Let's Stop Improvising Disaster Recovery July 2013

Let's Stop Improvising Disaster Recovery

James W. Fossett

“We can surge troops and equipment, but you can’t surge trust.”
General Carter Ham
James W. Fossett

The American intergovernmental system needs to stop improvising the way it manages long-term recovery from major disasters such as Hurricanes Katrina and Sandy and the terrorist attacks of 9/11. From financing to decisions about the proper response to long-term climate change, the American system for disaster recovery is ad hoc, uncoordinated, and reinvented from scratch after every major disaster. As a result, recoveries have been lengthy and conflictual, imposed considerable welfare costs on families and businesses, and have resulted in only marginal improvement in the vulnerability of areas afflicted by these disasters. The post-9/11 recovery process was marked by bitter and protracted conflict over almost every conceivable issue, so that ten years later many of the funds allocated for recovery remained unspent. One close student of post-Katrina politics labeled the response and recovery process as a “second disaster” that may have done more long-term damage than the hurricane.[1]

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James W. Fossett is a senior fellow at the Rockefeller Institute and associate professor of public administration and public health at the Rockefeller College of Public Affairs and Policy, University at Albany.

Much effort has been invested since Katrina and 9/11 by officials at all levels of government to improve the quality of the immediate response to such disasters and these efforts appear to have borne fruit in the response to Sandy. While there were clearly unanticipated problems and complaints of difficulties in particular geographic areas and with particular agencies, the overall first response to Sandy was clearly much stronger than Katrina. Power and public transportation were restored in a relatively short period of time, and casualties were far lower than in Katrina.

The long-term recovery process, however, may be equally as difficult, in large measure because so much of it remains improvised and fragmented. This improvisation and fragmentation begins with the recovery’s financing. The federal government has no single expedited process for allocating and spending relief money. Rather, appropriations for emergency purposes are made to a number of federal agencies, and state and local governments have to deal with each agency separately. Budgets for emergency spending are set on an annual basis, rather than on a longer-term basis that would allow the accumulation of reserves required to respond to Katrina- or Sandy-sized events, which are “certain, but unpredictable.” Rather, the federal government has historically relied on emergency appropriations outside the normal federal budget process to provide support for large-scale recovery efforts.

Historically, such emergency appropriations have not been controversial. This was not the case with the vote over Sandy, which became embroiled in Congressional deficit reduction politics and stretched over two Congresses. Initial appropriations for Katrina relief were voted within a week of the storm’s conclusion; the final votes on the Sandy package took three months to conclude.

Federal Oversight Is Improvised and Fragmented

The federal oversight structure for Sandy recovery is also improvised and fragmented. Historically, the Federal Emergency Management Agency (FEMA) has been seen as the lead agency for disaster recovery and the FEMA administrator has been designated as the “principal advisor” to the president for disaster matters. The National Disaster Recovery Framework (NDRF), approved by President Obama in 2011, envisions a continued lead role for FEMA in coordinating federal activities during recovery.

Rather than relying on this framework, however, President Obama vested responsibility for overseeing the federal response to Sandy in a Hurricane Sandy Rebuilding Task Force, created by executive order in early December 2012.[2] The Task Force is chaired by the Secretary of Housing and Urban Development (HUD), rather than by the FEMA Administrator. The largest part of the funds for Sandy relief comes not from FEMA, but from the Community Development Block Grant (CDBG) program, which is administered by HUD. The Task Force is assigned a rather ambitious agenda for overseeing federal assistance, including working closely with FEMA and overseeing the activities undertaken through the NDRF, managing the flow of CDBG funds, and coordinating and supporting local and federal efforts to provide for more resilient infrastructure. These activities are to culminate in the development of a comprehensive regional plan for rebuilding in six months.

How successful the Task Force will be in realizing this ambitious agenda remains to be seen. The first allocations of CDBG funds to New York, New York City, New Jersey, and Connecticut took place within a week of the president’s signature on the relief bill. These funds were earmarked for these areas, however. Subsequent allocations can be spent in other areas that had a disaster declared within the last two years as well as the areas affected by Sandy. Procedures for allocating these funds have yet to be announced. In a similar fashion, how well HUD and the various agencies represented on the Task Force can work with the FEMA-centric NDRF in developing and executing a recovery strategy remains to be seen.

Local Oversight: Too Many Cooks in the Kitchen?

