In January, DHS Secretary Michael Chertoff announced a shift in funding toward urban areas rather than just cities. The 2006 UASI funds provided $765 million directly to high-threat urban areas. "This year we've identified 35 areas that are eligible to compete for these funds. Now, I want to use the word 'area' very deliberately," he said when announcing the funding shift. "The 35 areas we're talking about encompass 95 cities with populations of 100,000 people or more. A single urban area may, in fact, include several cities. For example, what we have identified as the California Bay Area consists of Oakland, San Francisco and San Jose, as well as other smaller communities."
The DHS was widely criticized when it was revealed that New York City and Washington, D.C., had their UASI grants slashed by 40 percent from fiscal 2005. New York City officials were aghast at the reduction, and even suggested the DHS had declared war on their city. District officials also were angry about the cutback, and shocked that two of the nation's top targets could have their funding reduced so drastically when other states and urban areas received an increase in funds over the previous year.
Several factors contributed to lower funding for some of the nation's most obvious at-risk areas, according to state and local officials. Congress cut the overall amount of homeland security funding for fiscal 2006, and over-assessment of assets in some locations diverted dollars to lower-risk areas. However, the data used for the allocations is being refined, according to DHS officials, and the process for 2007 will be more efficient.
Inconsistent Mission?
Missouri received roughly $12 million more in overall homeland security grants in fiscal 2006 from the Homeland Security Grant Program (HSGP) that funds states. Charlotte, N.C., received an increase of more than $3 million under the UASI program -- which funds the 35 urban areas designated as high risk -- and Louisville, Ky., got about $3.5 million more in UASI funds in 2006 than in 2005.
The public line prior to the grants' release was that 2006 funds would be based on an all-hazards approach -- natural and manmade disaster prevention and management -- and based on risk, meaning the areas most at risk would receive the most funding.
But the actual funding levels, once announced, didn't seem consistent with an all-hazards, risk-based formula, according to some.
"None of this makes sense," said Vince Morris, communications director for Washington, D.C., Mayor Anthony Williams. "The biggest targets have been -- and remain -- New York City and Washington. We know that."
Criticism came from multiple sources, not just those in areas that received cuts. "Clearly we have a lot of doubts about it," said Lee Hamilton, co-chair of the 9/11 Commission. "I'm disappointed that the analysis by the DHS led to proposed cuts in homeland security for New York and Washington. The terrorists targeted New York and Washington. They are symbols of American power. The terrorists have indicated they want to go after symbols of power, and it would seem to me that New York and Washington needed to not have their funds reduced, but increased."
New York City received nearly $124.5 million UASI funds in 2006, compared to more than $207.5 million in 2005; and Washington, D.C., got nearly $46.5 million in 2006, compared to $77.5 million in 2005.
The cuts could stall homeland security projects under way, and force government officials to alter spending plans.
Washington, D.C., officials said they had hoped to invest $25 million into a communications system for first responders, but will instead invest $5.5 million. A plan to purchase extra hospital beds and cots in the event of a catastrophe was set back because the funding for that project will be cut from $4 million to $700,000.
"If you get half of what you ask for," Morris said, "you can do half of what you planned to do."
Arizona officials saw their HSGP funding slashed by 60 percent from 2005, and therefore notified the DHS that due to lack of funds coupled with event cost, they may not be able to host a planned TOPOFF (Top Officials) exercise in 2007.
After summertime negotiations with the DHS, the exercise's duration was cut from 10 days to a three- to five-day exercise so Arizona could host it, said Julie Mason, a spokeswoman for the Arizona Office of Homeland Security. "It wasn't going to be feasible for us to participate unless some scope of the exercise changed," she said.
Phoenix, however, informed the Arizona Governor's Office that it will not participate in the exercise because of the cuts.
Slicing a Smaller Pie
Any analysis of the funding allocations must be tempered by the fact that the total number of dollars for homeland security was cut almost in half, said Michael Greenberger, director of the University of Maryland Center for Health and Homeland Security. "The pie itself should never have been reduced," Greenberger said. "The needs are simply just too great."
Overall funding was reduced, Chertoff said to The New York Times in June, because "Congress gave us about $600 million less for our grant programs, including $125 million less for the urban areas initiative."
Congress hasn't been impressed with how states and urban areas spent previous homeland funds, which is why it cut funding for fiscal 2006, according to James Carafano, senior fellow at the Allison Institute for International Studies. "Spending has not produced value commensurate to the investment."
