New proposal to help homeless in Denver (KUSA 9 News)

KUSA - Denver Mayor Michael Hancock’s office is pushing a new plan to try and help those who are chronically homeless in the city. There are an estimated 800 people in Denver considered “chronically homeless” -- on the streets for more than three years, along with being in and out of jail, emergency rooms and detox centers.

“This is a population that is a very heavy user of the criminal justice system and the social safety net system,” said Denver Chief Financial Officer and Deputy Mayor Cary Kennedy.

Dealing with the chronically homeless costs the city an estimated $7 million a year. Now, though, the mayor’s administration says a new plan could help the city save that money and Denver taxpayers won’t have to pay for it.

“We will use investor funding,” Kennedy said.

It’s called a “social impact bond” program or SIB, but it’s not really a bond. Here’s how it works: the city would sign a five-year contract with an investment group. That group will put up more than $8 million for Denver to target 250 of the toughest homeless cases.

If the homeless people in the program stay out of jail and more than 20 percent stay off the streets in permanent city housing, the investors will begin see a return on their money.

“There won’t be any cost to Denver taxpayers because we’ll use the savings in the criminal justice system, fewer nights in jail, fewer nights in detox, fewer emergency room visits – we’ll use that savings to repay the investors,” Kennedy said.

The permanent housing would include 210 new units of housing, built using federal and state dollars, plus 40 existing units.

“I think there’s a lot of unanswered questions,” said Denver City Council Member Kevin Flynn, who represents Southwest Denver.

During a council committee meeting about the plan on Tuesday, Flynn expressed concerns about how the success of the program would be calculated and monitored.

“That’s why I think it’s essential that we have an independent evaluator such as, perhaps the city auditor, taking a look at whether we’re really saving that money we say we’re saving,” Flynn said.

Supporters admit the program isn't perfect.

“This isn’t going to solve Denver’s homeless problem," Kennedy said.

However, she also said the program would be the first-of-its-kind in the country and a start for those who need it.

The city council committee voted to send the proposal to a vote before the full council – five voted in favor, one abstained. The vote before the full council is expected to take place later this month.