STAFF REPORT
Meeting Date:
September 23, 2025
CONSENT
15 SUBJECT: RECONCILIATION AND REFUND OF FEMA ADVANCE PAYMENT FOR PROJECT 135485 (COVID-19 RESPONSE) AND APPROPRIATION OF FUNDS RECOMMENDATION: It is recommended that the City Council:
1. Authorize the City Manager to refund $150,185.81 to the California Governor’s Office of Emergency Services (Cal OES);
2. Appropriate $150,200 from the General Fund available fund balance for Fiscal Year 2024/2025; and
3. Determine that this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15378 of the CEQA guidelines.
Appropriation: $150,200 Fund: General Fund
Submitted By: .Michelle Bannigan Approved: David A Kiff Michelle Bannigan, Finance
Director
Dave Kiff, City Manager
SUMMARY OF THE MATTER
This report recommends that the City Council approve the final reconciliation of FEMA Project 135485 and authorize repayment of $150,185.81 to Cal OES. The repayment is required following FEMA’s final determination that a portion of the City’s COVID-19-related expenditures incurred between March and July 2020 were ineligible for reimbursement. A total of $1,288,907 in initial costs were submitted for reimbursement. Of that amount, $322,802 was advanced to the City. Following a detailed review, Cal OES and FEMA determined that only $172,616.19 was eligible, resulting in a required refund of the remaining $150,185.81.
DISCUSSION
RECONCILIATION AND REFUND OF FEMA ADVANCE PAYMENT FOR PROJECT 135485 (COVID-19 RESPONSE) AND APPROPRIATION OF FUNDS
September 23, 2025
In response to the COVID-19 pandemic, the City of Laguna Beach submitted FEMA Project 135485 requesting reimbursement for emergency operations costs incurred from March to July 2020. These expenses included staffing of the Emergency Operations Center (EOC), personal protective equipment, and enforcement of temporary facility closures.
The City submitted a total of $1,288,907 in eligible and ineligible expenses. FEMA initially advanced $322,802 under an expedited project worksheet. However, following a comprehensive review by FEMA and Cal OES, only $172,616.19 of the total submitted amount was deemed eligible for reimbursement under the COVID-19 disaster assistance program. The remaining $150,185.81 of the advance ($322,802 - $172,616.19) is requested to be returned.
FEMA issued a formal debt recovery letter dated July 28, 2025 (Attachment 1), instructing the City to remit the deobligated amount. This action finalizes the audit process and will ensure that the City remains in good standing with Cal OES and FEMA for future emergency funding eligibility.
FINANCIAL ANALYSIS
To satisfy the federal debt recovery, the City must remit $150,185.81 to Cal OES. Staff recommends the appropriation of this amount from the General Fund in account number 1101781-72071, Non-Department, Contingency for Unplanned Events account in Fiscal Year 2024/2025.
ENVIRONMENTAL ANALYSIS
The proposed action is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b)(4), as it involves fiscal and administrative activities that do not result in a physical change to the environment.
ATTACHMENTS
1. Correspondence from Cal OES dated July 28, 2025 (Pgs. 3-20) Report Prepared By: Coordinated With:
Michelle Bannigan, Finance Director Gavin Curran, Assistant City Manager Shannon Espinoza, Finance Manager