Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns
about Cost Sharing between Federal and Nonfederal Entities	 
(30-MAY-06, GAO-06-570).					 
                                                                 
Wildland fires burn millions of acres each year, requiring	 
substantial investments of firefighting assets. Since 2000,	 
federal suppression costs alone have averaged more than $1	 
billion annually. 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. Cooperative agreements between federal and nonfederal 
firefighting entities provide the framework for working together 
and sharing costs. GAO was asked to (1) review how federal and	 
nonfederal entities share the costs of suppressing wildland 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.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-570 					        
    ACCNO:   A54840						        
  TITLE:     Wildland Fire Suppression: Lack of Clear Guidance Raises 
Concerns about Cost Sharing between Federal and Nonfederal	 
Entities							 
     DATE:   05/30/2006 
  SUBJECT:   Cost analysis					 
	     Fire fighters					 
	     Forest fires					 
	     Forest management					 
	     Interagency relations				 
	     Policy evaluation					 
	     Wildfires						 
	     Cost sharing (finance)				 
	     Wildland fires					 

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GAO-06-570

     

     * Results in Brief
     * Background
     * Unclear Guidance and Inconsistent Application of Cost-Sharin
          * Master Agreements Provided Cost-Sharing Framework, but Those
          * Cost-Sharing Methods Were Inconsistently Applied for the Eig
          * The Cost-Sharing Method Used Can Lead to Significantly Diffe
     * Current Cost-Sharing Framework Raises Several Concerns
          * Lack of Clear Guidance Can Lead to Difficulties in Sharing C
          * Nonfederal Officials Were Concerned about Increased Costs an
          * Cost-Sharing Framework May Reduce Incentives to Mitigate Fir
               * Measures Are Available to Mitigate Fire Risks in the Wildlan
               * Cost-Sharing Framework and Federal Assistance May Reduce the
          * Officials' Concerns May Reflect Ambiguity over Financial Res
     * Conclusions
     * Recommendations for Executive Action
     * Agency Comments and Our Evaluation
     * Appendix I: Scope and Methodology
     * Appendix II: Characteristics of the Eight Fires That GAO Rev
     * Appendix III: Comments from the USDA Forest Service
          * GAO Comments
     * Appendix IV: Comments from the Department of the Interior
     * Appendix V: Comments from the National Association of State
          * GAO Comments
     * Appendix VI: GAO Contact and Staff Acknowledgments
          * GAO Contact
          * Staff Acknowledgments
               * Order by Mail or Phone

Report to the Chairman, Subcommittee on Public Lands and Forests,
Committee on Energy and Natural Resources, U.S. Senate

United States Government Accountability Office

GAO

May 2006

WILDLAND FIRE SUPPRESSION

Lack of Clear Guidance Raises Concerns about Cost Sharing between Federal
and Nonfederal Entities

GAO-06-570

Contents

Letter 1

Results in Brief 3
Background 4
Unclear Guidance and Inconsistent Application of Cost-Sharing Methods Can
Have Significant Financial Consequences for Entities Involved 9
Current Cost-Sharing Framework Raises Several Concerns 19
Conclusions 27
Recommendations for Executive Action 28
Agency Comments and Our Evaluation 28
Appendix I Scope and Methodology 31
Appendix II Characteristics of the Eight Fires That GAO Reviewed 34
Appendix III Comments from the USDA Forest Service 35
GAO Comments 37
Appendix IV Comments from the Department of the Interior 38
Appendix V Comments from the National Association of State Foresters 39
GAO Comments 41
Appendix VI GAO Contact and Staff Acknowledgments 43

Table

Table 1: Master Agreements for 12 Western States Varied in the
Cost-Sharing Methods Specified 10

Figures

Figure 1: The Varied Cost-Sharing Methods Used for Eight Similar Fires We
Reviewed 13
Figure 2: Distribution of Costs under the Actual Cost-Sharing Method Used
Compared with an Acres-Burned Method 17

Abbreviations

FEMA Federal Emergency Management Agency IMT incident management team NASF
National Association of State Foresters

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separately.

