Mastering Disaster

"They came in and talked a big talk, but they were more frustrating than helpful. They made a lot of promises they didn't keep," Jones says. Neither Jones nor county residents were prepared for the level of bureaucracy imposed by FEMA, which appeared to spend more money on administration and salaries than on helping people in need. One member of the FEMA team even took Jones aside and told him he'd better be prepared to "fight tooth and nail" for assistance. The aid amount would have little to do with the severity of damage, the team member cautioned.

It was a prescient warning. Red tape and poor coordination between FEMA and other government and non-government agencies hampered cleanup and recovery. FEMA decisions and actions seemed arbitrary and illogical to county officials. "They treated us like we didn't know anything," Jones says.

County officials had that bitter experience in mind when, a year later, Hurricane Fran delivered enough high wind and water to again render Madison County eligible for federal help. Jones braced himself for another frustrating experience. Instead, he found FEMA a changed agency. "It was a much smoother experience. They sent a much more professional group of people, and they didn't make promises they couldn't keep. Also, I think we had more realistic expectations, based on our experience. It wasn't perfect, but it was certainly better," Jones recalls.

The changes in FEMA over the last few years have been obvious to most people who have dealt with the agency. By the time James Lee Witt was appointed FEMA director in 1993, the agency had become legendary for poor service. It was widely perceived as a dumping ground for incompetent bureaucrats and top-heavy with political appointees. Frustrated lawmakers called for the agency's elimination after its abysmal response when Hurricane Andrew devastated Florida in 1992. But Witt's strong presence at FEMA's helm, his can-do attitude and his common-sense approach to problem-solving have combined to create one of the most dramatic turnarounds in the federal government.

"Prior to his arrival, FEMA was rivaled probably only by the IRS as the most disliked federal agency," Sen. Tim Hutchinson, R-Ark., said at a panel hearing of the Environment and Public Works Committee in July. When tornadoes ripped through Arkansas in 1997, "FEMA's reaction was outstanding," Hutchinson said. "People were receiving checks within days of the disaster. At times, it is difficult to identify owners of property because of handshake sales, yet, to my knowledge, there was little or no complaint in the filling of requests. This is an outstanding turnaround for a very important agency." At the same hearing, Sen. Bob Graham, D-Fla., hailed Witt as one of President Clinton's best appointments. Last year, after Florida was wracked by tornadoes, floods and forest fires in an unprecedented series of natural disasters, FEMA's response represented "a 180-degree turnaround" from its response to Hurricane Andrew just six years earlier, Graham said.

Getting Results

Senators weren't always so impressed with Witt. At his confirmation hearing, some questioned whether he was up to the job, his formal education having ended with a high school diploma. What the senators failed to appreciate at the time, however, was that Witt had something no previous FEMA director ever had--experience in emergency management. Experience, it turned out, was what FEMA needed. As director of the Arkansas Office of Emergency Services, Witt knew firsthand how crippling FEMA's problems were to states recovering from natural disasters.

Among Witt's first acts were reorganizing the agency and refocusing its mission. By shifting FEMA from its Cold War emphasis on preserving the government during a nuclear attack to preparing for and responding to natural disasters, Witt made the agency relevant to millions of Americans. To institutionalize the change, he dismantled the secretive National Preparedness Directorate, which was focused on classified national security operations, and reorganized FEMA's 2,200 full-time staff into five directorates, 10 regional offices, the Federal Insurance Administration and the U.S. Fire Administration. Witt determined that all employees, even those who were working exclusively on classified missions, would have a role in disaster preparedness or recovery operations.

From his first day on the job in the spring of 1993, when he stood in the lobby of FEMA headquarters greeting employees, Witt signaled change. When disasters struck soon after his arrival--floods in the Midwest, tornadoes in the South, and then the Northridge earthquake in California--Witt visited the devastated communities and talked to residents, local officials and emergency workers. He was quick to praise FEMA employees. But when he learned that FEMA staff at one aid center had told earthquake victims seeking assistance they would have to wait three weeks for appointments with agency representatives, he was livid and demanded better service. Within 48 hours, agency personnel modified the aid application software to streamline the process, and nearly 1,800 additional workers arrived in California.

Turning FEMA into an efficient, customer-driven organization became Witt's crusade, and he made sure employees knew it and felt empowered to act. Beginning in 1994, all employees, full-time and temporary, received training in customer service. The training was apparently effective; phone calls to FEMA are typically answered with "How may I help you?" as opposed to "How did you get my number?"

According to one longtime FEMA supervisor, "Witt gave employees this sense that they needed to do whatever it took, within the law, of course, to get out there and get help to people as quickly as possible, bureaucracy be damned. In a way, that's liberating. There was this sense that we could sort out the administrative details later, if necessary, so long as people were getting help they needed now. I think a lot of us welcomed that and responded to it."

Managing Information

Witt's emphasis on helping victims of natural disasters sooner rather than later came at a cost. After the Northridge earthquake, FEMA's efforts to speed up aid applications resulted in overpayments to thousands of people.

To quickly process more than 500,000 applications for aid FEMA received after the quake, managers adopted an expedited application process for residents in the hardest-hit areas. The fast-track process called for issuing checks before conducting physical inspections of applicants' homes to verify their eligibility for aid.

