Almost 10 months after Hurricane Sandy battered coastal New York and New Jersey, storm-struck municipal and county governments are still trying to regain their financial footing.
The governments are trying to repair or rebuild boardwalks, water treatment plants, recreation centers and other government owned properties.
On top of this visible damage, Sandy also undermined tax bases.
Together, this leaves many of the governments struggling.
Due to Sandy's impact Moody's Investors Service has downgraded at least four issuers: Long Island Power Authority, to Baa1; the Borough of Union Beach, N.J., to A2; the Borough of Seaside Heights, N.J., to A3; and the Township of Toms River, N.J., to Aa3. Moody's has assigned negative outlooks to four others.
All six governments that responded to Bond Buyer inquiries said that they still were trying to deal with the financial aftereffects. Some have sold notes to raise money for Sandy projects.
Originally, it was thought that the federal government would reimburse localities for 75% of Sandy's infrastructure damage expenses.
However, in May and June the federal government told New York and New Jersey that it promised to reimburse localities for 90% of infrastructure expenses. The increase in the Public Assistance grant reimbursement rate was due to the expenses' overwhelming size.
State and local governments and certain private nonprofit organizations are to be reimbursed for infrastructure repair, debris removal and emergency operational expenses.
The Federal Emergency Management Agency "obligates" the money to state governments and these governments disburse the money.
In New Jersey FEMA has approved 3811 of 4658 applications for Sandy aid, said FEMA spokesman Darrell Habisch. It has promised $809 million.
In New York, the federal government declared 14 counties eligible for Sandy-related aid. FEMA has obligated $1.7 billion to the state, FEMA spokesman Jim Homstead said.
Sandy left very big capital project bills for some of the states' coastal communities.
For example, Long Beach, N.Y., a community of 33,000 on Long Island, expects $180 million of recovery expenses.
Some other coastal towns and villages have capital damages of a few million dollars. However, since many of the communities only have a few thousand residents, the repairs represent substantial hits to government coffers.
The localities need the FEMA money but have only received a portion of it.
"The process is incredibly challenging, to say the least," Long Beach Township, N.J., Mayor Joseph Mancini said. Sandy cost the township of 3,000 people $13 million, he said.
The impact on the township will depend on whether FEMA follows through on its 90% commitment, Mancini said. So far the township has only received 8%. The township will pay its 10% share by using its surplus, Mancini said.
The township expects to sell bond anticipation notes in September, Mancini said. These are to be paid off ultimately with FEMA money, he said.
On the eastern half of Long Island, Suffolk County, N.Y., would also like to see more of the promised FEMA money delivered.
FEMA has says the county will receive $32.7 million for Sandy expenses, Suffolk County spokeswoman Vanessa Baird-Streeter said. So far it has received just $10.7 million. This does not include the costs of beach repair, which the Army Corps of Engineers is expected to handle, she said.
"The county has outstanding receivables for 2012 and 2013 (for response and repair costs) that are affecting the cash flow and putting a strain on budget, especially for those departments impacted," Baird-Streeter said.
Neighboring Nassau County has even bigger problems. The county has already spent $116 million to deal with Sandy, deputy county finance executive Tim Sullivan wrote in an email. FEMA provided $50 million to the county so far. Nassau expects to get the remainder of what FEMA is promising over the next eight to 10 months.
Additionally, the county's sewer treatment plant and pump stations sustained significant damage. Repair of these facilities is expected to cost $700 million. While this is expected to be reimbursable by FEMA, the construction will be drawn out over a few years, Sullivan wrote.
Atlantic City, N.J., expects Sandy-related capital costs of $2.5 million and operating costs of $1 million. Atlantic City has received some of the FEMA reimbursement and is expecting more, Atlantic City director of revenue and finance Michael Stinson said.
Of the six localities that responded to The Bond Buyer for this story, only Ocean County, N.J., said its capital costs would be minimal. But it has other problems.
Ocean County is struggling with a revenue decline that FEMA's Public Assistance program will not cover.
Hurricane Sandy lowered the value of residential and commercial properties paying taxes to the county. Some of the properties were destroyed, some damaged, and some simply devalued by surrounding damage.
The return of the "ratable base" in Ocean County will take a few years, Ocean County county administrator Carl Block said. Seasonal businesses in the county are doing OK but less than normal, he said.
While not receiving Public Assistance aid, the county is getting a $5 million community disaster loan from FEMA to offset the loss of tax revenue. The United States Department of Housing and Urban Development has given the county a $7.9 million Community Development Block Grant to help cover essential services in the context of reduced revenue, Block said.
FEMA is providing aid to cover operating expenses associated with Sandy, Block said. While FEMA is disbursing the aid slowly, the county hopes that government aid of all sorts will make it whole financially, Block said.
Suffolk County lost $10 million on property tax collections, Baird-Streeter said. The storm also cost the county $8.8 million in anticipated sales taxes, she said. Sales taxes are rebounding, up 6.5% for the year.
"While the county will receive aid on expenses it incurred, there is no mechanism currently to reimburse us for revenue losses," Baird-Streeter said.
In the aftermath of Sandy, the second costliest hurricane in United States history, amid concerns that global warming may bring more major hurricanes to the east coast, some coastal governments are trying to prepare.
In New York City, the Metropolitan Transportation Authority plans to spend undefined billions of dollars to repair Sandy damage and prevent future flooding. New York City mayor Michael Bloomberg has presented plans to spend $20 billion to prevent flooding in low-lying parts of the city.
In Suffolk County, "we are just completing an after action review of Superstorm Sandy to enhance our response to future storm events," Baird-Streeter said. The county has been communicating with New York and the federal government about possible sources of funding for upgrades to address future storms.
Atlantic City is planning to build storm walls and flood gates to limit damage from future hurricanes, Stinson said. The city recently sold $12.8 million in bond anticipation notes to cover Sandy's capital costs and to start construction of the sea wall.
Finally, Long Beach, N.Y., is rebuilding its boardwalk in a form that will be less susceptible to storm damage.