By Adam Swift
FEMA has denied the city’s initial appeal for reimbursement of expenses related to the city’s food distribution program during Covid-19, according to the city manager.
On March 6, 2025, FEMA (the Federal Emergency Management Agency) denied Chelsea’s request for $3,202,361.76 in reimbursement under Category B – Emergency Protective Measures. The denial cited insufficient documentation and compliance challenges. The city submitted its formal appeal on July 23.
The denial letter for the appeal references a missed deadline and the fact that the city submitted the appeal directly to FEMA instead of submitting it to the state, said City Manager Fidel Maltez.
“Our team is confident that we followed the process outlined to us,” stated Maltez. “We held a conference call with the State to understand this confusion. Fortunately, we have a second appeal available as a recourse.
“We will follow the process outlined by FEMA and will be submitting the second appeal imminently.”
While Maltez said it is unclear if the outcome of the second appeal will be any different, he said the city will continue to work with the state to get the costs reimbursed.
Last month, the city administration noted that not all the denied expenditures will result in a net financial loss to the city.
Due to some costs being covered by other funding sources, the current remaining deficit is $2,857,444.05, officials stated. Those costs were incurred during the previous Administration and are currently posted against Fund 3501 (FEMA) and Fund 3502 (State CARES Act).
To offset the shortfall, city finance officials stated that the city has identified just under $1.6 million in existing city council Covid appropriations.
In addition, city officials stated they would be reaching out to the Shah Family Foundation to see if it would reauthorize the past use of about $30,000 that was aligned with the Food PODS initiative to help offset the costs.
Last month, city officials anticipated the need for a supplemental appropriation of $1,264,011.85 to fully resolve the outstanding deficit if reauthorization is not granted.