San Francisco could be stuck with a $190 million covid relief bill if FEMA doesn't pay up
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The city of San Francisco might be forced to foot the bill for homeless hotel costs after federal officials backtracked on promises to fund the effort, according to reports.
Officials in San Francisco believed the $190 million in COVID expenses would be paid by the federal government, which comes at a time when the city's deficit is projected to reach more than $1 billion in a few years, the San Francisco Chronicle reported. Because Federal Emergency Management Agency (FEMA) typically reimburses municipalities for unexpected expenses during natural disasters and other emergencies, the California city expected the federal government to foot the bill. City officials said the move by FEMA could "pose a significant potential risk" to San Francisco’s budget forecast.
San Francisco and other cities across the state of California housed thousands of homeless people in empty hotels during the COVID-19 pandemic to allow for social distancing. This was an effort to cut down on transmission rates of the virus in homeless shelters and on the streets, the S.F. Chronicle reported. San Francisco reportedly spent more than $423 million sheltering over 5,000 residents in hotels and other "non-congregate" facilities during the pandemic.
A sanctioned and fenced-in homeless encampment is seen from this aerial view across from City Hall along Fulton Street between Hyde and Larkin Streets in San Francisco, Calif., on Tuesday, May 19, 2020. (Getty Images)
"We are profoundly disappointed that FEMA is changing their plans for reimbursement," Jeff Cretan, a spokesperson for Mayor London Breed, said.
At first, FEMA said it would reimburse 75% of the costs, then the federal agency told counties it would cover the entire cost of the non-congregate shelter program through July 1, 2022, the S.F. Chronicle reported. After that, they pledged to cover 90% through May 11, 2023.
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But, in October, FEMA officials sent a letter to the California Office of Emergency Services (OES) stating it would not reimburse many hotel stays of longer than 20 days between June 11, 2021, and May 11, 2023, the S.F. Chronicle reported. Bills incurred during this time period could cost San Francisco up to $114 million and more than $300 million for the state of California. The extra $76 million would come into play if FEMA didn't pay reimbursement claims related to stockpiling vacant hotel rooms.
Officials from both the city controller’s office and the state’s OES have both pushed back on the federal government, arguing FEMA changed its rules years after the fact and stated that if counties had known this was the case, they might have acted differently throughout the COVID-19 pandemic.
"We intend to explore every option available to appeal any claims denied by FEMA Region 9 that we believe to be eligible for reimbursement, based on the guidance in effect at the time," San Francisco City Controller Ben Rosenfield said Monday.
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California OES Director Nancy Ward sent a 95-page memo, which included letters from cities and counties from across California, responding to the change in FEMA policy, calling out the government agency for "inconsistently" applying its non-congregate shelter policies across the country, the S.F. Chronicle reported. She also pointed to numerous statements from FEMA and President Joe Biden where they committed to "fully cover" costs.
San Francisco has sought more than $879 million in reimbursements from the federal government for its COVID response, which includes hotel rooms and other expenses, but the federal government has only reimbursed the city for about $301 million, which includes $148 million for non-congregate sheltering costs, according to the controller’s office, the S.F. Chronicle reported.
Kendall Tietz is a Production Assistant with Fox News Digital.
