During its regular meeting on Monday, Feb. 14, the Johnson County Fiscal Court approved a budget amendment and transfer of approximately $2.5 million after hearing an update from Judge-Executive Mark McKenzie about the county’s ongoing disaster recovery process after last year’s ice storm and flooding.
During its regular meeting, the Johnson County Fiscal Court approved the payment of monthly bills for the court, which prompted Johnson County Judge-Executive Mark McKenzie to break down the numbers and process of seeking Federal Emergency Management Agency fund reimbursement.
“I will make one comment on the bills, it has no bearing on your decision … but you’ll notice there was a claim in there to City National Bank … this is related to FEMA, and you’ll notice there was a payoff of the principle and any outstanding interest related to this line of credit, so let me just recap briefly, kind of where we are,” McKenzie said. “So, here’s some rough numbers based on what we know about the damages related to the two disasters we had in February and March … those were huge impacts on this county, big time damages.”
McKenzie said those damages totaled approximately $3.8 million on the ice storm alone, and then explained how the process of receiving funds from FEMA works.
“That’s just on the ice storm alone. Now, keep in mind that when it comes to FEMA, it’s very important that we get a federal emergency declaration so that we have access to FEMA dollars, which we did … but please keep this in mind, that FEMA is a reimbursable program, they don’t send you a check upfront, you pay and then, they reimburse,” McKenzie said. “The thing you have to keep in mind is that this process is time sensitive, too, for two reasons … one, I think we have a responsibility to repair, as quickly as possible, the damages that we incur … and second is, FEMA doesn’t allow you to just do everything whenever you feel like it and then they still reimburse you, you have time limits, and it’s typically about 18 months. You think, ‘Well, that’s a long time,’ but 18 months goes pretty quick, especially when you have to go through all of the processes with FEMA.”
According to McKenzie, the county did not have that required $3.8 million in liquifiable funds.
“This county, obviously, did not have $3.8 million laying in the bank to pay that, so that’s when I approached you all so that we could timely make our repairs … it’s a revolving line of credit,” McKenzie said. “In business, this happens all of the time. Sometimes, you have things that happen in business unexpectedly and you have to reach out and temporarily pull in financial resources to help you get past that hard spot, then you obviously pay that back … this is the way it breaks down with respect to how FEMA participates in this process.”
McKenzie said that FEMA will pay 75-percent of the damages, totalling approximately $2.85 million, while the state pays a 12-percent share, totaling approximately $456,000 and local agencies have a 13-percent responsibility for their local match, which totals approximately $494,000.
“So, if you want to look at an overall scheme of things, we’re going to have to payout $3.8 million and we have to find a way to pay that out and then, we’re obviously in the process of receiving money back from FEMA, so, on the invoices that we have already paid and we’ve submitted for reimbursement, you all approved a payoff on that line of credit for more than $2.2 million … we filed those bills for reimbursement … they reimbursed, we paid off the line, so we’re going to be drawing on that again to continue repairs … We’re still talking ice storm, I haven’t even gotten to the flood, yet,” McKenzie said, adding that he had also reached out to local legislators to seek assistance in paying for the local match portion of the costs. “So, for the ice storm, I have reached out to both of our local state legislators, I’ve asked them if they would consider taking a look in the state budget, which is still under consideration in Frankfort right now, if they could see if they could find dollars to help, not only us, but our neighboring counties, who were also impacted so heavily by that storm, to help with that 13-percent match. We all know that negotiations are heavy and ongoing every day, when it comes to budgetting a year. Nevertheless, I made the ask.”
McKenzie then reiterated that, without this assistance, the ice storm will have cost the county $494,000, which he said it would be appreciably lower than what the cost could have been without the federal emergency declaration, but the timing was still difficult to swing and made the process difficult. According to McKenzie, the flood then cost the county an additional $3.5 million in damages, bringing total damages in 2021 to $7.3 million, but not all news was bad, as the county had made use of a grant manager, who had overseen the process from the beginning and had been responsible for locating the Local Match Participation Program that saw Governor Andy Beshear travel to Johnson County in November to present approximately $421,000 in funds to the county, which covered most of the required match of approximately $455,000.
The cost to Johnson County of the disasters suffered in early 2021 was substantial regardless, McKenzie explained, but that cost was offset greatly and that the disasters had a projected cost of $520,000, representing only approximately 7.12 percent of the total of approximately $7.3 million in incurred damages, although he added that this was a moving target, as FEMA still has the final say on what they will reimburse and what they won’t and that all repair expenditures must be completed by June 30.
McKenzie said he felt it prudent to explain this process to the commissioners as there was about to be put forth a proposition to amend the county’s budget and once again draw down on that line of credit to move forward in completing more of those repairs.
“So, I just tried to keep the math simple … but, next there is the approval of the transfers and financials and … certainly, I segued into this with that explanation because as you can see there is a transfer in the road department line for the $2.5 million, and $2.2 million of that was related to the payoff of the revolving line of credit … and there was $200,000 in asphalt and we just approved the payment of the flex amount of $151,000 … when you get out there in the field, it can vary a little bit,” McKenzie said. “You’ll also see that one of the transfers on that line … is related to the flood, the flood mitigation project, we had to go ahead and set up a line item for that as well.”
McKenzie also mentioned a $50,000 payment for jail expenses at the Big Sandy Regional Detention Center, stating that the center was an “ever-challenging situation,” but it was a required service that the county just tries to manage as best as possible.
The court approved the budget transfers.
The Johnson County Fiscal Court meets on the second Monday of each month at 4:45 p.m. in the Johnson County Fiscal Courtroom and all meetings are open to the public. For more information on the ongoing disaster recovery process in Johnson County, visit the Johnson County Community and Economic Development page by searching for it on Facebook.
