Santa Cruz County officials are considering a plan to borrow money to help pay for costs of the CZU fires, the Covid pandemic, the storms and floods from early 2023 and other federal disasters that have beset the county.
County staff will return to the board with a financial plan in February.
The Board of Supervisors on Tuesday heard a report about how the disasters have siphoned the county’s revenues as it waits for the years-long process of reimbursement from the Federal Emergency Management Agency (FEMA) and other agencies.
County officials say that they have received only 40% of more than $250 million that was spent on recovery efforts from storms in 2017 and 2023, the CZU wildfires in 2020 and the pandemic.
The remainder of $159 million pencils out to 75% of the county’s annual discretionary general fund revenue.
“We’re having to reorder our total budget priorities, and we’re going to have to issue debt to maintain our ability to basically fund this cash flow awaiting the response from FEMA and other federal agencies to get reimbursed,” County Administrative Officer Carlos Palacios said.
The county has so far completed just 120 projects from the 2017 storms, and 86 from the more recent storms, which damaged 215 sites.
The problem, Palacios said, is that FEMA has faced an increasing number of disasters nationwide over the past decade—25 in 2023—which has meant that counties are waiting from three to six years to get reimbursement from the agency, which was created to respond to just one disaster every decade.
That is coupled with a staffing shortage at FEMA, Palacios said.
“They’re being faced with all these disasters,” he said.
Santa Cruz County has faced seven federally declared disasters over the past six years, Palacios said, which he said is due in part to the region’s susceptibility to natural disasters fueled by the ongoing climate crisis.
“We are seeing the impacts of climate change in Santa Cruz County, not only in the frequency and severity of storm and fire events that we are facing, but also on the impact on the county budget,” he said.
