In October 2007, an innocuous-sounding item was published in the Federal Register and implemented after a 30-day comment period. The notice was a ruling that the Federal Emergency Management Agency (FEMA) was changing how it reimburses states for management costs associated with disaster declarations - abandoning a sliding scale in favor of a 3.34 percent flat rate all funds allocated to handle a disaster.

Although the change to the management costs provisions of the Robert T. Stafford Disaster Relief and Emergency Assistance Act hasn't had widespread impact yet, state emergency management officials are alarmed by what they see as an effort to shift more costs to the states.

"This is the No. 1 regulatory issue in emergency management right now," said Kristin Robinson, government relations director of the National Emergency Management Association (NEMA). "This is the heart attack issue."

State emergency management officials argue the rule slashes funding FEMA disburses to states through its Public Assistance Grants Program , which is allocated for infrastructure such as roads, government buildings, debris removal, overtime for first responders and sandbagging. FEMA's James McIntyre, acting press secretary, said the rule change won't impact how state and local agencies manage disasters.

Last year, NEMA surveyed its members and found the average administrative and management costs for the Public Assistance and Hazard Mitigation grant programs was 6.21 percent, which is 2.87 percent more than FEMA will pay under the new rule.

Robinson said FEMA based its percentage rate on historical payment data between August 1998 and July 2004, but those figures didn't include several major hurricanes that occurred later in 2004 and would have pushed the figure much higher. "Why they did that is the million-dollar question," she said. "We have tried to engage FEMA in dialog and debate about this and have not been successful."

John R. Gibb, director of the New York State Emergency Management Office, called the issue a huge concern. "As the Stafford Act has evolved, we've seen the necessity of states taking an active leadership role to help local communities that are dealing with damage during a disaster," he said. That requires state or contract personnel to do initial damage assessments and develop project worksheets. "Always in the past, we could recoup eligible costs from FEMA," Gibb said, "but this rule rolls back paying for that."

Pitting States Against Locals

New York's last disaster declaration was in August 2007, so the rule hasn't impacted the Empire State yet. But Gibb's office has reviewed New York's last nine disaster declarations and compared the federal funding for management costs it received to what it would have received at the new 3.34 percent flat rate. "The difference was $33 million," Gibb said. "This is also going to pit states against local governments because those funds are normally split with subgrantees."

Doug Hoell, director of North Carolina's Division of Emergency Management, did similar cost studies. "We compared this to several large disasters we have had over the last several years, such as Hurricane Floyd, and it always comes out we'd get considerably less than using the sliding scale," he said. At a time when states and local governments face tighter budgets, it's an issue for all states, Hoell said.

Gibb believes flexibility was the key to previous Stafford Act declarations. His office would meet with a federal coordinating officer, look at the disaster's scope and discuss the necessary state administrative costs. "We might need a certain number of retired or contract employees to go out into communities and help. And we would reach an agreement with that federal coordinating officer," he said. "Now that flexibility is gone and we think there won't be enough to meet the needs." Although he admits the funding change is a complex, "wonkish" issue, Gibb believes it's an important topic to discuss with FEMA and Congress because of the potential

David Raths  |  contributing writer