EIIP Virtual Forum Presentation — August 13, 2008
Bringing Home the Bacon
Getting and Keeping FEMA Public Assistance Dollars
Michael Martinet, CEM®
Coordinator, Office of Disaster Management
Area G, South Bay Region, Los Angeles County, California
Amy Sebring
EIIP Moderator
The following version of the transcript has been edited for easier reading and comprehension. A text transcript is available from our archives. See our home page at http://www.emforum.org
[Welcome / Introduction]
Amy Sebring: Good morning/afternoon everyone. On behalf of Avagene and myself, welcome to the Virtual Forum! We are pleased you could join us today, including our first-timers.
Our topic today is "Bringing Home the Bacon: Getting and Keeping FEMA Public Assistance Dollars." As with everything else, pre-planning can help ensure that your community will be effective in maximizing the benefits of the Public Assistance program.
There is a related poll/survey question on our home page, "The Public Assistance program should be administered at: a) FEMA HQ, b) FEMA Region, or c) State Agency." Please take a moment after our session to respond if you have not voted already, and review the results to date.
If you did not realize it, FEMA is currently conducting a Public Assistance Pilot Program, through December 2008, and must report the results to Congress by March 2009. There is a link on today's Background Page, and you may want to check that out. [http://www.fema.gov/government/policy/papilot.shtm]
Now to introduce our guest. Michael Martinet serves as the Coordinator for the Office of Disaster Management, Area G, which serves 14 cities in the South Bay Region of Los Angeles County. He has a Master's degree in Emergency Services Administration from Cal State University, Long Beach, is a Certified Emergency Manager (CEM®) from the International Association of Emergency Managers, and served six years on the CEM® Commission.
For ten years Mr. Martinet has taught classes in Disaster Record Keeping, EOC Finance and Administration issues, FEMA cost recovery and financial aspects of disasters to nearly 3,000 students. Please see the Background Page for additional biographical details.
Welcome Mike and thank you for being with us today. I now turn the floor over to you to start us off please.
[Presentation]
Mike Martinet: Good Morning everyone. Let's get right to the topic.
Disasters devastate communities. But the period of post-disaster rebuilding is often referred to as "the disaster after the disaster." When a major disaster strikes a local jurisdiction it is figuratively and sometimes literally turned upside down. Depending on the severity of the disaster, it will be a long time, if ever, before things will return to "normal."
A key factor in determining the timing of a "return to normal" is the nature and extent of the damage done by the disaster. Another important factor is the ability of the jurisdiction to restore its own financial order in the face of chaos. This challenge is not easily met, especially when finance departments are unfamiliar with the stringent requirements of FEMA's "public assistance" grant programs.
The term "public assistance" itself is a misnomer. "Public assistance" is not for the public, but rather it is for public agencies affected by disaster. Assistance for victims and their families goes by the term "individual assistance" and other terms, depending on the administering Federal agency.
The task of restoring financial order is very difficult in the face of a major disaster. If the disaster has effectively crippled the finance department, the department must save itself before it can help others. Finance departments can be devastated by the loss of electrical power, loss of telecommunications, or a failed computer system. In some cases the damage may be of a more direct physical nature.
This was the case for many jurisdictions affected by Hurricane Katrina. Entire government buildings were flooded or shredded apart in the high winds, and the finance offices within those buildings simply vanished. This clearly is a worst case scenario.
The task of financial recovery extremely is difficult when there is a lack of understanding of the public assistance process. However, this lack of understanding of the public assistance process is not limited to the finance departments. Public safety, public works, building and safety, community development and other departments can make the job of finance departments much more difficult if they do not understand the public assistance process and their respective roles in recovering disaster expenses.
