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Oakland is being threatened with the loss of millions of dollars in state funding because the city is “seeking to shirk its responsibility” over housing unsheltered people on Caltrans property along Wood Street in city limits, according to a letter from Gov. Gavin Newsom’s office.

In the letter sent to City Attorney Barbara Parker, Oakland is accused of taking a “novel legal position” that it has no responsibility to house about 200 individuals, even though the city received $4.7 million for rehousing activities at Wood Street.

The city said in July that it doesn’t have the capacity to shelter all of the people at the encampment.

The letter from Newsom’s office says local governments generally have the responsibility for providing shelter and rehousing for people who are homeless, while Caltrans is a transportation agency. It has no authority to provide housing or shelter to the public, the letter says.

In an undated photo, a hand-written message painted on the side of a camper shell at the Wood Street encampment in Oakland reads, “Welcome to paradise.” (Google image)

“To be clear, there is no such thing as a ‘resident of Caltrans,’ as the city’s position suggests,” said the letter from Ann Patterson, Newsom’s legal affairs secretary.

If Oakland maintains its position, the state may redirect funds to jurisdictions that will provide services to Oakland residents.

Parker said that Oakland is reviewing the letter from the governor’s office.

“Oakland values its longstanding relationship with the State of California in partnering on issues related to housing and homelessness, and shares the State’s immediate and long-term goal of sheltering and housing unsheltered Oaklanders,” Parker said Thursday.

“Meanwhile, the City has also been deeply engaged with Caltrans for an extended period about these same shelter-related issues,” she said. “We are eager to work with our local, regional, and state partners to resolve concerns and secure solutions for unsheltered Oaklanders.”

Patterson asked Oakland officials to respond to the letter by the close of business Friday.

Next week, a federal judge will rule whether Caltrans can clear its property of homeless people and their belongings.