Who Pays to Run Lodi’s New Access Center?

Lodi
Written By Don Bradford
Who Pays to Run Lodi's New Access Center?

Who Pays to Run Lodi’s New Access Center?

LodiEye — May, 2026

Lodi’s new Access Center, a shelter and services hub for people experiencing homelessness, is expected to open later this year. Operating it will cost an estimated $2 million a year, and the city has identified about one year of funding to cover those costs. A proposal for San Joaquin County to take over the center is already under discussion.

The short version

  • The cost: about $2 million a year to operate, according to the center’s director. The city’s share has not been disclosed; reporting indicates city–operator negotiations in the $1.5–$1.8 million range.
  • Funding on hand: about one year of operating funds. The current contract is paid for with one-time federal ARPA dollars that are set to expire by 2027.
  • The state funding picture: the state encouraged cities and counties to build shelters and signaled that ongoing operating support would follow. Statewide, that support has since declined.
  • A proposed solution: District 4 Supervisor Steve Ding says that in the year the city’s operating funds run out, he plans to propose that the county take ownership of the center.

The permanent Lodi Access Center is located at 712 N. Sacramento St. When it opens, the city will have a purpose-built, low-barrier campus — a shelter that accepts people without first requiring sobriety or other conditions — with a clinic, a kitchen, classrooms, and beds for roughly 100 people. It will also take on an ongoing operating cost that does not yet have a committed long-term funding source.

Center Director Johnny Coughran has estimated the annual cost to operate the facility at about $2 million. According to Coughran, the city will pay less than that amount, with the remainder covered by cash and in-kind donations and by Medi-Cal reimbursements. How much the city itself will pay has not been disclosed. City officials have said the city’s share will fall on the general fund — the city’s main operating budget, which already faces an ongoing gap between revenue and spending.

The city has said it has about a year’s worth of cash on hand for operations. One reason the timeline is short is that the current operating contract is paid for with one-time federal American Rescue Plan Act (ARPA) dollars, which carry a spending deadline and are set to expire by 2027.

How the project reached this point

The City Council approved buying the Sacramento Street property in October 2021. A temporary 49-bed emergency shelter opened on the site in July 2022, providing overnight beds, meals, and hygiene facilities, along with support services such as housing navigation, case management, job-readiness help, and connections to behavioral health care.

The design of the permanent facility changed over time. The original plan called for a campus capable of housing more than 200 people. To control costs, that was scaled down to a roughly 23,000-square-foot facility with overnight space for about 100, a commercial kitchen, room for as many as four classrooms, a medical clinic, and administrative offices. Construction has been pegged in the $10–$11 million range, helped along by a capital gift of roughly $2.9 million from San Joaquin County that the city did not want to forfeit.

The search for a permanent operator took several turns. Inner City Action ran the temporary shelter first, then chose not to renew. In late 2023 the council awarded a permanent operating contract worth nearly $2.7 million to the Salvation Army; the choice drew public objection from the city’s homelessness committee, which had favored a different organization. That contract was later canceled because the city could not secure sustainable funding for it. Outreach Ministries International (OMI), a nonprofit affiliated with Lodi’s Gravity Church, became interim operator in 2024 and was selected as the permanent operator on Feb. 4, 2026, on a 4–1 council vote, for a contract of more than $1.8 million.

The dissenting vote came from Mayor Ramon Yepez, who said he preferred the Salvation Army and questioned whether the city could sustain the contract over the long term. The city, he said, was not built to run a homeless shelter.

Annual operating cost by arrangement

Source: City of Lodi council records and Lodi News-Sentinel reporting. Figures mix proposals, awarded contracts, and estimates and are not strictly comparable; the OMI temporary figure combines the operator contract with the Salvation Army food-and-laundry agreement.

Across these arrangements, the completed facility’s roughly $2 million annual cost is higher than the earlier ones. The interim arrangements cost less in part because the temporary shelter provided fewer services than the permanent center will.

Why state funding fell short

Part of the cost question traces back to state funding decisions. In recent years, the state encouraged cities and counties to open shelters and interim housing, providing construction grants along with an expectation that ongoing operating support would follow. Local governments built. Statewide, that operating support has not continued at the scale many had anticipated.

Statewide homelessness spending has declined sharply. It peaked at about $6.9 billion in 2022–23, a level driven largely by one-time, pandemic-era funding. It fell to roughly $2.5 billion in 2024–25 and to about $1.5 billion in 2025–26 as that temporary funding ended.

California homelessness spending by fiscal year

Source: California Budget & Policy Center. Total state homelessness-related spending; the 2022–23 peak was driven largely by one-time pandemic-era revenues. Intervening years omitted for clarity.

