The Moore American

May 1, 2013

Disaster dollars blunt impact

By Michael Fitzgerald
The Moore American

MOORE — Gayland Kitch doesn’t feel a bit sheepish about not having a storm cellar, even though he is the director of emergency management in Moore, which faced one of the most violent tornadoes on record, with wind speeds greater than 300 mph, in May 1999.

It isn’t that Kitch is resisting the $3,000 or so it would take to build. It’s that during tornado weather, he’s not home. He’s at the office, which has its own shelter. His wife is there, too, volunteering. When their kids lived at home, they came as well.

Kitch isn’t stupid, though. When he retires, he said, “I will probably install one.”

A lot of people in Moore have done just that since the 1999 tornado killed 43 people in the Oklahoma City area. Kitch says more than 10 percent of Moore’s homes — about 2,500 — now have a safe room or shelter. Helping homeowners make the investment: A federal program that has paid up to $2,000 of the cost.

Every person has to make decisions about what to spend on preparedness for natural disasters. Buy a house with a view or live a few blocks from the beach? Build a storm shelter or make friends with a neighbor who has one? Get a weather radio? Buy earthquake insurance? Towns, too, must set building codes and choose whether to restrict the use of cheap building materials. They decide whether to allow development in flood plains, and whether to invest in sophisticated emergency equipment.

These are all down payments on the cost of a disaster. The rule of thumb is that every dollar spent on preparedness saves $4 in recovery costs, according to a report by the National Institute of Building Sciences’ Mutihazard Mitigation Council, which others confirm. That’s $4 taxpayers won’t have to spend.

In perhaps the closest thing to a bailout for those of us too small to matter, the government increasingly covers the costs of disasters.

The burden of disaster recovery is growing. In the 1950s, disasters in the United States caused a combined $53.6 billion in insured losses, according to an assessment by the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. In the 1990s, losses reached $778 billion.

Driving up the costs are population growth and urbanization. In 2004, Florida alone had $1.9 trillion in insured assets along its high-risk coastal areas, according to the Wharton Risk Management Center’s report.

And the insurance industry is balking. Private insurers, stung by costs over the last decade, have stopped writing policies for some areas, or charge such high premiums that people decide to take their chances. Even the National Flood Insurance Program, which will run a $28 billion deficit after Hurricane Sandy, won’t insure against flooding in some areas.

Many assets aren’t insured, which places more of a burden on government recovery programs. Taxpayers paid out about 62 percent of the recovery costs of disasters between 2000 and 2008, the Wharton Risk Management center reported.

“You didn’t see the governor of New Jersey make a big deal about having only 30 to 40 percent market penetration for flood insurance,” after Hurricane Sandy, said Jeffrey Czajkowski, a research fellow at the Wharton center. He noted many people live where they could get flood insurance from the government but do not. “The other 60 percent should have insurance, and if they don't, why should they get fast aid?” he said.

The Federal Emergency Management Agency is the main source of disaster recovery funds. It’s also the primary source of money for preparedness, though groups like the Army Corps of Engineers also have budgets for preparedness projects.

In 2012, FEMA spent more than $7 billion on recovery. By comparison, it spent $2 billion on disaster preparedness for various events, including terrorism.

FEMA has drawn fire from Sen. Tom Coburn, R-Okla., for its slowness in paying out those funds; it has billions in unspent preparedness money on hand

The agency keeps money in reserve for ongoing projects, but a high bar to get FEMA funds also may be part of the reason for the delay. Most of FEMA’s awards are reimbursement grants. In other words, a community or a person pays money for a project and then applies for reimbursement.

In the case of Salisbury, Mass., for example, the application process took “hundreds of hours over three years,” said Jerry Klima, a retired corporate lawyer and town selectman.

Salisbury got a grant to protect a business district and a portion of U.S. Route 1 from flooding that can close the highway for days at a time. The grant means the town can repair a culvert beneath an old rail bed that will drain water away from the commercial area during storms.

Politics also can bog down FEMA’s grants. In New Jersey, for example, some beachfront property owners are resisting community efforts to shore up protective dunes that would blunt the impact of coastal storms such as Sandy. Their lack of support threatens some plans, despite promised money from FEMA.

In a now-famous case, a couple won a judgment against their town for building a protective dune that blocked their ocean view — and eventually protected their property from Sandy’s impact.