As budget season looms, a $190 million cloud hangs over San Francisco.
The City is still unsure whether it will receive reimbursement from the Federal Emergency Management Agency for money it spent to place homeless people in hotels during the COVID-19 pandemic.
As San Francisco prepares another budget and plans for its financial future during tumultuous times, further fiscal uncertainty is the last thing San Francisco needs. The City is already facing an approximately $800 million budget deficit over the next two years. Revenues have dipped, in large part due to the economic effects of the COVID-19 pandemic and subsequent shift to hybrid work, which in turn lowered property values and prompted a decline in business taxes.
It’s unclear to what extent and how quickly The City will be able to return to its pre-pandemic economic vibrancy, making the FEMA uncertainty yet another headache with which San Francisco has to contend.
San Francisco was not alone in believing it would be reimbursed more fully for its shelter-in-place hotels, which were intended to keep the coronavirus from rapidly spreading through the unsheltered population.
Statewide, cities are expecting about $300 million in reimbursement from FEMA for the hotel program known as Project Roomkey, which is now in question.
Established early in the pandemic, the shelter-in-place program operated through May 11, 2023.
Previously, FEMA had pledged to reimburse at least 90% of the money cities spent on shelter-in-place programs in their second year. But updated guidance issued last fall said that except for in the first year of the pandemic, it would not cover the costs of hotel stays that lasted more than 20 days, according to city and state officials.
FEMA denies that it left cities and states on the hook.
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“FEMA did not revise eligibility for non-congregate sheltering or any other COVID-19 related activities in order to reduce costs,” an agency spokesperson told The Examiner in a statement. “FEMA under its Public Assistance Program works closely with State, Tribal, Territorial and Local governments to provide all eligible and available funding for reimbursement, and will continue to do so for those impacted during the pandemic.”
The agency has committed $9.7 billion to help cover California’s COVID-related costs, and officials in regionals throughout the country are working with state and local officials to review submissions for reimbursement, according to FEMA.
By the time San Francisco and other cities realized that FEMA would not cover their spending, it was too late to change course.
The cause united California’s elected leaders in Congress, who penned a letter in March imploring FEMA to make good on the payments to cities.
“In order for local governments to do their part in future disaster situations, it is imperative that California cities and counties are able to recover pandemic costs without sacrificing essential services and their continued investment in housing and community resources,” the letter stated.
Speaker Emerita Nancy Pelosi wrote a letter of her own to FEMA, calling it “imperative” for FEMA to “follow through on its commitment and fully reimburse state and local governments for expenses associated with protecting public health during the COVID-19 pandemic.”
“I strongly urge FEMA to reconsider its decision to limit reimbursements to state and local governments who stepped up and provided essential services to communities through the administration of Project Roomkey,” Pelosi wrote.
More than a month later, the agency has yet to respond to the letter, according to a spokesperson for Pelosi’s office.
