Dear Mayor,

Last week, under pressure from Louisiana Senator Mary Landrieu, the National League of Cities (NLC) and others, the Federal Emergency Management Agency (FEMA) rescinded its June proposal that would have cut its financial assistance to public entities and certain nonprofit organizations that sustain property damage in natural catastrophes.

Under the proposal, which was quietly introduced in June, public entities and nonprofit organizations faced the prospect of losing federal assistance for any damaged property that also had been damaged in a previous disaster. Elsewhere in the proposal, FEMA advised governmental and nonprofit buyers of National Flood Insurance Program coverage that it expected them to purchase enough “excess insurance” to guarantee full coverage for any damages above the program's $500,000 limits.

FEMA originally published its plan in a June 4 bulletin on the agency's web site. But most buyers and brokers did not become aware of the change until last week.

A key FEMA official agreed that the plan was "confusing at best" and probably misleading. He said the bulletin did not clearly detail FEMA's intent. But, he also noted, FEMA does want to ensure that the federal government is not "the first in line to bear the risk for disaster losses."

To that end, FEMA will make another attempt to outline the kind of financial assistance it will provide after a natural catastrophe and the insurance requirements it will demand that public entities and nonprofit organizations meet.

                                                                        Very truly yours,

                                                                        William G. Dressel, Jr.
                                                                        Executive Director