KCRHA faces $16.7M deficit calls to shutdown WA homelessness agency grow
KCRHA faces $16.7M deficit calls for shutdown grow
The King County Regional Homelessness Authority is facing a $16.7 million deficit as calls intensify from local elected officials to dissolve the agency.
SEATTLE, Wash. - The King County Regional Homelessness Authority is facing an unrecoverable $16.7 million funding deficit – a debt that local taxpayers in Seattle and King County will ultimately have to repay—following years of budget miscalculations, unbudgeted administrative software rollouts, and mounting interest costs.
The findings, compiled by financial consulting firm Turning Point Strategic Advisors, were delivered during a King County Executive Finance Committee meeting. The revelation comes as calls intensify from local elected officials to permanently dissolve the regional agency.
"What we’ve learned is that there is a cash reconciliation, the Turning Point has concluded, that is projecting a 16.7 million dollar funding deficit," said William Towey, Chief Operating Officer for KCRHA. "At this point, the final determination of that number won’t be in hand until Q1 2027, when we close out the 2026 financials fully".
How the revenue gap developed
The backstory:
According to the external financial review, the primary driver of the deficit was an ongoing mismatch between projected administrative revenue and actual program utilization. Over KCRHA’s five-year operational history, the agency adopted budgets reflecting roughly $1 billion in expected grant commitments. However, actual program spending reached approximately $750 million.
Because KCRHA’s administrative revenue was tied directly to underlying grant utilization, the underspent by community service providers meant the authority failed to earn roughly $15.6 million in anticipated administrative dollars.
"The administrative operating budgets for KCRHA were aligned with the projected revenue, and when the actual revenue deficit occurred, the budgeted amounts weren’t adjusted accordingly," Tow explained.
Councilmember Rod Dembowski, chair of the finance committee, expressed concern over the unspent service funds.
"With so much need in the community over just five or six years, a quarter billion dollars that was available was not deployed," Dembowski said.
King County homeless encampment
Software rollouts and financial mismanagement
By the numbers:
In addition to the unearned revenue, Turning Point confirmed that KCRHA incurred approximately $3.4 million in administrative overspending. The primary drivers included an unplanned implementation of Salesforce software, extensive legal fees, and high temporary staffing costs.
The agency also incurred more than $2 million in net interest charges by repeatedly carrying a negative operating balance in the King County Investment Pool.
Alan Chaffee, CEO of Turning Point Strategic Advisors, told the committee: "The financial records of the KCRHA were not consolidated into a single place. If they were produced, they couldn’t have been accurate."
Dr. Kelly Kinnison, Interim CEO of KCRHA, acknowledged the agency's internal control failures.
"I think it’s been really, again, heartbreaking, but also important to understand where the failures at KCRHA were, and being able to correct those takes your partnership, which I appreciate," Kinnison said.
King County homeless shelter
Leaders demand dissolution and accountability
What they're saying:
The release of the financial findings sparked swift condemnation from local leaders who argue the agency is beyond repair.
"It is shocking to learn that, because of persistent financial mismanagement by KCRHA, the City and the County will now have to repay nearly $17 million in debt on its behalf," Seattle Councilmember Maritza Rivera said in a statement. "We have already taken back our homelessness contracts; it’s time to entirely dissolve the agency".
Dembowski echoed the demand for structural closure.
"Today’s shocking revelation that the Regional Homelessness Authority overspent $14 million on administration and incurred an additional $2.7 million in interest — more than double the previous estimate of $8 million for unaccounted funds — further confirms that this agency is broken beyond repair and must be shut down," Dembowski stated.
Scaling down into 2027
What's next:
To stabilize the agency while local officials determine its long-term future, KCRHA is transferring locally funded contract administration back to Seattle and King County.
Moving into 2027, KCRHA will operate as a significantly smaller entity focused strictly on federal Housing and Urban Development and state Department of Commerce grants. Outside financial managers are currently implementing standard monthly close procedures, variance analyses, and tighter cash controls to prevent future deficits.
A final reconciliation of KCRHA's total deficit will be completed in the first quarter of 2027, once 2026 books close.
KCRHA claims Seattle and county owe it millions
The embattled King County Regional Homelessness Authority claims it is owed $8 million from Seattle and the county, despite an audit of the agency revealing $13 million in unaccounted-for public spending.
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The Source: Information in this story came from the King County Regional Homelessness Authority and FOX 13 Seattle reporting.