Detailed time, equipment and material records need to be prepared by any department involved in the response efforts, and usually normal department records will not meet FEMA requirements to receive the maximum possible reimbursements for response costs. FEMA's own forms are available on-line at: http://www.fema.gov/government/grant/pa/forms.shtm. Properly used, these forms will capture the necessary data to meet FEMA requirements:
Temporary FEMA Workers
In a major disaster, FEMA often brings in temporary workers to deal with the sudden influx of work. Many times these temporary workers are not highly trained or experienced. And many of these temporary workers will have relatively short term contracts and will simply "disappear" overnight because their short term contract has ended.
It is the responsibility of each jurisdiction to know the public assistance process better than temporary FEMA employees do. Jesse St. Amant, former Director of Emergency Services for Plaquemines Parish, Louisiana, stated that one of the most frustrating aspects of the public assistance process was the constant rotation of FEMA employees working in that parish. He would spend weeks building a working relationship with a FEMA representative, and suddenly that representative would be gone. When the new FEMA representative would begin working, the job had to start over again, from scratch.
FEMA does provide some information and training, but many painful and hard learned lessons will ensue as the public assistance process drags on. And the public assistance process does drag on. This is another factor that reduces the amount of cost recovery that a jurisdiction will receive and retain. Because the cost recovery process may go on for years, records must be well organized so that they are easily accessible for both in-house staff and auditors.
At a meeting in August, 2007, thirteen and a half years after the Northridge earthquake, the FEMA Region IX Director, Nancy Ward stated that there were still 2.2 billion dollars of public assistance projects still pending from that event.
Disaster Recovery Takes a Very Long Time
When a major disaster strikes a community, the rebuilding and recovery process will go on for years, and even decades. And for most of the recovery period, the finance department is carrying the greatest part of the burden.
Another set of contributory factors to disaster cost recovery difficulties is that most government agencies, and indeed most individuals, misunderstand the scope and balance of disasters. Why is attention to the scope of disasters important? Because almost all of the training and preparation done by local governments is directed at the small and medium level emergencies and disasters.
Public safety, law and fire, get regular and intensive training to deal with emergencies and small disasters. Public works employees and a few other personnel also get some training, or at least on-the-job experience with the small and medium size events. Finance personnel however, receive little or no training in the public assistance process. They only begin to understand the system through the process of painful experience.
As far as the balance of a disaster, the disaster actual response usually only takes a few days or weeks at most, but the recovery will go on for years and even decades. Long after fire and law have gone back to their normal routines, the rebuilding and recovery of a community continue. The personnel who receive the best training have little to do with the largest part of the disaster and those with often the least training are left with the greatest tasks.
Disasters Are Low Frequency Events
This makes it difficult to justify spending valuable time on disaster finance training. However, disasters are very high impact events and the cost of disaster finance training will pay for itself many times over when it is needed.
The Big Picture and the Little Details:
It is important to understand both the strategic picture and the minute details of the Federal disaster cost recovery process. Knowing the overall process of the public assistance program is essential to successful cost recovery. But at the same time, very close attention to detail is essential. If either the overall understanding of the process or the attention to detail is missing, cost recovery efforts will be doomed to failure. Information on the public assistance process is available on the FEMA website at:
These and other documents on the FEMA website will provide excellent information on how the public assistance process works. The essential documents include:
In reading these publications it will quickly become obvious that the basic three rules for disaster cost recovery are: 1) documentation, 2) documentation and 3) documentation. Having accurate and complete records is the key to getting public assistance grants and keeping the money after the auditors review the files.
Another important document for the public assistance process is the Code of Federal Regulations (CFR 44). When a disaster occurs, the current CFR 44 remains the governing document even on into future years. Each year the CFR 44 is revised, but the revisions do not apply retroactively, so it is important to keep the CFR44 from the year in which the disaster occurred.
The Keys To Success
If the Finance staff does not already have strong experience in the public assistance process, the system must be rapidly learned, literally almost overnight. The system is structured in such a way, that claims and requests must begin to flow to FEMA almost immediately or key deadlines will be missed. And missing a deadline is one of the most common ways in which disaster cost recovery programs falter. Only in extremely rare cases will FEMA be forgiving on missed deadlines.
