A Pre-Event Recovery Planning Guide for Transportation (2013)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

E-1 APPENDIX E: RECOVERY FUNDING SOURCES (Note: Material in Appendix E was current as of October 2012. For the most current information, please see http://www.fhwa.dot.gov/programadmin/erelief.cfm and http://www.fema.gov/public- assistance-local-state-tribal-and-non-profit.) This section provides a comparison of federal funding programs for transportation infrastructure and a detailed summary of all federal funding available for rebuilding and recovery. Comparison of Federal Funding Programs FHWA – ER FEMA – PA Guiding Policies Highway Trust Fund 23 USC 120, 125 23 CFR 635, 668 Emergency Relief Manual (August 2003 Interim Update) Stafford Act, as amended 42 USC 645 44 CFR 204, 205, 206 Disaster Specific Guidance (DSG) Categories of Damage Coverage Emergency repair (i.e., debris removal) Permanent repair for damages resulting from a disaster (i.e., road base, roadway lighting) Emergency work • Category A - Debris Removal • Category B - Protective Measures Permanent work • Category C - Roads and Bridges • Category D - Water Control Facilities • Category E- Buildings & Equipment • Category F - Utilities • Category G - Parks and Recreational Facilities Note: FEMA does not reimburse for items eligible under FHWA ER Typical Federal Cost Share Roads on federal lands - 100% Emergency repairs - up to 100% within the first 180 days Interstate highways- 90% Other highways - 80% Category A: Maximum of 70 hours of time and material contract expenses - 75% Categories A & B: 72 contiguous hours within the Incident period, often 100% All Categories (A-G): 75% minimum, may increase based on Presidential declaration cost share Funding Requests State DOT district offices State Division of Emergency Management Eligible Project Cost Threshold $5,000 Small Projects $1,000 Large Projects $57,500 (FY 2006)

E-2 A Pre-Event Recovery Planning Guide for Transportation Debris Removal Considered emergency repair Debris that is deposited by the event that it is needed to minimize damage, protect facilities, or restore essential traffic (reimbursed at 100%) Debris removal collection along federal-aid roadways (reimbursed at 100% for work completed within first 180 days) Considered emergency work Debris removed to restore travel and protect health and safety on non-federal-aid eligible roadways. Considered Category B - Emergency Protective Measures (reimbursed at 100% within the 72-hour period) Considered Category A - Debris Removal to eliminate the threat to public health and safety along ALL roadways (private roads typically excluded). (Reimbursed at 75% for work completed within the first 180 days.) Mitigation Betterments - improve and prevent future damages, need supporting cost benefit analysis Hazard mitigation - prevents future damages, need supporting cost benefit analysis. 406 Mitigation Documentation Uses Detailed Damage Inspection Reports (DDIRs) to document damages and costs. Uses Project Worksheets (PWs) to document damages and costs. Both programs control the scope of work, control quantities, but do not control unit prices or current market prices of labor, equipment, and materials as long as they meet reasonable cost. Both programs require as much documentation as possible to be prepared and subsequently funded; this may include procurement documents, proposals, contracts, cost estimates, invoices, GPS coordinates, drawings, GIS maps, time sheets, expense forms, supply receipts, equipment logs, debris removal load ticket, landfill receipts, etc. Review Process DDIRs are reviewed and approved by both state DOT and FHWA. PWs are reviewed by FEMA and State Public Assistance personnel before being sent to the regional office for final review and funding. PWs greater than a million dollars will go to FEMA headquarters in Washington, DC, for review and funding. Source: Adapted from FDOT Emergency Management