Locally, the decisionmaking process is also fragmented and improvised. Governors Chris Christie of New Jersey and Andrew Cuomo of New York and Mayor Michael Bloomberg of New York City now have independent access to large amounts of CDBG funds, which can be used for a wide range of purposes, and are developing plans for spending these funds more or less independently with little communication with each other. Plans have to be developed for spending these funds in a short period of time, with many programmatic components having to be devised from scratch. Since state emergency management agencies or FEMA have little experience with housing or economic redevelopment programs, these plans must be developed by state housing or economic development agencies who have little experience with disaster recovery and have little knowledge of FEMA’s rules and procedures. All three jurisdictions have had these “action plans” approved by HUD and are in the process of implementing them. Governor Cuomo has received reports from three commissions and is awaiting a fourth on various recovery and response issues connected with Sandy. Mayor Bloomberg has also commissioned a large-scale strategic plan that is due out in May. Other elected officials, most notably Senator Schumer of New York, have weighed in on the debate over how to spend Sandy recovery money. Still other elected officials have their own agendas and political interests to defend, so that local politics are inevitably involved in debates over how best to recover from Sandy.

Differences have already started to emerge. Both Governor Cuomo and Mayor Bloomberg have been vocal about the problem of climate change, but have different preferences for addressing it. A Cuomo proposal to buy out homeowners under favorable terms won substantial editorial support and public indications of interest from at least one Staten Island community. The proposal, however, got a cool public reception from Mayor Bloomberg, Senator Schumer, Governor Christie, and local officials. Mayor Bloomberg’s recent proposal for adapting to climate change, by contrast, relies on continued waterfront development, upgrades to local building codes, and local protections against storm surge. By way of further contrast, Governor Christie has pronounced the question of climate change as “esoteric” and appears to have delivered on a promise to reopen the New Jersey shore by Memorial Day. Senator Schumer is pushing a large-scale study by the Army Corps of Engineers to devise a flood-control strategy for the entire region, a policy direction that hasn’t received much public support from either Cuomo or Bloomberg. Other elected officials and advocacy groups have also weighed in with proposals that may push programs in different directions.

These differences might be expected to persist and even intensify as the recovery process proceeds. Spending plans for the first round of CDBG allocations appear to focus on housing rehabilitation and replacement and small-business loan and grant programs and paying for the local share of FEMA funded projects, areas where the primary economic impact is localized and one jurisdiction’s programs may have limited consequences for others. Local programs may wind up with entirely different emphases and rules, so that the same person might be treated differently in different places.

There’s nothing necessarily wrong with different jurisdictions making different choices about the management of funds to support local recovery. Long-term or larger-scale issues such as climate change or expensive flood control measures that inevitably affect the entire region are another matter. Christie, Cuomo, Schumer, and Bloomberg appear to have different views on the importance of climate change and the value of alternative strategies for dealing with disaster recovery, and there is no clear process for them to arbitrate their differences and arrive at a coherent regional approach. Control over the area’s utilities and public transportation systems is similarly divided in complex ways between the governors and the mayor. The strategy of providing the governors and the mayor with separate pots of money that they can spend without reference to each other limits potential conflict and allows recovery spending to proceed expeditiously. Such a strategy makes it difficult, however, to address large-scale, long-term regional issues.

The process of spending funds once decisions are made about their use is also fragmented and difficult to manage. The final Sandy relief bill contained appropriations to 18 different federal agencies, all of whom have their own procedures for allocating and spending money and retain oversight responsibility for how these funds are spent. The state and local agencies that manage these different federal funds may not work with each other regularly and may find different federal rules governing project eligibility and expenditures difficult to reconcile.

This local fragmentation is particularly noteworthy around FEMA’s Public Assistance program, which is the main source of support for the rebuilding and replacement of publicly owned facilities — schools, parks, government buildings, roads, and the like. FEMA regional offices and state emergency management agencies are understaffed and unable to deal with the volume of project proposals generated by a large storm — by one count, for example, Hurricane Irene generated some 15,000 separate project proposals. State agencies rely on cadres of retired engineers, largely from federal or state agencies, to do the bulk of the work with local governments to develop and negotiate project proposals. Since these engineers are retired, the hours they can work are limited by their pensions. As a result, turnover on particular projects is high — state or local governments may deal with more than one FEMA engineer on a single project or may be dealing with multiple engineers on different projects. FEMA’s Public Assistance procedures are complex and negotiations can be lengthy and contentious. These features may be exacerbated by a high turnover of FEMA and state office personnel, whose reading of the rules may differ.

