Federal judge presses Mayor Bass to fix homeless funding 'mess'

U.S. District Judge David O. Carter on Thursday criticized Los Angeles' pattern of unfulfilled homeless reduction promises and inability to track the millions of dollars that the city has been purportedly spending on ways to address it.

"Somebody's got to start making [decisions] or we're just running up a bill pretending to the American public like we're doing something, but we're not. You've inherited one heck of a mess ... that has occurred for decades," Carter told several Los Angeles officials, including Mayor Karen Bass, who attended the hearing.

The judge clarified that his frustration wasn't directly aimed at the officials in the room, but instead the history of Los Angeles' leadership. "When I'm talking to you, I'm not tearing down on you. I'm bearing down on every past official who saw this slow train wreck occurring ... and then I'm going to ask you what you are going to do about it."

The underlying case involves the validity of Los Angeles' compliance with a five-year housing agreement it made in 2022 with the L.A. Alliance for Human Rights, a skid row advocacy group. The group claims, among other things, that the city is using the January wildfires as an excuse to sideline its housing responsibilities and is not on track to fulfill homeless reduction commitments by 2027, pursuant to the agreement.

"Five years ago, we gathered in this courtroom ... and city official after city official came up here and spoke of wanting to solve this problem ... to this humanitarian crisis," Umhofer Mitchell & King LLP partner Matthew D. Umhofer told Carter. "Yet here we are and the problem has gotten worse."

Umhofer shifted his attention to Bass. "The city is failing. You are failing ... and I don't want you to."

The city took the position that it hasn't breached the agreement because the Alliance's concerns were merely speculative at this stage. Its counsel, led by Scott D. Marcus and Arlene N. Hoang of the city attorney's office, argued it has made, and continues to make, good faith progress on its encampment reduction targets.

However, Carter was not convinced that was the case and stated that although the fires needed the city's attention, it wasn't an emergency that was going to last forever. He also added, "All of this happened before the fires took place," while referencing the city's struggles to effectively clear the streets of homeless encampments.

Earlier this week, the judge found the city had been mischaracterizing its temporary encampment clean-up efforts as permanent resolutions. He had further concerns about whether the city would be able to make significant progress on the rest of its promises.

The judge based these criticisms on an independent financial and performance audit he ordered on the city last year. The auditors found there was a substantial lack of accurate documentation on the city's spending that made it difficult to track. Among the problems included a lack of contractual clarity, accountability and performance monitoring among the city, its service providers and the Los Angeles Homeless Service Authority.

However, Carter said these findings weren't new and have been a recurring problem within the city's homeless crisis expenditures for decades. He read the mayor several audit reports - which dated back to 2007 - that detailed similar tracing issues with the city's funding and no follow-up actions.

"In 2021, I started to question that I can't track or understand where the $600 million dollars went," Carter said while referencing one of the reports. "It's dawning on me that the providers now are keeping these documents in-house and nobody is asking the providers what they did or what services they performed. ... So, because we're not asking that, we may have providers who are committing fraud. We'll never know."

The city's counsel was sidelined for most of Thursday's hearing. "I've heard enough from the lawyers," Carter commented at one point as he directed his attention to the city officials who were seated in the jury gallery.

"I'm not going to do anything today ... but whatever you do, it has to be something to stop this train wreck," Carter told Bass. "I apologize that this has fallen on you ... but you're it."

Bass acknowledged the audit and said she and her staff understood the concerns.

"I ran because I knew the system was broken and I wanted to come here and make a difference. To me, though, the first priority from Day One was to save people's lives and to get them off the streets. ... I pointed out to you, before you even discovered it, a lot of the stuff that was brought. We know this. The point is how to fix it and what we're going to do about it," Bass told Carter.

"Can you fix it?'" Carter asked.

"I believe that we can stop people from dying in the streets. That's what I believe," Bass responded. Carter urged her to elaborate further.

"I believe the only way you're going to solve this problem is by bringing in both parts of government together. ... I don't single-handedly have the authority, and neither does my colleague here. We inherit some of this system between the city and the county and it's not just us. It's the entire state of California. We meet weekly with the different mayors and they all go through the same differences with their county. But that doesn't mean that these differences are antagonistic. ... I think we work hard and have a lot more to do. But it needs to be focused on the people and what their needs are ... not the administration," Bass said.

Carter said it was time for action and the time for talking about it has passed.

"We've finally reached a point in 2025 ... that now there has to be a resolution," Carter said. He advised Bass to find a solution expeditiously and for the city to report back to him with answers by May.

In 2020, the Alliance sued the city and county on claims its elected political leaders weren't effectively reducing street encampments and creating more shelter beds for homeless people. The city and county settled the matter years later and agreed to fulfill these duties. It is the second time in as many years the city has been brought before Carter on claims it has not been meeting the agreement's milestones.

Last year, the Alliance moved to sanction the city after claiming it had not been fulfilling promises of contracting plans by specific deadlines, pursuant to the agreement. However, Carter did not impose sanctions after finding the parties quickly resolved that dispute in good faith. L.A. Alliance for Human Rights et al. v. City of Los Angeles et al., 2:20-cv-02291 (C.D. Cal., filed March 10, 2020).