RICHMOND — The federal government will pay more than $32 million of Virginia’s costs for responding to Hurricane Florence, leaving the state to pay the balance of $10.8 million to prepare for a storm that prompted an unprecedented evacuation of low-lying areas along the Atlantic coast.
The Federal Emergency Management Agency approved the state’s major disaster declaration on Monday, the same day that Virginia Secretary of Finance Aubrey Layne informed legislators that the final cost of storm preparations was estimated at $43.4 million, down from an initial estimate of $60 million.
Most of the cost came from a $32 million contract with a Texas company and its sister firm that Virginia negotiated as Florence appeared to be heading toward Hampton Roads with Category 4 winds and storm surge. Those threats abated as the storm veered slightly before making landfall in North Carolina on Sept. 14.
“We were dead in the middle of what looked to be a catastrophic impact in Virginia,” Layne told the House Appropriations Committee on Monday. “At that point in time, we were in the bull’s-eye.”
But legislators remain skeptical over a last-minute contract for shelters that ultimately housed just 52 people at three public universities. The contract required the shelters to be able to care for 5,800 people for seven days.
“Many of us are scratching our heads over how we got to ... this dollar amount,” said Appropriations Chairman Chris Jones, R-Suffolk.
Gov. Ralph Northam had declared a state of emergency on Sept. 8, six days before the storm made landfall. At that point, Virginia’s anticipated cost was $27.2 million.
The initial cost included $10 million for one large state emergency shelter, Jeff Stern, state coordinator for the Virginia Department of Emergency Management, said in an Oct. 2 memorandum to Layne that reviewed the state’s preparations for the advancing hurricane.
The cost projection soared to $60 million on Sept. 10, when Northam ordered the evacuation of 245,000 people living in Zone A, low-lying areas of Hampton Roads and the Eastern Shore, because of the hurricane’s intensifying winds, likely storm surge and the potential for severe inland flooding from torrential rains.
The state’s Hurricane Evacuation Coordination Group recommended that the state open inland shelters, “and our requested amount to be included in the emergency declaration was increased to $30 million,” Stern told the finance secretary.
The Virginia Department of Planning and Budget was reviewing the initial cost estimate of $27.2 million when the governor’s evacuation order caused the price to jump to $60 million, department Director Dan Timberlake told the Appropriations Committee on Monday.
“At that point in time, it was already in play and the contract had been signed,” Timberlake said.
The Department of Emergency Management had turned to two companies that had “pre-qualified to provide base camp operations” in an emergency under a state solicitation last year for qualified contractors — Deployed Resources, based in New York, and DRC Emergency Services, based in Texas.
However, the solicitation was based on 72 hours’ notice for contractors to mobilize, and Virginia had less than 48 hours to prepare because of “evolving and uncertain predictions on Hurricane Florence’s possible impact,” Stern told Layne.
Deployed Resources, the New York-based company, was “not able to support the request” or any portion of it, so the state turned to DRC Emergency Services in Galveston, Texas, where more than 6,000 people died in a hurricane in 1900.
DRC partnered with SLS, a related Galveston company, on a contract to establish three state-managed emergency shelters at Christopher Newport University, the College of William & Mary and Virginia Commonwealth University for a minimum of seven days.
DRC and SLC are both part of Sullivan Interests, a portfolio of companies based on the Gulf Coast. “They’re different companies, but they’re related,” said Jeff Caldwell, a spokesman for the Virginia Department of Emergency Management.
Stern said the companies were able to meet the tight deadline with the provision that the setup of the shelters would be ongoing on the first day and meals would be limited to prepackaged meals.
“They established safe, clean and compliant shelters for the citizens of Virginia under extreme and unprecedented timelines as the storm approached,” he told Layne in the memo.
The shelters also were managed with support from 488 state employees from the departments of Social Services, Health, and Agriculture and Consumer Services; the Virginia State Police; and the Virginia National Guard.
At a premium?
In his memorandum, Stern said he was unable to answer Layne’s question about whether the state had paid a premium for the services because of the time constraints. However, he said the state has relied since 2013 on the estimated cost of running a large emergency shelter at $6 million to $10 million.
“As outlined, the commonwealth’s efforts to put these services under pre-disaster contract have been previously unsuccessful,” he said.
“These potentially life-saving services were therefore procured, under state law and regulations, through a pre-qualified base camp vendor who delivered the services requested — sheltering for 5,775 people — within 36 hours,” Stern concluded.
The state’s share of the shelter costs was almost $8 million, Layne told legislators.
Virginia was able to reduce some of the storm expenses by shifting resources south to the Carolinas, where Florence caused the widespread damage from storm surge, wind and inland flooding that state emergency officials had feared here.
Most notably, Virginia lowered the cost of special search and rescue teams from $21.8 million to $2.7 million, with Virginia’s share at $66,478. The total cost fell from $60 million to $43.4 million, with the federal government paying all but $10.8 million.
The major disaster declaration FEMA approved on Monday will allow federal reimbursement of storm-related expenses incurred by state, local and tribal governments in Richmond and at least nine other localities.
While Virginia was spared the hurricane’s direct force, the storm caused inland flooding and spun off 10 tornadoes, nine of them in the greater Richmond area, including one that leveled a warehouse in Chesterfield County, killing one man.
“The award of these funds will allow the commonwealth to complete our recovery efforts and will help local and state governments to pay for the costs incurred from storm damage and response operations,” Northam said in a statement.