No. 45, April 2005

Homeless dine and pay with food stamps

S.F.’s pioneering program for restaurants tops in nation
by Marjorie Beggs

San Francisco — the city and county that knows how — still holds its title as the first and only California county whose homeless food stamp recipients can pay their restaurant tabs with food stamps.

They can get a green burrito at Carl’s Jr. at U.N. Plaza, a plate of pot stickers from Oriental Restaurant on Market Street, a piece of pizza from Chico’s on Sixth Street, or hot chow from 14 other restaurants, most in or near the city center. And they do it with a swipe of their EBT card.

St. Mary's College volunteer at St. Anthony's helps food stamp applicant during DHS' outreach effort, Food Stamps in Day.

EBTs, electronic benefits transfer cards, replaced paper food stamps in 2003 and operate exactly like the more ubiquitous and upscale ATM debit cards. The cost of the food is automatically subtracted from the card-holder’s monthly food stamp allotment, which in San Francisco averages $98.

The U.S. Department of Agriculture, which runs the food stamp program, has allowed seniors and the disabled nationwide to use their food stamps when dining out since the early 1980s, and 15 years ago gave states the option of expanding the Restaurant Meals Program to the homeless.

But the expansion has been a hard sell: Eateries in most locations simply don’t want to encourage the patronage of homeless people.

            Today, only 19 states are participating in the restaurant program and of those, only five are implementing the homeless option — Illinois, Michigan, Minnesota, Oregon, and California, the last to sign on, in May 2004.

The four states besides California have just a handful of restaurants participating among them. According to Dennis Stewart, Western regional director of USDA’s Food and Nutrition Service, only 27 restaurants nationwide accept food stamps from the homeless. Two-thirds of those are here in the city, Stewart said, the legacy of a mayor who’s made a priority of homeless services.

San Francisco the Star

San Francisco got a special waiver to try out the homeless restaurant option in March 2003, more than a year before the state gave its blessing to statewide implementation of the program.

S.F.’s pilot project flew. High.

“It’s definitely a success here,” said Leo O’Farrell, director of Human Services’ nonassistance food stamp program (stamps for those ineligible for public assistance but who meet income guidelines). “This February, food stamp recipients bought 8,000 meals, and in its first year, restaurant program sales were more than half a million.” That’s half of the program’s $1 million sales nationwide.

O’Farrell estimates that of the city’s 28,487 people who received food stamps last year, about 4,000 homeless and 2,000 seniors or disabled were eligible for the restaurant bonus. But right now there’s no way to know how many are using their EBTs at restaurants.

“When they get their EBTs, we also issue them a yellow ID card for the program, if they’re eligible,” said Ylonda Calloway, support analyst for the city’s food stamp program and the only outreach staffer for the restaurant program. “But we have no idea if they use them. Probably by next month, that information will be automated, embedded in the EBT, so we can stop issuing IDs by hand and we’ll know how many people are out there buying meals.”

Carl’s Jr. on Board

Mohammed Safdar has been the manager at Carl’s Jr. at 10 United Nations Plaza for six years.

“We’ve been in the restaurant program for just over a year,” he said, “and I’d say about 10% of our customers use their EBTs here. In January, we took in $13,700, just from this program.”

Safdar said joining the program was his idea. “I was at a grocery store on Seventh Street and the owner told me about Subway Sandwich being part of the program and suggested that I find out about it. So I told my district manager and he told me to go ahead.” Since then, two other Carl’s Jr.s have joined.

It took about a month to implement the program at the U.N. Plaza franchise site and was smooth from start to finish, thanks, Safdar said, to Calloway’s help at every step. The only confusion came shortly after the EBT reader was installed.

“At first I thought anyone with an EBT card could use it here,” Safdar said. “We were getting up to $1,300 to $1,400 a day. Then we got a letter saying we were violating the law — we could only serve seniors, disabled or homeless with EBTs and they had to have an ID card saying they were part of the program. The sales dropped way down when we began doing it right.”

Most of the Carl’s Jr. customers in the program are homeless people, rather than seniors or disabled, Safdar said. “You have to have a lot of patience dealing with customers like ours, but I’m used to it. And this is a really good program. If another restaurant asked about joining, I’d say to do it. I also tell my customers to tell their family and friends about the program, if they’re eligible.”