Greenberger said there was no rhyme or reason to the way the pie was sliced in 2006, and criticized the DHS for not questioning recommendations from the peer groups -- homeland security officials and first responders from outside the applicants' jurisdiction -- that evaluated the applications. The peer groups were tasked with reviewing applications and evaluating them on risk-based criteria as set forth by the DHS. States and urban areas have questioned the evaluation process, and asked to know what data was considered and how it was critiqued.
"With regard to how the smaller pie was cut up, there was a lack of adult supervision. This was one of the most important decisions to be made by [the DHS]," Greenberger said. "In my view, it was not looked at [by] the highest levels of government, and you sort of have garbage in and garbage out."
In enlisting the peer groups, the DHS sought a nonbiased, risk-based funding allocation process, but the process was flawed, Greenberger said. "There were no uniform standards about how the judging was to take place," he said. "Problem No. 2 is in the intent to have objectivity by having strangers reviewing the applications, you lost expertise as to what each jurisdiction's needs were."
Unanswered Questions
Officials from states and urban areas whose funding was reduced were left to guess why they got less and what allocation formula was used as a determinant.
"Arizona is like so many other states where everyone is scratching their head a little bit, wondering what formula was used," Mason said. "We don't know the details of the formula; we've requested it, but haven't been provided that."
Washington, D.C., officials read in The Washington Post that their application, along with New York's, was incomplete or flawed in some way. They disputed that notion, and argued that risk should have been the deciding issue anyway. "It should be done purely based on need and risk assessment," Morris said. "And it doesn't take a rocket scientist to tell you that the nation's Capital, which was the target of two of the four planes on 9/11, was obviously a target -- if not the target -- and continues to be one."
The lists of targets submitted by states and urban areas -- which included a kangaroo conservation center, a bean fest and a bourbon festival -- was a source of criticism. Indiana's list of infrastructure listed 8,591 assets and New York's listed 5,687.
Morris called the list laughable. "Even if they were correct and our application was done with crayons or something, it's insane to say the quality of the application should determine where the resources go," Morris said. "We've said if there are areas where [the application was incomplete] show us, tell us, and we've yet to get the answers."
Westchester County, N.Y., went so far as to submit a Freedom of Information Act request to learn how the funding decisions were made, but hadn't received that information as of September, according to Anthony Sutton, commissioner of the Westchester Department of Emergency Services.
"When you don't have that, you can only surmise that the lack of information indicates that it may be less than an exact process, if you know what I mean," Sutton said. "And certainly at some point in time, the decision-making process does come down to one's best judgment at that time and we understand that, but we'd love to know what the overarching guidelines are and what criteria they're using to arrive at the data."
Inside the Process
Developing a risk-based formula is an evolutionary process, said Chris Geldart, assistant director of Maryland's Department of Homeland Security, who was in one of the peer groups that reviewed some applications for the DHS. He also said that an understanding of what that means is necessary to help states and urban areas maximize their potential to collect needed funds next time around.
Reviewers are not just looking at infrastructure and terrorist threats, he said, but also homeland security strategy, programs put in place and their effectiveness; and regional collaboration. "How are states using their money to attain their strategy? That's kind of what they were looking at, but also how can we make it so that the funding is going to the highest risk areas?"
The Washington, D.C., area has been slow to spend homeland security money granted between 2002 and 2004, missing a 2005 deadline to spend $46 million that had been available for two years, according to a Washington Post story. Morris said Washington, D.C., has spent its money wisely since 9/11, developing radio interoperability between first responders and a state-of-the-art command center. He said there is still much to do, and the spending can't be done all at once.
Though some sources privately acknowledged that New York and Washington, D.C., had received a lot of money since 9/11, and that some of that money is still being spent, Geldart said there was no evidence that previous funding levels influenced 2006 allocations. "I don't think that was the thought process," he said. "You have to remember that it was compounded by the fact that there was a big cut in the amount of money available to the program. It's a new process; everybody is getting used to it, trying to understand it and trying to make it better."
New York has been criticized for using homeland security funds to pay overtime for police and fire personnel, which Geldart said is common among states and urban areas, but that wasn't acknowledged in the application process. "That doesn't really go into the application itself," he said. "I didn't see that as a program in there, but that is what a lot of states and urban areas do."
