Program Plan
Department of Homeland Security - Community Disaster Loans Recovery Plan
Updated 05/20/2009
Objectives
Program Purpose
The "Traditional" Community Disaster Loan (CDL) Program provides operational funding to help local governments that have incurred a significant loss in revenue, due to a major disaster, that has or will adversely affect their ability to provide essential municipal services. AARA revised provisions to the "Traditional" CDL Program to include a supplemental that will help to identify and provide loans to eligible applicants from 2008 disasters.
Public Benefits
The specific goal of this portion of Community Disaster Loan Program is intended to provide additional funding to eligible applicants who were provided Traditional Community Disaster loans in 2008. Such additional funding would afford those eligible communities additional resources to continue providing those functions of a municipal operating character such as police or firefighter salaries. This specific goal will be accomplished by evaluating those loan recipients from 2008, determining if they have met the 25% tax revenue loss threshold, and providing them the additional eligible funding through the vehicle already set up with their Traditional Community Disaster Loan.
The “Traditional” Community Disaster Loan (CDL) Program provides operational funding to help local governments that have incurred a significant loss in revenue, due to a major disaster, that has or will adversely affect their ability to provide essential municipal services. Local governments must show a loss of greater than 5% of tax and other revenues for the current or succeeding year. Loan amounts may not exceed 25% of the operating budget of the local government for the fiscal year in which the disaster occurred, or the cumulative estimated revenue loss for the fiscal year of the disaster and the subsequent three fiscal years, but shall not exceed $5 million.
In 2009, Congress passed the American Recovery and Reinvestment Act which included revised provisions to the “Traditional” Community Disaster Loan (CDL) Program. Specifically, any local government with a major disaster in calendar year 2008 could receive a Community Disaster Loan up to 50% of the operating budget for the fiscal year of the disaster if they suffered a loss of 25% or more in tax revenues. The $5 million cap was removed. The mission of the Program is to identify and provide eligible applicants from 2008 disasters supplemental funding.
Historically, this provision has not been previously implemented with the “Traditional” Community Disaster Loan Program. Therefore, there is no history of accomplishments.
The objectives of the “supplemental” are to 1) identify local governments who received Traditional Community Disaster loans in 2008 that are eligible for additional funding based on the 25% tax loss requirement 2) complete new loan packages for those determined eligible and 3) provide additional loan funds for eligible applicants. FEMA has engaged the states where 2008 loans were provided and is currently working with each applicant who has requested evaluation for eligibility on a case by case basis.
Measures
The measures have been revised to enrich the performance metrics for Recovery targets. In some instances, targets will not be available until additional baseline data has been collected.
| Measure | Target/Actual |
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| 2009 | 2010 | 2011 | 2012 |
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[-]
Eligibility Determinations | - | - | - | - |
Measure Information
| Frequency : Annual | | Direction : No Data Available | | Type : Output | | Explanation : Evaluation of identified potential applicants | | Unit : No Data Available |
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| - | - | - | - |
Measure Information
| Frequency : Annual | | Direction : No Data Available | | Type : Output | | Explanation : The number of determined eligible applicants and the availability of the funds for drawdown. | | Unit : No Data Available |
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Schedule and Milestones
February 16, 2009 – Public Assistance Division notified of Stimulus Conference Report that articulated supplemental funding availability for 2008 Community Disaster Loan recipients.
February 17, 2009 – Public Assistance began financial review of all 2008 loan recipients to determine likelihood of eligibility with regard to supplemental funding requirements (i.e., 25% tax loss litmus test). Furthermore, Public Assistance un-officially notifies States of potential additional funding for 2008 loan recipients. Public Assistance engages Office of Chief Counsel to clarify limitations on “tax only” loss.
February 25, 2009 – Public Assistance develops guidelines for Traditional Community Disaster Loans as they relate to the supplemental.
March 2, 2009 – Public Assistance crafts announcement to States to detail new offering and its limitations.
March 3, 2009 – Public Assistance begins assembling staff to engage applicants based upon forecasting performed in February.
March 10, 2009 – Public Assistance officially notifies states of supplemental funding opportunity and availability of the program to engage interested parties immediately.
March 24, 2009 – Upon request by the State of Texas, Public Assistance speaks directly with the City of Galveston regarding potential eligibility for supplemental funding.
