Residents of Guam will receive Federal Emergency Management disaster assistance but money to replace government of Guam assets is uncertain.

Because the government of Guam has not insured government buildings after previous disasters FEMA money may not be forthcoming.

As each disaster has hit Guam unmet insurance obligations have compounded.

FEMA and the government of Guam are still tackling insurance issues arising from Typhoon Chata’an which hit the island on July 5 2002 causing $56 million in damage; and Supertyphoon Pongsona the $200 million disaster that struck Guam on Dec. 8 2002.

Following Supertyphoon Pongsona FEMA waived Guam’s cost share of the disaster provided insurance was obtained. A similar agreement was made for the Chata’an disaster but on a 90% federal and 10% Guam formula.

Declaration of a limited federal disaster area for Guam and the Northern Mariana Islands has placed officials on Guam in a precarious situation because of those unresolved insurance issues.

President George W. Bush issued a major disaster declaration for Guam on July 29. Based on that declaration local government agencies can apply for reimbursement of eligible costs for debris removal emergency services and the restoration of public facilities damaged during the storm. Funding through the U.S. Department of Homeland Security’s Federal Emer-gency Management Agency Public Assistance program will pay 75% of approved costs for infrastructure damage.

A preliminary damage assessment for Tropical Storm Tingting pegged damage at $1.2 million.

William Lokey FEMA coordinating officer said at a briefing for public officials on Aug. 10 that the number could go higher based upon disaster claims.

Tingting passed over Guam June 26 to June 29 bringing high winds and record rains that caused flooding and mudslides.

“The insurance issues on Guam from past disasters are extremely complex. The bottom line is that as this is a new disaster all of our regulations do apply.” He told the Journal “If something was damaged in a past disaster and repaired by FEMA and insurance was not obtained and maintained then that [structure] will not be eligible for this disaster.”

In past disasters FEMA has granted waivers for insurance in some instances. Lokey said for this disaster the only waiver he was aware of was the normal requirement that an insurance binder be in place to release funds on small projects under $5 000.

He said the binder was being waived because of the timing.

“We can release the money early to get it to people but insurance will have to be placed and maintained on those projects ” he said. “It’s a kind of waiver of convenience but not of insurance.”

Lokey said his agency is being lenient in releasing funding so repairs can proceed because of economic hardship in Guam. However he said anything above a $5 000 value repaired with FEMA money would need to be insured with the insurance maintained.

FEMA considers Guam a state. Lokey said imminent procedures will allow the state insurance commissioner to state insurance funds are unavailable or certain conditions surrounding insurance are unreasonable. The commissioner could then request a waiver.

“That would be up to the state [Guam]. A determination is made but that is different from my function. For the time being my marching orders are the rules apply and we are working with [Guam] officials to do that.”

The situation is complicated if one typhoon or disaster follows another. Lokey said “If something was damaged by the past supertyphoon and they are working on repairing it and a storm comes along and damages it again how do we deal with that? We try to be as fair as we can.”

Both Congress and the federal government have tightened insurance requirements over the last five to ten years in light of the availability of flood insurance and other programs. “Disasters have become so expensive. What we want to do is fix it once. After that it is going to be insured and then insurance is going to take care of it ” Lokey said.

FEMA staff have prepared an executive summary of unresolved insurance issues and where they stand. However this was not available as of press time.

Frank F. Blas Jr. recovery coordination representative for the government of Guam confirmed to the Journal insurance questions were still pending.

“There are still some unresolved Pongsona issues that may impact on the request for financial assistance for Tingting. We are crossing our fingers — a few days after the president declared Guam a disaster area we received a letter from the regional director giving us some positive feedback on insurance issues relating to both Pongsona and Chata’an ” he said. “How this news is going to affect Tingting is still premature because we are still satisfying the requirements that FEMA had for us to deal with in those disasters.”

Blas said FEMA sent authorization of government of Guam certification on the unreasonable cost of insurance for certain infrastructure and public assistance projects associated with previous disasters. How that will affect the Tingting declaration was still unknown he said. “I need to see what FEMA is going to do on their end. Then that would give me some idea of what to do. FEMA provided me this authorization around the same time as the presidential declaration. Even though we’re talking about disasters two years apart there are going to be the same issues with this disaster.”

Blas said the formulas for insurance are not fiscally viable.

“Not only is insurance expensive but it is unreasonable economically nor is it feasible. I can’t see why I need to get $5 000 worth of insurance so that I can satisfy a $7 000 award. Of the $7 000 I had to put out $700. I am going to be paying $5 700 for $1 300. It doesn’t make sense.”

He said it was understandable that FEMA would expect GovGuam to insure public buildings but it became moot when there was no funding.

“Guam is not the only one with these issues. FEMA is very cautious and deliberate in its decisions concerning Guam’s insurance issues because it has a national impact ” he said. “There are other areas that have disasters waiting in the wings to see how FEMA is going to react to Guam’s concerns. I’m keeping my radar out because I’m not the only jurisdiction that has money woes.”

Blas said the Stafford Act — the enabling legislation that provides federal money when a presidential declaration is made — is vague and ambiguous.

He said after years of back and forth negotiations combined with FEMA’s reluctance to change its policy he was now asking “‘What can you give me?’ We’ve adopted that approach and they’ve become more receptive.”

Blas also turned to the Insurance Association of Guam for help in the government’s procurement of needed insurance. “I went to the association and asked how I should approach FEMA on these issues because as much as providers would like to make money they recognize they can only make money with a customer that is able to pay.”

Bush’s declaration also included the Northern Mariana Islands which experienced Tingting as a low-grade typhoon. Lokey has eight staff working there. Briefings took place on Saipan Tinian and Rota on Aug. 11 and 12.

“One of the things they have come back and asked for is that the northern islands be added into the disaster. Because of weather conditions and expediency they were not initially assessed but they have identified some public property damage which appears to be water and wastewater system and some communications structure damages that we are trying to get the documentation on ” he said.

Lokey said the CNMI had an expedient solution to the insurance claims. “They got all the public agencies together. They put out a consolidated insurance request proposal which in the end provided underwriting insurance for everybody and each paid a portion.”

FEMA opened a disaster assistance office at the Micronesia Mall on Aug. 9. Lokey anticipated operations would be turned over within weeks to the Hawaii office to handle long-term issues including complex insurance questions.

“I have already cut loose some of the support staff so that they can move on and work the Hurricane Charley disaster that roared across Florida on Aug. 13 ” he said.

Lokey and FEMA staff will hold training on FEMA requirements on Aug. 25 regarding procedures and policy. MBJ