Stanislaus officials optimistic about funding Modesto homeless shelter through June
Stanislaus County supervisors approved a final budget Tuesday and also heard a detailed update on funding shortfalls that threaten the low-barrier homeless shelter in Modesto.
The county is weighing options to keep the 182-bed facility open.
County Chief Executive Officer Jody Hayes said Monday that the county believes it can resolve the funding gap this fiscal year so the shelter remains open through June. But there are concerns about funding what’s officially called the Access Center Emergency Shelter (ACES) in the 2026-27 budget year, which begins July 1.
Last week, the county sent a 180-day termination notice to the shelter operator, The Salvation Army, to start exploring solutions. The shelter on D Street no longer can rely so much on state Homeless Housing Assistance and Prevention (HHAP) funds after that source was not included in the 2025-26 state budget.
More than 20 sources of funding have supported the shelter at D and South Ninth streets since its inception in 2019, county staff said.
To fill the funding gaps in the current fiscal year, the county can receive HHAP money from a previous funding round that’s conditional on meeting performance measures. Assistant County Executive Officer Raul Mendez said the ACES facility is meeting one of six performance metrics and the Community Services Agency is making sure to input information for meeting other measures.
As for other solutions, the county hopes The Salvation Army can modify operations to qualify for Cal AIM health initiative funding for the low-barrier shelter.
Christine Huber, the county’s Community Services Agency director, told the board she believes the shelter can operate through April 2026 by combining money from past rounds of HHAP grants, the Community System of Care’s approval of a $600,000 request from The Salvation Army, and access to another $930,000 in funds.
The absence of HHAP grants in this year’s state budget means counties and cities won’t see those dollars in the next fiscal year starting July 1. The annual cost of running ACES is almost $3.3 million. The HHAP funding is expected to resume in the 2026-27 state budget, but the $500 million statewide will be half the shelter funding provided in previous years.
One cost-saving option may be converting ACES to an overnight emergency-only shelter. In addition to providing a bed for the night, the center has linked people to mental health and substance abuse programs, help with employment and transition to housing.
County officials are also talking with Modesto about the funding gaps.
Supervisor Terry Withrow said county Behavioral Health and Recovery Services could be more involved with providing mental health services at the shelter, which would be another possible funding source. “I wish BHRS could be more embedded in that facility,” Withrow said.
Supervisors also approved a final county budget marked by flat revenue projections. Hayes, the county CEO, said stagnant revenues are not a surprise after many years of revenue growth. The county’s fund balances have been drawn down in recent budget years as the county paid for one-time needs and made investments to fill workforce vacancies.
Hayes did not recommend spending increases in the 2025-26 budget.
This story was originally published September 30, 2025 at 7:43 AM.