March 25, 2009 – Received first request for evaluation for eligibility (Oakville, Iowa). No other 2008 loan recipient in Iowa determined to be potentially eligible.
April 1, 2009 – Received for request from the State of Louisiana for three (3) 2008 loan recipients. No other 2008 loan recipients determined to be potentially eligible.
April 2, 2009 – Public Assistance reaches out to State of Texas to determine if any other 2008 loan recipients would be interested. Two (2) additional 2008 loan recipients identified.
April 20, 2009 – All identified potential applicants engaged; Awaiting supporting documentation from all to make final eligibility determinations.
TBD – Upon an eligibility determination, applicants to deliver completed loan package to Governor’s Authorized Representative for concurrence and delivery to Region. At that point, the Region forwards to FEMA Headquarters for final processing through the Chief Financial Officer.
Milestones
No Data Available
Projects and Activities
The “Traditional” Community Disaster Loan (CDL) Program provides operational funding to help local governments that have incurred a significant loss in revenue, due to a major disaster, that has or will adversely affect their ability to provide essential municipal services. The Stafford Act, Section 417, subparts 206.360 through 206.367, authorizes FEMA to provide direct loans to local governments who have suffered a substantial loss of tax and other revenues as a result of a major disaster and which can demonstrate a need for Federal assistance in order to perform its governmental functions.
The local government shall use the loaned funds to carry on existing local government functions of a municipal operation character or to expand such functions to meet disaster-related needs.
• The funds shall not be used to finance capital improvements nor the repair or restoration of damaged facilities.
• Neither the loan nor any cancelled portion of the loans may be used as the non-Federal share of any program, including those under the Stafford Act.
• Typical uses for such loan funds would include paying the salaries of police, firefighters, garbage workers, or teachers while the community recovers.
Review Process
To date, the CDL Program has approved 22 “Traditional” Community Disaster Loans to communities affected by disaster in 2008. Seven (7) communities who received loans in 2008 have requested evaluation for the supplemental funding. Of those seven (7), all are currently being evaluated for eligibility; none have been determined eligible for supplemental funds to date.
Additionally, the CDL Program conducted a global review of all loans provided in 2008 and determined no other loan recipients would meet the 25% tax loss threshold for the supplemental.
FEMA disburses funds to local governments when requested, generally in accordance with their Schedule of Loan increments in the Promissory Note. As funds are disbursed, interest accrues against each disbursement. When incremental disbursements are requested, the local government is required to submit a copy of its most recent financial report for consideration by FEMA in determining whether the level and frequency of periodic payments continue to be justified. Desired adjustments in the disbursement schedule are submitted in writing 10 days prior to the proposed disbursement date in order to ensure timely receipt of the funds. Additionally, the local government is required to submit to FEMA copies of its annual financial reports (operating statements, balance sheets, etc.) for the fiscal year of the disaster and for each of the 3 subsequent fiscal years. FEMA reviews each loan periodically to determine whether projected revenue losses, disaster-related expenses, operating budgets, and other factors have changed sufficiently to warrant adjustment of the scheduled disbursement of loan proceeds.
Cost and Performance Plan
FEMA provides each loan recipient with a loan status report on a quarterly basis. Program Managers are held accountable for the timely engagement of potential applicants, expedient review of information for eligibility determinations, and the time it takes (given the process) for funds to be made available to the applicant. Such accountability is monitored through a weekly status report provided to the Division Director and the States.
Energy Efficiency Spending Plans
FEMA is required to consider the potential impacts to the human and natural environment of projects proposed for FEMA funding. FEMA, through its Environmental and Historic Preservation (EHP) Program, engages in a review process to ensure that FEMA funded activities comply with various Federal laws including: National Environmental Policy Act, National Historic Preservation Act, Endangered Species Act, and Executive Orders on Floodplains (11988), Wetlands (11990) and Environmental Justice (12898). The goal of these compliance requirements is to protect our nation’s water, air, coastal, wildlife, agricultural, historical, and cultural resources, as well as to minimize potential adverse effects to children and low-income and minority populations.
The Community Disaster Loan Program’s mission does not interact with any of these elements. The CDL’s mission is to provide funding to allow local government to continue funding their essential operations. There would not be any impacts to human or natural environments.
Program Plan Award Types
No Data Available