United States Government Accountability Office

Washington, DC 20548

May 30, 2006

The Honorable Larry E. Craig Chairman, Subcommittee on Public Lands and
Forests Committee on Energy and Natural Resources United States Senate

Dear Mr. Chairman:

Wildland fires burn millions of acres of land each year. Although wildland
fires triggered by lightning are a natural, inevitable, and necessary
ecological process, past federal fire suppression policies have led to an
accumulation of fuels and contributed to larger and more severe wildland
fires. In addition, as human development continues to expand in or near
wildlands-an area commonly known as the wildland-urban interface-wildland
fires increasingly threaten not only federal lands and public resources,
such as forests and watersheds, but also nonfederal lands and resources,
including homes and other structures.

Fighting wildland fires-which can burn across federal, state, and local
jurisdictions-requires significant investments of firefighting personnel,
aircraft, equipment, and supplies, resulting in substantial and increasing
fire suppression expenditures. Since 2000, federal suppression
expenditures alone have averaged more than $1 billion annually. In
addition, nonfederal entities, such as state and local governments, can
spend hundreds of millions of dollars during severe fire years.
Firefighting efforts are mobilized through an interagency incident
management system, which depends on the close cooperation and coordination
of federal, state, tribal, and local fire protection entities. At the
federal level, five principal agencies are involved in firefighting
efforts-the Forest Service within the Department of Agriculture and four
agencies within the Department of the Interior.1 Federal and nonfederal
firefighting entities share their personnel, equipment, and supplies and
work together to fight fires, regardless of which entity has jurisdiction
over the burning lands. Agreements between cooperating entities, commonly
referred to as master agreements, govern these cooperative fire protection
efforts and include general provisions for sharing firefighting costs.
According to federal officials, these provisions, and the guidance on
available cost-sharing methods, have been changing over the years, in
part, to address the continuing expansion of the wildland-urban interface
and the resulting increase in nonfederal resources at risk from wildland
fire.

1The four agencies within the Department of the Interior responsible for
wildland firefighting are the Bureau of Indian Affairs, Bureau of Land
Management, Fish and Wildlife Service, and National Park Service.

In this context of both the increasing size and severity of wildland fires
and the rising costs of suppressing fires and protecting federal and
nonfederal lands and resources, you asked us to (1) review how federal and
nonfederal entities share the costs of suppressing wildland fires that
burn or threaten both of their lands and resources and (2) identify any
concerns federal and nonfederal entities may have with the existing
cost-sharing framework. To address these objectives, we reviewed federal
statutes governing cooperative fire protection activities; federal and
interagency wildland fire policies and procedures; master agreements
between federal and nonfederal entities governing cooperative fire
protection in 12 western states that frequently experience wildland
fires;2 and federal, state, and nongovernmental entities' reviews of
recent large fires or other reports related to wildland fire suppression
costs. We also interviewed national, regional, and local firefighting
officials from the Forest Service and Department of the Interior agencies
as well as state officials from Arizona, California, Colorado, and Utah.
In addition, for two recent fires that burned or threatened both federal
and nonfederal lands and resources in the 4 states, we reviewed the
records listing the firefighting resources deployed, their costs, and the
methods chosen to share these costs.3 We determined that these data were
sufficiently reliable for the purposes of this report. Appendix I contains
a more detailed description of our scope and methodology, and appendix II
contains additional information on the fires we reviewed. We performed our
work in accordance with generally accepted government auditing standards
from May 2005 through May 2006.

2These 12 states were Alaska, Arizona, California, Colorado, Idaho,
Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
Although wildland fires can affect all states, we selected these western
states because they have substantial federal lands and often experience
wildland fires.

3The 12 master agreements reviewed, 4 states visited, and two wildland
fires reviewed within each visited state are all nonprobability samples.
Therefore, the results from these samples cannot be used to make
inferences about all master agreements, states, or wildland fires.

                                Results in Brief

Federal and nonfederal entities used a variety of methods to share the
costs of fighting wildland fires affecting both of their lands and
resources, but they applied these varied methods inconsistently to fires
with similar characteristics. Master agreements between firefighting
entities provide the framework for cost sharing and, typically, list
several cost-sharing methods available to the entities. The agreements we
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, we
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.
However, costs for a similar fire within the same state were shared
differently. For this fire, the state paid 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.

