FEMA funding delay forces Dade County to borrow $700,000

FEMA funding delay forces Dade County to borrow $700,000

August 12th, 2011 by Andy Johns in News

Don Townsend, Dade County Clerk

Don Townsend, Dade County Clerk

Dade County officials have borrowed $700,000 from a local bank to pay bills and payroll until the county is reimbursed by the Federal Emergency Management Agency for storm-related expenses.

"It's a real cash-flow problem right now," County Commissioner Peter Cervelli said.

County officials say FEMA still owes them about $3.2 million. The county has no reserves, and County Clerk Don Townsend admitted that payroll got "a little close" a few weeks back but "we survived."

The terms of the 2.25 percent bank loan give the county until Dec. 31 to pay it back.

Dade County Executive Ted Rumley

Dade County Executive Ted Rumley

Photo by Tim Barber /Times Free Press.

County Executive Ted Rumley said Dade is "holding our own" financially if it weren't for the FEMA money expected as reimbursement for expenses related to recovery after the late April tornadoes.

"You can't just keep going without getting it back," he explained.

And how much the county is going to get back remains up in the air. Rumley said the county wants $3.2 million, but FEMA has said nearly $600,000 of that is ineligible for reimbursement because that portion covers work done by county workers on state roads. Rumley said FEMA claims its guidelines require state crews to handle state roads, but he added that local crews had to clear roads to get supplies and equipment into damaged areas.

Attempts to reach a regional FEMA spokeswoman Thursday were unsuccessful, but a spokesman for the Georgia Emergency Management Agency asked for patience.

"I know it's a cash strain for everybody," said Ken Davis, of GEMA, which administers many FEMA reimbursements. "Soon is never fast enough, and we understand that. The recovery process is a long-term event."

He said some final payments after a 1994 flood in Macon took 10 years to distribute, but that periodic payments were made as phases of reconstruction were completed.

Rumley vowed to find a solution, however.

"We can make it work, and we're going to make it work without a tax increase," he said.

But he and Cervelli said that would mean more cuts to county services, likely including furloughs that could begin in September. Department heads have been asked to trim 6.7 percent from the 2012 budget.

Some of those cuts likely would have come even without the FEMA delays. Unlike Catoosa County, which saw an uptick in sales tax revenue after the storms as residents bought recovery and reconstruction supplies, Dade County sales tax income has fallen. Rumley said the county simply doesn't have the retailers Catoosa County has, so many of the supplies for local residents were bought in Fort Oglethorpe or Chattanooga.

Couple that with unemployment, and the county's economy is clearly hurting, commissioners said.

"We're not in good times," Rumley said. "People are still not back at work."