UPDATE: After an initial setback, Santa Clara County received the go-ahead from the state on July 6 for its plan to reopen the economy and allow hair salons and gyms to resume operations on July 13. Read more here.

---

Santa Clara County suffered a stinging setback over the weekend in its strategy to reopen the economy, when the state rejected its plan to allow more businesses, including gyms and hair salons, to resume operations later this month.

The county's new order, which county Health Officer Dr. Sara Cody announced on Thursday, July 2, would have permitted more businesses to reopen on July 13. The plan also outlined a set of rules that all businesses must follow during the pandemic, including allowing telework when possible, shifting operations outdoors and imposing density restrictions, with no more than one employee per 250 square feet of gross floor area.

But the county's request for a variance hit an unexpected hurdle on July 4, when the state Department of Public Health rejected the county's variance attestation, which would need to be approved before the county order takes effect. In an email to Cody, state DPH Executive Administrator Jake Hanson wrote that the county's attestation "does not meet the metrics or criteria necessary" to be posted on the CDPH website, which lists links to reopening plans cleared by the state, at this time.

"In order for a county's attestation to be posted, all metrics must be met in their entirety," Hanson wrote.

The email did not specify which metrics the county had failed to meet.

The surprising denial marked the first instance since the shutdown took effect on March 17 in which the state explicitly rejected an order from the county's health officer. While county officials acknowledged last week that the order would require approval from the state, they expressed optimism that the approval would be forthcoming.

Despite the recent uptick in COVID-19 cases across the state and the nation, the county still has fewer cases per 100,000 residents than any other county in the Bay Area, Cody said last week. In other counties, including San Mateo, indoor dining is already allowed and hair salons are back in business.

Santa Clara County Supervisor Mike Wasserman said during the July 2 news conference that he was hopeful that the state would "recognize all the work that the people and businesses of Santa Clara County have done to reopen our remaining businesses and approve our request."

In explaining the rejection, Santa Clara County Deputy County Executive David Campos said during a news briefing on Monday, July 6, that the state determination likely has to do with the growing rate of COVID-19 cases, even though the overall count of cases remains relatively low.

"We went from very low to low," Campos said. "That is not something considered by metrics because the metrics don't look at actual numbers, it looks at the percentage."

The county's order also made clear that certain high-risk activities that make it infeasible to wear face coverings or maintain social distancing would remain prohibited for the foreseeable future. These include indoor dining, indoor swimming, concerts and sporting events.

In her request for a variance, Cody acknowledged that the percentage change in COVID-19 cases and the absolute number of patients "do not explicitly meet" the state's metric for readiness. But she noted that the total number of patients "remains quite low given the size of the County and total number of available hospital beds."

"Indeed, overall hospitalization rates are lower than in other counties across the state at the time they were granted a variance," Cody wrote. "Our total number of hospitalized patients also remains much lower than in many other urban counties."

Recent guidance from the state also places into limbo efforts by various cities, including Palo Alto, to allow outdoor dining. Campos alluded to weekend reports by The Mercury News about agents from the state Department of Alcoholic Beverage Control visiting businesses in Gilroy and Morgan Hill and telling them to halt operations because they violate California's stay-at-home orders.

Newsom said at a Monday afternoon news briefing that state agents made 5,987 in-person visits over the weekend to bars and restaurants in counties on the state's monitoring list, with visits generally targeting parts of the state with known violators and establishments about which the state has received complaints.

In discussing the ABC visits, Campos said Monday the county did not receive any advance notice of the action and "cannot speak on behalf of the state."

Information from the California Department of Public Health suggests that the county did not have state clearance when it issued a local order on June 5 allowing outdoor dining. That order prompted Palo Alto to launch a "Summer Streets" program, which initially involved closing California Avenue to traffic to allow outdoor dining.

After a very positive reception, the city followed suit by closing University Avenue to traffic June 26.

The program, however, may be short-lived unless the county gets a green light from the state. Santa Clara County was placed last month on the state's "monitoring list" of counties where COVID-19 cases have been on a steady rise. Last week, Gov. Gavin Newsom issued an order banning many indoor activities, including indoor dining, in 19 counties, including Santa Clara, which make up more than 70% of the state's population. Newsom said the state is not shutting down businesses so much as asking them to shift operations outdoors.

On Monday, the list of counties on the state's watchlist expanded to 23. However, Santa Clara County was taken off the list, suggesting that it is meeting the required thresholds to reopen, Newsom said.

Despite this development, the California Department of Public Health is taking a firm stance on outdoor dining. State guidelines require counties that want to reopen more quickly to submit variance attestation forms, confirming that they have met the state's "readiness criteria." While some counties, including San Mateo and San Francisco, have submitted these forms and are allowed to move more quickly on reopening businesses, Santa Clara does not have an approved attestation at this time, according to the state.

In addition, some counties on the monitoring list have been granted a variance from the state that allows dining but only with outdoor seating (as well as takeout). Santa Clara had not received such a variance last week when it was on the list.

"Santa Clara County issued a local order opening outdoor dining, but the county does not yet have an approved attestation from the state to open indoor or outdoor dining," the state Department of Public Health stated in a response to this news organization.

Campos noted in a Monday afternoon news briefing that as part of their enforcement efforts, state officials informed businesses that they were there to enforce against indoor dining. They also orally informed businesses that the focus is on outdoor dining, he said.

Campos noted that the state had not explicitly banned outdoor dining. Many counties, he said, have opened outdoor dining on their own, without seeking a variance.

"I know all of this creates a lot of confusion to our businesses, to our residents," Campos said. "What we want them to know is, as far as the County of Santa Clara is concerned, we believe that outdoor dining is allowed under our order and that is consistent with the state order. ... As of today, we have not received any indication from any state agency that that is not true. We believe outdoor dining is allowed."

It was not immediately clear on Monday how the disagreement between the state and the county over outdoor dining will impact local programs. Meghan Horrigan-Taylor, Palo Alto's chief communications officer, said the city is not aware of any city restaurants being contacted by state agencies. The city, she said, is "concerned on behalf of our local businesses and that's why we are engaged with the County on this matter to understand the conflicting details that exist."

"The expansion of restaurant outdoor dining and retail has proceeded, while being very mindful of the safety of visitors to our downtown and Cal Ave business districts," Horrigan-Taylor wrote in an email. "We are monitoring the situation and any modifications to our programs will be based on the County's guidance as the lead Public Health agency locally, and informed by County conversations with the State. We have offered to assist in any way we can."

Campos noted that the county will continue to work with the state to obtain permission for the reopening plan. "We are still in conversation and discussion with the state regarding the application," Campos said. "We will continue to keep people informed about next steps."

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.