Federal and nonfederal agency officials we interviewed 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 shares suppression costs equitably between
affected federal and nonfederal entities, particularly for fires
threatening the wildland-urban interface. For example, different
cost-sharing methods were used for two fires we reviewed in one state,
even though both fires required substantial suppression effort to protect
the wildland-urban interface. Nonfederal officials agreed to pay a higher
proportion of the suppression costs for one fire-primarily because most of
the nonfederal share of the fire's costs were eligible for reimbursement
by a Federal Emergency Management Agency (FEMA) grant program-but they
would not agree to do so for the second fire. Second, nonfederal officials
were concerned that the emergence of alternative cost-sharing methods is
causing state and local entities to bear a greater share of suppression
costs than in the past. Moreover, both federal and nonfederal officials
were concerned that the inconsistent application of cost-sharing methods
has created inequities among states in the proportion of suppression costs
borne by federal and nonfederal entities. Finally, some federal officials
also expressed concern that the current framework for sharing
costs-combined with the availability of funds from FEMA to reimburse
nonfederal entities in certain cases-insulates state and local governments
from the increasing costs of protecting the wildland-urban interface.
Consequently, nonfederal entities may have a reduced incentive for
requiring the use of fire-resistant building materials and landscaping,
which can help mitigate fire risks in the wildland-urban interface and
thereby help reduce the costs of protecting it. On the basis of our review
of previous federal reports and interviews with federal and nonfederal
officials, we believe that these concerns may reflect a more fundamental
issue-that federal and nonfederal entities have not clearly defined their
financial responsibilities for wildland fire suppression, particularly
those for protecting the wildland-urban interface.

To strengthen the framework for sharing wildland fire suppression costs,
we are recommending that the Secretaries of Agriculture and the Interior,
working in conjunction with relevant state entities, (1) provide more
specific guidance as to when particular cost-sharing methods should be
used and (2) clarify the financial responsibilities for suppressing fires
that burn or threaten to burn across multiple jurisdictions. In commenting
on a draft of this report, the Forest Service and Interior generally
agreed with our findings and recommendations. The National Association of
State Foresters (NASF) also provided comments on the report and generally
did not agree with the recommendations. NASF stated that developing
national guidance specifying appropriate cost-sharing methods and
clarifying financial responsibility for fire suppression costs would not
provide the flexibility needed by local federal and nonfederal officials
to address the variability in local circumstances and state laws. We agree
that a certain amount of flexibility is needed, however, without more
explicit guidance to assist local federal and nonfederal officials
responsible for developing cost-sharing agreements for individual fires,
the inconsistencies in how suppression costs are shared within and among
states are likely to continue, along with concerns about perceived
inequities. Comments from the Forest Service, Interior, and NASF are
reprinted in appendixes III, IV, and V, respectively.

                                   Background

Wildland fires triggered by lightning are both natural and inevitable, and
they play an important role on our nation's lands. Many ecosystems have
adapted to periodic wildland fires, which help control vegetation levels
and stimulate seedling regeneration and growth. Past land management
practices, including effective fire suppression, have disrupted the
historic frequency of wildland fires. As a result, a decrease in the
number of acres burned nationwide during much of the twentieth century has
led to an accumulation of dense vegetation that now fuels larger, more
severe, and sometimes catastrophic wildland fires.

In recent years, both the number of acres burned by wildland fires and the
costs to suppress fires have been increasing. From 1995 through 1999,
wildland fires burned an average of 4.1 million acres each year; from 2000
through 2004, the fires burned an average of 6.1 million acres each
year-an increase of almost 50 percent. During the same periods, the costs
incurred by federal firefighting entities to suppress wildland fires more
than doubled, from an average of $500 million annually to more than $1.3
billion annually.4 Although efforts to fight these larger, more severe
fires have accounted for much of the increase in suppression costs, the
continuing development of homes and communities in areas at risk from
wildland fires and the efforts to protect these structures also contribute
to the increasing costs. Forest Service and university researchers
estimate that about 44 million homes in the lower 48 states are located in
areas that meet or intermingle with wildlands-commonly referred to as the
wildland-urban interface.5 When fire threatens the wildland-urban
interface, firefighting entities often need to use substantial resources
to fight the fire and protect homes, including firefighters, fire engines,
and aircraft to drop retardant. Although firefighters are able to protect
many homes threatened by wildland fires, these fires have burned an
average of about 850 homes each year in the United States since 1984.