One program illustrates the shift: the Homeless Housing, Assistance and Prevention grant, or HHAP. For four straight budget cycles, HHAP provided about $1 billion a year in flexible funding that cities and counties used both to build and to operate shelters, including staffing and outreach. The 2025–26 state budget included no HHAP funding. The governor’s proposed 2026–27 budget includes $500 million for a seventh round — half the historic level — tied to new accountability requirements and not final until the state budget is enacted in June. The May Revision did not restore the earlier funding.

Analysts have noted a structural issue: HHAP was created as a temporary funding source, but many communities came to rely on it for day-to-day operations. As the remaining funds are spent, there is no clearly identified replacement. The League of California Cities and the California State Association of Counties have said the reductions could lead to less shelter capacity and fewer housing placements.

HHAP, the state’s main flexible homelessness grant, fell from about $1 billion a year to no funding in 2025–26, with $500 million proposed for 2026–27.

Where the operating money would come from

The estimated $2 million annual cost would be covered by some combination of four sources: the city’s general fund, charitable donations (cash and in-kind), Medi-Cal/CalAIM reimbursements, and any grant funding the operator obtains.

One source is more secure than the others. The permanent center sets aside about 6,335 square feet for San Joaquin County and SJ Health services, including behavioral health care, a clinic, and respite and sobering beds. The county has said those county services will be funded by the county and its partners, with partial reimbursement through Medi-Cal — the state’s health-coverage program for low-income residents — and its CalAIM initiative, which allows Medi-Cal to pay for some housing-related services. The county has said this arrangement will not draw on city resources. It is the main reason the city’s share is expected to be less than the full $2 million.

Donations are a less predictable source. OMI and its partners rely on cash and in-kind giving, and the Salvation Army next door has historically provided food and laundry. Coughran has pointed to the program’s readiness to compete for grants if funding becomes available. As noted above, however, state grant funding has been reduced and now comes with additional conditions.

That leaves the general fund to cover whatever the other sources do not. The city has not stated a dollar figure publicly, but officials have said they expect it to add pressure to a budget that already faces an ongoing shortfall, with infrastructure and service costs outpacing recurring revenue.

A proposal for the county to take over

As reported in the News-Sentinel’s About Town column, Supervisor Steve Ding has said that in the year the city’s operating funds run out, he intends to propose that San Joaquin County take ownership of the center and relieve the city of the operating obligation. Councilwoman Lisa Craig-Hensley has said she supports the idea, describing it as the kind of city-county partnership the project needs.

Supporters point to several reasons a county role could fit. Homelessness services, behavioral health, and the Medi-Cal/CalAIM billing that helps fund shelter clinics are largely county responsibilities. The county already funds the center’s clinical wing, contributed capital toward construction, and operates the regional body that coordinates homelessness funding and services, known as the Continuum of Care.

Ding represents District 4, which includes Lodi, and currently serves as the board’s vice-chair. He is up for re-election in June 2026, with Lodi resident and EMT Travis Castle as a challenger. Several practical questions would need to be resolved before any transfer could occur: a board majority would have to agree; the commitment would have to fit within the county’s own budget; and the terms — ownership of a city-owned property, liability, and the existing operating contract with OMI — would have to be negotiated.

What a county takeover would have to clear

  • A board majority beyond a single supervisor’s stated intention, in a county managing its own state-driven cost increases.
  • The county’s own budget, affected by the same HHAP reductions and by state cost shifts such as In-Home Supportive Services (IHSS), a county-administered care program.
  • Transfer terms covering ownership of a city-owned property, liability, and the existing OMI operating agreement.
  • Timing that matches when the city’s one-year funding actually runs out.

Who the center serves

The center’s own figures add detail to common assumptions about who uses the shelter.

By the director’s account, roughly 40 percent of the center’s clients are seniors — many over 62, some too frail to climb into a top bunk — who have income, usually Social Security, but not enough to cover rent that inflation has pushed out of reach. A handful have arrived with stage 4 cancer and nowhere else to go. Coughran has described a shift in the population from people who once “will not” change course to people who simply “cannot.” The county’s Point-in-Time count rose from 139 in 2020 to 208 in 2022; the most recent count’s figures are still being tabulated.

The operator also makes an outcomes argument. Speaking to the council in February, Director Coughran said OMI had transitioned 203 clients into housing during its tenure — an average of roughly 14 a month — and put the value of that work at an $8 million return to the city. The basis for that figure is worth examining, since it is likely to be cited in discussions of the center.

