fourth Amendment to the Services Agreement with WeHOPE to account for Inclement Weather Hotel Program services provided during Fiscal Year (FY) 2025/26, continue the program through FY 2026/27 (the contract expenditures were inadvertently excluded from the FY 2026/27 budget), update the scope of services, and extend the term of the agreement through September 10, 2027. In addition, the amendment would increase the not-to-exceed amount for services from $2,012,950.16 to $3,243,070, with a separate $12,197.36 contingency for the Inclement Weather Hotel Program; the total authorized amount would not exceed $3,255,267.36. Staff has prepared Budget Modification No. 7 in the amount of $2,152,098 to fund the proposed services and reallocate Permanent Local Housing Allocation (PLHA) funds.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code (SMC), City Council approval is required for the procurement of goods and/or services exceeding $250,000 in any one transaction.
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by a motion adopted by affirmative votes of at least four members to authorize the transfer of unused balances appropriated for one purpose or another, or to appropriate available revenue not included in the budget.
The proposed Reinstatement and Fourth Amendment supports the Council Strategic Priority, “A model to prevent homelessness, prioritize new housing and support the unhoused community.” Street outreach and case management connect unhoused residents with services and housing opportunities, while the temporary hotel, mobile hygiene, and inclement weather hotel programs address their immediate needs and provide opportunities for continued engagement with WeHOPE staff.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b), because it authorizes the continuation of services in existing facilities and has no potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
In 2022, the City Council identified Supporting the Unhoused Community as a Council Strategic Priority. In March 2025, the Council updated the priority to “A model to prevent homelessness, prioritize new housing and support the unhoused community.”
In 2022, Council also authorized and funded street outreach services through a contract with HomeFirst to augment other social service programs in the County and help unhoused individuals learn about and access services. The City extended the street outreach services contract with HomeFirst three times through September 30, 2024.
In August 2024, the City Council approved a one-year Services Agreement with WeHOPE in the amount of $909,780 for street outreach and essential services, a temporary hotel program, and Dignity on Wheels mobile hygiene services. The approval included options to extend the agreement for up to four additional one-year periods based on available funding, need, pricing, and service (RTC No. 24-0830).
In December 2024, the City Council approved a first amendment to the Services Agreement with WeHOPE to establish the Inclement Weather Hotel Pilot Program, authorize the City Manager to approve up to two additional one-year extensions and approved Budget Modification No. 11 in the amount of $73,185 using PLHA and existing general funds (RTC No. 24-0198).
In June 2025, the City Council approved a Second Amendment to the Services Agreement with WeHOPE in the amount of $120,209 to account for emergency temporary hotel services provided from February 26, 2025, through March 27, 2025, bringing the agreement’s not-to-exceed amount to $1,090,972.80. Council also approved Budget Modification No. 24 to reallocate PLHA funds to support the temporary hotel program expansion (RTC No. 25-0642).
In September 2025, a Reinstatement of Contract and Third Amendment to the Services Agreement with WeHOPE was approved under the City Manager’s authority, retroactively effective to September 10, 2025, and extending the term of the agreement to September 10, 2026. The amendment also replaced the compensation exhibit with Exhibit B-3, entitled “Compensation,” and increased the agreement’s not-to-exceed amount to $2,012,950.16. The FY 2026/27 Budget inadvertently left out this increase.
DISCUSSION
Inclement Weather Hotel Program
During FY 2025/26, the Inclement Weather Hotel Program was activated on three separate occasions for a total of 15 nights in response to qualifying inclement weather conditions. Each activation provided 10 participant rooms. The Inclement Weather Hotel Program served a total of 48 individuals and averaged 98% utilization. The high utilization rate shows strong demand for temporary shelter during qualifying inclement weather events and indicates that the unhoused community used the program effectively.
Based on program utilization during FY 2025/26, staff recommends continuing the Inclement Weather Hotel Program in FY 2026/27. The program is proposed to operate for up to 40 inclement weather nights annually when one or more of the following criteria are met:
• Overnight low of 40° F or lower with a probability of rain of at least 5%;
• Overnight low of 45° F or lower with a 50% or higher probability of rain;
• Persistent rainfall is expected for two or more days and/or rainfall with flooding and/or soil oversaturation that could cause land movement that would create life-threatening conditions for those living in or along affected areas; or
• Overnight low of 35° F or lower for two or more days that would endanger the lives of people living in places not meant for human habitation (outside or in vehicles) or that lack heating.
