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February 04, 2013

What the Rates Tell Us About Vermont's Motel Spending

MotelsLast week Seven Days followed up a story we first explored back in December: When shelters are full, the state turns to local motels to house homeless families and individuals. The practice is on the rise after the state loosened eligibility requirements in 2009, and it's costing taxpayers a pretty penny — more than $2.2 million in fiscal year 2012, and likely more still this year.

As we reported last week, a few local motels are profiting mightily from the extra business (total earnings for top motels in fiscal year 2012 pictured at right).  

What we couldn't uncover in time for the print edition was specific information about just what kind of rates the state is negotiating with these motels. Vermont Department of Children and Families deputy commissioner Richard Giddings told us the state's antiquated computer system made it impossible to quickly generate reports pinpointing nightly rates at the various motels. 

So we filed a public records request, asking for billing information from six of the highest earning motels in fiscal year 2012. How much did these motels bill the state during the months of November and December, and more importantly, what sort of nightly rates did the state negotiate? How does this spending compare with the cost of traditional homeless shelters?

In some cases, the state is securing lower rates than other motel customers, according to the documents. At the University Inn, where Vermont taxpayers paid for 1312 nightly stays in November and December, the state negotiated a rate of $38 a night — a roughly 34 percent discount from the flat rate of $54 that the South Burlington motel typically charges at this time of year.

The Ho Hum Motel on Williston Road in South Burlington quoted this reporter rates of $68 and $78 a night for a single or double room, but charged the state $42 in November and December. The Swiss Host billed out at $39 a night, but quoted rates by phone ranging from $66 for a night's stay to $47 a night at the weekly rate. 

But discounts vary by motel. Documents provided by DCF show the state paid $60 a night at Rutland's Economy Inn, to the cumulative tune of $39,060 over two months; a receptionist at the motel quoted the same rate by phone when we called this week. Similarly, the Econo Lodge in Shelburne charged $50 a night for state-funded clients, and a search of its rates online turned up a "best available rate" that is essentially identical: $49 a night. 

Of the six motels included in our public-records request, America's Best Inn in Brattleboro earned the most in taxpayers' dollars in November and December: Charging between $55 and $70 a night, the inn billed the state for $60,136 during those two months.

The records also show that, for many of these motels, visitors on state assistance make up a huge chunk of their potential business. The University Inn housed, on average, 22 clients a night in November and December; with 88 rooms available, those clients would account for a quarter of the motel's business if all rooms were filled. And even if some of these hotels are cutting the state a deal, the total amount spent during just two months last year is still staggering: $240,017 between the six motels alone.

How do the rates stack up against the costs faced by nonprofits serving the homeless population? Mark Redmond, the executive director of Spectrum Youth & Family Services in Burlington, says that his organization is contracted to bill the state $65 a night when DCF asks Spectrum to shelter an individual. But that $65 buys far more than a warm bed, says Redmond: Spectrum's services include case managers who help residents craft plans about health care, schooling and life skills. There is an overnight supervisor awake all night long in each of Spectrum's facilities. Spectrum provides access to a health clinic, job training and mental health or addiction counseling services.  

In other words?

"It's like the total package. It's not just the roof over your head," says Redmond. "Frankly, it’s the solution. I think what we provide is the way out of homelessness."

Burlington's Committee on Temporary Shelter (COTS) doesn't track spending on a per-night basis, but director Rita Markley did pass along some of the expenses the organization shoulders; they vary, she explains, depending on the type of shelter and services provided.

For instance, COTS spent $113,700 running a temporary overflow shelter for homeless individuals between October 2011 and July 2012; if the shelter were constantly at full capacity (18 individuals), the costs break down to roughly $21 a night per head. At COTS' waystation, which typically shelters 36 individuals, the cost breaks down to roughly $16 a night if fully occupied.  

Family shelters tend to be more expensive, Markley says, because COTS provides 'round-the-clock staffing and more services. The family overflow shelter operated for $215,000 for the same 10-month period between October 2011 and July 2012, and accommodated 10 individuals each night; the average cost breaks down to roughly $71 a night per spot. COTS' main family shelter, which accommodates 10 families, costs $94 a night per family. Like Redmond, Markley says the costs may be higher than that of a motel because of the expenses involved in staffing, training and liability, among other costs. The majority of COTS' funding comes from community donations, not state funding, and the organization only receives $17 in state funds per night to shelter a family that is receiving welfare benefits such as Reach Up.

Shelters and motels aside, Markley ultimately believes state funding is best used preventing a family or individual from losing housing in the first place — a refrain that's become common in the motel spending debate. She points to a program that COTS ran last year that stopped 233 evictions. "That was 233 households who could have otherwise ended up in motels," she says. The cost? $187,971 — 24 percent less than what the state paid to six motels alone in two months. She says state funds would be best spent helping people retain housing, and investing in more affordable housing stock. 

"Most of the folks who wind up in shelters or these motels had a home before they lost it," says Markley. "Let’s do a lot more of what’s working."

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