Long Beach quietly pulled the plug on its partnership with First to Serve, the nonprofit that had been running most of the city's interim shelters, after an internal review raised red flags about billing and administrative records. City staff have frozen some payments and shuffled operations, so beds stay open while investigators comb through paperwork. For now, dozens of shelter beds are in the hands of temporary operators as the city scrambles to ink new contracts.
Audit And The City's Move
The city's auditor has been reviewing how Long Beach hands out and oversees homelessness contracts and city properties as shelter capacity has grown. Those performance reviews focus on lease management, contract compliance, and documentation, and have already produced findings and follow-up questions for several departments. For more details on what auditors are looking at, see the memo from City Auditor Laura Doud.
Which Sites Were Affected
The shake-up touches multiple city-contracted shelters, including the Homekey interim housing project at 5950 Long Beach Blvd., a 78-unit motel conversion the city had previously said would be operated by First to Serve. City contract files show First to Serve held several agreements to provide both year-round and seasonal beds in Long Beach. For the Homekey site, the city outlined its plans in a news release and detailed the contract history in its legislative records: City of Long Beach; Legistar.
What Investigators Say And The Allegations
According to reporting by the Long Beach Post, the auditor's review examined about $69 million in city spending on homeless services over the past five years and flagged information that needed deeper scrutiny. The outlet reports the city had been paying First to Serve roughly $13–$14 million a year to operate four shelter sites and that the nonprofit ran the majority of Long Beach's contracted beds until the relationship was suspended. The same reporting notes a video posted by a mayoral candidate that appeared to show very low occupancy at one Homekey motel, which helped fuel public questions about how the program was being run.
Interim Operators And Next Steps
To avoid closing beds while the audit work continues, city officials quickly brought in backup. The Long Beach Post reports that People Assisting The Homeless (PATH) stepped in to operate the four former First to Serve locations, and it quotes the city's Homeless Services manager saying the city expects to put out bids in the next month or two to choose new long-term operators. In the meantime, the city says it has held back specific payments tied to the disputed contracts while investigators and procurement staff sort through the documentation.
What Officials And Residents Should Expect
City leaders are stressing that shelter doors will stay open while the paperwork battle plays out. Long Beach's contracting office regularly posts solicitations and guidance for service providers and will use that system as it looks for replacement or new vendors. Contract reviews and any follow-on procurement steps can take weeks, and the city's public contracting page lays out the process and upcoming chances for organizations to bid on shelter work: City of Long Beach.
Why This Matters
If auditors conclude the city paid for services that were not delivered or for inflated bed counts, Long Beach could seek to claw back money and tighten how it polices future homelessness contracts. For now, officials say the top priority is keeping people indoors and connected to services while the legal, financial, and administrative reviews play out in the background. Residents who need shelter referrals or information can find city-run resources here: City of Long Beach.
