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The $7 million question

Jacksonville and Calhoun County are waiting to see whether they’ll hit a dollar limit for the federal government to kick in for tornado cleanup. Here’s why.

  • 3 min to read
Jacksonville and Calhoun County are waiting to see whether they’ll hit a dollar limit for the federal government to kick in for tornado cleanup. Here’s why.

As volunteers and debris-clearing crews work their way across Jacksonville’s storm-damaged hillside, city and county officials are still in the dark about who will ultimately foot the bill for the work.

Jacksonville and Calhoun County expect to pay a total of $4.5 million to clear up debris and fix public property damaged by the March 19 storm. If another $2.4 million in damage pops up somewhere else in the state, the federal government will likely pick up three-quarters of the tab. If not, local governments will be stuck with the entire bill.

“This is a huge bill for a city or a county to have to swallow,” said Jonathan Gaddy, director of the Calhoun County Emergency Management Agency.

Life in Jacksonville was turned upside down by the mid-March twister that plowed along Alabama 204, across the Jacksonville State University campus and into the mountainside residential neighborhoods known colloquially as the Avenues. Two weeks later, piles of debris line the streets like hedgerows, and debris-removal trucks were just beginning to haul that trash away.

To locals, it’s clearly a disaster area. But to get an official federal disaster declaration – and the federal reimbursement that comes with it – someone will have to prove that Alabama saw at least $6,978,414.56 in damage on March 19. That’s because of a formula set up in a 1988 disaster relief law.

“The Stafford Act sets a per capita rate, based on a state’s population in the census and adjusted for the Consumer Price Index,” said Brett Howard, director of recovery for the Alabama Emergency Management Agency. At this year’s rate, a disaster has to cost state or local governments the equivalent of $1.46 per state resident or the federal government won’t pay a dime.

That’s good news for Wyoming, which is home to fewer people than Alabama’s Jefferson County, and bad news for high-population states such as California, New York or Florida. But there’s a rationale behind the formula.

Debris removal

Removal of the tornado debris began in the northeast neighborhoods of Jacksonville Thursday. (Trent Penny/The Anniston Star) 

“States and local governments should be able to provide for routine events, and a tornado is routine event in Alabama,” said Florida emergency management consultant Craig Fugate, who served as Federal Emergency Management Agency director during the Obama administration.

Fugate said the law was built on the notion that states have first responsibility for disaster response, with federal assistance kicking in only in abnormally severe disasters. He said some large-population states actually do set aside money to cover disaster costs. But most states, he said, set aside little or no money, hoping they’ll meet the threshold for federal funds.

Fugate, who was director of Florida’s EMA under then-Gov. Jeb Bush, said Florida quickly got federal money for the multiple hurricanes that hit the state in 2004. But two years later, the state bore the cost of two tropical storms by itself because the damage didn’t reach the federal threshold.

“People gave Bush a hard time for not even applying for federal assistance, but, he said ‘This is what we have a rainy day fund for,” Fugate said.

Alabama set up the structure for a state-level storm recovery fund years ago, Gaddy said, but lawmakers never actually set aside any money for disaster recovery. The fund sits empty, increasing the chance a small community could pick up millions of dollars in cleanup costs by itself.

“These costs could bankrupt some small towns,” Gaddy said.

There’s still a chance the March 19 storm could meet the $7 million threshold. Jacksonville State University has yet to release an estimate of its damage. Howard, of the state EMA, said Etowah County took around $1 million in damage according to initial estimates. Cullman County had non-tornado damage from the same storm, including hail damage to a local government’s vehicle fleet. A tornado touched down in Ashville before the Jacksonville storm, but county officials didn’t have a damage estimate last week.

Much depends on how much insurers will pay. Federal assistance will cover only a local government’s uninsured costs, officials say. Jacksonville State’s buildings are insured by the state Department of Finance, but Gaddy said it’s possible some of them are underinsured — buildings that would cost more to replace than the amount insurance will cover.

Watchdog agencies such as the Government Accountability Office have suggested raising the threshold in order to require states to pay even more out-of-pocket. As FEMA director, Fugate tried a different plan: giving states a yearly “deductible” for disaster relief, similar to the deductible most people pay at the doctor. FEMA, he said, could lower the deductible to reward states for taking actions, such as improved building codes, to offset the cost of disasters.

Fugate had hoped to get that policy into place though administrative rule changes, but the Obama administration ended before the changes were final.

Fugate said federal law technically prohibits FEMA from awarding money based solely on a dollars-and-cents formula. In practice, he said, federal officials rely on the formula because there are few other clear-cut guidelines to determine who gets funding.

“Everybody hates it but no one has a better solution,” he said.

Capitol & statewide reporter Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.