What if an expensive disaster befalls a community, but the federal government doesn't track it?
On May 16, devastating storms and tornadoes struck St. Louis. Five people died and 38 were injured
The disaster came soon after the May 8 announcement from the National Oceanic and Atmospheric Administration that it has mothballed its tracker of billion-dollar weather and climate disasters.
The costs of the May 16 storms to St. Louis are likely to be around $1.6 billion, according to an estimate from Mayor Cara Spencer's office shared with The Bond Buyer.
The retirement of the NOAA database as the Trump administration slashes the federal government's climate science and weather forecasting capabilities removes a quantitative and authoritative metric for weather disasters.
"In alignment with evolving priorities and staffing changes, NOAA's National Centers for Environmental Information will no longer be updating the Billion Dollar Weather and Climate Disasters product," John Bateman, meteorologist and public affairs officer, told The Bond Buyer. "Additional details and the opportunity to submit comments are available at the NESDIS
Reports from 1980 to 2024 have been archived but remain available on the NCEI's website, he said.
The historical billion-dollar disasters
The cost has skyrocketed, from under $58 billion in 1980 to nearly $517 billion in 2024. Severe storms have become a much larger share of the total disaster count, as has drought.
The Trump administration
Beyond its impact on governments' and members of the public's ability to gauge worsening climate disasters, the loss of the NOAA database threatens to undermine the parametric triggers used in catastrophe bonds and impede insurers' ability to model secondary perils, the insurance industry credit rating agency AM Best
The NOAA database's removal "presents immediate challenges to insurers, reinsurers and ILS investors who rely on its metrics for modelling weather-linked risks and structuring parametric insurance and cat bond deals," according to AM Best.
"If more of these data sources were to disappear, parametric triggers within catastrophe bonds, which depend on measurements by the NOAA, may need to be redesigned," said Sridhar Manyem, senior director, industry research and analytics at AM Best.
The insurance credit rating agency acknowledged there are other data sources, including private data sources, but said the availability of an authoritative government data source "has always been seen as beneficial for its trustworthiness and transparency."
Michael Weinstein, head of surveillance at Build America Mutual, said that from a muni perspective, the loss of the NOAA's live data set is not a game changer.
"There's no single data set that a municipal analyst can rely on to assess the risks posed by natural disasters, but that also means losing a single source doesn't derail the analysis," he said.
"BAM's underwriters use multiple public and private databases to help us understand an individual issuer's exposure to events like flooding and hurricanes, with a particular focus on the potential impact on the tax base and revenue-generating capacity," he added. "We can generate the analyses we need from the data that is still available."
As things stand, storms like the ones that hit St. Louis are not growing any milder, said Sam Wobbe, secretary of communications for Megan Green, president of the St. Louis board of aldermen.
"If the country's current approach to climate change is anything to go by, we need to do a lot more to prepare for a future where we are regularly grappling with strong thunderstorms and the damage they cause," he said.
"Living in the Midwest, you get used to severe weather to the point where you can become desensitized," Wobbe said.. "With that in mind, I would say that while the quantity of storms radically varies from year to year, their strength does seem to be increasing — this tornado being an example of that."
Missouri Gov. Mike Kehoe requested a federal disaster declaration for St. Louis on May 26, according to a statement from the governor's office, which did not respond to requests for comment.
In addition to the city, the request covers St. Louis County and six southeast Missouri counties struck by the severe storms on May 16.
The governor's office announced on May 23 that the Federal Emergency Management Agency would participate in joint damage assessments in the city of St. Louis and in St. Louis and Scott counties.
"The joint preliminary damage assessment teams that reviewed the damage to homes and personal property this week worked extremely efficiently to document the destruction that we are confident will lead to a federal major disaster declaration," Kehoe said in a statement Friday. "We will be jointly cataloguing the same type of evidence to support a potential request to FEMA for necessary funding to rebuild and restore the infrastructure our citizens rely on."
The teams included representatives from FEMA, the State Emergency Management Agency and local officials in each community. On May 28, six teams surveyed and verified damage in the area.
FEMA doesn't release specific information from those joint damage assessments, which are done at the request of the state and don't look at every single structure impacted, said Barb Sturner, external affairs specialist for FEMA Region 7, which includes Missouri.
They try to get a broad-brush overview, so any assessment probably would be less than the real total, she said. But there's a "pretty big scope of damage" in St. Louis, she added.
"Last week we did preliminary damage assessments to look at the impacts to individuals and businesses," she said on Friday. "This week we looked at the impacts to public infrastructure" such as government buildings, roads, bridges, utilities, water control facilities and the costs of debris removal — anything affecting assets of a local government or eligible nonprofit.
The governor then reviews that information and decides whether and what kinds of disaster assistance requests to file.
"He's already filed a request for emergency disaster assistance," which involves debris removal, emergency protective measures and setting up shelters, Sturner said. "He submitted a request for individual assistance earlier this week. Then he'll add the request for public assistance. Both are asking for a major disaster declaration, which brings a lot more resources than an emergency request does."
Sturner referred questions about the status of the FEMA disaster relief fund and the work of the FEMA review council that was convened to determine the agency's future, as well as whether cities' immigration policies are now a factor in dispersal of disaster relief funds, to FEMA headquarters. FEMA did not respond to those questions.
For St. Louis' recovery, the board of aldermen's Wobbe did not rule out bonds as one potential tool.
"All options are on the table, and there is absolutely more to come," he said. "We know residents impacted by the tornado are in desperate need of tangible aid, not just kind words. In the meantime, alders are having conversations to determine the best path forward."
Fitch Ratings
Counterbalancing St. Louis' weak population and median household income level trends are the city's high degree of educational attainment and a strong assessment of liabilities to total government revenues, Fitch said.
In September 2023,
Moody's analyst Catherine Nicolosi said the city's fiscal 2023 reserves surpassed the median fund balance and liquidity levels for A-rated cities with comparable populations.
"We will assess any potential significant decline in a city's reserves, as we would with other credit factors, and its ability or capacity to adjust its budget to restore the reserve position," she said.
Nicolosi added that "weather-related events frequently result in federal and state assistance for recovery efforts which will have implications for the credit profile.
"Given the recent storms, the full extent of such support is currently unknown for the city," she said. "We will continue to evaluate the situation and incorporate any new information into our analysis."
