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FEMA backs away from reimbursements

WORTHINGTON -- Even though they were told differently, cities in southwest Minnesota may not be reimbursed for regular work hours related to April's ice storm.

It's a change that would cost cities thousands of dollars.

"We had been at the applicant briefings, as well in Jackson and here in Windom, and were told by the FEMA personnel that regular time would be included for debris cleanup," Windom City Administrator Steve Nasby said. "That was the one area where regular hours were eligible. We've obviously put time and effort into preparing all the paperwork that was needed to document that and turn that into FEMA.

"Earlier this month, we were told by our FEMA rep that the OMB, which is the Office of Management and Budget, was telling them that only overtime hours were eligible," Nasby continued. "That was kind of a disconnect between two federal agencies."

For the city of Windom, it will be about $20,000 in aid for which the community won't be eligible.

In Worthington, city administrator Craig Clark experienced the same disconnect.

"May 14th, I believe it was, we had an applicants' meeting with FEMA and at that meeting, they told us our regular hours would be reimbursable as FEMA eligible," Clark said. "We were kind of told different things from different people about whether the regular time would be covered or reimbursable. Some would say no and others would say yes. Other reports we got from Cottonwood County was that regular time was going to be covered. Then, finally, during the meeting on May 14, we felt like we got assurance that regular time hours would be reimbursable and be eligible for FEMA reimbursement."

However, once the city had its own project manager, the story changed.

"Our local project manager came back and told me the regular time hours wouldn't be reimbursable," Clark said. "The explanation was that the Office of Management and Budget out of Washington, D.C., deemed it would not be eligible, contrary to what they told us at the applicants briefing and later at the kick-off meeting.

"Part of the process has been getting the information and understanding it," Clark added. "On this one, it's been told one thing and the decision has been changed."

In Luverne, the cost from the lost reimbursement will be even greater. According to city administrator John Call, the regular hours will cost the city about $70,000.

"Basically, what we decided here was in the aftermath of the storm was ... to clean it up with not only our own forces, but we hired contractors, too," Call said. "We basically cleaned it up and figured it would all shake out. Some would be reimbursed and some wouldn't. We got a lot of ours cleaned up within that first 70 hours.

"Obviously, we have areas that are unfunded -- stump grinding and other tree trimming and things like that we will be doing over the next couple of years," Call continued. "We basically made a decision early on to just clean it up and, 'we'll see what's reimbursable and what's not reimbursable.' With that, we'll just have to live with it."

According to FEMA spokesperson Anita Westervelt, it was an error by the staff person at those meetings.

"In initial meetings with local officials, FEMA field staff erred in their explanation that reimbursement for 'straight time' cost for debris removal would be available to communities for this disaster," Westervelt said. "We regret any confusion and will continue to work with the impacted communities to ensure that they receive all eligible assistance. Through FEMA's Public Assistance program, state and local governments can receive 75 percent of their eligible disaster related costs from federal funding. This can significantly reduce the financial impact to communities as a result of this severe winter storm."

The change happened because of a misunderstanding with the Sandy Recovery Improvement Act of 2013. It was signed into law on Jan. 29, 2013, by President Barack Obama.

"The Sandy Recovery Improvement Act of 2013 authorized FEMA to make significant changes to some of our disaster assistance programs," Westervelt said. "Included in these changes is the authority to reimburse state and local governments for certain debris removal costs incurred by using municipal staff. However, at this time, the regulatory framework and policy guidance, which are necessary to ensure that these authorities are properly implemented, has not been finalized."

Westervelt wasn't sure when those changes would be implemented moving forward.

"In the past, we have not paid the regular time hours, and the theory behind that was because that was budgeted," she said. "Since then -- and why the law was passed was because -- even though that was budgeted by the cities and counties, the disaster and debris removal brings different work for those individuals. The regular hours or their regular jobs, which are budgeted for, still need to be done."

In the Oklahoma disaster, regular time was paid. However, Westervelt stressed it was as part of a pilot program.

Gaining attention

The issue has gained attention through the state, and in Washington, D.C., as well.

Kris Eide, Director of Minnesota Homeland Security and Emergency Management, has sent a letter to lodge an official complaint against OMB and FEMA.

