Why one victim of recent flooding in the Midwest decided not to involve a third party when applying for federal aid.

Some people consider the Federal Emergency Management Agency (FEMA) a villain, but Tom Watson, infrastructure commander for the tiny Iowa town of Palo (population less than 1,000), enjoyed working with the agency after the Cedar River flooded the town in June.

One source of FEMA's reputation as being difficult may be the adjustor companies that offer their services as intermediaries between the community and the federal agency after disasters. Such companies gave Palo city officials the impression that their services had to be used to qualify for federal reimbursement. Not true.

“The companies charge administration fees ranging from 3% to 10% for submitting paperwork, and another 10% of total reimbursement for their services,” Watson says. The company claims applicants will get more federal money by using their services, thus covering the additional expense of using their expertise.

Palo chose to work directly with FEMA. In addition to being the town's infrastructure commander, Watson owns a local contracting company and had worked with federal agencies, so he knew what to do.

“Working with the adjustors wasn't the right decision for Palo,” says Watson, who encourages small communities with limited budgets to consider taking the same path. “We wanted to keep the money local. Paying the adjustor's charges plus the city's 15% contribution required by FEMA to the overall damage totals was just taking too much from Palo's coffers.”

FEMA also proved flexible, helping officials fill out and submit the appropriate worksheets for reimbursable items and offering some latitude in how the money is spent.

“Items must be brought back to preflood conditions,” Watson says. “But the guidelines allow a city to declare an ‘alternate project,' and up to 90% of the funds for the project can be redirected.”