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Good Question: Where Does Clean-Up Money Come From?

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(credit: CBS) Jason DeRusha
Jason DeRusha filed his first report for WCCO-TV on April Fool's D...
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MINNEAPOLIS (WCCO) — The mayor of Duluth says there is at least $100 million worth of damage to clean up.

In a time where budgets are tight, where does the clean-up money come from?

Jason DeRusha found out that Minnesota doesn’t have a dime sitting in savings.

The ferocious flood waters knocked out bridges, swallowed cars and demolished entire roads in northeastern Minnesota.

The earthquake-like damage is reverberating all the way from Duluth — to the state’s emergency operations center in St. Paul.

“We really don’t budget for disaster,” said Kris Eide, Minnesota’s Director of Homeland Security and Emergency Management. “Minnesota doesn’t have a disaster relief fund.”

So where does Minnesota get the money to pay to fix things up after an emergency?

“We take a little out of everything,” Eide said.

The first step is getting the President to declare a disaster area.

Minnesota has already asked the Federal Emergency Management Agency to send assessment crews to northern Minnesota.

Those crews are looking for enough eligible damage to justify a disaster declaration.

“We have to meet a threshold of $7.2 million of uninsured damage,” Eide said. “That comes a lot quicker than we think.”

But not all damage is included in that assessment. Damage to personal homes and private businesses do not count, nor does damage to privately-owned utilities (like power poles owned by Minnesota Power).

The only damage that counts is uninsured public property — like roads, bridges, parks, and public utilities.

State engineers flew over the area today, and according to Eide said, “It’s bad.”

Federal agents start assessing Monday, starting in the south and working north toward Duluth. If the President declares Minnesota a disaster, FEMA will pay 75 percent of the cost to rebuild those uninsured public areas. The state has to come up with 25 percent.

“We’ve had a lot of practice with this,” said Eide, as this will be her 13th presidential disaster declaration in her seven-year term.

She said some of the money comes from the general fund, and the state legislature has to authorize that expenditure. That means that money is taken, generally, from other planned projects.

Other money is loaned.

“If it’s a construction project, we can use bonded money, which is basically borrowing,” Eide said.

The last major flood — in Zumbro Falls and Zumbrota — ended up costing Minnesota $68 million, Eide said. And not just for the 25 percent portion of fixing uninsured public roads, but also for the 25 percent the state ends up paying when the federal government initiates programs to help homeowners and business owners rebuild after a flood.

“Everybody knows we have to do it,” Eide said. “And we’ll make it happen.”

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