Disasters in the United States are increasing in size and destructiveness. As a result of an increased numbers of disaster declarations, FEMA is considering new rules to incentivize local policies that improve community resilience and reduce federal costs for future incidents.
FEMA’s proposed Public Assistance Deductible framework rule will change how state and local governments apply for and receive FEMA disaster assistance. The rule proposes a Public Assistance Grant “deductible” – similar to a deductible for health and car insurance – that a state must meet before receiving federal disaster assistance. FEMA would base the deductible amount based on the state’s risk and fiscal capacity.
By implementing a deductible requirement the hope is to lower future recovery costs by incentivizing states to be better prepared for disasters. FEMA proposes to offset the deductible amount by allowing state’s to apply for “credits” which may include policies and procedures for building code enforcement, emergency management programs, and mitigation projects. If a state has not paid its annual deductible and receives a major disaster declaration, then the affected state must first cover the that amount (through state-funded projects) before a Public Assistance reimbursement takes place.
The deductible rule mostly affects infrastructure projects. FEMA would continue to fund evacuation, life safety, and property protection as well as emergency protective measures and debris cleanup regardless of the deductible requirement. This will ensure the initial response to the disaster is not hindered by this rule.
From FEMA’s perspective incentivizing state behavior to reduce disaster cost can help better prepare communities for disaster. A study by the Multi-Hazards Mitigation Council claims that for every $1 spent in mitigation activities, $4 is saved in disaster recovery. Having states financially invest in community resilience programs may assist in curtailing the rising costs of disasters in our country and the federal spending being distributed to these disasters.
The emergency management community does have a concern about potential documentation requirements that may result from this rule. A deductible will undoubtedly require a more thorough damage assessment and financial expenditure tracking process to assess the disaster costs. Such a process will then need to identify those locally funded projects that could satisfy the deductible amounts. In addition, disaster cost tracking may need to be collected on smaller incidents since those costs may apply to the deductible for a larger incident.
Smaller jurisdictions may be particularly susceptible. With many communities not having a full-time devoted emergency manager, there is concern that these communities may not be able to support additional resource requirements needed for documentation. These communities would then need to turn to the state for additional help.
Lastly, conflicting priorities during a response is another concern. Some local infrastructure projects, emergency repairs in particular, are hastily performed to reopen local services. In these cases documentation on local resources expended tend to be an afterthought since tracking financial costs on FEMA Project Worksheets can be time consuming. If accounting for these projects are critical towards meeting a deductible, local governments will need to turn to more automated processes to document disaster costs.
How to Plan
We have yet to hear what the new administration has in store for the FEMA Public Assistance Deductible, or if there will be any changes to the current state of the proposal. However, there are some analysts who think that this rule may survive the current anti-regulation climate in Washington.
Here are some ways that local emergency managers can start to plan for this new regulation:
- Track the PA Deductible through the rulemaking process. With public comments recently closing and a new FEMA Administrator nominated, this process could move more quickly. You’ll need to understand the potential impacts that credits may have as well as understand the documentation requirements that will result in the rule change. Stay tuned to this blog for future updates.
- Start a local damage assessment program. Planning your damage assessment program before an incident will ensure you have the resources, tools and processes aligned to quickly conduct a comprehensive damage assessment and document the critical items needed to receive disaster assistance. Sign up for a short course here.
- Research automated solutions. Disaster management software packages such as Crisis Track, can help you automate disaster cost tracking, saving you time and improving the accuracy associated with damage assessment and completing FEMA documentation.
Even in our current process, we still must rely on gathering accurate damage assessments, disaster costs and other financial data from our local jurisdictions. These efforts are sure to become more important as we look towards future Public Assistance Program changes. Planning for these changes ahead of time will help ensure that you can receive disaster assistance when your community most needs it.