Restaurants begin by signing an MOU with S.F. Department of Human Services in which they agree to serve low-cost or discounted meals to food stamp participants, post a sign saying they are part of the program, agree to all USDA rules and regulations about food stamps, including not accepting EBTs for alcoholic beverages and not charging sales tax.

“After the MOU, there’s state and federal paperwork, and I help any restaurant that wants to join the program do it all,” Calloway said. “I know the ins and outs, and how to get applications into the right hands. It usually takes no more than a month.”

Restaurants have to pass a Department of Public Health inspection and submit bank information. Once the USDA authorizes them to accept food stamps, they get free gear from the state — a point of sale device for swiping EBT cards, PIN pad, receipt printer and printer supplies. Calloway trains staff on how to use the equipment.

EBT purchases are deposited in the restaurant’s bank electronically every working day. The EBT machine gives the owner or manager an accounting of the previous day’s transactions.

“I also have confidential access to dollar amounts and transactions for individual restaurants,” Calloway said. “That’s how I monitor the program.”

The Sixth St. Experience

Lien Thai, owner and manager of Honey Donut & Deli on Sixth Street, signed on for the program two years ago, just a few months after she bought the restaurant. Besides doughnuts, she sells bacon and eggs, oatmeal, hamburgers and other hot fare.

Thai says she’s had no problems with the EBTs, except that sometimes people don’t have their yellow ID cards and get angry if she says she can’t serve them. Though she gets a daily report of how much she’s taken in via the EBTs, she wasn’t sure how much that amounted to monthly.

“Right after people get their food stamps, maybe 10 to 15 people a day use the EBTs, but when they run out it’s maybe four a day,” Thai said. “Our business is very slow now — I don’t know why. If I wasn’t in the program, there’d be even less business.”

Thai said she’d recommend the program to other restaurants.

Just up the street, at Victory Restaurant, steam tables of fried chicken, rice, fish and other hot foods were ready for the lunch crowd. Wendy Ho was sounding discouraged about the EBTs. She and her husband have owned the Victory for four years and they were among the first to join the restaurant program.

They make money from it — she estimates $200 to $300 a day early in the month and $100 daily the final week — but she cites problems.

“A lot want to cheat. They come without their yellow IDs and lie about it,” she said, “or they swipe the card when they know there’s nothing left in it (as with ATMs, the sale is immediately rejected). Then they get very angry and yell at me. Or they want to pay after they get their food, but they don’t have their card and when I say no, they get mad.”

It’s bad to have other customers see that, but there’s worse. “I get a lot of people with cards who go and ask someone sitting in the restaurant for, say, $3. They say they’ll get them another meal. Then they swipe their card, get the food and take the cash.”

She lowered her voice. “They’re doing it to get money for drugs. And they do it right in front of me.”

Ho and her husband are trying to sell their restaurant. She talked fondly of the 13 years she spent as a home health care worker for On Lok. It was a much easier life, she said.

Ebb and Flow of Eateries

Calloway hopes to keep adding more restaurants to the 17 on the program roster; as of the end of March, three more were in the hopper. “We’re proud of this program, and we definitely need to do more outreach, but staffing shortages keep us from doing the necessary footwork,” she said.

In March, she made a presentation at the Tenderloin Futures Collaborative and plans to do more of the same in other neighborhoods, keeping the focus on recruiting restaurants that are already serving the homeless.

 Six months ago, there were 22 restaurants in the S.F. program, 14 of them Subway Sandwich shops. The number of Subways has now dropped to nine.

“The Subway numbers constantly change,” Calloway said. “They’re often sold or transferred from owner to owner. Just like with any retailer who accepts food stamps, if the ownership changes, the authorization process has to start all over. But besides Subway, no one’s dropped out of the program.”

Elsewhere in the state, Los Angeles County is getting ready to add its homeless to the restaurant program, according to USDA’s Stewart. He’s pleased L.A.’s coming on board, but he’s also concerned that the restaurant program, like the food stamp program in general, is underutilized.

“As few as half the people who are eligible for food stamps in California are taking advantage of the program,” Stewart said.

In San Francisco, that figure may be higher or lower, 66% or 44%, depending on whose statistics you use.