Appendix E: Recovery Funding Sources E-3 Federal Emergency Management Agency (FEMA) Public Assistance Grants Public Assistance (PA) grants are FEMA’s primary assistance program for state and local governments. These grants may be used to repair, replace, or restore disaster-damaged, publicly owned facilities and the facilities of certain private nonprofit organizations. Disaster Funding Process and Key Deadlines Key Deadlines Application Submit a Request for Public Assistance within 30 days of the designation of the declared disaster area. Submit small projects within 60 days of the Kick-off meeting for 20% validation. Appeals Any determination related to federal assistance may be appealed. The appeal must be submitted to the grantee within 60 days of receipt of notice of the action which is being appealed. Eligible Activities This program has two types of eligible activities, emergency work and permanent work. Emergency Work Category Description Eligibility A Debris Removal Debris removal is eligible when It eliminates an immediate threat to life, health, and safety It eliminates an immediate threat of significant damage to improved property It ensures economic recovery of the community and provides a benefit for the community-at-large Debris removal is generally the responsibility of the property owner. However, if debris is so widespread that public health, safety, or economic recovery of the community is threatened, the actual removal of debris from private property may be eligible.

E-4 A Pre-Event Recovery Planning Guide for Transportation B Emergency Protective Measures Emergency Protective Measures are actions taken by a community before, during, and following a disaster to save lives, protect public health and safety, or eliminate immediate threat of significant damage to improved public and private property through cost-effective measures. Permanent Work C Roads and Bridge Systems Eligible permanent work Must repair, restore, or replace disaster-damaged facilities in accordance with regulations Must restore to pre-disaster design, capacity, and function in accordance with applicable codes and standards Must be required as a result of the disaster May include cost-effective hazard mitigation measures D - G D. Water Control Facilities E. Public Buildings / Equipment F. Public Utilities G. Other (Parks, Recreation, etc.) Administrative Allowances Stafford Act stipulates that each grant recipient be provided an allowance to meet the cost of administering the grant. Administrative Allowances cover direct and indirect costs incurred in requesting, obtaining, and administering public assistance. No other administrative or indirect costs incurred by the applicant are eligible. Includes costs incurred for overtime pay, per diem, and travel expenses for state employees who participate in the administration of Public Assistance grants. It does not cover regular time labor costs and other costs directly associated with grant administration. In addition may be reimbursed for the necessary costs of requesting, obtaining, and administering federal assistance in accordance with 44 CFR § 13.22. A category Z, Project Worksheet (PW) is used to generate the reimbursement of the Grant Management Costs.

Appendix E: Recovery Funding Sources E-5 There is generally a 25% matching requirement, but the statute authorizes the President to waive part or the entire required match. Applicants performing restoration work on a damaged facility may make improvements to the facility while restoring the facility to its pre-disaster condition. The improvements must be approved by the grantor prior to construction. The applicant is responsible for the cost of the improvements. Federal funding is limited to the cost of restoration. Public Assistance projects are processed as either small or large projects. If the project cost is less than the annually updated cost threshold amount ($63,900 for FY 2011), the project is processed as a small project. If the project cost equals or exceeds the threshold, the project is processed as a large project. Large projects are funded on a reimbursement basis as the project is completed. Small Projects Large Projects Federal cost share is paid upon project approval. Funding is based on an initial cost estimate. Federal cost share is paid as work is accomplished. Final assistance is based upon actual costs or an estimate using the Cost Estimating Format. Forms and Documentation: A form called a project worksheet is utilized jointly by FEMA, Homeland Security and Emergency Management Division (HSEMD), and applicants to identify each project, scope of work, and cost estimate. Each project must be approved by FEMA before projects can move forward. The regulations specify that federal officials must obligate funds for approved applications within 45 days of the approval of applications for assistance. To be eligible for reimbursement, costs must Be reasonable and necessary to accomplish eligible work. Comply with federal, state, and local laws and regulations. Include deductions of insurance proceeds, salvage value, and purchase discounts. Time limits for project completion begin on the disaster declaration date: Emergency work must be completed within 6 months. Permanent work must be completed within 18 months. FEMA may also extend the time limits when sufficient justification is submitted. Alternate Projects: When restoration of a damaged facility or function does not serve the public welfare, an applicant may use a Public Assistance grant for another public facility. The alternate project must be approved by FEMA prior to construction. The alternate project may require an environmental assessment.

