$2.1 million withheld by FEMA over hotel occupancy concerns

Despite Mecklenburg County’s insistence FEMA would reimburse all expenses for its now closed quarantine hotel, internal records suggest that’s far from a guarantee.

MECKLENBURG COUNTY, NC — Amid concerns about how few people stayed at a taxpayer-funded pandemic hotel, WCNC Charlotte has discovered FEMA has withheld at least $2.1 million in reimbursements from Mecklenburg County.

Public records show the county has spent months trying to convince the federal agency to release those funds, but there’s a chance county taxpayers will now have to cover the unexpected cost.

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A WCNC Charlotte investigation in April revealed the now closed 120-room isolation hotel leased by the county averaged just 68 guest stays a month over the course of 21 months. The discovery resulted in the president of Citizens Against Government Waste criticizing the program.

“I think taxpayers need to be more demanding about getting results for the money that they are spending,” Tom Schatz said.

The isolation hotel alone costs roughly $300,000 a month. Despite the criticism, Health Director Dr. Raynard Washington told WCNC Charlotte in May he wasn’t concerned FEMA would withhold any reimbursements for the county’s $14.7 million pandemic hotel program.

“I don’t know where their concern came from, but I think every city and county really across the country has had to take a similar approach and I fully expect FEMA to reimburse those expenditures as they have up until this point,” Dr. Washington told WCNC Charlotte at the time.

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Dr. Washington also said in an email statement in April the county expected FEMA would reimburse 100% of the expenses.

Newly-obtained county records show FEMA has not reimbursed all expenses, with at least $2.1 million in reimbursements pending. That number does not consider the millions more the county still needs to request.

A county document reveals FEMA started asking questions related to occupancy at the county’s pandemic hotels as far back as September and has repeatedly requested more information.

“The primary concern is the low occupancy of the quarantine/isolation hotel,” the county noted on an internal project status document in December. “Based on the comments in the meeting, we are working on appropriate responses that refute FEMA’s stance and the interpretation of policy and COVID specific guidance.”

The two sides remain at an impasse more than seven months later, specifically about reimbursements for unused hotel rooms.

In response to WCNC Charlotte’s questions, Mecklenburg County indicated the federal agency misled officials.

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“Mecklenburg County leased hotels to isolate certain COVID positive County residents,” an email statement from the county’s finance department said. “It was the County’s clear understanding from FEMA that each of the expenses would be fully reimbursed. After submission of the request for reimbursement and multiple responses to requests for information, FEMA has indicated that only the costs for occupied rooms would be covered. Unlike other hotels that we leased, this particular site was not 100% occupied. This position is not in keeping with FEMA’s published policies nor does it make sense in that we could NOT procure sufficient space on an as-needed basis. The County continues to seek full reimbursement from FEMA and is meeting with FEMA representatives to find a way to achieve full reimbursement.”

County records from May detail a plan to request at least another roughly $7 million from FEMA for Mecklenburg County’s non-congregate sheltering program. However, at the time, the county was investigating potential overbilling related to meals and instances of inconsistent and apparent exorbitant billing for rooms, prompting an audit, the records reveal.

The isolation hotel, which closed in December, provided a priceless emergency shelter for people like Aaron Hall. I tested positive for COVID-19 and had nowhere else to go.

“I don’t think that’s ever a waste of money,” Hall said. “I literally thought I was going to be living on the street for a little while.”

Even so, FEMA has said the agency must ensure all claimed costs are necessary and reasonable.

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“We have been working with the applicant and the state of North Carolina to ensure that all claimed costs for this project meet eligibility and other federal requirements,” a FEMA spokesperson told WCNC Charlotte. “Once this review is complete a determination letter will be sent to the county and state.”

A final decision is expected in the next few weeks.

WCNC Charlotte is always asking “where’s the money?” If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.

Contact Nate Morabito at nmorabito@wcnc.com and follow him on Facebook, Twitter and Instagram.


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