Because one firefighting entity alone cannot handle all wildland fires
that may occur in its jurisdiction, federal and nonfederal entities work
together to protect lands and resources and to fight fires. At the federal
level, five principal agencies are involved in fire suppression-the Forest
Service within the Department of Agriculture and the Bureau of Indian
Affairs, Bureau of Land Management, Fish and Wildlife Service, and
National Park Service within the Department of the Interior. In addition,
nonfederal entities-including state forestry entities and tribal, county,
city, and rural fire departments-play an important role in protecting
resources and fighting fires. Federal and nonfederal entities enter into
master agreements that govern their cooperative fire protection
activities, including wildland fire suppression, and provide for sharing
the costs of these efforts.6 To share suppression costs for a specific
fire, local representatives of federal and nonfederal firefighting
entities responsible for protecting lands and resources affected by the
fire decide which costs will be shared and for what period. They document
their decisions in a cost-sharing agreement for that fire. These local
representatives can include federal officials from a national forest, a
Bureau of Land Management district office, or a national park and
nonfederal officials from the state or other entities. In developing the
cost-sharing agreement for a specific fire, these officials are guided by
the terms of the master agreement.

4These dollars have been adjusted for inflation using the gross domestic
product price index, with fiscal year 2005 as the base year.

5Susan Stewart et al., Mapping the Wildland Urban Interface and Projecting
Its Growth to 2030: Summary Statistics, January 2005,
http://www.silvis.forest.wisc.edu/Library/Stats/uswuistats.pdf (downloaded
May 5, 2006).

As wildland fire suppression costs have continued to rise, increasing
attention has focused on how suppression costs for multijurisdictional
fires are shared. According to federal officials, in the past these
cooperating entities often shared suppression costs on the basis of the
proportion of acres burned in each entity's protection area. These
officials explained that this method is relatively easy to apply and works
well when the lands affected by a wildland fire are similar. In 2000,
federal officials updated interagency policy to include, among other
things, additional information about alternative cost-sharing methods.
According to a federal official, the interagency policy was updated, in
part, in response to requests for additional guidance on cost sharing.7 In
addition to the acres-burned method, the policy describes two alternative
methods for sharing the costs of fire suppression efforts.8 Under the
first alternative-you order, you pay-each entity pays for the firefighting
personnel, aircraft, and equipment it orders, regardless of where these
resources are deployed during a fire. Under the second alternative-cost
apportionment-entities share total fire costs according to the assignment
or actual use each day of firefighting personnel, aircraft, and equipment
in federal or nonfederal protection areas. Indirect costs can then be
shared in the same proportions as these direct costs.9 According to the
interagency policy, however, the cost-sharing terms of the master
agreements take precedence.

6Cooperative fire protection agreements for the Forest Service are
executed principally under the following five laws: The Granger-Thye Act
of 1950, the Reciprocal Fire Protection Act of 1955, the Cooperative Funds
and Deposits Act of 1975, the Cooperative Funds Act of 1914, and the
Cooperative Forestry Assistance Act of 1978, as amended. Cooperative fire
protection agreements involving Department of the Interior agencies are
executed, among other authorities, under the Reciprocal Fire Protection
Act of 1955.

7National Wildfire Coordinating Group, Interagency Incident Business
Management Handbook (Boise, Id.: 2004).

8According to the Interagency Incident Business Management Handbook, an
acres-burned method should be used when entities' responsibilities,
objectives, and suppression costs are similar. The handbook also lists a
fourth method, which addresses sharing costs for a fire controlled during
initial fire suppression efforts. This fourth method did not apply to our
study because none of the fires we reviewed were controlled during the
initial "attack" period.

To facilitate an effective response to wildland fires-including those
affecting both federal and nonfederal jurisdictions-firefighting entities
in the United States use an interagency incident management system. This
system provides an organizational structure that expands to meet a fire's
complexity and demands and allows entities to share firefighting
personnel, aircraft, and equipment. When a fire is first detected,
firefighting entities normally follow a principle of "closest available
resource," whereby, regardless of jurisdiction, the closest available
firefighting personnel and equipment respond to the fire. The firefighter
managing the suppression efforts is called the incident commander.
Typically, when a fire is first detected, it is classified as a type 5-the
least complex-or type 4 fire, depending on the fire and the number of
firefighters needed to fight it. If additional firefighting assets are
needed, the incident commander orders them through a three-tiered system
of local, regional, and national dispatch centers. Federal, state, tribal,
and local entities and private contractors supply the firefighting
personnel, aircraft, equipment, and supplies, which are coordinated and
dispatched through these centers. If the fire escapes initial suppression
efforts, officials may request a type 3 incident commander and additional
firefighting assets. The fire may grow in size or complexity into a type 2
or type 1 fire, the latter being the most complex. For such fires,
officials may request an incident management team that includes not only
an incident commander but a cadre of personnel to handle command,
planning, logistics, operations, and finance functions. Nationally, there
are 17 type 1 incident management teams available to manage the most
complex fires. An additional 38 type 2 teams are available to manage large
fires that are less complex.

