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Texas bolsters role of retail giants in hurricane preparedness




Web Posted: 07/28/2007 10:42 PM CDT

Terri Langford
Houston Chronicle
When the next hurricane hits Texas, the Gulf Coast region's recovery time may depend less on the Federal Emergency Management Agency and much more on Wal-Mart, H-E-B, Home Depot and other large retailers.
"If FEMA shows up, good," said Jack Colley, chief of the governor's Division of Emergency Management. "But we're not waiting."

Call it one more example of the lingering Hurricane Katrina effect, but Colley and his team are looking past the traditional go-through-FEMA-to-get-ice kind of emergency management model. A new strategy, born during 2005's Hurricane Rita and fine-tuned in the two years since by the state's emergency agency, has retailers conducting mock drills alongside government officials.

"FEMA was an old contact point for ice, water, etc," Colley said from the agency's state operations center at Department of Public Safety headquarters in Austin. "The private sector is willing and able to do this for us."

For the past two years, Colley and Texas Homeland Security Director Steve McCraw have cultivated direct relationships with retailers after watching Louisiana and Mississippi officials dial FEMA in vain for food, water and other aid.

"FEMA can't compete with the private sector," Colley said. "They do it quicker, smarter, faster every day."

These large retailers, including Wal-Mart, H-E-B and Home Depot, are part of the state's emergency prep team, invited to brainstorm and solve problems about the best way to respond to a disaster. In exchange for their know-how, they're given advance notice about when the state is about to make critical decisions on evacuations and school closings or when highways will be "contraflowed" into one direction away from a storm.

Some people have voiced concerns about this new partnership and the potential benefits for big retailers. But the retailers deny that they are in it for financial gain, and state officials have only praise for the speedier response to disasters.

"They didn't just show up," McCraw said of Wal-Mart in the aftermath of Katrina. "They showed up with a very skilled, professional team. We embedded them immediately. Next thing you know, they were delivering commodities immediately."

Justen Noakes, emergency management coordinator for H-E-B, the San Antonio-based grocery chain, said the private sector has a big advantage when an evacuation announcement is made.

"Speed to action is a huge asset that we bring to the partnership. We don't need a governor, a statewide or a local emergency declared, to move. All we need is a telephone call from an official," Noakes said.

From FEMA's standpoint, this collaborative process dovetails nicely with its own strategies.

"It seems like that would be a natural fit," said Earl Armstrong, spokesman for FEMA's regional office in Denton. "We supplement the state and local efforts and if they can get it, that's just one last thing we don't have to coordinate for. If that gets supplies to people who need it, that's great."

New model


This new model, in which retailers' flexible delivery systems are paired with government's network of local emergency responders and powerful communication tools, has received rave reviews from those involved in recent Texas emergencies.
"I don't know Jack Colley, but I can't wait to meet him and shake his hand," said Burnet County Judge Donna Klaeger, whose county includes Marble Falls, where floods June 26 killed one person and sent 300 others from their homes.

"We could not have made it through without the state emergency management team," Klaeger said. "They were amazing.""

Conference calls kept local officials in touch with the state and one another. State officials were quickly on the scene, advising Marble Falls and Burnet County how to file for a federal disaster declaration for aid to combat the $137 million in losses the county suffered.

Then, the retail partners moved in.

"H-E-B, Wal-Mart, Home Depot, every business that I think that was not affected by the flood was out there helping victims with the flood," Klaeger said.

As soon as police, firefighters and paramedics began gathering in a Wal-Mart parking lot in Marble Falls, a store official pressed a store gift card into her hand and told her he heard she needed food for her emergency troops working through the night. "He said, 'Go buy groceries for the first responders.'"

Maverick County Judge Jose Aranda reported a similar outpouring last April after a tornado struck Eagle Pass, destroying 125 homes.

"The same night we were out there, the local (H-E-B) director was out there with sandwiches for all the first responders," Aranda said. Bottled water and anything the county needed was quickly there for the asking.

Retailers and officials in Florida point to Hurricane Andrew as the greatest wake-up call. The 1992 Category 5 storm killed 15 people immediately and 25 later, of indirect causes. Andrew displaced 700,000 residents, destroyed more than 25,000 homes and damaged another 100,000.

"The lesson of Hurricane Andrew was don't wait for the federal government and don't wait for permission to serve your citizens," said Craig Fugate, Florida's emergency management director.

So afterward, Florida officials turned to contracting directly with vendors instead of waiting for FEMA to do it for them. They also brought retailers into government disaster response planning.

Florida officials now focus on delivering aid faster to the poorest residents or those who live in isolated areas. That leaves large retailers to supply those with access and money.

"If a retailer is open and meets demand, we don't need to be in that area," Fugate said.

Motives questioned


Some people grouse that profit is the only motive behind all of this commerce-government hand-holding, but both sides say that's just not so.
"We actually take kind of a beating because our expenses go way up in responding to the market," said Jim Shortal, director of crisis management and business continuity at Home Depot headquarters in Atlanta. Additional employees are shipped in. Overtime has to be paid. Transportation costs rise when roads are out.

Colley said nothing is promised to retailers and no service contracts have been cut with them pre-storm.

During the disaster response period, roughly 72 hours before and after a major storm hits, the state will rely on corporate partners to work in the area with donated water and other supplies.

"Prior to 2005, there was no process in place to maximize not only the willingness of corporate America but the capability of corporate America," McCraw said.

Once a disaster moves into a recovery phase, where debris removal begins and long-term shelters might be needed, the state will turn to contracting, particularly after a presidential emergency declaration is made and federal dollars are available for reimbursement, McCraw said.

For example, during the flooding in Marble Falls, retailers donated water and food to first responders and the public during the initial emergency. The Texas Department of Health and Human Services reached into its emergency funds to pay for $90,075 worth of bottled water for the town when the flooding temporarily compromised the city's water system.

Retailers insist that their only interest is to quickly push supplies into an impacted region to keep commerce and that community alive.

But there are skeptics..

"I think everybody cheered when Federal Express and H-E-B were able to deliver supplies to New Orleans when the federal government couldn't and wouldn't," said Tom "Smitty" Smith, director of the watchdog group Public Citizen. "But having these companies be a part of the planning for disaster relief puts them at a competitive advantage. The smaller stores do not have the same kind of access to the kind of data and the kind of preferential treatment."

Retailers scoff at the idea there is any hidden motive or a desire to manipulate prices during a disaster.

"I can't think of a quicker way to lose customers than price-gouging," said Don Harrison, spokesman for Home Depot's Atlanta headquarters. In fact, Home Depot and Wal-Mart have controls in place that freeze prices for an area once an emergency declaration is made.

Helping communities fight disasters by keeping the retail supply chain open not only gets the community back on line more quickly, retailers said, it gives evacuating residents a reason to come home sooner and get back to work. The state wins because when a community is back at work, taxes are paid and unemployment is down.

In Louisiana, for example, three Wal-Mart stores remain closed because "there's no community to come back to," said Jason Jackson, Wal-Mart's director of emergency management.

"The benefit (for us) is...we will have a community to go back to in the end," Jackson said. "That's the benefit."

© 2007 KENS 5 and the San Antonio Express-News.
All rights reserved.

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