With passage of the 2018 Disaster Recovery Reform Act (DRRA), the new consensus-based codes and standards policy has brought substantive change to the Federal Emergency Management Agency (FEMA) Public Assistance (PA) grant program. Our previous blog discusses nuances of this new policy and while it offers an opportunity by allowing the communities to build back to more resiliently, it poses challenges and risk.
About the Policy
According to the consensus-based codes and standards policy, FEMA will fund PA projects to comply with the latest published editions of relevant consensus-based codes, specifications, and standards. The policy requires incorporating a holistic hazard approach to determine minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for FEMA PA. Additionally, the project must be designed for the purposes of protecting the health, safety, and general welfare of a facility’s users against disasters.
This new policy amends FEMA’s previous codes and standards criteria which limited funding only to restore a damaged facility per the codes and standards locally adopted at the time of the disaster. However, per this new policy, FEMA now requires applicants to adhere to numerous published codes, specifications, and standards as listed within Appendix A of the new policy. The challenge is, these required codes, standards, and specifications may or may not be locally adopted. Moreover, applicants are now responsible for identifying, analyzing, justifying, and complying with applicable codes when restoring damaged facilities even if they have no experience building to such standards. FEMA’s previous codes and standards policy limited funding to only cover codes, specifications, and standards that were locally adopted and consistently implemented; however, now, FEMA will fund upgrades beyond what is locally adopted, provided they restore damaged facilities to be more resilient to future hazards.
Potential Implementation Challenges in Puerto Rico
On September 20, 2017, Hurricane Maria made landfall in Puerto Rico, and it was followed by a major disaster declaration. Since this incident declaration was after August 1, 2017 and before November 6, 2019, eligible applicants in Puerto Rico were eligible to request to opt-in to the interim policy and had to navigate the dilemma of deciding to do so or not. Ultimately, many communities in Puerto Rico declined the opportunity to opt-in to the new policy because the risks seemed to outweigh the rewards. Specifically, the rigor of the code analysis, availability of contractors, and FEMA’s requirement to certify that all restoration adhered to the highest resilience standards meant that failing to comply would jeopardize FEMA funding. As a result, many communities opted out, foregoing potential funding but protecting themselves pitfalls of trying to comply with a new, untested policy.
Sub-applicant’s experience on the island highlighted the risk and reward calculation of choosing to opt-in to a more rigorous policy with additional compliance requirements, administrative burden, and potential risk to PA funding. Factors that led to opt-outs in Puerto Rico are telling – and foreboding – because now, for disasters declared on or after December 20, 2019, FEMA requires recovering communities to comply with this new policy.
The FEMA guidance emphasizes that the burden of code identification and application is on each applicant and sub-applicant. Based on our experience, this will force each individual community to conduct a comprehensive code analysis, along with additional cost for architectural and/ or engineering services required to perform such an analysis. Furthermore, codes and standards are typically regularly updated, and updates are often prompted by the lessons learned during a disaster event. After the devastating hurricanes of the 2017 season impacted Puerto Rico, the building codes were updated to Puerto Rico Codes 2018 to include new wind speed and seismic category maps, and to implement more strict design requirements across the island. While it is positive that local codes were updated, it does further complicate compliance with FEMA’s new policy going forward.
While the process begins with code analysis, another risk is the availability of trained contractors and compliance certifications. Due to large variances in codes, finalizing the performance specification for a project will prove to be a challenge for communities across the nation. The guidance also specifies that when a code or specification offers discretion in design, FEMA will fund the least expensive option and it is up to the applicant to show how a more expensive alternative would provide greater hazard risk reduction. This uncertainty and lack of clarity in guidance poses further risks as a community looks at the life cycle of the project and potential pitfalls that could result in challenges with cost eligibility.
New Codes and Standards Policy and Equity
When FEMA funds more rigorous codes and standards than what is locally adopted, it makes damaged facilities more resilient to future events; however, going forward, implementation challenges will not be unique to Puerto Rico. For underserved communities, which may lack the resources or experience analyzing complex FEMA policy, this can create inequitable outcomes – something FEMA recently sought to address. While we believe that this policy can improve community resilience, it poses enormous implementation and equity issues and may result in otherwise eligible communities being unable to obtain funding or begin the grant process.
Greater technical assistance opportunities, provided by FEMA, could reduce these burdens, and result in more equitable program implementation. For example, instead of putting the onus of analyzing, identifying, implementing, complying with applicable codes on local communities, FEMA could provide technical assistance and be jointly responsible. This would support underserved communities and incentivize FEMA to support – rather than only enforce – compliance.
The Way Forward
While this new policy offers a unique opportunity to bolster community’s resilience to standards previously not funded by FEMA, it does pose significant challenges. Based on our experience, despite the need to build back more resiliently, many applicants have preferred not to opt-in; however, now applicants recovering from disasters declared on or after December 20, 2019, have no choice – they must comply. This will certainly make FEMA PA program compliance more challenging especially for communities with scarce resources and little disaster experience.
Fortunately, the work associated with code identification, implementation and compliance are eligible costs under the FEMA PA program. Therefore, while there are challenges, we believe this expansion of FEMA policy can work to achieve the stated goals of promoting resiliency and risk reduction; protecting lives and property; and supporting the efficient use of federal dollars, if recovering communities are supported by FEMA through technical assistance.
Hagerty Can Help
The disaster recovery process can be complicated, but it is eased with excellent advice and assistance. Hagerty professionals understand and know the rules, and we have years of experience advocating for and negotiating on behalf of our clients. The results of our work — the billions of dollars we have helped secure for our clients — is proof of our success and expertise in working with government programs. Contact us to discuss how we can help you meet your preparedness, response, and recovery needs.
Savita Goel serves as Hagerty’s Deputy Director of Infrastructure Resilience. Savita is an experienced engineer with more than two decades of experience in management, business administration, and recovery-related projects. She is also adept at assisting firms to assess risk. Savita’s storied engineering background gives her the ability to head teams including management and hands-on engineers, often with projects that deal in millions of dollars of federal grant management and budgeting. Savita is also experienced in assessing risks posed to large urban areas from terrorist threats.
Ari Renoni is Hagerty’s Deputy Director of Recovery and has 12 years of experience working with government and international public organizations. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida.
Sage Hart is a Managing Associate in Hagerty’s Recovery Division, supporting various natural disaster recovery and COVID-19 response projects in New York, Puerto Rico, California, and other areas of the country. His experience and expertise include program management, policy analysis, finance, and data analytics. Sage holds a master’s degree in International Relations from the Maxwell School of Citizenship and Public Affairs and a Bachelor’s in finance from the Whitman School of Management at Syracuse University.