California cities and counties could be hit by the more than $300 million they spent housing thousands of homeless residents in hotels amid the COVID-19 pandemic.
At the time, local officials took this unprecedented step under the impression that the federal government would reimburse much of the cost of providing shelter, without time limits, to people who were homeless and at high risk for severe symptoms. But the Federal Emergency Management Agency says they were wrong and that the agency had only agreed to pay for hotel stays of up to 20 days.
Now, worried members of the California delegation want answers. A Monday letter from Rep. Robert Garcia (D-Long Beach), signed by 34 other Democratic members and one Republican, Rep. David Valadao (R-Hanford), calls on FEMA Administrator Deanne Criswell to reconsider and reimburse cities that are already in need of resources. cash.
“We're talking about the greatest loss of life we've had to go through in more than a generation,” Garcia said. “This idea that, in this massive emergency, we're not going to fully reimburse cities and counties for housing people… is crazy. “FEMA has the responsibility to solve this problem.”
Los Angeles could lose $60 million spent from its general fund, nearly a third of the $194 million submitted to FEMA for reimbursement. The city already faces hiring limits due to a budget shortfall.
“Every dollar would help us fill some of those vacancies,” said Ben Ceja, deputy city administrative officer.
The issue stems from a letter sent Oct. 16 by FEMA Regional Administrator Robert Fenton to Nancy Ward, director of the California Office of Emergency Services.
Governor Gavin Newsom ended California's statewide pandemic stay-at-home order on June 11, 2021, by which time more than 70% of adults had received at least one vaccine dose.
Fenton told California officials that FEMA would limit refunds for two years after the order was lifted to hotel stays of up to 20 days. That is “according to the [Centers for Disease Control’s] Isolation and quarantine period is recommended,” he wrote.
Emergency hotel accommodations were offered to people who had been exposed to or tested positive for COVID-19 and had nowhere to isolate, and those who were considered high risk, such as people over 65 years of age or with underlying health conditions . Unhoused people in encampments and congregate shelters generally were at higher risk of exposure to the virus.
Fenton wrote that the rules for the refund were established in letters to California on March 27, 2020. Those requirements did not change, he said, although the previous letters do not explicitly state the 20-day limit.
The COVID-19 pandemic was the largest disaster response in FEMA's history. The agency said it has provided California with more than $9.4 billion in COVID-19-related assistance, and that all states and local governments are subject to the same policy and reimbursement process for housing homeless people.
“FEMA, under its Public Assistance Program, is working closely with state, tribal, territorial and local governments to provide all eligible and available funds for reimbursement, and will continue to do so for those affected during the pandemic,” the secretary said. FEMA interim press officer, Daniel Llargués.
California officials tell a different story.
After declaring a state of emergency over COVID-19, Newsom launched Project Roomkey in April 2020 to help homeless people safely isolate themselves in hotels and motels to prevent the spread of the virus.
Some 62,000 people were welcomed thanks to the program.
Local counties and cities assumed the cost of hotel leases and food and service providers with the expectation that they would be reimbursed. FEMA's commitment was critical to California's ability to protect its residents, Garcia's letter states.
Initially, FEMA agreed to cover 75% of eligible expenses, but in January 2021 the agency agreed to reimburse all costs.
Fenton's letter in the fall came as a shock.
“This October 2023 policy decision comes long after local governments across our state had already spent significant local resources under Project Roomkey with the full expectation of repayment,” the members of Congress wrote. “We noted that FEMA had never noted any prior limits.”
California officials argue that the indefinite length of stay was important for public health and to allow residents to transition to different housing. The program was not perfect: In Los Angeles, it never came close to the goal of securing rooms for the approximately 15,000 eligible homeless people, although it maintained a long waiting list and many of those housed left without explanation.
Reimbursement losses range from hundreds of thousands to hundreds of millions: $114 million for the city and county of San Francisco, $22 million for Ventura County and $200,000 for Madera County. Some jurisdictions that have already received compensation could be forced to return the money.
Garcia said he is intimately familiar with Project Roomkey from his days as mayor of Long Beach. Long Beach could lose $6.2 million it spent on housing for homeless residents.
The situation erodes trust between California localities and FEMA, he said.
“I remember being at the table when cities like mine were told they would get a full refund for this,” Garcia said. “So it is quite troubling and, frankly, unacceptable that counties and cities across the state could lose more than $300 million for past expenses that we had every reason to believe would be reimbursed.”
In January, the Governor's Office of Emergency Services sent FEMA a letter urging it to reconsider the cap.
“California is committed to maximizing federal aid to communities and has been aggressively pushing for FEMA to rescind its decision to deny promised assistance to local governments,” said Emergency Services spokesman Brian Ferguson.
Had there been clearer guidance, Los Angeles would have recommended that the program be limited to stays of 20 days or less, said city administrative officer Matt Szabo.
Wendy Huff Ellard, a disaster recovery attorney who represents four California counties seeking reimbursements from FEMA, as well as others in Texas and New York, said some localities will face significant difficulties recovering from the loss of the funds they spent.
“The cities and counties in this case have relied on FEMA to provide funding for the program,” he said. “It's impossible to go back and change what they've done.”
Ellard said California is at the forefront of what she believes will be denials across the country. When the reimbursement requests started coming in, she said, “I think FEMA realized how big the programs were and maybe they should have issued more specific parameters.”
Llargués, the FEMA spokesman, said that is not true.
“FEMA did not review eligibility for non-congregate sheltering or any other COVID-19-related activities to reduce costs,” he said.
Once FEMA issues decisions on applications, California governments that receive denials can begin an appeal and arbitration process. That could take about a year, Ellard said.
