San Jose got more than $200M in coronavirus aid. Now it’ll have to up its expense tracking

San Jose has led on many of the region’s coronavirus response efforts, but officials are still figuring out how to track the related costs so the city doesn’t foot the entire bill while facing a major budget shortfall.

Now San Jose officials are about to hire an outside consultant to monitor and help guide how coronavirus relief funds are spent and recorded.

The consultant would help ensure those efforts remain eligible for reimbursement through a slew of federal and state programs that come with complex and sometimes murky requirements that are very different from other crises the city has faced before, Lee Wilcox, chief of staff for the city manager’s office, told councilmembers this week.

“This is due to the volume of documentation, the variety of new programs, the amount of funding from the federal government — which has been considerable — but also from a variety of different funding pots that have very different documentation processes,” he said.

So far, San Jose has received more than $200 million in aid for the coronavirus, including the largest pool of federal dollars for a crisis in the city’s history, according to a recent memo by councilmembers Maya Esparza, Sergio Jimenez and Johnny Khamis.

Most of that funding comes from the federal CARES Act which has come with “Byzantine federal terms and conditions” about how the money can be spent, according to the councilmembers.

San Jose has also received aid from the U.S. Department of Housing and Urban Development, the state for its emergency homeless response and the U.S. Department of Justice.

But the most complex funding San Jose is going after comes from the Federal Emergency Management Administration, or FEMA. That money comes with requirements around how the city awards contracts for services, invoicing and can only be spent on certain efforts. San Jose has requested $25 million from the agency so far.

“I just want to make sure that we take full advantage of of the funds so that we don’t have to give them back,” Khamis said this week during a meeting. public discussion on the matter. He’d signed onto the memo to ensure the city is “spending (the funds) where they’re supposed to go and not and not losing an opportunity.”

A preliminary audit of the city’s record keeping of coronavirus expenses shows that officials created some systems to track how much time, money and other resources have been spent trying to alleviate the strain of the pandemic that ground many peoples’ lives to halt for months.

Consultant Witt O’Brien’s, which worked with the city after the 2017 Coyote Creek flood response, has helped in the current crisis, officials said.

But the coronavirus is very different from a flood, and there’s still a long way to go to ensure the city is tracking all of its costs so they can be paid with state and federal dollars, according to an audit by City Auditor Joe Rois.

“It’s important we get the systems in place as soon as possible to ensure the city is able to maximize federal or state reimbursements in a timely manner,” he told councilmembers this week.

Many of Rois’ recommendations centered on creating new, centralized systems for time- and document-tracking and getting community partners on board with those processes.

Those recommendations come at a time when many city employees have taken on new tasks or jobs to help with the coronavirus emergency response, making the effort all the more complicated.

Now the city is looking to hire an outside consultant to close some of those gaps. The memo by Esparza, Jimenez and Khamis suggested the city hire someone like Harvey M. Rose Associates, a well-known public sector auditor in the Bay Area.

“We find ourselves as city in unprecedented circumstances and I don’t think any single person in our city has the experience needed to deal with this kind of federal funding in addition to all the other duties that we’re facing,” Esparza said during a meeting this week.

But city officials were already working on bringing in extra help. Wilcox said his office is talking to an unnamed consultant, but it’s “a name that no one’s going to be surprised by.”

He said they could not name the consultant because of ongoing negotiations, which should be done this week.

Officials will return in two weeks to the city’s Rules and Open Government Committee to discuss the new consultant’s job description. It’s unclear how much the contract will cost, but lawmakers his week suggested that it could be paid though CARES Act funding.

Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.