All costs associated with the disaster response and recovery must be processed in the same manner as the agency handles non-disaster matters. There are no short cuts allowed because of the disaster. Except for the first 70 hours after a disaster (exercise caution with this), emergency work must be bid according to the agencies normal procedures.
Requests for disaster cost recovery are divided up into "Project Worksheets." A project worksheet may be as small as replacing windows in a building that was wind damaged or as large as the re-building of an entire city hall or other building. Each project worksheet must have its own separate file and include all the necessary documentation to document the damage done, prepare the cost estimate, track the work done and close the file.
Failure to have a complete documentation package will run the risk of losing the FEMA funding for the project. For large disasters, the public assistance process will generate tens of thousands or hundreds of thousands of pages of documentation. To effectively manage so much information, the agency must have a solid records management system. With different projects, there will be multiple concurrent deadlines for each step of the process.
Multiple projects may be billed by a single original invoice and that single invoice will have to be accessible to the auditors, regardless of which project file they may be working on. FEMA requires original invoices, and a lost original invoice is like lost cash.
In Closing
This discussion does not even begin to scratch the surface of the disaster cost recovery process. To be truly effective, managers in all government departments, not just finance personnel need to have a good working knowledge of the "public assistance" processes.
However, finance personnel ultimately will be the people to bear the largest and longest burden of disaster recovery, and therefore it is in their greatest interest to fully understand the ever changing mystery known as "public assistance."
Back to you Amy.
Amy Sebring: Thank you very much Mike. Now, to proceed to your questions or comments. We especially want to hear your comments about any specific experience you may have had in this area.
[Audience Questions & Answers]
Question:
Norma Houston: In addition to missing deadlines, what are some other common mistakes that negatively impact PA reimbursement?
Mike Martinet: If you hear a giant sucking sound, that's because I am constantly seeking (and soaking) up information on this topic. Failure to submit complete documentation.
Amy Sebring: Mike, how about lack of policies with respect to overtime?
Mike Martinet: Overtime is a touchy subject. For emergency response, overtime is paid, but not straight time. For recovery and rebuilding, both overtime and straight time can be eligible. For exempt employees, however, FEMA will reimburse "disaster overtime" only when a pre-existing policy is in effect and that policy must meet some stringent criteria. I have seen some policies that failed FEMA's tests even though the locals thought they were fine.
Question:
Matthew Groves: I found, in my one incident, that as long as I was following established state procedures that FEMA would have no problem reimbursing 99%. Is this true across the board?
Mike Martinet: Not necessarily. First of all disasters are political events. Some disasters victim agencies fare better than others. Also, just because an agency is eligible, it doesn't mean that all their damages are eligible.
Please understand that under the constraints of this forum, these answers are very short and the real answers are quite complex.
Amy Sebring: Mike, can you give an example of ineligible damages e.g. golf courses etc.?
Mike Martinet: Sure, for instance, while public recreation facilities may be eligible, landscaping is not.
Question:
Shandi Treloar: Has any jurisdiction actually written a Financial Recovery Plan detailing what needs to be done so that they are ready to document what is necessary should the disaster be declared?
Mike Martinet: This is a question that I'm often asked when I teach classes in this area. I have developed a list of over fifty policies and procedures that should be evaluated to assist cities and agencies in being better prepared for disaster cost recovery.
Question:
Charles Hagerhjelm: What feedback have you heard regarding FEMA's changes to the Section 324 Management Costs and Direct Administration Costs (FEMA Policy DAP9525.9)?
Mike Martinet: I don't know that policy by number. I will say, that FEMA's policies usually don't receive a warm welcome at the local level.
Question:
Norma Houston: You mentioning bidding issues and the requirement that local jurisdictions follow their normal bidding processes. In NC, our purchasing and contracting laws (bidding) differ somewhat from CFR requirements, which creates reimbursement nightmares. Any info or comments on this issue?