One of the most important aspects of the fast-track program was psychological-- by demonstrating to a frightened, frustrated public that help was indeed at hand, it helped prevent panic. Given the magnitude of the earthquake and the huge numbers of people affected, waiting to conduct inspections before distributing financial aid would have been a public relations nightmare. But distributing aid before determining residents' eligibility meant FEMA had to bypass controls. In addition, errors in designating who was eligible for fast-track processing resulted in inconsistent treatment of victims in similar circumstances, the General Accounting Office found in 1997.

Moreover, FEMA erroneously gave money to nearly 4,000 people who
didn't suffer enough damage to qualify for aid, who were covered by insurance or whose damaged property was not their primary residence. In some cases, people devised schemes to receive more than one payment. Of the $143 million distributed through the fast-track program, nearly $10 million was erroneously issued, GAO noted in its October 1997 report (RCED-98-1). Collecting the overpayments proved difficult--in some cases, impossible--and costly.

After the Northridge earthquake, FEMA strengthened its registration, inspection and processing capabilities. A new electronic registration system can receive and process thousands of applications daily. FEMA also established three national inspection service contracts to provide a much larger cadre of trained inspectors than was previously available during disasters. FEMA managers believe the new registration system and more trained inspectors will allow the agency to better manage large-scale disasters.

Runaway Costs

Not everyone has found getting federal disaster help cumbersome. When some residents of North Carolina's barrier islands suffered severe storm damage last summer during Hurricane Bonnie, their financial worries were eased knowing they'd soon be rebuilding, thanks to federal flood insurance funds. For many, rebuilding coastal property has become a ritual as predictable as the seasons.

It's a ritual FEMA would like to change. About 2 percent of the 10 million homes insured by the federal government account for about 40 percent of all flood insurance payments, according to a 1998 study by the National Wildlife Federation. By the year 2010, FEMA estimates the number of people living in the most hurricane-prone counties will double. But by law, FEMA is prohibited from raising flood insurance premiums or declining coverage for what common sense would suggest is risky or frivolous building. In November, FEMA proposed cutting off flood insurance to homeowners who have filed two or more claims totaling more than the value of their home unless they elevate their houses or accept federal buyouts of the high-risk property. Agency officials believe the plan would cut annual disaster losses in half over three years and save nearly a billion dollars over the next 10 years. In addition, people who live in high-risk areas would be charged fair market rates for insurance, instead of lower, subsidized federal flood insurance rates.

FEMA also has proposed restricting development on floodplains and wetlands and requiring that all public buildings be insured to 80 percent of their replacement value within the next two years, in return for mitigation incentives. "We see too many families suffering from damages that could have been prevented," Witt said in November when he announced the proposals.

Preventing damage through pre-disaster planning has been the cornerstone of FEMA's efforts to get a handle on runaway costs. Before 1989, the most costly natural disaster was Hurricane Agnes in 1972. Agnes cost the federal government more than $500 million. But since 1989, every year but 1991 brought at least one disaster costing more than Agnes.

For the 10-year period before 1989, the federal Disaster Relief Fund paid out $4 billion; in the 10-year period since, it has paid out $21 billion. By spending money now to impose stronger building codes and installing ice-jam control structures to prevent flooding downstream, FEMA hopes to save more money after disasters strike.

Bringing costs down also may require more stringent criteria for disaster assistance, GAO's Judy England-Joseph told the House Committee on Transportation and Infrastructure's panel on water resources and the environment in March. Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the President is authorized to declare emergencies and disasters when state and local governments are overwhelmed.

When a disaster is declared, area residents qualify for grants for temporary housing and personal items and get legal aid. State and local governments and nonprofit organizations get funds for removing debris and repairing or replacing infrastructure. FEMA advises the President on making such declarations, but there is no formula for quantitatively analyzing damage or otherwise objectively determining that the situation warrants a disaster declaration.

"The flexibility and generally subjective nature of FEMA's criteria have raised questions about the consistency and clarity of the disaster declaration process," England-Joseph said. GAO auditors have found measuring the success of FEMA's mitigation efforts or the associated cost savings is difficult, given the high degree of uncertainty and inconstancy surrounding disasters. "That's why we call them disasters," says one FEMA manager. "If we could plan for them, we could avoid a lot of losses."

To be responsive in the unpredictable world of emergency management and disaster relief, FEMA has an on-call temporary workforce triple the size of its full-time staff. Some full-timers believe more of the part-time staff should be on the full-time rosters.

"We don't want to see this huge temporary workforce continue to grow. I don't think [the trend in hiring part-time people] is good for the country, and I don't think the government should be supporting it," says Steve Hardman, a utility service repair operator at FEMA's facility in Mount Weather, Va., and president of the American Federation of Government Employees Local 1754. FEMA's efforts at forging a better labor-management partnership through reinvention have been disappointing. "I think our expectations were too high. From the employees' perspective, reinvention has meant contracting jobs out," Hardman says.

Better communication between the blue-collar force and senior managers could help control maintenance costs and improve facilities management, he adds. For instance, when FEMA recently built a new training facility at Mount Weather, the agency did not adequately involve staffers who ultimately would be responsible for maintaining and managing the facility.

Nonetheless, the fact that FEMA has handled personnel cuts through attrition and has not made cuts through an involuntary reduction in force has been a huge boon to Witt's credibility with workers, Hardman says. "I think a lot of employees would do anything for him. I know I would. But still, I don't think the director really understands how much pressure the full-time employees are under."

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