8/13/08 EIIP Virtual Forum Transcript: Public Assistance Cost Recovery 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. We want you to feel comfortable about participating, and we will be giving instructions as we go along. Amy Sebring: 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. Amy Sebring: 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. Amy Sebring: 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 ] Amy Sebring: First, for the benefit of our first-timers, we will go over the order of business. We will begin with a presentation and then we will proceed to your questions and comments. Amy Sebring: We will provide further instructions just before we begin the Q&A section. You may want to begin composing during the presentation, but we ask you NOT to submit your question or comment until we get to that part of the program, since it is possible that your question will be addressed later in the presentation. Amy Sebring: A formatted transcript of today's session will be available by later this afternoon -- just check back on our home page or the background page (refresh the page if needed). Amy Sebring: Please take a moment after the session to rate this session in terms of usefulness of the information and/or write a short review or post a comment. I will mention more about that in our closing. Amy Sebring: Finally, please do not send private messages to our speaker or the Moderator, as we will be busy with the presentation. If you need assistance, you may send a private message to Avagene. Amy Sebring: 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. Amy Sebring: He has a Master's degree in Emergency Services Administration from Cal State University, Long Beach, is a Certified Emergency Manager (CEMŽ) from the International Association of Emergency Managers, and served six years on the CEMŽ Commission. Amy Sebring: 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. Amy Sebring: 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. Mike Martinet: Good Morning Everyone, Let's get right to the topic. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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: Mike Martinet: FF90-123 Force Account Labor Summary Record FF90-124 Materials Summary Record FF90-125 Rented Equipment Summary Record FF90-127 Force Account Equipment Summary Record Mike Martinet: 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. Mike Martinet: It is the responsibilities 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: Information on the public assistance process is available on the FEMA website at: http://www.fema.gov/government/grant/pa/9500toc.shtm and at: http://www.fema.gov/government/grant/pa/padocs.shtm and at: http://www.fema.gov/government/grant/pa/index.shtm Mike Martinet: These and other documents on the FEMA website will provide excellent information on how the public assistance process works. The essential documents include: Mike Martinet: FEMA 321-Public Assistance Policies. FEMA 322-Public Assistance Application Procedures FEMA 323-Public Assistance Questions and Answers FEMA 325-Debris Management Guide Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: Except for the first 70 hours after a disaster (exercise caution with this), emergency work must be bid according to the agencies normal procedures. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: 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. Mike Martinet: In an effort to help agencies be better prepared, I am starting what I call the "Disaster Finance Policy Project." The goal is to collect policies and procedures that agencies already have in place that help in tracking disaster costs and getting FEMA reimbursement. I am particularly interested in those policies that people have implemented based on lessons that they learned as a result of a disaster they went through. I want to help other agencies avoid the most common mistakes of disaster cost recovery. Mike Martinet: 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." Mike Martinet: Back to you Amy. Amy Sebring: Thank you very much Mike. Now, to proceed to your questions or comments when we canget into some more detail. We are using the Moderation feature today. When you click on Send (or hit the Enter key), your question or comment will not go directly to the screen... Amy Sebring: Instead, it goes to a Moderator's Admin Panel, to be released into the chat at the appropriate time. We will take the questions or comments in the order submitted. Please be patient as it may take some time to get to yours, if there are several ahead of you. Amy Sebring: Please do NOT submit multi-part questions or very lengthy comments. Instead, if you have a second question or a follow up question, please compose and submit it separately. Amy Sebring: We are ready to begin now, and you can enter your question or comment anytime you are ready. We especially want to hear your comments about any specific experience you may have had in this area. 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. Mike Martinet: Failure to submit complete documentation. Amy Sebring: Mike, how about lack of policies with respect to overtime? Mike Martinet: Overtime is a touchy subject... Mike Martinet: For emergency response, overtime is paid, but not straight time.. Mike Martinet: for recovery and rebuilding, both overtime and straight time can be eligible... Mike Martinet: For exempt employees, however... Mike Martinet: FEMA will reimburse "disaster overtime" only when a pre-existing policy is in effect... Mike Martinet: and that policy must meet some stringent criteria... Mike Martinet: I have seen some policies that failed FEMA's tests... Mike Martinet: event though the locals thought they were fine. 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... Mike Martinet: First of all disasters are political events... Mike Martinet: Some disasters victim agencies fare better than others... Mike Martinet: Also, just because an agency is eligible, it doesn't mean that all their damages are eligible. Mike Martinet: Please understand that under the constraints of this forum, these answers are very short... Mike Martinet: and the real answers are quite complex. Amy Sebring: Mike can you give an example of ineligible damages ... Amy Sebring: e.g. golf courses etc? Mike Martinet: Sure, for instance, while public recreation facilities may be eligible, landscaping is not. Amy Sebring: Thanks... 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... Mike Martinet: I have developed a list of over fifty policies and procedures that should be evaluated... Mike Martinet: to assist cities and agencies in being better prepared for disaster cost recovery. 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. Mike Martinet: I will say, that FEMA's policies usually don't receive a warm welcome at the local level. 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... Mike Martinet: There should be "disaster" versions to give agencies more flexibility during a declaration. 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... Mike Martinet: However, there's lot's of information that they don't provide... Mike Martinet: and situations are constantly changing which makes interpretation difficult for locals. 