Mike Martinet: In my opinion, local policies should be created with FEMA's requirements in mind. There should be "disaster" versions to give agencies more flexibility during a declaration.
Question:
Matthew Groves: How much would rely on the FEMA public assistance guide (FEMA 322)?
Mike Martinet: The FEMA Guides that I mentioned are very helpful in the information they provide. However, there's lot's of information that they don't provide and situations are constantly changing, which makes interpretation difficult for locals.
Question:
Riley Kyle: Regarding engineering - if engineering (typically reimbursable) is required on a project to complete the repairs, how can non-engineers (FEMA) question the reimbursement options for the engineering costs? An understanding of this would go a long way to explaining to an applicant's "financial section."
Mike Martinet: Not to be glib, but they have the money. The real answer is that the burden of proof falls on the locals. We have to know the system better than the Feds, and even then, we can't always prevail.
Question:
Shandi Treloar: I would be interested in seeing that list you've developed.
Mike Martinet: Thanks for the segue. In the next issue of the IAEM Bulletin, there will be an article about the project and I hope the complete list, or at least an on line link to it, will be included.
Question:
M. Bussell: As you may know, the Center for Domestic Preparedness offers in-person classes free of charge for many subjects (for local state/county/ER hospital staff). Considering the turn over issue with FEMA consultants, why do they not have a class on recovery (most classes focus on response)?
Mike Martinet: For my money, recovery is (in the long term) more important than response. For instance, a wounded vet that is treated for his or her injuries doesn't have much of a life if they can't fully recover from everything else associated with the injury, the mental trauma, etc. The same is true for communities. Halting the crisis phase is only a small part of the equation. How the community rebuilds itself is the real issue. Will they come back the same (or worse off than before) or will they take advantage of the adversity to become stronger?
Question:
Rick Brown: I have been through 3 disasters in my county in Kansas in the past 7 years. Each time FEMA does thing differently. Seems like left hand does not know what the right hand is doing. I agree with Mike. Documentation, Documentation. If you have it, you can prove it.
Mike Martinet: This is why we have to know the system better than FEMA. They constantly get new people and these people may or may not really care about our community’s long-term recovery as much as we do. I'm not FEMA bashing, these are just the facts of life. No one really will take care of us like we will.
Question:
Avagene Moore: Mike, thanks for this vital topic today. What prompted you to teach others how to make the most of disaster public assistance? Is your interest and expertise in this topic a result of personal experience in your jurisdiction? Can you share an example or two if that is the case?
Mike Martinet: Years ago, I realized that somehow, someway, police, fire and EMS would get through most disasters. The real question was how will the rest of the city get through without some training. As an example, look at Katrina. Fire, law, EMS, and all other first responders have gone back to what they are supposed to do, to be first responders. Now it's up to everyone else in local government to put the community back together again. That’s not what we pay law and fire and EMS to do.
Amy Sebring: I forgot to mention up top that you can check out a brief podcast interview with Mike that is now linked from our home page, and he tells us a little about how he got involved with teaching.
Question:
Linda Cowart: A comment on bidding issues - During the 2004 and 2005 hurricanes (we sustained damage from seven hurricanes), here at University of Florida we used Construction Managers (CM's) that were already on contract with UF. FEMA accepted the invoicing/costs for the work completed by these vendors with us providing a copy of the individual contracts with these vendors. Perhaps it depends on who at FEMA is reviewing the PW's.
Mike Martinet: Yes, that can be the case. Also, very important is how the material is presented. I'm studying a real life case from the Northridge earthquake. The hospital in question did almost everything wrong from the very beginning. If I were a FEMA inspector, I would certainly question anything that came from this organization.
On the other hand, I know of one city that put together such a professional looking package that FEMA actually sent them a letter thanking them for the great work. I have a copy of that letter and I use it in my classes.
Amy Sebring: Hmmm, had they taken your class by any chance Mike?
Mike Martinet: Actually, the lady used some of the forms that I had developed in Excel format.
