Austin city staff are recommending no funding cuts to the 133 social-service agreements reviewed as the city prepares for the next budget cycle, according to a presentation delivered to the City Council on Sept. 22. The review recommends maintaining 106 agreements at their current funding levels, representing about $39.5 million, or 82% of the $48.2 million covered by the evaluation. Staff recommended modifying the remaining 27 agreements, representing about $8.3 million, over the next 12 months. No agreements were placed in the “reduce” category for FY27. The evaluations were conducted by staff from eight city departments in response to a council resolution seeking an assessment of agreements that could have been affected by budget reductions. Reviewers examined funding levels, contract structures, provider performance, community need and partnerships. The recommendations come after the city entered the FY27 budget process facing a projected $16.8 million reduction in social-services contracts. The proposed budget later called for an $8 million reduction in ongoing funding for FY27 and an additional $8.8 million reduction planned for FY28. In August, the adopted FY27 budget restored $4.7 million to maintain social-services funding at current levels. The city’s FY27 social-services portfolio totals roughly $101.4 million across grants, operations funding and one-time allocations. Austin Public Health and the Homelessness Strategy and Operations department account for the largest shares, with nearly $24.9 million and $53.8 million, respectively. Other participating departments include Community Court, Housing, Economic Development, Police, Parks and Recreation, and Equity and Inclusion. The evaluation also identified compliance concerns or performance flags in 26 agreements, or about 20% of those reviewed. The concerns may involve unsupported or ineligible expenses, late or incomplete deliverables, or missed contractual performance measures. The flagged agreements included 15 overseen by Austin Public Health, five under Homelessness Strategy and Operations, three under Economic Development and three under Small and Minority Business Resources. City departments said they use ongoing fiscal and performance monitoring, invoice reviews and corrective-action plans to address compliance problems. Providers generally receive 30 to 90 days to meet improvement targets, with possible remedies including payment holds, cure notices or contract termination. Separately, the city is beginning a broader strategic reset of its social-services system. A City Manager’s Office-led working group is expected to examine community needs, service gaps, the city’s role, regional partnerships, funding models, performance standards, reporting and contract structures. Staff expect to complete that strategic work by the end of December 2026. The results will guide agreement modifications and new solicitations ahead of FY28. The city plans to develop and issue solicitations in early 2027, with new agreements expected to take effect in October 2027. The process is also expected to include engagement with service providers, residents and people affected by the programs, as well as the City Council’s public health, public safety, economic opportunity and housing committees. The city plans to use the coming months to define service areas, identify unmet needs and determine how responsibilities should be shared with regional government partners.