A Case for the Budget Office as Local Government Lead for Disaster Recovery: LESSONS FROM NYC AFTER HURRICANE SANDY.

Author:Grathwol, John

Local governments, take notice: You are increasingly responsible for disaster recovery.

Two factors contribute to this growing reality. First, climate change has increased the frequency and severity of natural disasters. Second, the federal government has begun to push recovery responsibilities down, with the Federal Emergency Management Agency (FEMA) insisting that disaster recovery should be "federally supported, state managed, and locally executed." (1)

Natural disasters over the last two years make the new reality clear. In 2017, three hurricanes alone--Harvey, Irma, and Maria--caused a combined $265 billion (2) in damage, mostly to locally owned infrastructure and housing. This is in addition to a severe 2018 hurricane season, which included hurricanes Florence and Michael, and a growing risk of wildfires in the west. In addition, the federal government continues to emphasize the need for state and local governments to take on an increasing share of responsibility for response and recovery. FEMA's 2018-2022 Strategic Plan emphasizes that successful disaster recovery is "federally supported, state managed, and locally executed"--a message FEMA reinforces in practice and policy. In short, local officials must prepare and be ready to respond.

The City of New York, New York, knows firsthand the challenge local governments face after a major disaster. Hurricane Sandy--which made landfall on October 29, 2012 --was the most devastating storm in the city's history, temporarily knocking out portions of the public transit system, electric and power service, schools, wastewater treatment, and roads, and damaging thousands of homes. In total, Sandy caused at least $19 billion in damages, the costliest storm in NYC history. 70,000 housing units claimed property damages, and 23,000 businesses were affected. (3) The city's greatest loss, however, was the death of 43 New Yorkers.

NYC has made one of the most successful recoveries from a major catastrophic disaster in recent history, in part because the city centralized recovery management with the NYC Mayor's Office of Management and Budget (OMB). NYC has focused on three recovery strategies: 1) centralized public budgeting recovery management; 2) strong internal systems and controls; and 3) advocacy for policy innovation. These three strategies guided NYC's decision to establish a centralized project management cell within the OMB to help facilitate its recovery from Hurricane Sandy. As a result, infrastructure recovery projects are better coordinated across multiple agencies, all of which are administered consistently with the city's internal controls and core vision of building a more resilient future.

Central budget offices normally determine how public money will be spent, making them the ideal focal point for managing long-term infrastructure recoveries. NYC's experience to date is instructive and may help guide local governments as they prepare to take on an ever-increasing burden for disaster recovery.


Sandy struck NYC on October 29, 2012, during high tide and a full moon. Approximately 17 percent of the city's landmass--51 square miles--flooded, along with 88,700 buildings and 23,400 businesses. Nearly 850,000 people lived in the inundation zone--10 percent of the city's population--and 2 million lost power. Total damages, including lost economic activity, were estimated near $20 billion.

Public infrastructure was hit especially hard: FEMA Public Assistance funding for NYC's infrastructure recovery alone will total nearly $8 billion, in addition to over $2 billion more in non-infrastructure recovery work like debris removal, emergency sheltering, temporary generators and boilers, and much more. The U.S. Office of Housing and Urban Development (HUD) will provide another almost $900 million to match the local share of FEMA Public Assistance grants for public housing and infrastructure recovery projects...

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