9Direct costs include the costs for firefighters, aircraft, and equipment
deployed to fight the fire. Indirect costs include the costs for fire
managers, fire camps, and other support services.

In 2000, in response to a decade of severe wildland fires, the Departments
of Agriculture and the Interior developed a National Fire Plan. This plan
comprises several strategic documents that together address how to respond
to wildland fires, reduce the impacts of these fires on communities and
the environment, and ensure sufficient firefighting resources for the
future.10 The National Fire Plan encourages collaboration and cooperation
among a variety of stakeholders, including federal, state, and local
firefighting and other government entities; nongovernmental entities; and
property owners. The plan includes a 10-year comprehensive strategy and an
associated implementation plan that outline a collaborative approach for
reducing wildland fire risks to communities and the environment. The
implementation plan includes steps addressing four key areas-improving
fire prevention and suppression, reducing hazardous fuels, restoring
fire-adapted ecosystems, and promoting community assistance-and identifies
parties to help carry out these steps. For example, to help protect
structures and communities, state and local entities are encouraged to
develop and adopt local land-use plans and ordinances to help reduce the
wildland fire risks to homes and other structures. To help meet National
Fire Plan goals, Congress provided funding for programs to assist not only
federal firefighting entities but also nonfederal entities and
communities. For fiscal years 2001 through 2005, assistance to nonfederal
entities and communities totaled $436 million ($462 million adjusted for
inflation). These funds-in the form of grants or other assistance
administered by the Departments of Agriculture and the Interior-were used
to train state and local firefighters and acquire firefighting equipment,
carry out hazardous fuel treatments, conduct hazard assessments and assist
communities in developing community wildland fire protection plans, and
educate homeowners and others on preventive steps to help reduce their
risk from wildland fires.

10The various documents making up the National Fire Plan include (1) a
September 2000 report from the Secretaries of Agriculture and the Interior
to the President in response to the wildland fires of 2000, (2)
congressional direction accompanying substantial new appropriations in
fiscal year 2001, and (3) several strategies to implement all or parts of
the plan. For a description of these strategy documents, including the
National Fire Plan, and their contents, goals, and relationships to one
another, see GAO, Severe Wildland Fires: Leadership and Accountability
Needed to Reduce Risks to Communities and Resources, GAO-02-259
(Washington, D.C.: Jan. 31, 2002).

 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 provided the framework
for cost sharing and, 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. Consequently, for
eight fires we reviewed in four states, we found varied cost-sharing
methods used and an inconsistent application of these methods within and
among states, although the fires had similar characteristics. 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 master agreements we reviewed for 12 western states all directed
federal and nonfederal entities to develop a separate agreement,
documenting how costs were to be shared for each fire that burned-or, in
some cases, threatened to burn-across multiple jurisdictions. The master
agreements also listed one or more methods that could be used for sharing
costs (see table 1). The master agreement for Idaho was the only one of
the agreements reviewed that did not cite any specific methods for sharing
multijurisdictional fire suppression costs. Three other master
agreements-for Alaska, Arizona, and New Mexico-provided that firefighting
entities should distribute suppression costs exclusively or primarily on
the basis of the percentage of acres burned in each entity's jurisdiction,
although two of the agreements permitted another method if all parties
agreed to use it. The master agreements for the remaining 8 states listed
a variety of methods that could be used to share suppression costs.
Although, the specific methods varied from agreement to agreement, they
included acres burned, cost apportionment, or variations of these or other
methods.