E-6 A Pre-Event Recovery Planning Guide for Transportation Federal funding is limited to 75% of the federal share of the original project estimate or actual alternate project cost (whichever is less). Specific eligibility requirements are spelled out in the FEMA Public Assistance Guide, available at http://www.fema.gov/government/grant/pa/index.shtm. Supporting resources are available at http://www.fema.gov/government/grant/pa/resources.shtm. Hazard Mitigation Grants This program provides grants to states to implement mitigation measures during recovery from a disaster and to provide funding for previously identified mitigation measures to benefit the area. The purpose of the program is to reduce loss of life and property resulting from natural disasters and to enable mitigation measures to be implemented during the recovery from a disaster. Projects must be cost-effective. There is a matching requirement of 25%. As amended, the statute limits assistance to 75% of the cost of the hazard mitigation measure, with total assistance limited to 7.5% of the total assistance provided under the Stafford Act. Eligible applicants include local jurisdictions, states, tribes, and certain private nonprofits that can apply through the state for the HMGP following a presidential disaster declaration. Examples of projects under the HMGP include the following: • Acquisition or relocation of structures located in a special flood hazard area • Elevation of structures/utilities • Structural and non-structural retrofitting of existing public buildings, facilities, or utilities to protect against wind, ice, or flood hazards • Minor structural hazard control or protection projects such as storm water management (e.g., culverts, floodgates, retention basins) • Localized flood control projects, such as floodwall systems, that are designed specifically to protect critical facilities and do not constitute a section of a larger flood control system • Hazard Mitigation Planning Pre-Disaster Mitigation Grants This program provides grants and technical assistance to state, territorial, and local communities for cost-effective hazard mitigation activities that complement a comprehensive hazard mitigation program and reduce injuries, loss of life, and damage and destruction of property. A minimum of $500,000 or 1.0% of appropriated funds is provided to each state and local government, with assistance capped at 15% of appropriated funds. Federal funds compose generally 75% of the cost of approved mitigation projects, except for small impoverished communities that may receive up to 90% of the cost.

Appendix E: Recovery Funding Sources E-7 CDBG funds are not specifically meant for disaster recovery use. They are generally allocated to states for housing and community development purposes. In recent years, Congress has chosen to use this program as a vehicle for delivering additional disaster aid to states with major disasters. With each allocation, states must complete an “action plan” detailing plans for the funding. Once that occurs, the state can begin committing the funds to specific projects. This program is reimbursement only. Funds are never transferred to the state. Checks are cut for specific projects after their completion. Under Section 108, a wide variety of large-scale projects are permissible that include construction, reconstruction, or installation of public facilities (including streets, sidewalks, and other site improvements). CDBG funds can be used to repair or construct infrastructure—such as streets, water pipes, and sidewalks—that has a direct impact on the economic development of an area. For example, before a company can expand and create more jobs for residents in a designated service area, there may be infrastructure improvements that need to be made. CDBG funds can be used to make those improvements. U.S. Department of Transportation (U.S. DOT) Funds These funds are to assist DOTs with disaster-related transportation costs, including repairs and other expenses. FHWA Emergency Relief Program • Emergency Relief (ER) is a special program from the Highway Trust Fund, in which funds are available for the repair of federal-aid highways or roads on federal lands that have been seriously damaged by natural disasters or by catastrophic failures from an external cause. Applicability is based on the extent and intensity of the disaster. For example, damage to highways must be severe, occur over a wide area, and result in unusually high expenses to the highway agency. A catastrophic failure cannot be the result of an inherent flaw in the structure but must result from a sudden, disastrous impact such as a bridge collapsing after being struck by a barge. This program supplements the commitment of resources by states, their political subdivisions, or other federal agencies to help pay for unusually heavy expenses resulting from extraordinary conditions. Community Development Block Grant (CDBG) Funds