The Cost of Fragmentation

The costs of improvisation and fragmentation at all levels of government in disaster recovery are difficult to value precisely, but they are surely large. The recovery processes from such major disasters as Hurricane Katrina or the terrorist attacks of 9/11 stretched on for years beyond any reasonable time frame for getting public facilities repaired or rebuilt and people and businesses re-established. Delays and conflicts in getting budgets passed, funding allocated, programs established, and money spent drive up what economists call welfare costs — the adverse effects on the quality of life of families, business owners, and citizens trying to recover from the loss of loved ones, the destruction of homes or businesses, the loss of income from a damaged place of work, children having to go to school miles away from home, and other storm-related damages. These costs are very real, but difficult to estimate and hence tend to be ignored or undervalued.[3]

Institutional and process changes to address at least some of the costs of improvisation in the process of recovery from major disasters seem in order. The need to improvise in recovery can’t be eliminated — no two severe weather events are alike, meaning different agencies may need to be involved and recovery funds spent on different things. In similar fashion, local political conflict over recovery will persist no matter what procedural changes are adopted. It should, nonetheless, be possible to reduce delays that come about because there is little funding and few organizational structures and procedures in place before an event happens.

One source of delay that could be reduced is the reliance on emergency appropriations, which can become entangled in congressional politics. It is in principle possible to budget for disaster recovery on insurance principles that set “premiums” or annual appropriations to disaster recovery accounts at a level that allows the funds to accumulate “reserves” that can be used to support recovery from a Sandy-sized event without the need for further congressional action. Such a practice would require dramatic increases in the size of annual appropriations to these accounts, which is likely to be unpopular in the current budget environment.

A Modest Proposal

A more modest version of this proposal would be to annually budget funds to allow for the accumulation of reserves in the Community Development Block Grant-Disaster Recovery (CDBG-DR) program. CDBG-DR has become one of the federal government’s major tools for financing the response from large-scale disasters — some $17 billion of the final Sandy relief bill, for example, was appropriated for this purpose. CDGB-DR is very popular with mayors and governors because it is extremely flexible and can be used to support a wide range of recovery activities beyond those supported by FEMA, the U.S. Small Business Administration (SBA), and other federal agencies. It is frequently used, as in the Sandy case, to pay the local share of projects funded by FEMA and other agencies; provide recovery support to homeowners not covered or able to be covered by FEMA flood insurance; provide support for economic redevelopment beyond that available through SBA; and a variety of other uses that are difficult to fund through other programs. Providing a CDBG-CR “reserve” that could be allocated without further Congressional action would reduce delays in allocating and spending recovery funds.

A second set of proposals that might reduce delays in the expenditure of funds would simplify the processes by which funds are allocated. Numerous commentators have noted the difficulties in spending funds under FEMA’s Public Assistance program, which relies on detailed project-by-project review of literally thousands of individual projects. Negotiations around particular projects have dragged on for years. FEMA has adopted a variety of changes to expedite the approval process and close out individual projects within a reasonable period of time, but the potential for conflict and delay remains high.

One proposal that might expedite matters further would convert FEMA’s project system into some variation of a block grant.[4] Under such an allocation system, “blocks” of funds would be allocated among eligible states or local governments on the basis of an initial damage estimate or econometric models of past disasters without being earmarked for particular projects. If accompanied by simplified rules for project eligibility, such a procedure would give the state and local officials responsible for overseeing recovery a reasonably hard, timely estimate of how much money would be available from FEMA to support response and recovery. Such an allocation process might expedite the recovery process.

In a similar fashion, the national oversight machinery for recovery from large-scale disasters might be formalized to reflect the differences in scale and program mix that recovery from these disasters requires. A FEMA-centered recovery framework such as the National Disaster Recovery Framework makes sense in smaller-scale events where the bulk of the funds being spent come from FEMA. For larger-scale disasters where other agencies will be contributing significantly more funds in support of recovery than FEMA, an alternative structure seems more reasonable. As numerous commentators have noted, the program machinery established by the Stafford Act was envisioned to address smaller-scale disasters such as local floods, tornados, and blizzards. Several commentators have likened using the FEMA structure to address such incidents as Katrina or Sandy as “trying to stuff a pig through a straw.” Other pieces of recovery-related legislation have tried to differentiate between such major events and others, so that the same incident can be labeled as a Major Disaster, a Catastrophic Incident, or an Incident of National Significance, with differing regulations applying to each of these designations.[5]

Congressional or administrative action to integrate these various designations and establish more clearly the institutional machinery through which the federal government will manage its response to large-scale disasters seems in order.