District 10 Supervisor Sophie Maxwell held a hearing in February to explore how aggressively — or not — the city is going after federal funding to improve childhood nutrition. Since then, she’s asked the city attorney to draft a policy of nutrition standards and to check into the possibility of mandating  city agencies and CBOs to step up their efforts to bring in the bucks.

In question, at the top of the list, was DHS’ food stamp program, which costs $23.5 million to administer and whose staff oversee the distribution of $33.5 million worth of food stamps to 11,546 children and 16,941 adults.

Harvey Rose, the supes’ budget analyst, prepared a fat report for the February hearing. It included nutrition staff estimates of the percentage of people eligible for that benefit who actually get it. Food stamps said 56%. The other programs ranged from 17% of eligible students getting school breakfasts to 122% getting WIC benefits.

The budget analyst also included data from a 2004 report by California Food Policy Advocates, a nonprofit headquartered in San Francisco. It said 86,585 San Franciscans are eligible for food stamps but two-thirds don’t get them, a loss of $60 million in federal funds.

O’Farrell questions the nonprofit’s number of eligible food stamp recipients.           

“I think the advocates simply looked at annual income from the 2000 census,” O’Farrell told The Extra when we asked about the budget analyst’s report. “They just didn’t factor in personal assets, resources, immigration status and SSI/SSP that can disqualify people. Here in the city we know there are people who are eligible who aren’t getting food stamps. I support the 44% figure.”

Food Stamps in a Day

On a rainy morning in late March, The Extra caught up with O’Farrell at the Hamilton Family Center in the Haight, a 24-hour shelter for homeless families that also provides meals and support services to homeless people.

O’Farrell arrived at Hamilton with six eligibility workers and a few supervisors and IT people, who lugged in cardboard boxes of applications and informational materials and computers. At long tables, they talked with about 50 people, mostly homeless from nearby Golden Gate Park and Haight Street. Homeless families weren’t part of this outreach, O’Farrell said, because they are “mostly already wired for benefits” through other programs.

By midafternoon, he estimated that 40 people got the good news: Based on an interview, they appeared to be eligible for food stamps, their name had gone into the computer and their EBT card would be ready for them the next day.

This was DHS’ third Food Stamps in a Day outreach effort, a program O’Farrell started in January.

“Our first two days were at St. Anthony’s,” O’Farrell said, “and each time we talked to about 50 people and got 40 approved. We plan to go back again.”

While O’Farrell and his crew set up upstairs from the dining room, St. Anthony’s volunteers and staff had talked to people lined up outside waiting for lunch, explained Lisa O’Neill, St. Anthony’s media associate.

The St. Anthony’s folks used a one-page “screener,” a list of questions to eliminate those with no chance of getting food stamps: noncitizens and illegal residents; SSI and SSP recipients; people with felony convictions for selling or trafficking drugs (as of Jan. 1 this year, convictions for drug use and possession no longer disqualified food stamp applicants); and monthly income over $1,009 for a one-person household.

Those who appeared to be eligible went upstairs for a formal interview. They didn’t even need paperwork to verify their identity or income; they could just state their Social Security number. O’Farrell told The Extra that in cases like that, his staff went so far as to call relatives or friends of the person applying to check the veracity of the information.

Food Stamp Stats Overstated

O’Neill said St. Anthony’s was delighted to collaborate with DHS and to have more of its clients get food stamps and be able to eat at restaurants.

“We’re serving an average of 2,400 meals day, up 20% from two years ago,” O’Neill said. “We want our guests to be able to expand their resources for meals.” 

A Feb. 15 press release from St. Anthony’s announcing the second Food Stamps in a Day included some numbers to explain the need for more outreach: “For every dollar in food stamp benefits entering the city, there is an economic impact of about $1.84.” O’Farrell said that figure came from USDA’s economic research services and that Stewart had cited it at the city’s February nutrition hearing. He had no quibbles with it.

Not so the other statistics in the release — that 66% of eligible people citywide weren’t getting food stamps, that the city was losing $60 million a year, and that 82% of people in the Tenderloin weren’t getting the food stamps they were entitled to.

“I don’t know where these numbers regarding Tenderloin food stamp participation come from,” O’Farrell said in an e-mail.

As for the rest, he was emphatic: “Lies, damn lies and statistics!”

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