FEMA pays initial costs of Sandy-related power, transportation operations

Thursday - 11/1/2012, 2:13pm EDT

FEMA press conference on Nov. 1, 2012

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Pedestrians asses the damage from flooding near Rockaway Beach in the New York City borough of Queens in the aftermath of superstorm Sandy, Tuesday, Oct. 30, 2012, in New York. Sandy, the storm that made landfall Monday, caused multiple fatalities, halted mass transit and cut power to more than 6 million homes and businesses. (AP Photo/Frank Franklin II)

The federal government is picking up the tab to restore power and provide transportation in the areas hardest hit by Post-tropical Cyclone Sandy.

"The President has directed that we do [direct federal assistance] in support of state and local governments, in particular with pumping operations and transportation operations and getting the power systems back on," said FEMA Administrator Craig Fugate, in a conference call with reporters Thursday, two full days after the superstorm hit the Eastern seaboard.

The President's disaster declaration applies to certain counties in the states of New York and New Jersey for the next 10 days. More counties could be added, depending on FEMA's assessments.

Typically, the cost-share for governments in disaster responses is 75 percent federal and 25 percent state and local. However, if the magnitude of a disaster is great enough, FEMA could pay as much as 90 percent of the recovery costs. If there's a need for FEMA to kick in greater than 90 percent, Congress can call for 100 percent federal funding for all recovery costs, which is what it did in the cases of Hurricanes Katrina, Rita and Wilma, Fugate said.

So far, there has not been an assessment of total damages, Fugate said, adding federal agencies are still "very much in response mode."

"What will be needed as far as cost-share adjustments will be based upon impact ... We're not even at the point of what kind of total bill this is going to be," Fugate said.

Fugate said FEMA can make recommendations for specific "life-saving, life- sustaining" funding, as the President did last night for 100 percent federal funding for power restoration and transportation.

Fugate reiterated the $3.6 billion in FEMA's disaster relief coffers are enough in the Sandy recovery efforts. The total includes funds carried over from last fiscal year and a prorated amount for this fiscal year based on the stopgap funding measure, which funds federal government through March. The amount FEMA receives for disaster relief could be adjusted by Congress, Fugate said.

Property damages caused by Sandy could end up totally as much as $20 billion and as much as $30 billion more in lost business, according to IHS Global Insight, a forecasting firm.

On Wednesday, New York Governor Andrew Cuomo requested 100 percent of response and recovery costs be funded federally.

"Our counties are responding to the continued impacts of multi-building fires, tunnel closures, power losses to hospitals and other critical infrastructure, destroyed homes and sheltered populations — all in the midst of historic flooding that has complicated emergency response operations exponentially. Moreover, the cost to restore the complex electrically driven subway and rail transportation systems after total inundation from saltwater flooding will place a tremendous financial burden on New York State," Cuomo wrote in a letter to President Obama.

The senators from New Jersey have also made this request for their state. Federal News Radio has requested comment from the office of New York Governor Chris Christie on whether he plans to make the same request.

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