WASHINGTON – The Federal Emergency Management Agency has agreed to have an outside expert take a look at Erie County’s claim that it should not have to pay back $48.5 million in federal aid it received after the surprise snowstorm of October 2006.
W. Craig Fugate, the FEMA administrator, announced that development Wednesday in a meeting with Sen. Charles E. Schumer, D-N.Y., and Erie County Executive Mark Poloncarz.
“Getting an independent specialist to look at this is a good thing because we don’t think Erie County did anything wrong here” and thus should not have to pay back the money, Schumer said after the meeting.
Poloncarz was optimistic after the meeting as well.
“I’m hopeful that very soon this will end so that we can get on to more important things in county government,” Poloncarz said.
Fugate, Schumer and Poloncarz met for about 25 minutes in the senator’s office to discuss the results of a Department of Homeland Security Inspector General’s audit that said Erie County should have to repay the $48.5 million.
The inspector general initially issued that audit in January, saying Erie County improperly awarded repair work after the October storm to local companies, without wider bidding.
When the county cited federal law that allowed the work to be done locally, the inspector general revised the audit to say the county had not sought to hire minority- and women-owned businesses during the cleanup.
And while no one from the inspector general’s office was at Wednesday’s meeting, both Schumer and Poloncarz cited the shifting arguments of the audit as a good reason for the agency to reject its findings.
“FEMA approved all the reimbursements” at the time of the storm, Schumer noted. “To come back seven years later and try to get the money back seems totally unfair.”
Poloncarz agreed, saying that Erie County appeared to be caught in the middle of a dispute between FEMA and the inspector general.
“They had an ax to grind against FEMA, but unfortunately Erie County was the one they were going to take it out against,” Poloncarz said.
Doing so could be very costly to Erie County in more ways than one. Repaying the money would wipe out two-thirds of the county’s fund balance, and credit rating agencies know that, Poloncarz said, meaning the squabble could affect the county’s future ability to borrow at a low interest rate.
FEMA originally had 90 days to respond to the inspector general’s revised audit, which came out in early April. But Fugate said in the meeting that the agency would need an extra 30 days to respond.
That means Erie County should know by August whether it will be forced to repay the money.