Flooded with FEMA Mitigation Funding: Can We Spend It?

Earlier this month, the Biden Administration announced an unprecedented commitment of $3.46 billion of the Federal Emergency Management Agency’s (FEMA) Hazard Mitigation Grant Program (HMGP) funding for the 59 major disaster declarations for COVID-19. The top ten recipients are:

COVID-19 FEMA HMGP Allocations

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Additionally, the Administration announced $1 billion for the Building Resilient Infrastructure and Communities (BRIC) program and $160 million for the Flood Mitigation Assistance (FMA) program. The nearly $5 billion of funding is to assist states, territories, and tribes to maximize their investment in mitigation, address the growing climate change crisis, and prioritize underserved communities.

HMGP is a statewide competitive grant program while BRIC and FMA are nationally competitive grant programs.

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HMGP

FEMA announced all 59 states, tribes, and territories that received a major disaster declaration in response to the COVID-19 pandemic will be eligible to receive 4 percent of those disaster costs to invest in mitigation projects that reduce risks from natural disasters. Though the dollar amounts vary, the overall intent of the HMGP funding is clear – develop innovative mitigation projects that reduce the impacts of climate change.

BRIC

Earlier this week, FEMA released the Notice of Funding Opportunity (NOFO) for BRIC 2021. Based on lessons learned from the inaugural grant cycle, FEMA made some integral changes to the program to incorporate not only high-impact, neighborhood scale infrastructure projects, climate change, and increased emphasis of nature-based solutions, but, increasing and restructuring the funds to address the most vulnerable populations through the Justice40 Initiative. This initiative mandates that 40 percent of the BRIC funding benefit disadvantaged communities.

FEMA will distribute up to $1 billion through the BRIC program using the following approach:

• State/ Territory Allocation: $56 million (up to 1 million per applicant). All 50 States, the District of Columbia, and U.S Territories may apply under the State/Territory Allocation. This includes Capability and Capacity Building (C&CB) activities (project scoping, partnership, building codes, and planning).
• Tribal Set-Aside: $25 million, and all federally recognized Tribal Governments may apply under the Tribal Set Aside.
• National Competition for Mitigation Projects: Approximately $919 million and any funds that are not awarded from the State/Territory Allocation will be re-allocated to the national competition.

FMA Program

FMA provided annual funding to eligible states, local communities, tribes, and territories to reduce or eliminate the future risk of flood damage to structures insured under the National Flood Insurance Program (NFIP). The $160 million is distributed through the FMA program by allotting the funds in five categories:

• Up to $10 million: Project Scoping – funding for developing community flood mitigation projects or individual mitigation projects.
• Up to $70 million: Community Flood Mitigation Projects to address community flood risk projects on a larger scale.
• At least $80 Million: For technical assistance; flood hazard mitigation planning; and individual flood mitigation projects.

The Growing Mitigation Backlog

While these three funding streams (HMGP, BRIC and FMA) are providing communities with an unprecedented mitigation opportunity, how quickly should communities expect to have funding in hand and a shovel in the ground?

We analyzed FEMA’s Open Data Set for HMGP funding from 2010 to 2021 and only a little more than half of all awarded projects have been implemented and closed out. Much of the funding that was originally allocated for HMGP has not been spent which means that projects are either not being implemented, being deemed ineligible, or extremely delayed. In total, over $9 billion dollars in previously allocated HMGP funding remains unspent. Moreover, when examining the time spent from award to closeout, over 1,200 projects took over five years to be implemented.

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This analysis reflects a grant program that is complex and complicated. While funding may be allocated, it does not necessarily demonstrate that projects are being implemented and/or constructed in a timely manner. FEMA’s mitigation funding is meant to save lives and protect critical infrastructure, which are urgent priorities that need quicker mitigation interventions. Furthermore, climate change is a pressing problem that requires a timely mitigation response. Yet, the fact is, we are still implementing and spending funding from legacy disasters including Hurricanes Katrina (2005) and Sandy (2012). Accordingly, this new mitigation funding, while incredibly helpful and needed, will tack on billions more in funding to an already significantly backlogged system.

How Can the This Funding Be Expedited?

To spend the funding quicker, it would require a commitment and change at every level of government and to the Hazard Mitigation Assistance (HMA) program.