The program will include up to 15 double-occupancy rooms, providing capacity for up to 30 individuals per night, and one additional staff room for residential caseworkers. Residential caseworkers will be on-site during swing and graveyard shifts each day the program is activated to support participants. WeHOPE will also provide food to participants for the duration of their stay.
The proposed Reinstatement and Fourth Amendment would establish the Inclement Weather Hotel Program as an ongoing service under the Services Agreement and incorporate associated program costs into the street outreach staffing and operating budget as distinct line items. The amendment would also update the contract Scope of Work to outline when Inclement Weather Hotel Program funding may be used, account for inclement weather program services provided during FY 2025/26 and continued operation in FY 2026/27, and extend the contract term through September 2027.
The proposed Reinstatement and Fourth Amendment would increase the agreement’s not-to-exceed amount for services from $2,012,950.16 to $3,243,070, an increase of $1,230,119.84. A separate $12,197.36 contingency for the Inclement Weather Hotel Program would bring the total authorized amount to $3,255,267.36.
FISCAL IMPACT
Through the State Department of Housing and Community Development, Sunnyvale receives a five-year allocation of PLHA funding for housing-related projects and programs that address unmet housing needs in local communities. Street outreach and case management services are eligible costs under this program; the City will reallocate some PLHA funds to backfill the street outreach contract and cover the cost increase from the inclement weather program expansion.
To date, the City has allocated $299,620 of PLHA Fund and $803,554 of General Fund funding to Project 837010 - Street Outreach, Temporary Hotel Program, and Mobile Hygiene Services.
Although the Reinstatement of Contract and Third Amendment to the Service Agreement with WeHOPE were approved in September 2025, the corresponding budget $1,052,137 for the agreement was inadvertently overlooked during the FY 2026/27 budget development process.
Budget Modification No. 7 has been prepared in the amount of $2,152,098 to increase funding for the Third Amendment, totaling $1,052,137, and the Fourth Amendment, totaling $1,099,961, for WeHOPE’s street outreach, temporary hotel, mobile hygiene, and Inclement Weather Hotel Program services. The budget modification reallocates $654,754 in PLHA funds from project 836850 - PLHA Unhoused Services and $1,497,344 from the General Fund Future Unhoused Services Set-Aside to 837010 - Street Outreach, Temporary Hotel Program, and Mobile Hygiene Services.
Budget Modification No. 7
FY 2026/27
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|
|
|
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|
PLHA Grant Program Fund |
Current |
Increase/ (Decrease) |
Revised |
|
Expenditures |
|
|
|
|
Project 836850 - PLHA Unhoused Services |
$1,340,870 |
($654,754) |
$686,116 |
|
|
|
|
|
|
Project 837010 - Street Outreach, Temporary Hotel Program, and Mobile Hygiene Service |
$28,280 |
$654,754 |
$683,034 |
|
|
|
|
|
|
General Fund Expenditures |
|
|
|
|
Project 837010 - Street Outreach, Temporary Hotel Program, and Mobile Hygiene Service |
$91,425 |
$1,497,344 |
$1,588,769 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Future Unhoused Services Set-Aside |
$1,905,623 |
($1,497,344) |
$408,279 |
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Approve a Reinstatement of Contract and Fourth Amendment to the Services Agreement with WeHOPE to update the scope of services, including the Inclement Weather Hotel Program; extend the term through September 10, 2027;
- Authorize a Contingency of $12,197.36 for the Inclement Weather Hotel Program;
- Increase the total agreement not-to-exceed amount to $3,255,267.36, which includes the contingency of $12,197.36 and $3,243,070 for services;
- Approve Budget Modification No. 7 in the amount of $2,152,098; and
- Authorize the City Manager to execute the Reinstatement and Fourth Amendment when all necessary conditions have been met.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Annette Tran, Human Services Manager
Reviewed by: Amanda Sztoltz, Housing Officer
Reviewed by: Trudi Ryan, Director of Community Development
Reviewed by: Kurtis Mock, Budget Manager
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Reviewed by: Connie Verceles, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Draft Reinstatement and Fourth Amendment to Services Agreement with WeHOPE