Approve the recommendation to discontinue the CalWORKs Pacifico Project in partnership with the City of Davis and redirect available CalWORKs Housing Support Program (HSP) funds to staff and immediate, high-impact housing support services. (No general fund impact) (Morales)

Approve the recommendation to discontinue the CalWORKs Pacifico Project and redirect existing HSP funds toward staffing and allowable, high-impact activities within existing programs and services including Rapid Rehousing, Prevention, Landlord Incentives, Move-in Assistance, and Emergency Motel Placements.

The Pacifico Project was first agendized before the Board of Supervisors on August 30, 2022, as a collaborative initiative between the County and the City of Davis to re-purpose a portion of the Pacifico property into 20 family housing units. The County committed $1.6 million in CalWORKs Housing Support Program (HSP) funds, matched by $1.6 million from the City of Davis. The goal was to create permanent, affordable housing for CalWORKs families leveraging one-time HSP funding.

Throughout 2025, HHSA worked closely with the City of Davis, the California Department of Social Services (CDSS), and the County General Services Department (GSD) to align funding and construction timelines. CDSS granted a one-time exception to use HSP funds for capital construction, contingent on a 20-year restriction requiring the units to remain reserved for CalWORKs families. However, due to HSP’s annual and non-guaranteed funding from the State of California, HHSA could not sustain such a long-term financial commitment without commensurate ongoing revenue commitments from the State to support the housing of the CalWORKs families.

Two additional factors further preclude project feasibility: (1) receiving clarification from the State that the County would be required to expend (not just encumber as was previously conveyed) all HSP funds by December 31, 2025, which left insufficient time for full procurement and construction, and (2) an unexpected $600,000 reduction in the County’s FY 2025–26 CalWORKs allocation from the State as Yolo County’s share of a $42m statewide reduction to counties. Yolo County was notified of this $600,000 reduction in funds on October 9, 2025. Notification of this funding reduction was received after adoption of the County Final Budget, therefore creating an unanticipated $600,000 budget deficit in Yolo CalWORKs programming and services in the current fiscal year. Together, these challenges rendered the project fiscally and operationally infeasible, necessitating a staff recommendation to the Board of Supervisors a pivot in priorities to 1) backfill the $600,000 loss in revenue to avoid immediate and substantial impacts to services, and 2) to avoid reverting $1.6m to the State if not expended by the end of this calendar year.

As a result, HHSA recommends discontinuing the CalWORKs Pacifico Project and redirecting the remaining HSP funds to support staffing and existing high-impact housing supports. These include Rapid Rehousing, Prevention, Landlord Incentives, Move-in Assistance, and Emergency Motel Placements. Due to the truncated timeline to administer these changes prior to the end of the calendar year, staff seeks maximum flexibility to utilize the CalWORKs funding to backfill the $600,000 budget gap and to support appropriate eligible expenditures on existing services, programs, and housing sites.
Despite this setback, HHSA will continue to support CalWORKs families with existing housing HSP Projects including:

The City of Davis, General Services Department (GSD), and California Department of Social Services (CDSS) collaborated throughout the project’s development and review. As the County has been in the process of developing architectural plans for the implementation of the CalWORKs Pacifico project, staff is in communication with the City of Davis about transferring the plans to the city to assist in their future project rehabilitation efforts.