Overcoming Fragmentation May be Difficult

Overcoming fragmentation and improvisation at the state and local level is likely to prove more difficult. The practice followed after Katrina and Sandy of allocating CDBG-CR funds, which are the major source of discretionary funds for recovery spending, to governors and to major local governments as New York City appears to be the more sensible way for the federal government to allocate these funds, rather than deal directly with the hundreds of local governments affected by major disasters. Governors are responsible for the declaration process that triggers eligibility for FEMA funds; managing the state emergency management offices that oversee local recovery operations, agencies that manage housing, economic development, and transportation projects; and may have some influence over the public service commissions that regulate utility operations. While they lack control over land use and building codes, which continue to be the purview of local governments, they may have state agencies with some regulatory authority in coastal areas. They are thus in a better position to make and implement a coherent recovery policy than other actors. While multiple state and local agencies are involved in managing recovery programs and funding, chief executives can establish mechanisms for coordinating funding streams and ensuring that programs fit together well on the ground. Such mechanisms might include cross-training agency personnel in the appropriate state and federal procedures and processes — state and local housing agency personnel, for example, need to be aware of what FEMA’s flood insurance, individual assistance, and hazard mitigation programs will and will not cover.

Addressing issues that require coordinated action across state or jurisdictional lines, however, may continue to be difficult. Elected officials in charge of recovery efforts will continue to have differing policy views and political needs on such issues as climate change and large-scale flood control, and there is no clear forum to resolve these differences. New York is party to a variety of joint undertakings with other governments through public benefit corporations whose boards are jointly appointed by the participating governments. The record of these undertakings is mixed. The Metropolitan Transit Authority and the Port Authority have managed the area’s transportation systems for decades, and several bridges between New York and Canada are managed by joint enterprises. The one past attempt to use such an entity to address contentious recovery issues has not gone well. After the terrorist attacks on 9/11, the Lower Manhattan Development Corporation (LMDC) was created with a board appointed by the New York City mayor and the New York governor to oversee the redevelopment of the World Trade Center site and manage the allocation of CDBG funds to appropriate projects in the area. LMDC did provide the necessary forum for arbitrating the complex and controversial issues surrounding 9/11 recovery, but it was frequently undercut by mayors and governors alike, and found it difficult to effectively arbitrate the rancorous conflicts over nearly every aspect of the recovery. Ten years after 9/11, over 20 percent of the allocated CBDG funds were still unspent. The 9/11 recovery was likely unique in its architectural and emotional issues. Given the competing substantive priorities and political interests involved in the Sandy recovery, however, it is not difficult to imagine those involved in a joint undertaking to address climate change and large-scale flood control having trouble coming to agreement. The Army Corps of Engineers, which would be responsible for designing and building large-scale flood control projects, has considerable experience in negotiating such interjurisdictional conflicts, but such an undertaking is likely to prove difficult.

It’s unlikely that improvisation or political conflict can be eliminated in the recovery from large-scale disasters. Developing and implementing a long-term recovery effectively, however, requires developing good working relationships between agencies that have no ongoing contact between disasters and are unfamiliar with each other’s rules and procedures. It’s difficult for these relationships to develop under the current system, where recovery programs must be reinvented from scratch after every disaster. Some of the incremental changes proposed here, however, might expedite the process of getting recoveries started and shorten the time it takes to get citizens, businesses, and governments back to normal functioning.



[1] Karen Rowley, “GulfGov Reports: One Year Later — First Look at the Recovery, Role, and Capacity of States and Localities Damaged by the 2005 Katrina and Rita Hurricanes” (Albany NY: The Nelson A. Rockefeller Institute of Government and Baton Rouge, LA: The Public Affairs Research Council of Louisiana, August 22, 2006), http://www.rockinst.org/pdf/disaster_recovery/gulfgov/gulfgov_reports/2006-08-22-gulfgov_reports_one_year_later.pdf.

[2] “Executive Order — Establishing the Hurricane Sandy Rebuilding Task Force” (Washington, DC: Office of the White House Press Secretary, December 7, 2012), http://www.whitehouse.gov/the-press-office/2012/12/07/executive-order-establishing-hurricane-sandy-rebuilding-task-force.

[3] See Jason R. Abel, Jason Bram, Richard Dietz, and James Orr, “The Welfare Costs of Superstorm Sandy” (New York, NY: Federal Reserve Bank of New York, December 18, 2012), http://libertystreeteconomics.newyorkfed.org/2012/12/the-welfare-costs-of-superstorm-sandy.html.

[4] Mitchell Moss, Charles Schellhamer, and David A. Berman, “The Stafford Act and Priorities for Reform,” Journal of Homeland Security and Emergency Management 6, 1 (2009): 1-21.

[5] Ibid.

About the Rockefeller Institute of Government

The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public policy academic experts throughout the country.