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... Mike Martinet: The real answer is that the burden of proof falls on the locals... Mike Martinet: We have to know the system better than the Feds, and even then, we can't always prevail. Shandi Treloar: I would be interested in seeing that list you've developed. Mike Martinet: Thanks for the segue... Mike Martinet: In the next issue of the IAEM Bulletin, there will be an article about the project... Mike Martinet: and I hope the complete list, or at least an on line link to it, will be included. 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... Mike Martinet: For instance, a wounded vet, that is treated for this or her injuries... Mike Martinet: doesn't have much of a life, if they can't fully recover... Mike Martinet: from everything else associated with the injury, the mental trauma, etc... Mike Martinet: The same is true for communities... Mike Martinet: Halting the crisis phase is only a small part of the equation... Mike Martinet: How the community re-builds itself is the real issue... Mike Martinet: Will they come back the same (or worse off than before)... Mike Martinet: or will they take advantage of the adversity to become stronger? Rick Brown: I have been through 3 disasters in my county in Kansas in the past 7 years. Each time FEMA does thing different. 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... Mike Martinet: They constantly get new people... Mike Martinet: and these people may or may not really care about our community's long term reocvery as much as we do. Mike Martinet: I'm not FEMA bashing, these are just the facts of life... Mike Martinet: no one really will take care uf us like we will. 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,... Mike Martinet: police, fire and EMS would get through most disasters... Mike Martinet: The real question was how will the rest of the city get through without some training. Mike Martinet: An example... Mike Martinet: Look at Katrina... Mike Martinet: fire, law, EMS, and all other first responders... Mike Martinet: have gone back to what they are supposed to do... Mike Martinet: be first responders... Mike Martinet: Now it's up to everyone else in local government to put the community back together again... Mike Martinet: 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. 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... Mike Martinet: Also, very important is how the material is presented... Mike Martinet: I'm studying a real life case from the Northridge earthquake... Mike Martinet: the hospital in question did almost everything wrong... Mike Martinet: from the very beginning... Mike Martinet: If I were a FEMA inspector, I would certainly question anything that came from this organization... Mike Martinet: on the other hand, I know of one city that put together such a professional looking package... Mike Martinet: that FEMA actually sent them a letter thanking them for the great work... Mike Martinet: 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. Amy Sebring: Comment from Norma relating to Linda's 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... Mike Martinet: A normal contract for tree trimming probably wouldn't be accepted by FEMA... Mike Martinet: because if the contract is applied to green waste removal... Mike Martinet: the quantities after a hurricane would be so vastly different... Mike Martinet: that FEMA would expect to get much better rates because of the quantities involved. 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... Mike Martinet: I've gotten some of my cities to create them... Mike Martinet: It helps to track disaster related costs... Mike Martinet: the vendors like them, because it helps them track their goods... Mike Martinet: when they are properly created, FEMA likes them, because they can follow the costs... Mike Martinet: and it shows FEMA that this is an agency that is on the ball. 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... Mike Martinet: Most of the streets in the communities that I travel in would not be eligible for FEMA reimbursement in my opinion... Mike Martinet: because they are not currently well maintained... Mike Martinet: FEMA's position generally is we will help you get back to where you were before the disaster... Mike Martinet: but we won't fix the problems that existed before the disaster that you weren't taking care of... Mike Martinet: This is their general approach... Mike Martinet: 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... Mike Martinet: An agency must be able to document damage. That's tough to do after a significant event without proof... Mike Martinet: of what things looked like before the event... Mike Martinet: the same way that an insurance adjuster isn't interested in just my word... Mike Martinet: regarding what I lost in a fire... Mike Martinet: If I live in a 50,000 dollar home, he'll be suspicious if I'm claiming a 40,000 dollar bedroom set. 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... Mike Martinet: Like everyone else, they have training problems... Mike Martinet: when a major disaster happens... Mike Martinet: they suddenly have to hire lots of outside help... Mike Martinet: they can't possibly give these temps enough training.... Mike Martinet: If they did, they would never get out into the field where they're needed... Mike Martinet: It's an imperfect system... Mike Martinet: Again, we have to know the system, because we can't trust them to be perfect. Norma Houston: On debris contracts, what standard is FEMA currently using for measuring quantities - cubic yard or tonnage? It seems to change every disaster I've worked. . . Mike Martinet: Well, that question gets my favorite answer... it depends... Mike Martinet: Who's doing the debris removal, what's their track record, how substantial is the monitoring,... Mike Martinet: FEMA will always try to pay out the least amount of money... Mike Martinet: We need to know what is eligible... Mike Martinet: Remember, Public Assistance is not an entitlement program... Mike Martinet: and FEMA has enormous latitude in how they interpret the law... Mike Martinet: This is why we need to be so familiar... Mike Martinet: I suspect that many agencies would benefit from having a consultant... Mike Martinet: who does this kind of work all the time be involved. They know the ropes. 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 Mike Martinet: don't know it better than they do now. The Stafford Act isn't going to become an entitlement program... Mike Martinet: so we will always have to be on our toes. 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: Thanks. And thanks to all our participants for great questions and comments. Please stand by just a moment while we make a couple of quick announcements... 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. Amy Sebring: Before we adjourn, please take a moment now, or after you review the transcript to Rate today's session and/or write a review or post your comments. You can access the form either from today's Background Page or from our home page. Amy Sebring: If you do not have time to write a short review or comment, then please just take a moment to do the rating. It should take less than a minute, and will assist future visitors to our site to find useful information. Amy Sebring: Our next session will be August 27th when our topic will be First Responder Guide to the Media. Amy Sebring: We would also like to get your feedback about topics for future Forum programs, and if you have any suggestions, please stay a moment after we adjourn to let us know. Amy Sebring: 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.