"My staff, along with FEMA, conducted applicant briefings the week of May 13," Eide wrote to Andrew Velasquez III, Regional Administrator of FEMA Region V. "During those briefings, they discussed the implementation of the changes to the Stafford Act. On June 5, I was notified by the Federal Coordinating Officer for DR4113 that FEMA and OMB were implementing this new alternative procedure on a case-by-case basis and was not extending this option to the state of Minnesota. I was surprised and disappointed by that news."

The national political delegation has also taken notice.

Minnesota Sens. Amy Klobuchar and Al Franken, as well as Rep. Tim Walz, sent a joint letter to Sylvia Mathews Burwell, Director of OMB, and William Craig Fugate, Administrator for FEMA.

"We are troubled to learn that the Federal Emergency Management Agency (FEMA) has yet to implement a key provision in the Sandy Recovery Improvement Act of 2013,which is impacting the federal reimbursement for emergency cleanup activities in Minnesota," the delegation wrote. "... Consistent with the change in the law FEMA officials informed local government officials as well as staff from our offices that cleanup work by public employees would be covered as an eligible expense for reimbursement."

Local impact

Between Worthington, Luverne and Windom, the total regular-time hours is equivalent to $110,000 in compensation. However, other projects were delayed as city crews worked to clean up debris instead of completing their normal tasks.

"We have people on staff and we are going to pay them whether we were cleaning up debris or doing something else anyway," Nasby said. "What that $20,000 does for us is there are projects we didn't get done. We had some sealcoating and street patching and things like that didn't get done, so we are either going to have to spend more hours doing that over the course of the year or possibly have more overtime hours over the course of the year to catch up on some of that stuff."

The time spent by contractors in all three cities is reimbursable by FEMA.

"We were trying to be proactive with getting the debris cleaned up," Nasby said. "If we would have had to go through and get contractors, we couldn't leave all the trees and branches and stuff that was down laying in the roads. It was a public safety issue. We needed to commit our staff to getting that cleaned up. To say, 'Do what you're normally going to do,' you just can't do that with the type of debris that we had laying around."

In Luverne, Call explained the decision was made despite not knowing how -- or if -- the money would be reimbursed.

"We weren't happy with that, but we'll have to live by the decision," Call said. "We made the call at the time to clean up everything right away. Sometimes you just have to make those calls, and that was a call we made. We knew that we might have to pay some more out of pocket because of it, but our mayor and council were supportive of it because we had a heck of a mess and we knew it had to be cleaned up one way or another."

State impact

As the out-of-pocket expense rises for the cities, the state's share for the unmet need will be drained even quicker.

The state legislature passed $1.5 million to match the 25 percent not covered by FEMA. It also passed another $250,000 for extra clean-up costs not covered by FEMA.

"A lot of it goes to stump grinding and obviously trees in the right of ways that we probably will still have to be working on over the next couple of winters," Call said. "We do have a backlog now of trees to work on. If we trying to quantify that, and if you put the man-hours and equipment hours in there, you're probably talking somewhere from $100,000 to $150,000. It adds up pretty fast when you have equipment and man-hours."

In Worthington, the city council approved $100,000 for shaping and trimming of trees that were not FEMA-eligible. However, that only covers about 25 percent of the trees in the community, meaning there would be up to $300,000 more necessary to finish the rest, according to Clark. The council has also discussed up to $150,000 for stump grinding.

Given some of the numbers for unmet need, Call doesn't believe there will be enough in the pot for each community in the five-county area.

"Our legislators did a good job and likely tried for more than that," Call said. "Some of the disaster will fall back on us as individual cities to have to clean up ourselves. That's OK, too. As a local government, you should have some reserves to fall back on for emergencies, and we do here in Luverne. It would have been a hard call to make to cover all the unmet needs. But I don't think the $250,000 will cover it for the five-county area."

Call, though, hopes to get what he can for Luverne.

"I do appreciate Rod Hamilton and for us over here Joe Schomacker and Bill Weber -- I know they were trying to get what they could for us," he said. "I do appreciate that. We certainly won't turn it down. We'll turn in our unmet needs through the county, and we'll certainly be thankful for what we get."

Community Content Coordinator Aaron Hagen can be reached at 376-7323.