The Role of Local Government in Emergency Management

A Discussion Addressing Financial Planning

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Evelyn Trammell
February 12, 2016

Local government has an innate responsibility to ensure the safety of its community in emergency situations. Government leaders are expected to adequately prepare and immediately respond. In order to provide impactful service, financial planning should be involved in a city’s emergency management strategy.

Effective financial planning is paramount in supporting emergency recovery efforts, as emergency purchasing and adept recordkeeping are often necessary in these circumstances. Financial planning not only involves being prepared to make emergency purchases and record related expenses, it also involves setting aside funds that are only useable in such circumstances. There are countless instances nationwide where insufficient planning has hindered the outcome of recovery efforts. Therefore, every aspect of emergency management, inclusive of financial planning, should be a priority for all local governments.

Proper financial planning can ease recovery efforts. As a precaution, cities should set aside funds, which may be committed to emergency and disaster recovery. Examining the financial planning of the City of Sunny Isles Beach exemplifies such preparedness. According to the City of Sunny Isles Beach Fiscal Year 2015-2016 Comprehensive Budget and Five Year Capital Improvement Program, the “City Commission has adopted a financial standard to maintain a Hurricane/Emergency and Disaster Recovery Operating Reserve at a minimum level of $10,000,000 and a Fiscal Stability Reserve of 25 percent of the General Fund operating expenditures to be implemented by Sept. 30, 2017.”

This fund reflects the operating reserve for hurricane/emergency and disaster recovery. The city’s budget further indicates the City Commission may make emergency appropriations “to meet a public emergency affecting life, health, property or the public peace.” The use of fund balance or emergency notes may be issued in this instance. Local governments that have not followed suit should consider such financial planning to ensure they are sufficiently able to respond to their community, should the need arise.

Processes and procedures involved in public procurement are guided by regulations, codes and ordinances such as the Federal Acquisition Regulation, Uniform Commercial Code and the American Bar Association Model Procurement Code and Model Procurement Ordinance. Due to the need to abide by municipal policies and mandates, public procurement across local governments can sometimes be a lengthy and complex process. For example, this may be evidenced by the need and usage of request for proposals (RFP), invitation to bid (ITB) or request for quotes (RFQ). Emergency situations frequently call for emergency purchases. Therefore, sufficient preparation to make emergency purchases is important, or the risk of delayed response may be imminent as a result of a lengthy purchasing process.

A recommended practice is to have a pool of qualified vendors for use during emergency and disaster recovery. This will eliminate the frantic search to find contractors to provide services. Contracting for Services in State and Local Government Agencies, by William Sims Curry, recommends “to award contracts in advance of emergencies to facilitate contracting for services during actual emergencies that threaten lives, property, and the continuance of essential government services,” when necessary services can be determined before an emergency or disaster. This will help ensure fair and reasonable pricing was obtained, as well as procurement policies followed.

In order to facilitate contracting during emergencies, local governments can have letter contracts available. Curry indicates, “Development of a letter contract, containing provisions to minimize the agency’s exposure to risk yet which can be awarded in time to address most emergencies, is recommended to minimize the agency’s risks when it is necessary to award a contract and there is insufficient time to award a fully staffed contract.” A letter contract is only to be used in emergency and disaster situations, and needs to be replaced by a formal contract.

The need for recordkeeping in preparation for, during and in the recovery period is worth mentioning. Precise tracking of expenditures and labor hours of city employees during these timeframes is important and should be included as part of financial planning. The Federal Emergency Management Agency recommends accurate recordkeeping take the place of expenditures, as they will be necessary when these agencies seek reimbursement.

In conclusion, financial planning for emergency management is not limited to budgeting funds for use during these situations. It also involves preparing necessary documents such as letter contracts, having a pool of qualified contractors and a method for accurate recordkeeping. The lack of preparedness can result in hasty decisions and the risk of non-availability of goods or services needed. Responsible financial planning is proven highly beneficial when local government needs to respond to their community, especially when the safety, security and livelihood of the community is at risk, as may be the case during emergency and disaster recovery.

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Author: ASPA member Evelyn Trammell has nearly five years of experience in municipal government employed with the City of Sunny Isles Beach as a senior administrative coordinator in the Cultural & Community Services Department. Evelyn has a Bachelor of Arts with a double major in International Relations and Religious Studies, a Master in Public Administration and a Certificate in Public Procurement. Email: [email protected]. 

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