California cities and counties are grappling with significant financial losses exceeding $300 million as they pursue reimbursement from the Federal Emergency Management Agency for pandemic-related Project Roomkey expenses, all while addressing the state’s homelessness crisis.
The dispute revolves around a miscommunication about the length of time FEMA would pay for hotel stays — originally thought to be unlimited but now limited to 20 days. Project Roomkey, an initiative introduced by Gov. Gavin Newsom in April 2020, helped provide shelter for more than 62,000 high-risk unhoused individuals, keeping them and the community safe from the pandemic.
Lawmakers are deeply concerned about this issue. Rep. Robert Garcia, D-Long Beach, wrote a letter with 34 other members of Congress, asking FEMA Administrator Deanne Criswell to review the reimbursement policy. Los Angeles is dealing with a $60 million shortfall from FEMA’s delay, while also facing hiring freezes because of the city’s budget deficits.
Every dollar is crucial as they strive to fill vacancies and uphold city services, according to Assistant City Administrative Officer Ben Ceja. The current situation is due to a communication from FEMA Regional Administrator Robert Fenton on Oct. 16, which set a 20-day reimbursement limit after Newsom lifted the statewide pandemic stay-at-home order on June 11, 2021. This difference has resulted in substantial potential financial losses for many cities and counties, ranging from hundreds of thousands to millions of dollars.
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Garcia remembered being promised full reimbursement during Project Roomkey’s implementation and was troubled by the recent updates from FEMA. “It’s concerning and unacceptable that counties and cities across the state might lose over $300 million for past expenses that we expected to be reimbursed,” he stated.
Los Angeles officials wished they had received more straightforward guidance to make better program recommendations. If FEMA had offered more straightforward instructions, LA would have suggested capping the program at a maximum of 20 days, according to City Administrative Officer Matt Szabo.
Nonetheless, FEMA’s acting press secretary Daniel Llargués emphasized that the agency’s policies and reimbursement procedures have stayed consistent, with no changes made to reduce spending.
“FEMA did not update requirements for non-congregate sheltering or any other COVID-19 related activities to cut expenses,” he stated. The current issue is the way FEMA’s assistance terms are interpreted and communicated to local governments. California cities and counties are currently waiting for FEMA’s application decisions and preparing for a potential lengthy appeal and arbitration process that may last close to a year.
Meanwhile, the crisis persists as federal and local government efforts are inadequate, with recent statistics indicating a 12% increase in homelessness compared to 2022. With more than 653,000 individuals currently without homes across the country, regions that prioritized housing the homeless using federal assistance may encounter funding challenges in the future if FEMA’s position stays the same.
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