Where do Hoosiers stand in regard to disaster relief preparedness?
Ice Miller partner Freedom S.N. Smith posed that question during an environmental symposium hosted by the Indiana University Robert H. McKinney School of Law on Friday, addressing the state’s environmental resiliency across legal and policy platforms.
Smith approached the issue of emergency planning and response, specifically speaking on federal disaster relief funding. In what she characterized as a “depressing” topic, Smith said most Hoosiers unfortunately are not prepared for natural disasters that may occur.
“I think we overestimate how much our state and our federal government can give us,” she said of financial assistance.
Smith noted that Americans face the largest insurance gap in comparison to other countries, according to the Federal Emergency Management Agency. Of the United States’ total estimated natural catastrophe losses of $55 billion annually, the expected uninsured annual losses total more than $30 billion.
That means more than half of those losses won’t be covered by insurance, she said, which is evident in the low percentage of Hoosiers who receive assistance from federal dollars.
Since 2006, Indiana has received federal disaster relief 12 times, most recently last May after several Indiana counties were impacted by severe storms and flooding. The state was approved to receive FEMA aid, but Smith noted that historically, the percentage of insured Hoosier residences has remained low. On top of that, the amount of federal aid barely scratches the surface of remedying those damages.
For example, roughly $3.8 million of approved FEMA assistance for damages from the 2018 flooding was divided among 1,164 impacted individuals and households. That averaged to only $3,316.35 per person.
“If your home was severely impacted, is $5,000 going to get you that back?” she asked. Probably not. With little aid coming from the state’s small disaster relief fund, Smith said that leaves Hoosiers in a bind when trying to secure aid for their uprooted lives.
Drawing in the legal component, Smith cited the “big daddy of all legal rules” related to disaster relief funding – the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Amended in 2018 by President Donald Trump, Smith said the act was adjusted to ease constraints that once made it difficult for communities to keep the relief funds they were initially given. It also makes sure more post-disaster assistance goes toward future mitigation and resilient building.
“To put that in perspective, when you get relief as part of the disaster recovery program or public assistance program, particularly from FEMA, you get audited by the government — especially if you get a large amount of money,” Smith said. “They have the right to come back and take that money from you if you don’t comply with the statutes and the associated preconditions.”
Such noncompliance could result in the disallowance of costs, False Claims Act liability or civil and criminal penalties, she said. Smith also noted that even if federal aid is granted in the event of a disaster, allotted assistance funds would more than likely not encompass the full payment necessary to remedy all damages.
“Generally, the federal government only commits to 75 percent of the impact, and the other 25 percent has to come from somewhere else,” she said. At the end of the day, following procurement laws is critical.”
Therefore, in the preparation of future disasters, Smith advised Hoosiers should first establish procurement policies and procedures that maintain controls; establish standard policies to procure all services in a FEMA-compliant manner; and maintain all records to detail any history of procurement action.