California counties, towns hit with $300M in surprise fees for COVID housing after feds reportedly renege on promise
Cities and counties across California could be on the hook for at least $300 million after officials say the federal government reneged on its promise to pay for COVID hotel stays — with deficit-ridden San Francisco potentially having to find $190 million to cover the costs.
As the pandemic started hitting California in March 2020, Gov. Gavin Newsom implemented a program called Project Room Key in which homeless people would be placed into empty hotel rooms to enable social distancing and cut down on the spread of the virus in shelters and tent cities.
At the time, FEMA officials said it would reimburse 75% of the costs associated with the project, but later informed California officials it would cover the entire cost of the program through July 1, 2022 and 90% afterward, through May 11, 2023, according to the San Francisco Chronicle.
California officials were left blindsided in October when they received a letter from the federal agency saying it would not reimburse hotel stays longer than 20 days between June 11, 2021 and May 11, 2023.
They are now trying to fight back — with San Francisco officials arguing that if they had known about the 20-day stay limit before, they may have acted differently.
“It’s not over until FEMA sings, and we’re not done,” said San Francisco Supervisor Aaron Peskin.
On Jan. 31, California Office of Emergency Services Director Nancy Ward sent FEMA officials a 95-page memo urging them to rescind its decision, according to the Chronicle.
She noted that the agency had “inconsistently” applied its non-congregate shelter policies across the country and pointed to numerous statements from FEMA officials and President Biden committing to “fully cover” eligible costs.
A spokesperson for the agency said it would review the request and would respond “as soon as possible,” according to the Chronicle.
In a separate letter, San Francisco Controller Ben Rosenfield also claimed FEMA never communicated its 20-day hotel stay limit at any time during the pandemic, and argued that the agency’s actions amounted to “impermissible retroactive law.”
He said on Monday that the city responded to the pandemic based on FEMA’s guidance at the time and without the funds it was expecting from the agency, the city would have to find at least $114 million in its budget to cover the expenses.
That amount could balloon up to $190 million if the federal agency also decides not to pay $76 million in reimbursement claims the city filed to ensure the hotel rooms were vacant and ready for the homeless, Rosenfield noted.
The sudden dearth in funds would pose a “significant potential risk” to San Francisco’s budget, as the city is expected to face a deficit of more than $1 billion in the coming years, city officials said.
“We intend to explore every option to appeal any claims denied by FEMA Region 9 that we believe to be eligible for reimbursement, based on the guidance in effect at the time,” Rosenfield said.
FEMA officials, though, claim the guidance was in effect at the time — with regional administrator Robert J. Fenton saying he was just “clarifying the original guidance” in his October letter to California officials.
The agency said in a statement to The Post that all states had been provided “the same guidance and policy updates throughout the pandemic.”
It added that it is still reviewing funding requests from states, cities and other jurisdictions across the country.
“FEMA is committed to working with each impacted jurisdiction on all requests for federal funding to maximize reimbursement for the appropriate life-saving measures they implemented to protect their citizens from COVID-19, while also ensuring the appropriate oversight of federal funds,” the agency said.
With Post wires.
