Travis County will not be participating in a third-party review of homeless services that the City of Austin and a few other partners agreed to conduct, citing concerns with costs and the consultant chosen to do the review.
The review is part of a move by the City of Austin to take a closer look at the programs and money going toward homelessness services across several partners that serve the homeless community.
In January, the Austin City Council approved a $2 million contract with consulting giant McKinsey that included reviewing programs and services provided by Integral Care, Dell Medical School, Central Health and Travis County.
The city agreed to pay $1 million of that using American Rescue Plan Act relief funding. The remainder of the money would be split between the remaining entities — with Travis County expected to pay about $400,000.
Central Health and Integral Care have agreed to participate in the review and that agreement is still being negotiated with the city and McKinsey. But Travis County leaders felt that money could be better spent.
Commissioner Brigid Shea said the county agrees there needs to be a holistic review of how each entity is serving the homeless community but felt this wasn’t the right approach.
“I think there are a number of concerns that have been raised about the consultant,” she said during a commissioner court meeting last week. “We certainly don't have any disagreement with the idea of working with our governmental partners to really look at how we can improve our homeless services, but I don't think there is an appetite for joining this [agreement] with this consultant.”
Homeless Strategy Officer David Gray told KUT that Travis County's withdrawal would not stop the city from moving forward with the review. Gray said the city was renegotiating the scope of work and price with McKinsey.
“There is a real sense of urgency here,” Gray said. “Our goal continues to be to move as diligently and efficiently as possible because every day we wait is another day someone is on the streets trying to access services.”
However, the cost was just one issue for Travis County. County Commissioners also expressed concern with the way the agreement was developed.
Not everyone approves of how McKinsey was selected
County commissioners said the agreement was done without their input.
Commissioner Jeff Travillion said the county wants to work with its partners, but said “they were not involved in the forming of this review but asked to sign on.”
“As public policy folks we have to make sure that we are doing the right things in the right way,” Travillion said. “At the end of the day, this is something that we all want but ... I think it is important that we work together as partners, not subordinates.”
Gray maintained that the city had engaged all its partners from the beginning, including Travis County.
The city conducted an informal competitive process, and a review panel selected McKinsey based on qualifications and experience among staff and past projects, Gray said.
City officials told KUT that other firms were considered in this process, but could not publicly name the firms that were considered “until after the contract is executed.”
McKinsey has done similar reports in Los Angeles, San Francisco and Seattle, and the city felt the company was the best fit. This is despite a ProPublica investigation that revealed McKinsey has a reputation for being expensive with some clients getting little in return.
Several community members expressed similar concerns.
Chris Harris with the Austin Justice Coalition said during a January council meeting that, “McKinsey cannot be trusted, is way expensive and these ARPA dollars are so scarce and crucial."
Yasmine Smith, vice president of justice and advocacy of the Austin Area Urban League, said her group felt the same. The Austin Area Urban League is one of the many partners providing homeless services in Austin. It helps manage shelters downtown and in South Austin.
“We really feel like the McKinsey firm, specifically with their history of very harmful impacts to communities, is not the right partner to bring in for such a high magnitude survey and analysis,” Smith said. “We think the price is a little bit too expensive, and they also have a history of ballooning prices … We feel like that $400,000 could be better spent with direct service provision to our unhoused neighbors.”
Council Members Zo Qadri and Natasha Harper-Madison also expressed concerns with the review in January. Both abstained from the vote to move forward.
Qadri told KUT he agreed with taking a holistic approach to ensure the city is doing right by people who are experiencing homelessness but had concerns with the funding and the expedited timeline.
“I really do think we need to be deliberate about how those funds are allocated,” Qadri said.
Gray said the city stood by its decision and is confident McKinsey can do the work. He also assured the community the company was well-vetted.
The city hopes the review will find overlaps and gaps
This is the first comprehensive review spanning the City of Austin, Travis County, Dell Medical School, Central Health and Integral Care. Each entity has done reviews and audits in this space, but Gray said, that even with collaboration, there are gaps in the system. The city also felt there could be some overlap.
The system cares for more than 5,500 people experiencing homelessness, and the hope is this review will help bring to light where some of those gaps and overlaps are, making the cost worth it.
“As a city we invest tens of millions of dollars every year in direct services to our unhoused and sheltered population, and we saw this as an opportunity to plug the gaps and figure out how we make more impactful investments,” Gray said.
Last year, Austin bought, renovated and reopened the former Salvation Army shelter downtown. It opened the Marshalling Yard, a Southeast Austin warehouse, as a temporary shelter that can accommodate up to 300 people with services available on site. In December, Austin also created an independent office to lead homelessness response.
The city is working with McKinsey on a way forward and will report back to the council with the new scope of work and an updated price. Gray said they expect to have findings by April. The county said it will conduct an internal review of its services with results expected by June.
“I want to be clear: to me this action articulates our intention to work with [the city] in partnership; We are just not choosing to do it in this form with this consultant,” Shea said. “I think we are clear about our commitment to work with [the city] in partnership because this is such a huge issue and all our governmental entities and services are interconnected.”