Subapplicants

Subapplicants should thoroughly analyze projects for potential pitfalls, including potential Duplication of Programs (DOP) issues; Benefit-Cost Analyses (BCAs) which are reliant on questionable benefits to be cost-effective; as well as Environmental and Historic Preservation (EHP) considerations which may delay or render the project infeasible. Subapplicants should be transparent regarding any easements, public opposition, or other obstacles which may not be readily apparent in the subapplication materials so applicants can fully assess, evaluate, and subsequently inform subapplicants on the project’s viability. To accomplish these goals, subapplicants should consider taking the following steps:

• Meet with your State Hazard Mitigation Officer (SHMO) and participate in State sponsored mitigation outreach and webinars.
• Engage stakeholders and partners in advance of project development including the community for needed project buy-in; include securing a project champion to assist the project from beginning to end – project scoping to closeout.
• Utilize pre-award costs to scope out potential mitigation projects including the development of planning and feasibility studies.
• Frontload projects with detailed environmental and historic preservation (EHP) analyses including desk reviews for natural and cultural resources.
• Submit credible subapplications (including a well-documented BCA), otherwise the State or FEMA may need to phase your project or send requests for information (RFIs) which can impede progress.
• Fully utilize management costs to successfully implement your awarded project.

Applicants

Applicants play a key role in providing technical assistance and support to subapplicants as they navigate these complex and resource intensive programs. Applicants who can provide proactive and ongoing support to subapplicants as they scope, apply for, and manage awarded grant funding, greatly increasing the subapplicant’s chances of successfully implementing and closing out the project. Some important steps Applicants can take include:

• Establish a continuous mitigation outreach program that engages partners during blue skies, as well as, during disasters.
• Educate subapplicants on the State’s mitigation priorities which includes publication of state-sponsored mitigation materials to educate and inform subapplicants applying for funding.
• Utilize Advance Assistance funding to build a pipeline of future shovel ready projects or to address gaps in the program (e.g., create a BCA for heat mitigation).
• Conduct project scoping calls with subapplicants interested in the HMA program and/or have a potentially eligible mitigation project.
• Utilize the Notice of Intent (NOI)/Letter of Intent (LOI) (screening process) to weed out ineligible projects.
• Consider establishing a global match funding strategy to assist economically disadvantaged subapplicants who may lack the needed local match funding.
• Perform detailed programmatic, feasibility, cost-effectiveness, and EHP reviews of the subapplications before sending them to FEMA.
• Inform subapplicants of procurement requirements outlined in 2 CFR 200 as procurement violations are one of the most common reasons FEMA deobligates funding.
• Fully utilize management costs to build capacity and to provide robust support to subapplicants.

FEMA

• Update the current 2015 HMA Guidance to reflect the new reality of mitigation and resiliency efforts and community needs.
• Re-evaluate cost effectiveness policies considering equity, climate change priorities, and the need to provide more quantitative approaches for ancillary benefits such as carbon sequestration, watershed protection, and water quality improvement.
• Expand guidance and eligible activities for other mitigation activities including drought, heat, and wildfires.
• Expand direct technical assistance (TA) to States and subapplicants (feasibility and cost-effectiveness support); consider a special TA outreach and subapplication development track that targets economically disadvantaged communities.
• Gain efficiencies in the RFI process to help streamline the post-subapplication submission.
• Establish more programmatic agreements for EHP review for multiple project activities.
• The BCA is proving to be an insurmountable and inequitable obstacle for resource constrained subapplicants and innovative climate adaptive projects (inherent equities and outdated methodologies), FEMA should consider reducing the discount rate to a more relevant rate to relieve this burden.
• Invest in mitigation personnel to develop the next generation of mitigation subject matter experts (SMEs) capable of reviewing/evaluating subapplications and BCAs and can support subapplicants and applicants as they implement this program.

The Way Forward

Communities, and specifically mitigation practitioners, have an opportunity to plan, design, and construct vital infrastructure and community mitigation projects given this new infusion of mitigation funding. The burden though, lies with helping streamline the current processes, and assist one another to succeed in implementing current and future projects in a timelier manner so that we can truly thwart the impacts we all face given the ever-present and growing threat of climate change.

Amelia Muccio is the Director of Mitigation at Hagerty Consulting and a SME in disaster recovery. With over 15 years of experience in public health, disaster preparedness, mitigation, and financial recovery, Amelia has helped clients obtain $5 billion in federal funds after major disasters, including Hurricane Sandy, the California Wildfires, and Hurricane Harvey.

Lauren Dozier is a Senior Managing Associate and a subject matter expert in disaster recovery. Lauren has spent the past 11 years in preparedness, mitigation and Public Assistance (PA). Her knowledge and experience of financial recovery has assisted communities nationwide to recover from and prevent future disasters.

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