EconSouth (Fourth Quarter)
Q & A
Hurricane Recovery Will Boost Spending in 2005
An Interview with Kenneth O. Burris Jr. of FEMA
The 2004 hurricane season will be remembered for a long time in Florida and other affected states. By the end of the year, much of the wreckage had been cleared although recovery efforts will extend into 2005 and beyond as the rebuilding of private property and public infrastructure continues.
Hurricanes Charley, Frances, Ivan, and Jeanne cost insurers an estimated $23 billion, according to the Insurance Information Institute. But the economic disruption of the storms is offset by this infusion of insurance money, along with federal and state aid, that is boosting construction and payrolls in many of the storm-ravaged areas.
In the eye of the hurricane recovery effort is Kenneth O. Burris Jr., director of Region IV (the Southeast) of the Federal Emergency Management Agency (FEMA), whose mission in Florida is to get hurricane victims back in their homes and back on their jobs. EconSouth talked with him about the economic impact of the recent barrage of hurricanes.
EconSouth: How many people are helping with the recovery efforts in the region, and what kind of work are they doing?
Kenneth Burris: We have 110 full-time staff in the region, and our home office is in Atlanta. We respond to disasters through our reservists. These are intermittent employees, and nationally there are about 5,000 reservists. When we need a skill set, they are deployed to a disaster. Weve placed a lot of people in Florida with engineering backgrounds who work on damaged infrastructure. Many of our reservists are retirees who work six to eight months out of the year. These are people who enjoy helping people in need.
ES: How do these recovery efforts affect the local economy?
Burris: After Charley hit we leased a building in Orlando and had a fully functional office up and running with 600 people within 48 hours. We have two other field offices in Florida, one in Pensacola and another near Port Charlotte. We definitely have a major impact on the hotel, restaurant, and rental car economies. Its not unusual for us to rent entire hotels. To some extent, the economic impact is a function of the size of the economy of the area. When you move 4,000 people into Orlando, its a drop in the bucket. But if you go into a rural area with 1,000 people it can make a difference in the economy because our people are paid per diem. Also, we make sure we hire local talent, so we try to help the local job market. We have been hiring people with all sorts of skills in technology, warehouse management, and administration.
ES: How long will you continue to operate in these disaster areas?
Burris: There are several phases to the recovery effort. After the evacuation, the first phase is emergency shelter. We look for certain places where people can stay with lots of open space and bathrooms. Schools are attractive, but we want to get the kids back in there. We try to make this phase as temporary as possible. Some people need temporary housing, and we transition that group. Our individual assistance program for families is capped at $25,000. Its a program to assist you in getting back on your feet. That process lasts a year, maybe longer in special circumstances. Were not generally in the business of doing anything on private property. We cant replace homes, although we will do a lot of temporary repairs on roofs. We want people back in their homes and out of emergency shelters.
Basically, were in the business of reconstructing public infrastructure: roads, bridges, public parks, schools, fire stations, and hospitalsanything that was built with tax money. The money is spread out over a long period of time. It will take us years to rebuild the infrastructure.
ES: How much money is being spent to repair damage from the storm?
Burris: There is $5 billion in supplemental appropriations from Congress. We have a constant cash-flow requirement. On an annual basis, well have some 90 presidentially declared disasters on average. Our appropriations keep the cash flowing to thousands of projects that are continuous. The federal portion is 75 percent, and each state manages its portion differently. Everybody focuses on Florida, but the storms caused damage up and down the East Coast. We have field offices in Alabama and several locations outside of Florida.
ES: Are the hurricanes a boost or a drag on the Florida economy?
Burris: Overall, Id say its a net gain, with all of the public and insurance money going into the affected areas. A big factor with the recent hurricanes is the difference in building quality. Newer buildings did very well because they were built under stricter codes in effect since Hurricane Andrew [in 1992]. But its a function of the community. People need to know that disasters have a significant impact on smaller businesses. In many areas, small businesses are crucial. Some 30 percent of small businesses that are damaged dont reopen, and thats because they lack a continuity plan. Businesses need to identify how to relocate and have a plan.
ES: Will the hurricanes cause people to rethink moving to coastal areas in Florida?
Burris: The people will come back. The attraction to live on the water is too great. Ive seen this before, and people rebuild right in the same path of the storm. Hurricanes have been around forever. The allure of the ocean is strong, and people have a willingness to take a risk to live there. Some communities dont ever fully recover from a hurricane. But they change. People adapt to the hand that Mother Nature deals, and life goes on.