How to read the $8 million

  • It is the operator’s estimate, not an audit. Both the 203 placements and the $8 million figure come from OMI’s director at the Feb. 4 council meeting. No city or county methodology for the figure has been published, and OMI — a faith-affiliated nonprofit operating since 1982 — is not a source of independent financial filings that would substantiate it.
  • The per-client math is plausible. Eight million dollars across 203 placements works out to roughly $39,000 a person, which sits inside accepted benchmarks: California’s homelessness spending ran about $42,000 per homeless individual in 2021–22, and the state auditor has put the public cost of a single chronically homeless person as high as $50,000 a year.
  • But it is gross avoidance, not net return. The estimate does not subtract the program’s own roughly $1.1–$1.8 million in annual operating cost, assumes the placements hold over time, and applies statewide averages rather than Lodi-specific costs.
  • And “to the city” overstates Lodi’s slice. Most of the avoided cost — emergency rooms, jail beds, county health and behavioral-health services — would have fallen on county, state, federal, and health-system budgets, not the city’s general fund.

None of this means the figure is incorrect. The general point is supported by research: housing people who would otherwise rely on emergency rooms, jails, and encampment cleanups tends to cost the public less overall than leaving them unsheltered. But the $8 million is an estimate of broad public savings, not a direct credit against the city’s operating costs, and it should not be read as money the city recovers against the bill it is taking on.

What to watch next

Several decisions over the next year and a half will determine how the center’s operations are funded. Most will take place in budget hearings and contract negotiations.

The city’s share of the cost

The city has not yet disclosed how much it will pay. The operating agreement with OMI and the first full-year budget that includes the permanent center are the documents expected to establish that figure.

Whether the county proposal moves forward

A supervisor’s stated intention is not yet a board action. The next step would be whether Ding’s proposal reaches the board with enough support to pass, and whether that happens before the city’s funding runs out.

The June state budget

The proposed $500 million for HHAP Round 7 is not yet enacted and is tied to new accountability requirements. Whether it is included in the final June budget, and whether any of it reaches San Joaquin County, will affect the funding picture for local programs.

For now, the city’s own summary stands: it has about a year of operating funds identified, and the source of funding beyond that has not been determined. The building is on track to open; the long-term funding plan is still being worked out.

LodiEye is the investigative research arm of Lodi411.com, a citizen-run civic data and transparency platform serving Lodi, California and San Joaquin County. LodiEye is not a traditional news outlet. It does not employ professional journalists or reporters, and the people behind it do not hold journalism degrees or have professional newsroom experience. LodiEye is best understood as civic research and analysis — not peer journalism — and is not a substitute for the local and regional news organizations that do this work professionally. For traditional reporting on Lodi, San Joaquin County, and the broader region, readers are encouraged to consult the Lodi News-Sentinel, Stocktonia, The Sacramento Bee, CalMatters, and other established news outlets staffed by credentialed journalists.

This LodiEye analysis was produced using artificial intelligence tools under the direction and review of the founder. Lodi411 uses multiple AI platforms in its research and publication workflow, including Anthropic’s Claude (primarily Opus and Sonnet models) and Perplexity AI across a variety of large language models offered by each. These tools were used in the following capacities:

Source Discovery: Perplexity AI handled initial real-time retrieval of primary documents and prior reporting — City of Lodi press releases and council records, the operator’s public materials, San Joaquin County board records, and California state budget analyses. Claude was used for deeper reading of the identified sources.

Credibility Validation: Claude (Opus and Sonnet) cross-referenced figures and attributions across multiple independent sources, prioritizing government and institutional records (city and county documents, the California Budget & Policy Center, the California State Association of Counties) over secondary reporting, and flagged where numbers are proposals, canceled contracts, or single-source operator claims rather than confirmed amounts.

Analysis and Synthesis: Claude assisted in connecting the local operating-cost question to the statewide HHAP funding decline and to the county’s structural role in homelessness and behavioral-health services, and in separating confirmed contract figures from estimates and proposals.

Presentation: Claude assisted in drafting, structuring, and formatting the report, including the inline data visualizations of state homelessness spending and Lodi’s operating-cost history.

Final Review: Multiple AI models reviewed the completed draft for factual consistency, source attribution, and logical coherence; cross-checking across tools is the primary mechanism used to reduce errors. All framing, analytical conclusions, and publication decisions were made by the founder.

Lodi411/LodiEye believes transparency about AI use serves both readers and the broader information ecosystem. Readers who spot errors are encouraged to write editor@lodi411.com so corrections can be made.

References

Don Bradford
Previous

The Regional Climate Plan and Lodi's Opportunity
Next

Who Pays to Keep the Lights On? Data Centers, EVs, and the Grid's New Era in California and Lodi