City of Austin Council Message Board

I remain concerned about Item 28, which is a project under Pay for Success... but Travis County has pulled out of the program. I felt very surprised when we learned this first a few weeks ago and I do not feel sufficiently informed about the impacts of that change.

I will talk to staff more about it this week, but wanted to express my concerns on the message board now in case other offices wanted to weigh in.

28. Pay for Success: I see this is still on consent, and I would advocate for us voting on it tomorrow so we can move forward with this critical program. Please see the separate post I will add to respond to CM Flannigan's on this same issue.

Dear CM Flannigan:
Sorry about the misfire - as I indicated above and in a separate post, I would strongly urge we move forward with this item on tomorrow's agenda -- or postpone to 4/9.

I appreciate your post flagging this as an area of concern for you. You likely have already reached out to staff to discuss, so for others who may have questions I am including some information about why I perceive Item #28 to be on our Thursday agenda.

This item relates to the same Pay for Success contract that Council previously approved on March 28, 2019. This action reduces the contract’s term from 60 months to 54 months. The term reduction is required to cover the difference that has resulted from Travis County’s departure from the initiative. All remaining payors in the initiative (Central Health and Episcopal Health) are being asked to approve this term reduction, too.

Another change, as staff indicated to me, is that the price per outcome is now at an increased cost of 7.5% above the original price/cost per outcome as a result of (1) the reduced term and (2) a reduction in the investors’ rate of return from 9% to 7.5%. The City’s total financial contribution over this reduced term does not change. Beyond our previous commitment, the City will not be expected – nor obliged – to pay any additional funds if successful outcomes are met.

If you have any questions about this item before Thursday, I encourage you to contact staff. Also, while I am not as knowledgeable on the contract specifics as our capable staff, I am not currently at quorum on this item and I am happy to discuss this initiative should anyone have questions about the genesis of this initiative or desire other background on this effort.

While it is regrettable that Travis County has exited the initiative as a payor in Pay for Success, I strongly believe that the initiative should continue moving forward, now more than ever. Pay for Success, while now in a different configuration than originally conceived, is still a viable and innovative solution for us to substantively assist those experiencing chronic homelessness.

Many thanks,
Kathie