Comment:
Norma Houston: On bidding, Linda, I agree - pre-positioned contracts are very helpful and have been by and large accepted by FEMA - with DOCUMENTATION, of course!
Mike Martinet: Regarding pre-event contracts, a normal contract for tree trimming probably wouldn't be accepted by FEMA because if the contract is applied to green waste removal the quantities after a hurricane would be so vastly different that FEMA would expect to get much better rates because of the quantities involved.
Question:
Amy Sebring: Can we segue into a little about the current Pilot Program here Mike, which appears to encourage the pre-positioned contracts for debris removal at least?
Mike Martinet: Pre-event contracts are so important. I've gotten some of my cities to create them. It helps to track disaster related costs. The vendors like them, because it helps them track their goods when they are properly created; FEMA likes them, because they can follow the costs and it shows FEMA that this is an agency that is on the ball.
Question:
Craig Haner: Working in NOLA, I have seen trouble with determining the condition of, say, a road before the disaster. This presented troubles with how much FEMA would, or what percentage, cover. And would it be best to restore not just using the 51% rule for PA? Any proposed solutions up and coming?
Mike Martinet: Roads are special. Most of the streets in the communities that I travel in would not be eligible for FEMA reimbursement in my opinion, because they are not currently well maintained. FEMA's position generally is we will help you get back to where you were before the disaster but we won't fix the problems that existed before the disaster that you weren't taking care of. This is their general approach. It can vary from situation to situation
Amy Sebring: Is pre-disaster documentation of condition of public facilities useful? e.g. photos etc.?
Mike Martinet: In my opinion, little else is more important. An agency must be able to document damage. That's tough to do after a significant event without proof of what things looked like before the event. The same way that an insurance adjuster isn't interested in just my word regarding what I lost in a fire. If I live in a 50,000 dollar home, he'll be suspicious if I'm claiming a 40,000 dollar bedroom set.
Question:
Riley Kyle: Related to the consistency issue, the Public Assistance Officers from each state meet at EMI each fall and the lack of consistency is always the number one issue.
Mike Martinet: I can understand this. Like everyone else, they have training problems when a major disaster happens. They suddenly have to hire lots of outside help. They can't possibly give these temps enough training. If they did, they would never get out into the field where they're needed. It's an imperfect system. Again, we have to know the system, because we can't trust them to be perfect.
Question:
Norma Houston: On debris contracts, what standard is FEMA currently using for measuring quantities - cubic yards or tonnage? It seems to change every disaster I've worked.
Mike Martinet: Well, that question gets my favorite answer - it depends. Who's doing the debris removal? What's their track record? How substantial is the monitoring? FEMA will always try to pay out the least amount of money. We need to know what is eligible.
Remember, Public Assistance is not an entitlement program and FEMA has enormous latitude in how they interpret the law. This is why we need to be so familiar. I suspect that many agencies would benefit from having a consultant who does this kind of work all the time be involved. They know the ropes.
Question:
Amy Sebring: Last question today. Mike, we are going to focus on the Stafford Act later this fall, but if there were just one thing you could change relating to the Public Assistance program, what would it be?
Mike Martinet: I think that all the changes in the Stafford Act won't mean much if local agencies don't know it better than they do now. The Stafford Act isn’t going to become an entitlement program so we will always have to be on our toes.
[Closing]
Amy Sebring: That's all we have time for today. Thank you very much Mike for an excellent job and we appreciate your time and effort and sharing this information. I believe you had an email address for your project. Would you like to put that up?
Mike Martinet: disaster.finance.policy.project@gmail.com
Amy Sebring: Again, the formatted transcript will be available later today. If you are not on our mailing list and would like to get notices of future sessions and availability of transcripts, just go to our home page to Subscribe.
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Our next session will be August 27th when our topic will be First Responder Guide to the Media.
Thanks to everyone for participating today. We stand adjourned but before you go, please help me show our appreciation to Mike for an excellent job.