Budget cuts from slumping pot sales hitting Aurora homeless programs

Editor’s note: Earlier versions of this story incorrectly stated the amount of grant funding that the City of Aurora is proposing to award Mile High Behavioral Healthcare because the city on multiple occasions provided information that was inaccurate.

AURORA | A shortfall of millions of dollars could tear holes in Aurora’s safety net for homeless residents starting in 2024, with cold-weather sheltering, temporary housing and meal programs at risk of vanishing due to a lack of funding.

The situation mostly reflects a decrease in retail marijuana sales, which are taxed by the city to fund homelessness services and youth violence prevention efforts. In September, the city reported that marijuana sales tax revenues fell by 11% in 2022 and that revenues were down by about 8.5% in 2023.

In total, the amount of marijuana funds available to homelessness services agencies dropped from $3.9 million for 2023 to $1.4 million to 2024. At the same time, federal COVID-19 relief funds are drying up, as pandemic-specific grants end and the city’s remaining American Rescue Plan Act money is spent down.

Between August and September, Aurora invited grant applications for programs serving the city’s several hundred homeless residents, and city staffers shared their recommendations for funding during a city council committee meeting in October.

Some of the city’s largest homelessness service providers say the cuts have the potential to endanger their clients’ physical safety and their progress toward obtaining stable housing.

“People won’t be getting fed. They won’t be having case management. They won’t have emergency shelter. They won’t have emergency outreach during cold days,” said Bob Dorshimer, CEO of Mile High Behavioral Healthcare.

“The impact this will have on the Aurora Day Resource Center is significant. With the funding cut, it can’t operate at $200,000, seven days a week, and it will not be able to operate as a cold-weather shelter, because there will not be staff to do that.”

Mile High oversees the Aurora Day Resource Center, which offers emergency shelter to homeless residents when temperatures reach 20 degrees or colder. The facility in north Aurora offered shelter to approximately 5,100 individuals during the previous cold season.

Mile High also administers the Comitis Crisis Center, where a kitchen for preparing meals — about 191,000 last year — and a case management program for families could both shut down for lack of funding. The agency’s outreach work could also be defunded.

Dorshimer said about 75% of Mile High’s funding comes from the City of Aurora. Currently, Mile High is set to receive $933,000 from the city in 2024 for all of its programs compared to about $2.4 million in 2023. While $300,000 of Mile High’s funding in 2023 came from a pandemic-related Community Development Block Grant, the majority of the decrease reflects marijuana tax shortfalls.

One client of Mile High, Ivan Mowery, became homeless in Aurora after medical problems cost him his job with FedEx and consequently the room at a motel where he had been living for two and a half years. Since January, Mowery has been sleeping at the Comitis Crisis Center, during which time he said he’s seen Mile High connect numerous homeless people with jobs.

Comitis is located near Mowery’s doctors at the University of Colorado Hospital, though he said he’s close to moving into an apartment with the support he’s received through Mile High.

“This place will help you get housing and help you with a job,” he said. “If they take that away, you’re going to see more people in the streets.”

Jen — who asked to give only her first name, citing the fact that she became homeless after fleeing an abusive relationship in January — said staffers at Comitis helped connect her with mental health care and that she is close to securing an apartment with their help.

She described the support offered through Comitis, the Aurora Day Resource Center and Mile High as a lifeline for homeless clients, warning that people who are in need of mental health services in particular will be vulnerable if outreach and other services are scaled back.

“You’re going to have a lot of people not wanting to live. And if you think the hospitals are going to do anything for us, think again,” she said. “There is nowhere for us to turn. So if funding for this place goes down, it’s going to get worse. And honestly, we get no respect as human beings. We’re treated like dirt, even the ones who don’t leave trash around.”

It remains unclear how the potential reduction in shelter space and other services would impact the effectiveness of the city’s ban on homeless camping, which supporters say forces homeless people to engage with service providers.

Mowery and Jen both said sweeps of encampments have only succeeded in displacing homeless campers, who often set up tents again a short distance from where they were evicted from, an observation that has been echoed since the camping ban’s introduction by local service providers.

In 2022, the conservative majority of Aurora’s City Council codified the city’s current policy for dealing with unsheltered homelessness, including sweeping camps as long as there is enough shelter space to accommodate campers and pursuing “work-first” policies that prioritize employment as a way for homeless people to improve their lives.

Aurora City Councilmember Alison Coombs said progressives plan to bring forward a proposal to make up for the shortfall using council discretionary funds and unspent ARPA dollars during the council’s Nov. 20 study session.

