In a joint statement issued Monday, Zahilay and Wilson said the transition is part of an effort to "right-size" KCRHA so it can focus on regional coordination.
King County Executive Girmay Zahilay and Seattle Mayor Katie Wilson have announced plans to transition homelessness service contracts from the King County Regional Homelessness Authority back to King County and the City of Seattle, saying the move is intended to reduce the agency's administrative responsibilities while preserving its regional role.
In a joint statement issued Monday, Zahilay and Wilson said the transition is part of an effort to "right-size" KCRHA so it can focus on regional coordination, including administering the federal Continuum of Care program, while the county and city assume responsibility for managing homelessness service contracts.
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"Our priority is to ensure stability for providers, continuity of services for people experiencing homelessness, and strong stewardship of public dollars," the statement said. "At the same time, we remain committed to avoiding a return to the fragmented system that existed before KCRHA."
The plan would return 117 city-funded emergency homelessness response contracts worth about $112.8 million to Seattle’s Human Services Department starting in January 2027, while King County’s Department of Community and Human Services would resume administration of 100 county-funded emergency homelessness response contracts totaling about $46.3 million.
Officials said the transition is meant to minimize disruption for providers and clients, and the city and county plan to keep 2026 contract scopes largely intact into 2027. The city said HSD’s Homelessness Division will add 23 emergency positions to support the return of the contracts, at an estimated annual cost of about $3.9 million if fully filled.
The county plan says some county-funded contracts may remain with KCRHA, including certain severe weather shelter contracts and projects tied to federal housing grants. KCRHA would continue to handle the Continuum of Care lead role, the Homeless Management Information System, Coordinated Entry and the Point-in-Time Count, while city and county officials coordinate closely on this year’s federal funding application.
Both governments have also begun holding provider meetings on the transition. The county plan says the first meeting was held July 1, with follow-ups set for July 31 and Sept. 9, and that meetings will continue monthly through the first quarter of 2027 and then every two months through the first quarter of 2028. The city’s response says the governments also plan “Regional Reset Conversations” with providers, labor, business, philanthropic groups, people with lived experience and other stakeholders between fall 2026 and March 2027.
The announcement comes as the agency continues to face heightened scrutiny following a forensic evaluation released in April that identified widespread financial management and internal control deficiencies.
The evaluation found KCRHA accumulated a $44.7 million negative cash position between December 2023 and July 2025, identified a $4.26 million administrative operating deficit and raised concerns about roughly $13 million in public funds that auditors said could not be fully accounted for.
During a June briefing to the King County Council's Committee of the Whole, however, KCRHA leaders disputed the characterization that millions of dollars were "missing." Agency officials said roughly $8 million identified in the forensic evaluation as unreconciled receivables may instead represent legitimate reimbursements that were never billed to Seattle and King County because of accounting and documentation failures dating back to the agency's early years.
"Basically, these are the funds that we should have billed to King County and the city of Seattle, and that we didn't," KCRHA Associate Director William Towey told councilmembers during the June 8 briefing. He said the agency was completing a cash accounting review to determine how much each government may still owe.
KCRHA officials acknowledged the severity of the audit's findings but argued they reflected poor financial controls rather than fraud or missing taxpayer money.
Leaders told councilmembers many of the problems stemmed from the agency's reliance on an inadequate contract management system and temporary staffing while it was building a regional homelessness response. They said KCRHA was implementing a corrective action plan to improve documentation, strengthen internal controls, resolve outstanding receivables and hire an outside financial consultant to help carry out the audit's recommendations.
The forensic evaluation also prompted a broader debate over the agency's future. In May, the King County Council launched a 90-day review to determine whether the county should continue, modify or terminate its participation in KCRHA.
Some elected officials, including King County Councilmember Rod Dembowski and Seattle City Councilmember Maritza Rivera, later introduced resolutions calling for the agency to be dissolved, while Zahilay and Wilson demanded corrective actions and increased financial oversight.
Monday's announcement signals the direction county and city leaders have chosen following that review.
Zahilay and Wilson said shifting contract management back to the county and city will allow KCRHA to focus on regional planning while maintaining a coordinated homelessness response. They said both governments will work together to align goals, outcomes and performance measures and will engage providers, local governments and other stakeholders as they reshape the region's homelessness response system.
"The future of the regional homelessness response system must be shaped by partners across the region," the statement said. "We are using this reset as an opportunity to engage stakeholders to strengthen our approach on this crisis and make real progress for our communities."
Ultimately, county and city leaders said they still want a regional homelessness system, but with clearer lines of responsibility. The city’s response says the goal is to preserve a regional approach while improving accountability, avoiding service disruption and maintaining federal funding for the region.
