Show Me the Money: Financial Recovery after Disaster: Professional Emergency Management, Physical Mitigation, Public Education, and Financial Assistance Can All Lessen the Impact of Post-Disaster Community Recovery Costs

Article excerpt

The United States is unique in its far-reaching financial assistance programs for disaster-impacted areas. Communities that request and receive presidential disaster declarations are eligible to receive financial assistance through the Federal Emergency Management Agency (FEMA) for specific recovery activities. The U.S. Departments of Agriculture and Housing and Urban Development and the U.S. Small Business Administration, among others, have disaster assistance programs, as well. Programs include reimbursement for emergency response costs such as overtime and financial support for the repair of damaged public infrastructure. While President George W. Bush provided 100 percent funding for "emergency work" for communities impacted by Katrina, other categories require some matching funds from the devastated state and local governments. At the same time, these local governments are losing revenues as residents and businesses struggle to recover from the disaster.

Federal Aid and Local Financial Responsibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S. Code [section] 5121 et seq. as amended) aids disaster-damaged communities through public assistance programs. Following a presidential declaration of a state of emergency or disaster, these programs may be accessed by state and local governments and by nonprofits fulfilling governmental functions. Table 1 shows the activities that qualify for federal financial support. The federal contribution is considered "supplementary assistance," so the federal share is "not less than 75 percent of eligible costs," and the state determines how to apportion the remaining 25 percent between the state and local governments. In California, for example, the state pays 75 percent of the 25 percent remaining after the federal reimbursement, and the local government pays the remaining 25 percent of the cost share.

Category B, Emergency Protective Measures, is the most comprehensive category. It includes pre-impact activities undertaken to protect the community and its residents, as well as immediate response to the disaster (Table 2).

For example, responding to an "immediate threat," defined by the federal government as something that could happen within the next five years, communities may open the emergency operations center to coordinate preparation and response to the imminent disaster, activate emergency communications systems, provide emergency public transportation, and conduct post-disaster building inspection. Reimbursable costs associated with Category B include employee overtime, materials, equipment, and contracts awarded for eligible work.

As shown in Table 3, eligible applicants may be governmental entities or private, nonprofit organizations fulfilling a governmental function.

Direct federal assistance may also be offered when the severity of the disaster precludes response by local or state government. The state may request that Category A or B emergency work be performed directly by a federal agency. FEMA uses the National Response Framework and emergency support functions to assign the work, which may be performed by federal employees, or through a federal contractor.

On the basis of the severity of the event, the president may raise the federal cost share for Category A and B work up to 100 percent. For example, in the August 29, 2005, supplemental declaration for the state of Louisiana, President George W Bush ordered 100 percent federal funding for emergency protective measures, including direct federal assistance, for the first seventy-two hours after the storm. This still leaves the state and local jurisdictions with a significant financial responsibility for the cost of response to and recovery from disasters. For example, after the first seventy-two hours, the state was responsible for 25 percent of the cost for the Coast Guard rescue work and the logistics support of the Army. …