E-8 A Pre-Event Recovery Planning Guide for Transportation Funding and Eligibility Funded through a $100 M permanent annual authorization Additional funding may be provided through supplemental appropriations Disaster Threshold = $700,000 per state Site Threshold = $5,000 per site Emergency Repairs Restore essential traffic, minimize the extent of damage, or protect the remaining facilities Emergency repair work may include Debris removal to outside edge of shoulders Traffic control and temporary detours Stabilizing damaged roadways Immediate repairs to restore essential traffic Eligible at 100% within 180 days Eligible at normal share beyond 180 days The applicability of the ER program to a natural disaster is based on the extent and intensity of the disaster. Damage to highways must be severe, occur over a wide area, and result in unusually high expenses to the highway agency. Applicability of ER to a catastrophic failure due to an external cause is based on three criteria: (1) the failure was not the result of an inherent flaw in the facility but was sudden, (2) the failure caused a disastrous impact on transportation services, and (3) the failure resulted in unusually high expenses to the highway agency. By law, the FHWA can provide up to $100 million in ER funding to a state for each natural disaster or catastrophic failure that is found eligible for funding under the ER program (commonly referred to as the $100 million per state cap). For a large disaster that exceeds the $100 million per state cap, Congress may pass special legislation lifting the cap for that disaster. As a general rule, the estimated cost for repairs from a disaster or catastrophic failure in a state must require at least $700,000 in ER funding before the FHWA will consider approving the disaster or catastrophic failure as eligible for funding under the ER program. Approved ER funds are available at the pro-rata share that would normally apply to the federal- aid facility damaged. For Interstate highways, the federal share is 90%. For all other highways, the federal share is 80%. Emergency repair work to restore essential travel, minimize the extent of damage, or protect the remaining facilities that is accomplished in the first 180 days after the disaster occurred may be reimbursed at 100% federal share. It is the responsibility of individual states to request ER funds for assistance in the cost of necessary repair of federal-aid highways damaged by natural disasters or catastrophic failures. A notice of intent to request ER funds filed by the state DOT with the FHWA Division Office located in the state will initiate the ER application process.

Appendix E: Recovery Funding Sources E-9 Source: FHWA Special Federal Aid Funding, Emergency Relief Manual. For some states, the availability of state funding sources ends with the Disaster Emergency Fund. For others, however, additional resources may also be available for the recovery process, including additional funding from different state departments (e.g., the state DOT) for specific types of projects. For example, as directed by Minnesota Statutes Chapter 162.06 and 162.12, the Minnesota DOT (MnDOT) administers disaster assistance funds to state-aid roads and streets. In other cases, there may also be funding available from the affected counties or other localities, local private organizations, and nonprofit agencies. Additionally, in the aftermath of a

E-10 A Pre-Event Recovery Planning Guide for Transportation large disaster, some states opt to create a new funding program specifically targeted toward raising and allocating money for the recovery process. In the event that a Governor's Declaration is made, but not a Presidential Declaration, disaster recovery funding comes first from the affected locality, as well as the area's respective county/parish. If these resources have been exhausted, then funding may also be provided via the aforementioned state Disaster Emergency Fund. Other state-level funding sources may be available from various state departments, as well as from federal agencies (for example, the FHWA ER funds do not require a Presidential Declaration), depending on the type of recovery projects being undertaken. Additional funding and resources may also be sought out from private organizations and nonprofit agencies. Special Federal Legislation Funding Examples Congress enacted special legislation because of the widespread devastation that resulted from Hurricane Katrina in the fall of 2005. P.L. 109-68, the Temporary Assistance for Needy Families (TANF) Emergency Response and Recovery Act of 2005, provided additional TANF funds and waived some program requirements for states affected by Hurricane Katrina. P.L.109-87 authorized the Secretary of Transportation to make project grants for airports that incurred emergency capital costs because of Hurricanes Katrina or Rita. Resources and Tools See Appendix A for forms, worksheets, and other resources.