2021 | Government

Some council members, executive branch spar over FEMA reimbursements

Pace of reimbursements, federal relief funds distribution at center of debate

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Montgomery County Executive Marc Elrich and his staff are facing County Council criticism over how they pursued federal reimbursement for coronavirus-related expenses.

Montgomery County has been waiting to see whether the Federal Emergency Management Agency will cover some costs, particularly for personnel and supplies such as personal protective equipment.

According to council staff documents, county officials submitted a request to FEMA in October 2020 for $31.8 million for personal protective equipment and other supplies purchased by the county’s Department of General Services. That money has been reimbursed.

The county also is seeking about $31.2 million for personnel costs, but FEMA says only about $1.5 million of that is reimbursable.

However, county officials are reviewing new guidance FEMA issued in June.

That guidance requires the county’s Office of Emergency Management and Homeland Security to look at its expenditures based on three categories: food distribution, non-congregate sheltering, and emergency medical care and all other expenditures. Then, the county would submit another request to FEMA. 

FEMA has indicated that the county will fall tens of millions of dollars short of what it is seeking.

According to council documents, the staff has submitted reimbursements for $91.4 million in costs to FEMA and plans to submit more. Staff members say it would cover the difference in CARES Act funding and possibly American Rescue Plan dollars, if council members decide to go that route

In March, Chief Administrative Officer Rich Madaleno told the County Council that the county staff is still determining what is reimbursable, including what qualifies as hazard pay for employees. Hazard pay is also reimbursable through FEMA. 

FEMA could not be reached for comment Monday morning via phone or email.

Process scrutinized

For months, Council Member Andrew Friedson and other council members have criticized the overall reimbursement process and how federal dollars are being distributed. In October, they criticized Elrich and the staff for not distributing federal Coronavirus Aid, Relief, and Economic Security Act funds quickly enough. 

In January, Friedson continued his criticism, especially as the county continued to provide hazard pay for its employees into 2021 without County Council approval. He remained concerned about how the county would pay for them, given that the county had not been reimbursed by FEMA.

Elrich and his staff previously said they are distributing the money as quickly as they can.

Madaleno said Tuesday that one of the challenges is that county officials are asking for reimbursements in the middle of a disaster — the coronavirus pandemic. Typically, officials would submit requests for FEMA funds after a disaster, like a hurricane or a tornado.

In March, it was still unclear how much FEMA would reimburse, including for hazard pay, Madaleno told the County Council. 

Friedson spent more than 20 minutes at Tuesday’s council meeting questioning Madaleno. He asked if the county had contingency plans if it doesn’t get full reimbursement.

He repeatedly expressed concerns about the county’s overall financial approach to reimbursements during the pandemic.

“The lingering concern is the continued pattern here where the executive branch seems to cherry pick small bits of information and extrapolate it out of context to justify major departures from financial best practices in our county’s fiscal policies,” he said Tuesday.

Elrich said in an interview Thursday that his staff has sent regular updates to council members about FEMA reimbursements. The administration has told the council about the struggles with the reimbursements as FEMA has changed its requirements during the pandemic.

“We’re not doing anything that isn’t in the budget,” Elrich said about the council’s concerns about contingencies and potential shortfalls. “If they want to say they’re surprised, they really should read the budget closely.”

Madaleno and other county officials said FEMA has changed its guidelines for reimbursements multiple times during the pandemic, posing a challenge.

He added that President Joe Biden’s administration has appeared to allow more reimbursements than when President Donald Trump was in office, and that the council, if it wanted, could use American Rescue Plan funding to cover what FEMA doesn’t reimburse.

Madaleno added that the county is likely to receive about $5 million in reimbursements for personnel costs.

“We’re not thrilled at all with the amount of reimbursement we’re getting for personnel costs. One point five million will not be the total we will receive. We will receive more than that as we submit [more invoices],” he said.

Debate about hazard pay

Much of the debate on Tuesday stemmed from Elrich’s decision to award about $89 million on extra hazard pay from April 2020 to mid-February 2021.

Employees in direct contact with the public were paid an extra $10 an hour. Those who worked in offices, not with the public, were paid an extra $3 an hour.

Council Member Hans Riemer, who is running against Elrich for county executive, on Tuesday criticized the administration’s decisions.

“Mr. Madaleno said that they’ve been planning for the worst-case scenario,” Riemer said. “I think what they’ve been doing is creating the worst-case scenario. This entire compensation arrangement has always been unaffordable and unsustainable.”

He called the $89 million deal an “egregious abuse” of power, saying much of that could have gone to small businesses, rent relief or other needs during the pandemic.

Madaleno replied that Elrich disagreed with his argument that employees working with the public were overpaid.

“The county executive does not agree with your assessment that we overpaid firefighters, police officers, nurses, social workers during the middle of a global pandemic, when we were asking them to put themselves and their families’ lives at risk,” he said.

Riemer said in an interview that one of his largest concerns was that Elrich and his staff said for weeks last year that FEMA would help cover the costs of the hazard pay agreement with county employees. In recent months, county officials have been discussing with FEMA how much can be reimbursed.

Elrich said in an interview, however, that the federal government has allowed local governments like Montgomery County to use not only FEMA money, but also money from the American Rescue Plan to reimburse hazard pay up to an additional $13 per hour.

“We’re not going to have a shortage here. We’ve got more federal money,” he said. “There’s not going to be a need to cut any services or revise the budget. … It has no impact because we planned for this contingency.”

Steve Bohnel can be reached at steve.bohnel@bethesdamagazine.com