Charlotte Mayor Pat McCrory, whose city received an increase in funding for 2006, said operating costs, including overtime, was a big factor in the allocations -- or lack thereof. "The big issue continues to be operating costs, and what we shouldn't be doing is using homeland security funds to supplant existing city funds needed for everyday public safety needs," he said. "I'm not going to state which cities those are, but in some cities, there's a danger of using homeland security funding for everyday public safety needs."
Greenberger said punishing New York City with fewer funds because the city used the money for overtime is a mistake. "When you have scares on the subway system, the only reliable response is to staff up on police or other first responders monitoring the subway," he said. "To second-guess New York City about how they're going to deal with this kind of threat is a mistake."
McCrory said Charlotte got high marks for its efforts to regionalize spending in the area by sharing the cost of projects with its neighbors. "We have not acted as an isolated city, but as a region in determining how that money should be spent, because if a regional disaster occurs, we all have to respond together, not just each unit of government separately," he said. "The less segregated you are in the application process, the more efficient you'll be in the way you spend your money. The more you create regional teams, the more effective you'll be in spending the money, and I think that's looked upon favorably."
Geldart confirmed that efforts at regional planning received high marks during the application evaluation process. "There were some applications that had some really good regional stuff within a state or urban area, and those were looked on favorably."
On the other hand, he said the regional plans that crossed state lines were more difficult to evaluate and less likely to yield a high score. "I know from sitting in my group we looked at anything that had a real regional impact in the application, and that was absolutely marked high," Geldart said. "But anything that would deal with multiple states, there may have been an issue with correlating what one state was saying to what another state was saying."
All-Hazards-Based Grants?
That the 2006 UASI grants were advertised as all-hazards funding -- meaning a state or area could use it for natural or manmade disasters -- may have been misleading, Geldart said.
Arizona, though one of the driest states, is also very prone to serious flooding. That risk should have been a factor in the 2006 funding decision, state officials contend. "Because it gets so dry, when it does rain, it really floods," Mason said. "We have floods, wildfires, and prepare for them with homeland security funds. There's been a shift, which I think is a good one, that funds are not just being used for anti-terrorism, it's for all hazards."
But that wasn't reflected in the application process, Geldart said. "From our state perspective and everything we were told [by the DHS] and we saw, this funding was going toward terrorism funding -- prevention, response and recovery from a terrorist event. Now most states and every state that I've seen -- Maryland especially -- we look at how we can use this funding as dual use. So if we're going to buy something for the first responder, let's buy something, No. 1, they can use on their everyday job if at all possible, and No. 2, that can be used in both manmade and natural events."
But there is really no distinction between homeland funding and emergency management funding, said George Foresman, undersecretary for preparedness for the DHS, adding that 70 percent of funding for a terrorist event can be used to mitigate a natural disaster and vice versa.
"We've created -- not through policy and not through law, but through practice -- artificial distinctions, and that's why having the stakeholders at the table and saying, 'Look it's not about preparing for terrorism, it's not about preparing for natural disasters,'" Foresman said. "Homeland security is emergency management and emergency management is homeland security."
Fiscal 2007 Funding
Greater transparency in the process is a goal for 2007, Foresman said. "I've been in this business for more than 20 years," he said. "You've got to be able to articulate to a mayor or a county executive with a degree of certainty and of understanding, what is it that you're using by which to make the allocations."
Foresman said the risk analysis model won't change much for 2007, but the data sets used to determine allocations have been revised. "In the case of a lot of the metropolitan areas, such as Las Vegas, they had a number of issues they wanted to make sure we considered," he said. "We've been working closely with all of those urban areas to make sure we've got a solid data set by which to do this."
Foresman also acknowledged that the funds were disbursed "way too late" in 2006, and wants 2007 funds out by the end of this calendar year.
Geldart also noted this move toward greater transparency by creating what he called the Transparency Initiative, where DHS officials will meet with state and local representatives, and discuss what the agency considers as risk when evaluating applications.
The DHS will also let states and urban areas vet some of the data used to determine 2006 funding levels, and develop work groups to define and create an effective risk-based model, he said, adding that state and local government officials would do well to further educate themselves on the methodology used by the DHS to determine risk.
"Going forward, the best thing the urban areas can do is understand the risk pieces that the DHS is looking at for their area," Geldart said. "They have to work with their preparedness officers from the DHS and the Office of Grants and Training."
Through that process and working with the DHS, he said, the preparedness officer would explain to them what in their case is being considered for risk assessment.
"States and urban areas should be keeping their ears to the ground," Geldart said, "hearing what's going on with this risk stuff, and how they can get involved and better understand what their risk score is."
