As the COVID-19 pandemic exacerbated hunger in San Jose, nonprofit food distributors say city leaders have stalled on reimbursing their costs to supply food to the South Bay’s most vulnerable residents.
Nonprofit executives say demand for food has tripled since the pandemic shuttered businesses and slashed jobs in mid-March following Santa Clara County’s shelter-in-place order.
A local nonprofit leader said her agency has bared the brunt of meal requests and spent more than $1 million to provide meals since March. In February, the nonprofit provided around 8,000 meals for those in need. The number of meals soared to more than 43,000 two months later.
The leader asked to remain anonymous out of fear of retribution.
“The city understandably was scrambling,” the nonprofit leader said. “The phones were starting to ring off the hook for programs like Meals on Wheels, and other providers were immediately starting to see increased demand.”
However, the source said the city only reimbursed the nonprofit a little over a third of what they owed them through a CDBG grant.
Although the city has now finalized a contract with the nonprofit to cover about 60% of costs by Aug. 31, the representative said many nonprofits were excluded from the contracts and won’t get reimbursement.
“A lot of the other nonprofits are much more at risk,” the source said. “So we were starting to hear folks who were like, ‘Hey, we’re just fronting the money because if people come to our doors, we’re not going to turn away somebody from a meal. But we also are freaking out about paying the utility bill at the end of the month.’ ”
Santa Clara County and San Jose leaders decided that the city would coordinate food distribution for the county.
Multiple nonprofits approached the city to offer their assistance with providing meals, the representative said.
“I wouldn’t be able to say that it covers 100% of the costs, it’s going to cover the best costs that are going to be allowable through the coronavirus relief fund and FEMA,” said Neal Rufino, the co-lead of the San Jose Emergency Operation Center’s Food and Necessities Distribution branch.
In early March, the nonprofit representative said San Jose City Hall authorized the nonprofits to distribute meals countywide.
“At that time we all had a friendly agreement verbally, like, we’ll figure out the contracting down the road,” the source said. But the city stalled on finalizing contract during the pandemic because costs were too high.
The city asked the nonprofit to reduce meal prices to $5 per meal, despite the usual cost per meal for the nonprofit being more than $10. The meals cost more to make because the nonprofit primarily delivers food to homebound elderly and frail people, the source said.
As the nonprofits struggled to recoup money already spent on meals, the city signed a $1.9 million contract with for-profit meal provider Revolution Foods in early May.
“I have frustration and other nonprofits do, too, that the community-based organizations that were here on the ground before and during the pandemic, we’re not getting paid,” the representative said. “And so instead the city decided to go to a for-profit food company based in Oakland.”
Rufino said the city is working on improving their engagement with the local nonprofits.
“We definitely have heard the frustration. We’ve had meetings with the nonprofit partners,” Rufino said. “I’m fully aware. We’re aware of their frustrations and that challenge. We’ve been working to address their frustration.”
He said the city contracted with Revolution Foods to provide food to families with children on free and reduced lunch programs.
“The schools are only providing special school lunch meals Monday through Friday, but hunger doesn’t stop on the weekends,” Rufino said.
Another challenge is that it takes time to qualify for Federal Emergency Management Agency funds because of extensive documentation, Rufino said. The city is still unclear how to use funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, he added.
“You don’t want any double dipping,” he said. “I haven’t gotten that great clarity out of the CARES Act so the city is being a bit more cautious on this… We do take ownership that the contract development (with the nonprofits) and execution was slow.”
For its free meal delivery programs, San Jose has worked with nonprofits including Catholic Charities of Santa Clara County, The Health Trust, Loaves and Fishes Family Kitchen, Hunger at Home, FIRST 5 of Santa Clara County and Team San Jose.
City leaders aim to allocate at least 79% of city funding for meals during the pandemic to nonprofits by Aug. 31, Rufino said.
But local nonprofit leaders say the need is dire now and they’re struggling to find funding sources while under contract with the city.
Gisela Bushey, CEO of Loaves and Fishes, said her organization has produced 85% more hot meals than before the pandemic and provided 335,000 meals in Santa Clara County from March to June.
Loaves & Fishes has only received $200,000 from the city through CDBG funds. The organization needs $750,000 in annual funding to continue providing meals during the pandemic.
“If you aren’t able to cover the costs through a contracting process with either the city or the county, obviously we would seek other sources of funding,” said Gisela Bushey, CEO of Loaves and Fishes. “The problem is that everybody’s in the same boat so to speak in that we’re all trying to avail all of the resources available to us and that is a finite pie.”
Contact Mauricio La Plante at [email protected] or follow @mslaplantenews on Twitter.