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City must pay back $4 million in storm aid
Overspending in 2006 cited in audit by FEMA

Buffalo must reimburse the federal government nearly $4 million in disaster aid that the city spent in the aftermath of the October Surprise storm in 2006, according to a preliminary federal audit.

Federal auditors determined that the city didn't comply with procurement standards when contracting for debris removal and other services. Auditors also concluded that the city overspent when it hired companies to remove storm debris.

FEMA's demand for reimbursement is being assailed by New York's two U.S. senators, other members of the Western New York delegation and Mayor Byron W. Brown.

According to information released Thursday by congressional offices, a report from FEMA's inspector general found Buffalo's expenses were nearly$4 million higher than contract costs would have been had the city waited a week to deal with storm debris, as was done in the suburbs. City officials and the congressional delegation insist the comparison is unfair.

"The comparison fails to recognize the different and more costly logistics of storm repair in a 19th century city as opposed to the logistics of performing such work in a post-World War II suburb," the senators and local congressmen wrote in a letter to FEMA. "Wide rights of way and widely spaced development make the work easier in the suburban setting."

Brown insisted that the city "did everything by the numbers."

"We think everything that was done during the October Surprise Storm was done properly," he said. "It was done to protect health and safety and to get the city open and operational as quickly as possible."

A 2006 investigation by The Buffalo News several weeks after the storm revealed that Buffalo and Erie County paid top dollar for cleanup, as much as 50 percent to 85 percent higher than some suburban communities.

In Buffalo, city leaders skipped the public bidding process, reasoning that safety concerns took priority. In Erie County, the investigation concluded that the county paid more for debris removal because of its decision to focus on hiring local contractors.

Earlier this year, The News learned that federal auditors were reviewing expenses incurred during the 2006 storm. At the time, public works officials described the review as a "routine" audit and expressed cautious optimism that no problems would be detected.

But FEMA has since determined that Buffalo must repay $3,929,044, according to city officials.

Brown said he believes the demand is unfair.

The Brown administration declined to release the federal report, saying it's up to FEMA to release the document. Peter K. Cutler, the mayor's communications director, described the report as "preliminary" and reiterated the city's hope that FEMA will do an about-face.

A FEMA spokeswoman in New York City said she could not comment on the report at this juncture.

Sen. Charles E. Schumer called FEMA's demand for reimbursement "outrageous." He joined Sen. Kirsten Gillibrand, Rep. Brian Higgins and Rep. Louise M. Slaughter in sending a letter to FEMA Administrator William Craig Fugate.

The city did an "excellent" job in the wake of the massive storm, said Schumer, making sure that citizens were not shut off from emergency medical care and other vital services.

"FEMA should be using Buffalo's response as a model for other cities, instead of trying to nickel-and-dime them for actions that FEMA itself signed off on," Schumer said in a written response.

Gillibrand was equally critical of the determination, saying local citizens should not be forced to shoulder the fiscal burden for Buffalo's "efficient" actions after the disaster. "If it weren't for the city's quick response to the Surprise October Storm, the toll on its residents and properties could have been much worse," she said. "Local residents should not be left shouldering all of the costs from this storm."

Brown praised the congressional delegation for fighting FEMA's decision, saying he believes the city complied with all federal procedures.

"We did everything by the numbers," the mayor said. "We were one of the communities that most quickly recovered after the storm . . . and we had the debris up most quickly."

If Buffalo is forced to repay $4 million, it would come at a time when the city is grappling with cuts in state aid and soaring pension costs.

The city does have a $33.6 million "rainy day fund" for emergencies, and another $48.2 million that is free and clear of any fiscal obligations. Still, being saddled with nearly $4 million in unexpected costs would require the city to revise the four-year fiscal plan that it is required to present to a state control board that oversees finances.

e-mail: bmeyer@buffnews.com

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