Politics & Government
$143M IOU: FEMA, Fed. Highway Administration Owe Santa Cruz County
The county is awaiting disaster reimbursements that date back to 2017.
SANTA CRUZ, CA — Santa Cruz County is out of cash for disaster recovery and is stuck with a pile of I.O.U.s from the state and federal government for a range of approved disaster reimbursements from 2017 to 2023.
The county Board of Supervisors ratified yet another local emergency proclamation for storms that struck in January and February of this year, but not before hearing about how delays from the Federal Emergency Management Agency and Federal Highway Administration (FHWA) are compounding local costs.
The Board was given a mid-year budget report during its regular meeting Tuesday that outlined a need to cover an $85 million deficit for disaster repair that only exists because of the slow pace of repayment of disaster funds by FEMA and FHWA, which owe the county a combined $143 million, according to the county.
Find out what's happening in Santa Cruzfor free with the latest updates from Patch.
FEMA has not transferred about 57% of the roughly $250 million in funds that were approved for reimbursement for a series of natural disasters from 2017 to 2023, including the CZU Lightning Complex fires, the COVID-19 pandemic, and a series of atmospheric rainstorms that hit the county in late 2022 and early 2023.
"It's a very, very challenging situation," said Supervisor Zach Friend.
Find out what's happening in Santa Cruzfor free with the latest updates from Patch.
Some funds are also being held up by the state's Office of Emergency Services because of its own cash shortage. Payments that would usually be made by the state within 90 days are being held until September, County Budget Manager Marcus Pimentel told the board.
That has blunted some of the progress the county has made in recent months by appealing to local congressional leaders for help, which resulted in a modest acceleration in payments from FEMA of about $15 million, according to Pimentel.
The county is seeking to issue lease revenue bonds through the Santa Cruz County Capital Financing Authority to obtain a portion of the funds. The mechanism borrows against capital improvement costs for county owned buildings, in this case the county courthouse, the behavioral health building at 1400 Emeline Ave., the Live Oak Branch Library, and a psychiatric health facility at 2250 Soquel Ave.
"This is going to be complicated financing," said Pimentel. He said the cost of interest on the debt plan was still being calculated.
County Administrative Officer Carlos Palacios told the board it would be one of the largest debt issuances in the history of the county.
A public hearing on the debt plan will be held at the Board of Supervisors meeting on May 14.
Supervisor Bruce McPherson said the county needed the federal government's urgent help.
"We really can't borrow our way out of this," said Bruce McPherson. "I haven't seen anything as dire as this in my 11 years on the county board," he said.
Damage costs from storms in late January and February are still being tallied. The storms caused at least one death, when a tree fell on a house in Boulder Creek on Feb. 5.
An assessment from the county for damage to private property is available at http://tinyurl.com/58v2vvha.
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