“That is the approach that I’m trying to pursue so that hopefully we can get the support of all of the council to ensure we continue to have a shelter and other services without getting into ideological conflicts,” she said.

Whether or not the proposal is successful will depend on the majority’s interest in spending more city funds to backfill lost marijuana tax revenue and COVID-19 relief funds.

Mayor pro tem Curtis Gardner and Councilmember Dustin Zvonek both said they would wait to see progressives’ proposal before deciding whether to support it or not. They said they were unaware of any competing proposals to fully fund homelessness services coming from council conservatives.

“Staff will bring something forward, I’m sure,” Zvonek said. “I know that in the cold weather months, there’s always going to be a higher demand for services. So I’m sure they’ll bring forward something to ensure that we can adequately support those who are going to be facing the cold weather conditions in the coming months.”

However, city spokesman Ryan Luby said a proposal and the ultimate decision to backfill a shortfall with other funds “would rest with the City Council as a body, not staff.”

Gardner previously proposed cutting taxes on marijuana to help dispensaries that have struggled as sales have fallen since the pandemic. He said Tuesday that he is still exploring the idea.

Mile High is just one of the agencies bracing for significant cuts. Kristen Baluyot of the Salvation Army said the organization is probably looking at a shortfall of hundreds of thousands of dollars next year that could force it to close one of its two Pallet shelter locations in Aurora.

The small, prefabricated housing units have been described by supporters as an effective and popular path to stability for the many homeless people who avoid group shelter facilities due to concerns about safety and the security of their property.

The Salvation Army operates 96 of the shelters located at the organization’s warehouse on Peoria Street and at Restoration Christian Ministries on East Sixth Avenue, and provides meals, showers and case management for residents.

“My hope is that we’ll continue the conversations with the City of Aurora to ensure that we have funding for those for the programs that we operate, because the reality is (that) the unhoused population or those that have been displaced from housing is a city issue,” Baluyot said.

“It is the city’s responsibility to respond to the needs of its citizens. And we step in to help at the request of cities to support in whatever way that we can, but our operations are funded by the city.”

The organization is bracing for a cut of at least $1.1 million, with most of the difference attributable to the conclusion of grants related to the COVID-19 pandemic.

The Salvation Army asked for a total of $1,130,520 in federal Emergency Solutions Grant funding and marijuana tax dollars to fund Pallet shelters in 2024. City staffers recommended they be approved for $228,088 in total grants.

Separately, the city contributed $600,000 in general fund dollars for the Pallet shelter program in 2023 and is expected to contribute the same amount in 2024. A $1,026,202 contribution of ARPA dollars from Aurora to the Salvation Army for Pallet shelters is expected to be spent completely in 2024.

All but one of the eight organizations that were tentatively approved for funding through the latest homelessness grant process would be given less money than they asked for. 

“We have significantly less funding available this year than we did in prior years, and that’s mostly because marijuana tax revenue has been down,” Emma Knight, the city’s manager of homelessness, told the Housing, Neighborhood Services and Redevelopment Policy Committee in October.

Aurora Mental Health and Recovery asked for $264,865 to fund drug and alcohol detox, outreach, mental health care and limited night shelter for the city’s homeless — they were approved for $100,000 and could take a cut of more than $120,000 compared to last year’s funding levels.

The organization is separately slated to get about $7 million in ARPA funds from the city for its proposed Crisis and Acute Care Campus, which will include permanent supportive housing and help the organization serve homeless clients. However, the campus is not projected to open until the end of 2025.

Chief Clinical Officer Kirsten Anderson said in a statement that Aurora Mental Health and Recovery was disappointed to learn about the potential cuts.

“From Aurora Mental Health and Recovery’s perspective, the services we provide with that city funding are critical and essential to our most vulnerable populations,” Anderson said.

“We will be looking for alternative funding solutions to keep all of our homeless services intact; however, if we aren’t able to find that funding, we will then be having to make difficult decisions regarding those services.”

Baluyot, too, said the Salvation Army will continue to look for other sources to fully fund its Pallet shelters. Dorshimer said cities, counties and the state government are the primary funders of shelter services and that charitable foundations have shifted their focus to investing in “housing-first” programs.

If nothing else, he said the shortfall has united nonprofits behind the common goal of ensuring Aurora’s homeless residents have help and a place to go during the cold season of 2024.

“I’m at least excited that all of our nonprofits are interested in securing flat funding to keep homeless services together for one more year, to allow more time for us to have thoughtful budget conversations,” he said.