HomeMy WebLinkAbout05.b. Receive update on submission of Claim to State of California Department of Finance for Reimbursement of COVID-19 Related Costs and receive update on status of FEMA claims process Page 1 of 2
Item 5.b.
CENTRAL SAN
October 26, 2021
TO: FINANCE COMMITTEE
FROM: KEVIN MIZUNO, FINANCE MANAGER
PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE UPDATE ON SUBMISSION OF CLAIM TO STATE OF
CALIFORNIA DEPARTMENT OF FINANCE FOR REIMBURSEMENT OF
COVI D-19 RELATED COSTS AND RECEIVE UPDATE ON STATUS OF
FEMA CLAIMS PROCESS
On October 15, 2021, staff submitted a claim for reimbursement of COVI D-19 related costs to the State
of California Department of Finance.
Background
The 2021 Budget Act appropriated a one-time $100 million allocation through the General Fund to provide
fiscal relief to independent special districts for revenue losses or unanticipated costs incurred due to the
COVI D-19 public health emergency. Funds were reserved for districts that have not received other forms
of COVI D-19 fiscal relief directly from the state or federal government. Districts were still eligible to apply
if they have received or intend to receive Federal Emergency Management Agency (FEMA)
reimbursements, with the claim to be netted of such amounts. Each qualifying district that applies is to
receive an allocation based on its proportionate share of the total unanticipated costs and revenue losses
incurred by all districts during the following eligible periods:
Revenue Losses—Revenue losses, from all fund sources, incurred due to the COVI D-19 public health
emergency during the 2020-21 fiscal year, compared to the revenue from all fund sources in the 2018-19
fiscal year (which serves as the base period to which the revenues will be compared).
Unanticipated Costs—Unanticipated costs incurred due to the COVI D-19 public health emergency during
the period starting March 4, 2020, and ending June 15, 2021. This aligns with similar federal fiscal
reporting timeframes.
Independent special districts were invited to apply for an allocation by completing an online application
form by October 15.
Key Results
Central San staff submitted the required information on October 15, including the following:
• Fiscal Year(FY) 2018-19 total revenue from all fund sources: $155,818,161
• FY 2020-21 total revenue from all fund sources: $161,748,802
• Information for the covered period beginning on March 4, 2020 and ending on June 15, 2021 on:
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a. Unanticipated costs: $2,798,700
b. FEMA Eligible costs: $313,336
The following are notable:
• There is no claim for revenue loss as FY 2020-21 revenues exceed the defined baseline year of FY
2018-19. The requirements are that"ALL" revenues be considered. Despite the fact that FY 2020-
21 Sewer Service Charge (SSC) revenues were not increased due to suspended collection of the
FY 2020-21 increase, there was still a rate increase in FY 2019-20, and there were increases in
other components of revenue, such as ad-valorem taxes. While staff did report in December 2020
that a decline in commercial revenues was appearing likely, this revenue loss would not appear until
FY 2021-22, due to the billing lag that exists with the use of water purveyor data from 2020 to
determine sewer service charge bills for FY 2020-21. Further, more recent data is showing that the
revenue decline for commercial customers is not as significant as originally expected. Because of
the defined baseline (FY 2018-19) and test year(FY 2020-21), and the fact that"ALL" revenues are
to be considered in determining whether a revenue reduction has taken place, staff did not see an
opportunity for a valid claim for revenue loss given any of the parameters defined by the State for this
program.
• The net claim for unanticipated costs is $2,485,364 ($2,798,700 less $313,336 FEMA Eligible
Costs). This consists primarily of in-house labor costs ($2,270,920), some contracted services
($181,070), and supplies and materials ($15,443), and capital related items (such as laptops,
$17,931). Labor related costs include time charged for COVI D-19 specific activities, staff paid while
on COVI D-19 reserve status during 2020, COVI D-19 related Administrative Leave during 2020,
and State of California mandated Emergency Family and Medical Leave Act(EFMLA).
The ultimate recovery by Central San for these costs will depend on the extent of total claims of
independent special districts compared to the $100 million in available funding. Staff expect that
preliminary information on that point will be released by the State shortly, and prior to disbursement of
funds. Staff will report back to the Board with additional information as it becomes available.
Between this program, and a subsequent FEMA claim, it is possible that Central San may be reimbursed
for all, or at least a substantial portion of unanticipated costs related to COVI D-19. As to the FEMA
claim, Central San has been compiling a log of expenditures to be submitted to FEMA, and been in
contact with the FEMA representative regarding the claims process. Central San continues to monitor and
document all costs eligible for FEMA reimbursement. Once the COVID-19 disaster declaration expires, staff will
submit a single claim to FEMAfor all recoverable expenses. We currently estimate this will occur in early 2022.
Strategic Plan Tie-In
GOAL THREE:Fiscal Responsibility
Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial
management
GOAL SEVEN:Agility and Adaptability
Strategy 1—Maintain a safe working environment for employees and the public during the COVID-19 pandemic
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