Common Reasons for FEMA Denial of Funds After Disasters

Local governments and nonprofits trying to recover from major disasters have sometimes learned the hard way that money spent on protective measures, cleanup and rebuilding is not always reimbursed by the U.S. government.

The Associated Press analyzed more than 900 final appeals of public assistance from the Federal Emergency Management Agency over the past decade. A look at some of the common reasons money is denied, with examples:

A common point of dispute is whether work undertaken by cities, counties and other governmental bodies was vital to address an “immediate threat” to life or property.

Sticking tightly to its definitions, this means that some appeals can be denied even when FEMA acknowledges that particular protective measures were the right thing to do.

In early 2009, heavy rains and melting snow caused flooding in parts of Washington, leading to a leak in the earthen abutment of the Howard Hanson Dam, nearly 50 miles southeast of Seattle. While repairing the dam, the U.S. Army Corps of Engineers warned downstream communities that they could be at increased risk of flooding if another severe storm hit.

Officials in King County and several cities placed giant sandbags atop downstream levees, erected flood guards around facilities such as a jail and sewage treatment plant, and temporarily relocated the county election office.

The governments sought a combined $38 million from FEMA. Upon denial, local officials flew to the nation’s capital with what they described as “a mountain of evidence” in favor of a scaled back appeal for $31.5 million.

“FEMA staff told us, ‘We understand why you did what you did, and it was a reasonably prudent thing to protect the public,”’ said Mark Isaacson, King County’s wastewater treatment director who at the time led its flood control division. But “it didn’t fall within their definition of imminent flooding.”

So the local governments ate the costs, delaying other levee projects while taking money out of various funds.

FEMA also can face difficult calls on whether damaged buildings should be replaced or repaired. Its rules say they should be fixed if doing so would cost less than half of what it would cost to build new. But those calculations and decisions are often disputed, sometimes even within the agency.

The University of Iowa’s recovery from a 2008 flood focused attention on the so-called 50 percent rule. FEMA initially promised $297 million to replace a flooded performing arts auditorium and a flooded art school building, but ruled that the school’s damaged art museum should be repaired at its same location for $5.2 million.

The university had requested $40 million to rebuild the museum on higher ground, saying it could no longer find insurance for the $500 million fine art collection at the location on the banks of the Iowa River. But FEMA rejected its appeal in 2012, saying the university’s inability to obtain coverage was a business decision by its insurer.

Two months later, an agency audit concluded that the auditorium and the art building also should not have qualified for replacements – only repairs – because staff erred in calculating the “50-percent rule.” The audit recommended suspending those projects and cutting $83.7 million in funding, outraging university officials and Iowa politicians. FEMA officials ultimately rejected the audit’s findings and allowed the projects to go forward.

The school remains without an art museum, and its 12,400-piece collection has remained largely unavailable. In June, the university received permission to build a new museum outside the 500-year flood plain using donations and bonds, but the price tag has risen to $50 million.

FEMA often faces another question when deciding what infrastructure projects qualify for money: Was the damage caused by the disaster or prior neglect?

The Cromwell Recreation Center on Staten Island, a community hub since its opening on a pier in 1936, was set to get long-awaited repairs to stabilize its structure in 2010. Contractors for the New York City Parks Department were starting a $4 million project to retrofit the last 100 feet of the pier with concrete and steel.

But just before the work began in March 2010, a nor’easter pummeled the region with strong winds and heavy rains that knocked over and flooded buildings and homes. Two months later, the recreation center and pier partially collapsed into the water.

The city asked FEMA for $125 million to replace the landmark where residents had played basketball, boxed and held meetings, arguing the storm was to blame for the collapse. FEMA rejected the city’s final appeal in 2013, saying the structure collapsed due to pre-existing decay.

“One thousand people a day would use the space, but where do they go now?” said Kelly Vilar, founder of a group pushing to rebuild Cromwell.