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In a battle for fiscal responsibility amid the nation’s unprecedented homelessness crisis, California cities and counties face potential financial losses exceeding $300 million as they seek reimbursement from the Federal Emergency Management Agency for pandemic-related Project Roomkey expenses.
The clash centers on a misunderstanding regarding the duration that FEMA would cover for hotel stays — initially believed to be indefinite but now capped at just 20 days. Project Roomkey, an initiative launched in April 2020 by Gov. Gavin Newsom, played a crucial role in sheltering over 62,000 high-risk unhoused individuals, protecting them and the broader community from the pandemic’s spread.
This issue has sparked significant concern among lawmakers. Rep. Robert Garcia, D-Long Beach, who penned a letter co-signed by 34 other members of Congress, urged FEMA Administrator Deanne Criswell to reconsider the reimbursement policy.
Los Angeles faces a shortfall of $60 million from FEMA’s holdout, amid hiring freezes due to the city’s budget deficits.
According to Assistant City Administrative Officer Ben Ceja, every dollar counts as they work to fill vacancies and maintain city services.
The current situation results from an Oct. 16 communication from FEMA Regional Administrator Robert Fenton, establishing a 20-day reimbursement limit following Newsom’s lifting of the statewide pandemic stay-at-home order on June 11, 2021. This discrepancy has led to significant potential losses for numerous cities and counties, from hundreds of thousands to millions of dollars.
Garcia recalled assurances of full reimbursement during Project Roomkey’s implementation and found the recent developments from FEMA disturbing and unacceptable.
“It’s quite disturbing and quite frankly not acceptable that counties and cities across the state essentially could lose more than $300 million for previous expenditures that we had all the reason to believe would be reimbursed,” he said.
Los Angeles officials expressed regret that they weren’t provided with clearer guidance, which would have led to different program recommendations. Had FEMA provided clearer guidance, LA would have recommended the program be limited to stays of maximum 20 days, City Administrative Officer Matt Szabo said.
However, FEMA’s acting press secretary Daniel Llargués insisted the agency’s policies and reimbursement procedures remain consistent, with no revisions made to cut expenditures.
“FEMA did not revise eligibility for non-congregate sheltering or any other COVID-19 related activities in order to reduce costs,” he said.
The contention now lies in the interpretation of FEMA’s assistance terms and their communication to local governments. As California cities and counties await FEMA’s application decisions, they brace for a possible lengthy appeal and arbitration process, which could take nearly a year.
Meanwhile, the crisis continues to worsen with federal and local government efforts falling short, as recent statistics show a 12% rise in homelessness compared to 2022. With over 653,000 people now unhoused nationwide, localities that invested heavily in efforts to house the homeless with federal aid in mind face future funding deficiencies if FEMA’s stance remains unchanged.
As reported by the Los Angeles Times and USA Today
