According to federal officials, cooperating entities  traditionally shared suppression costs on the basis of the proportion of  acres burned in each entity’s protection area because the method was  relatively easy to apply and works well when the lands affected by a  wildland fire are similar. Unclear Guidance and Inconsistent Application of Cost- Sharing Methods Can Have Significant Financial Consequences for Entities Involved

Federal and nonfederal entities included in our review used a variety of  methods to share the costs of fighting fires that burned or threatened both  federal and nonfederal lands and resources. Although master agreements  between federal and nonfederal entities typically listed several cost- sharing methods, the agreements often lacked clear guidance for officials  to follow in deciding which cost-sharing method to apply to a specific fire. The type of cost-sharing method chosen is important  because it can have significant financial consequences for the federal and  nonfederal entities involved. Master Agreements Provided Cost-Sharing Framework, but Those We Reviewed Lacked Clear Guidance

Master agreements provide the framework for federal and nonfederal  entities to work together and share the costs of fighting wildland fires. The costs for the two fires that we reviewed in Utah were shared using  two different methods, although both fires had similar characteristics. Methods used to share suppression costs for fires with similar  characteristics also varied among states. In Colorado, federal and nonfederal officials agreed to share suppression  costs for both of the fires we reviewed in that state using guidance they  had developed and officially adopted in 2005, called “fire cost share  principles.” Under these principles, aviation costs for fires burning in the  wildland-urban interface are shared equally for 72 hours, and other fire  suppression costs, such as firefighting personnel and equipment, are  shared on the basis of acres burned. Current Cost-Sharing Framework Raises Several Concerns

Federal and nonfederal agency officials we interviewed raised a number of  concerns about the current cost-sharing framework. Finally, some federal officials expressed concern  that the current framework for sharing costs insulates state and local  governments from the cost of protecting the wildland-urban interface,  thereby reducing their incentive to take steps that could help mitigate fire  risks and reduce suppression costs in the wildland-urban interface. Lack of Clear Guidance Can Lead to Difficulties in Sharing Costs

Some federal officials said that the lack of clear guidance can make it  difficult to agree to use a cost-sharing method that they believe equitably  distributes suppression costs between federal and nonfederal entities,  particularly for fires that threaten the wildland-urban interface. As  discussed, different cost-sharing methods were used for the two fires we  reviewed in Utah, even though both fires required substantial suppression  efforts to protect the wildland-urban interface. Nonfederal Officials Were Concerned about Increased Costs and Equity among States

While federal officials expressed the need for further guidance on how to  share costs, nonfederal officials were concerned that the emergence of  alternative cost-sharing methods was leading state and local entities to  bear a greater share of suppression costs than in the past, and they  questioned whether such an increase was appropriate. Federal and nonfederal officials said that because some states  use particular cost-sharing methods more often than other states, the  proportion of costs borne by federal and nonfederal entities likely varies  from state to state, resulting in nonfederal entities’ paying a higher  proportion of costs in some states and a lower proportion in other states. Officials’ Concerns May Reflect Ambiguity over Financial Responsibilities

On the basis of our review of previous federal reports and interviews with  federal and nonfederal officials, we believe that the concerns we identified  may reflect a more fundamental issue—that federal and nonfederal  firefighting entities have not clearly defined their fundamental financial  responsibilities for wildland fire suppression, particularly those for  protecting the wildland-urban interface.
Why GAO Did This Study

Wildland fires can burn or threaten both federal and nonfederal lands and resources, including homes in or near wildlands, an area commonly called the wildland-urban interface. Agreements between federal and nonfederal firefighting entities provide the framework for working together and sharing the costs of fire suppression efforts. GAO was asked to (1) review how federal and nonfederal entities share the costs of suppressing fires that burn or threaten both of their lands and resources and (2) identify any concerns that these entities may have with the existing cost-sharing framework. This testimony is based on GAO's May 2006 report Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns about Cost Sharing between Federal and Nonfederal Entities (GAO-06-570).

What GAO Found

Federal and nonfederal entities used a variety of methods to share the costs of fighting wildland fires affecting both of their lands and resources. Cooperative agreements between federal and nonfederal firefighting entities--which are developed and agreed to by the entities involved--provide the framework for cost sharing and typically list several cost-sharing methods available to the entities. The agreements GAO reviewed, however, often lacked clear guidance for federal and nonfederal officials to use in deciding which method to apply to a specific fire. As a result, cost-sharing methods were applied inconsistently within and among states, even for fires with similar characteristics. For example, GAO found that in one state, the costs for suppressing a large fire that threatened homes were shared solely according to the proportion of acres burned within each entity's area of fire protection responsibility, a method that traditionally has been used. Yet, costs for a similar fire within the same state were shared differently. For this fire, the state agreed to pay for certain aircraft and fire engines used to protect the wildland-urban interface, while the remaining costs were shared on the basis of acres burned. In contrast to the two methods used in this state, officials in another state used yet a different cost-sharing method for two similar large fires that threatened homes, apportioning costs each day for personnel, aircraft, and equipment deployed on particular lands, such as the wildland-urban interface. The type of cost-sharing method ultimately used is important because it can have significant financial consequences for the entities involved, potentially amounting to millions of dollars. Both federal and nonfederal agency officials raised a number of concerns about the current cost-sharing framework. First, some federal officials were concerned that because guidance is unclear about which cost-sharing methods are most appropriate in particular circumstances, it can be difficult to reach agreement with nonfederal officials on a method that all parties believe distributes suppression costs equitably. Second, some nonfederal officials expressed concerns that the emergence of alternative cost-sharing methods is causing nonfederal entities to bear a greater share of fire suppression costs than in the past. In addition, both federal and nonfederal officials believed that the inconsistent application of these cost-sharing methods has led to inequities among states in the proportion of costs borne by federal and nonfederal entities. Finally, some federal officials also expressed concern that the current framework for sharing costs insulates state and local governments from the increasing costs of protecting the wildland-urban interface. Therefore, nonfederal entities may have a reduced incentive to take steps that could help mitigate fire risks, such as requiring homeowners to use fire-resistant materials and landscaping. On the basis of a review of previous federal reports and interviews with federal and nonfederal officials, GAO believes that these concerns may reflect a more fundamental issue--that federal and nonfederal entities have not clearly defined their basic financial responsibilities for wildland fire suppression, particularly those for protecting the wildland-urban interface.