Stanislaus County has issued a six-month termination notice to The Salvation Army, signaling the possible closure of the low-barrier homeless shelter on D Street in Modesto. The facility, also known as the Access Center Emergency Shelter (ACES), currently provides 182 beds for people experiencing homelessness.
The decision follows a reduction in state funding for homeless services. The Homeless, Housing and Prevention (HHAP) funds were not included in California’s 2025-26 budget, which has created uncertainty about how the county will support the shelter moving forward. HHAP funds have been a significant source of annual support for ACES.
Next year, counties and cities across California are expected to receive $500 million in HHAP funding—half of what was distributed in previous years.
Andy Johnson, director of Stanislaus County’s general services agency, sent the termination notice to Salvation Army Maj. Darren Stratton last Thursday. In his letter, Johnson stated that “a new model for ACES ‘is likely inevitable’ and operational changes should be explored.”
County officials from both the Chief Executive’s Office and Community Services Agency declined interviews about the current funding challenges.
The potential closure or downsizing of ACES comes at a time when several California counties have reported decreases in their homeless populations. For example, Merced County saw its count drop by 15% this year; Santa Cruz, Sonoma, and Contra Costa counties each recorded declines of 20% or more according to data from Hub for Urban Initiatives.
In contrast, Stanislaus County experienced a slight increase: its point-in-time count rose by 1.6%, from 2,052 people experiencing homelessness in 2024 to 2,086 this year. Of those counted in January, 950 were unsheltered while 1,136 were staying in shelters.
Since opening in 2019 through June this year, ACES has provided shelter and services to 2,762 individuals—including 512 during fiscal year 2024-25. According to a recent county report released Friday, many clients face physical health issues or mental illness and may be survivors of domestic violence or human trafficking.
The county had planned to use $2.3 million from HHAP funds to cover about 70% of ACES’ operating expenses this year. While it expects over $1 million from an earlier HHAP disbursement due next January, there is uncertainty over whether it can meet required performance metrics needed to access an additional $1.23 million.
Even before these latest developments with state funding cuts, county staff projected a shortfall of $350,700 for ACES operations this fiscal year.
Legislation governing HHAP allocations now requires counties to meet certain criteria—such as increasing shelter capacity during annual counts or moving more people into permanent housing—to qualify for full funding amounts.
Shelter operations are among several items up for discussion as Stanislaus County supervisors prepare to finalize their budget for the fiscal year ending June 30, 2026. On Tuesday morning at Tenth Street Place (1010 10th St., Modesto), supervisors could approve a final budget totaling $1.89 billion based on estimated revenues and fund balances combined with retained earnings.
Of that total spending plan:
– The general fund stands at $538.7 million.
– It is supported by $492.8 million in revenue plus $46.1 million from fund balances.
– Adjustments have been made since June’s preliminary budget approval due to changes at both state and federal levels as well as other emerging issues.
Public comments on the proposed budget can be submitted via email at COBsupport@stancounty.com ahead of Tuesday’s hearing starting at 9 a.m., where residents will also have an opportunity to speak directly before supervisors.
