To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: PROVIDE DIRECTION ON THE POTENTIAL USE OF UNALLOCATED COVID-19 FEMA RESERVE FUNDS TOTALING $14,729,868 FOR FISCAL YEAR 2025-26
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
PROVIDE direction on next steps related to the unallocated portion of former COVID-19 FEMA Reserve funds totaling $14,729,868 appropriated as Appropriation for Contingencies within the General Fund in fiscal year 2025-26 (FY25-26).
FISCAL IMPACT:
No fiscal impact. Today’s action is informational and is seeking direction from the Board of Supervisors on next steps related to the unallocated portion COVID-19 FEMA Reserve funds (now General Fund Appropriation for Contingencies (0990)) totaling $14,729,868.
BACKGROUND:
Establishment of the COVID-19 FEMA Reserve
On April 22, 2024 <https://contra-costa.legistar.com/LegislationDetail.aspx?ID=6639234&GUID=5C143422-E0CD-4C15-8BD0-36C645A7A9A6&Options=ID%7CText%7C&Search=FEMA&FullText=1>, the Board of Supervisors directed the County Administrator to claim $37,544,395 in remaining American Rescue Plan Act (ARPA), Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to offset a portion of the General Fund subsidy to the Hospital Enterprise Fund in FY23-24. In addition, the Board directed the County Administrator to take the following actions:
1. Include a General Fund Assigned Reserve designation in a like amount at the conclusion of FY23-24 in recognition of FEMA claims that have not yet been obligated or received and to return to the Board at least annually with an update as to the status of COVID-19 era FEMA Public Assistance program claims; and
2. At that time the Board would make determinations as to whether the General Fund Assigned Reserve designation amount should be reduced based on additional revenue received from FEMA.
On April 30, 2024, the County Administrator’s Office processed the final CSLFRF claim in the amount of $37,544,395 as directed by the Board and subsequently reported the transaction in the next quarterly report to the United States Treasury Department effectively concluding the County’s ARPA CSLFRF program.
On June 4, 2024 <https://contra-costa.legistar.com/LegislationDetail.aspx?ID=6710249&GUID=5271BE5F-4693-4317-BFDD-C612A4C0B957&Options=ID|Text|&Search=FEMA>, the Board authorized a second transaction to draw the full balance of the ARPA Local Assistance and Tribal Consistency Fund (LATCF) in the amount of $100,000 and similarly allocate a like amount to General Fund Assigned Reserve status.
On September 24, 2024 <https://contra-costa.legistar.com/LegislationDetail.aspx?ID=6869480&GUID=4302899F-FFF5-4CA4-9F52-1AF888B7FDAF&Options=ID%7CText%7C&Search=FEMA&FullText=1>, the Board of Supervisors approved the FY24-25 Adopted Budget as Finally Determined, which includes mandatory schedules outlined in the County Budget Act. Schedule A, titled “Detail of Provisions for Obligated Fund Balances for Fiscal Year 2024-2025 Final Budgets <https://contra-costa.legistar.com/View.ashx?M=F&ID=13319952&GUID=E180B601-6361-453C-8367-36097CE1ACEE>” includes a provision for the combined $37,644,395 General Fund Assigned Fund Balance (henceforth referred to as the “COVID-19 FEMA Reserve”), in compliance with the direction from the Board on April 22,2024 and June 4, 2024 as outlined above.
FY23-24 Single Audit Review Process
In Winter 2025, the County’s external auditor, Macia, Gini & O’Connell (MGO) selected the County’s CSLFRF program for examination as part of the County’s annual Single Audit process required by 2 C.F.R. § 200 (2024) <https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200>. On March 28, 2025, the Single Audit Report was released with no findings related to the CSLFRF program, including the final claim transaction of $37,544,395.
Year 1 COVID-19 FEMA Reserve Report
In compliance with the Board’s direction from April 22, 204, the County Administrator returned to the Board of Supervisors on April 28, 2025 to provide a Year 1 report on the status of COVID-19 era FEMA Public Assistance program claims. The report was integrated into the FY25-26 budget hearing process.
Specifically, the County Administrator’ s report indicated that, as of April 21, 2025, the County had received $74,003,942, or 89.7% of anticipated COVID-19 FEMA Public Assistance funding across 20 of 23 applications for reimbursement. Of the three (3) projects that the County had not yet received funding for, the California Office of Emergency Services (CalOES) and FEMA had already approved the County’s full funding request and the payments were being processed.
Below is a complete reconciliation of projects as provided to the Board at the April 28, 2025 presentation:
Based on this status report, the County Administrator recommended to the Board that up to $20,971,026 be reclassified from Assigned fund balance to Unassigned fund balance at the conclusion of FY24-25.
This figure was derived from a calculation taking into account three specific factors:
1. The amount outstanding related to COVID-19 FEMA Public Assistance claim payments not yet received totaling $8,177,747;
2. Retention of 10% of the County’s total obligated COVID-19 FEMA claims in case of future audit totaling $8,218,169; and
3. $277,453 related to the County’s share of Fair Market Value (FMV) costs related to capital assets procured as part of the County’s COVID-19 response efforts.
The table below provides a reconciliation between the original COVID-19 FEMA Reserve amount and the proposed amount for FY25-26:
Ultimately, the Board directed the County Administrator to continue to return annually to provide similar updates on the status of the COVID-19 FEMA Reserve and to decrease amount held in the COVID-19 FEMA Reserve fund balance by $20,971,026 from $37,644,395 to $16,673,369 for FY25-26.
Allocation of Released COVID-19 FEMA Reserve - $20,971,026
The reduction of the COVID-19 FEMA Reserve in the amount of $20,971,026 effectively reclassifies that funding amount from Assigned General Fund Balance to Unassigned General Fund Balance.
Following that reclassification, and as part of the FY25-26 budget hearings, the Board allocated $6,241,158 of the released funding to support certain programs and designated the remaining $14,729,868 to be appropriated within the General Fund “Appropriation for Contingencies”. Appropriations for Contingencies is a unique cost center within the General Fund containing appropriated funds - typically for use in exigent circumstances - and specifically requires a four-fifths (4/5s) vote of the Board for any transfers from that cost center. .
Below is a reconciliation of allocations of the released $20,971,026 COVID-19 FEMA Reserve:
Update on Status of COVID-19 FEMA Public Assistance Program Claims
Since the adoption of the FY25-26 budget, the County has received the remaining three (3) COVID-19 FEMA Public Assistance program claims anticipated during the April 2025 budget hearings totaling $7,829,870. As of this writing, the County has received $81,833,812, or 99.2% of anticipated funding across all 23 reimbursement requests submitted.
The County continues to work with FEMA and CalOES on formal closeout of three (3) projects and anticipate a final payment to the County of approximately $451,294 at conclusion.
Below is a complete reconciliation of COVID-19 FEMA projects as of May 22, 2025 (the latest update available):
Today’s action is in response to a request from the Board of Supervisors during the May 2025 budget adoption to return to the Board on June 10, 2025 to further discuss next steps related to the unallocated portion COVID-19 FEMA Reserve funds (now General Fund Appropriation for Contingencies) totaling $14,729,868.
CONSEQUENCE OF NEGATIVE ACTION:
Should no action be taken today, the unallocated funds will remain appropriated for use by the Board in the General Fund as an Appropriation for Contingencies commencing in FY25-26.