Table 1: Master Agreements for 12 Western States Varied in the
Cost-Sharing Methods Specified

               Cost-sharing method specified in master agreement
                                     Acres burned was the                     
State       No specific method   primary or only method   Multiple methods
Alaska                                                    
Arizona                                                   
California                                                
Colorado                                                  
Idaho                                                     
Montana                                                   
Nevada                                                    
New Mexico                                                
Oregon                                                    
Utah                                                      
Washington                                                
Wyoming                                                   

Source: GAO analysis of data provided by the Forest Service.

The master agreements we reviewed provided a framework for cost sharing,
but they did not provide clear guidance for federal and nonfederal
officials to follow in deciding which method to use for a specific fire.
Only one master agreement, the agreement for Alaska, clearly stated that
an acres-burned method should always be used. The agreement noted,
however, that this method may distribute suppression costs
disproportionately to the cost of protecting lands and resources in a
particular jurisdiction. The acres-burned method spreads fire suppression
costs evenly across the affected landscape, a distribution that may not
recognize extra fire suppression costs incurred to protect lands and
resources in one entity's jurisdiction. Most of the master agreements we
reviewed for the remaining 11 states listed multiple, alternative
cost-sharing methods but did not provide clear guidance on when each
method should be used. For example, master agreements for several states
defined three cost-sharing methods, including cost apportionment. These
master agreements noted that the cost-apportionment method was "the most
equitable method and should be used when a type 1 team is assigned" to
manage a wildland fire, but they provided no further guidance about when
the other methods should be used. Similarly, the master agreement for
another state, Montana, suggested that an acres-burned method be used when
entities' responsibilities, objectives, and suppression costs are similar,
but the agreement did not describe when the other three listed methods
should be used. Finally, the joint master agreement for Oregon and
Washington11 listed five possible cost-sharing methods. The agreement
stated that some of the cost-sharing methods described were typically used
on "smaller, less complex" fires and others were typically applied to
"larger, more complex" fires. It did not define, however, at what point a
fire crosses the threshold from smaller and less complex to larger and
more complex.

Two other master agreements prescribed a primary cost-sharing method but
allowed the use of alternative methods without explicitly stating under
what circumstances an alternative method would be appropriate. The master
agreements for these states-Arizona and New Mexico-stipulated that
firefighting entities share suppression costs on an acres-burned basis
unless federal and nonfederal officials jointly agreed to use an
alternative method. But the agreements for these states did not clearly
delineate the circumstances that would warrant use of such an alternative.
The master agreement for New Mexico, for example, cited "extra suppression
effort," and the agreement for Arizona referred to "an unusually high
amount" of suppression activity as prerequisites for distributing
suppression costs on a basis other than acres burned. The agreements did
not define what constitutes "extra suppression effort" or an "unusually
high amount" of suppression activity.

In addition to providing limited guidance on cost-sharing methods, the
master agreements we reviewed also provided unclear guidance on whether
estimated or actual costs should be shared between federal and nonfederal
entities. Although estimated costs can be more quickly determined than
actual costs-often by the end of a fire-estimated costs can be incomplete
or inaccurate. For example, federal and nonfederal officials with whom we
spoke in California said that in their experience, estimated costs could
differ from actual costs by as much as 30 percent. Such discrepancies can
occur because not all costs are available and entered into the accounting
system at the time of a fire. In addition, some costs entered into the
accounting system at the time of a fire, such as federal personnel costs,
are in fact estimated costs. According to federal officials, actual cost
data may take from several weeks to several months to become available.

11Instead of having a separate master agreement for each state, federal
and state officials in Oregon and Washington developed a joint master
agreement for fire protection in both states.

For several of the fires we reviewed, total actual fire costs were much
higher than the costs estimated immediately after the fire. For one fire
we reviewed in Colorado, for example, total estimated fire costs increased
from $5.4 million at the end of the fire to $7 million as of February
2006-an increase of 29 percent. Federal and state officials have been
using actual costs to finalize federal and nonfederal entities' shares. In
another example, for a fire we reviewed in Arizona, total costs increased
from an estimated $17.3 million at the end of the fire to $19.4 million as
of February 2006-an increase of more than 12 percent. In this case,
nonfederal entities' share of costs was agreed to on the basis of
estimated costs. As a result, federal entities will bear the total
increase.

Cost-Sharing Methods Were Inconsistently Applied for the Eight Fires We Reviewed

Federal and nonfederal entities used varied cost-sharing methods for the
eight fires we reviewed, although the fires had similar characteristics.
As shown in figure 1, the cost-sharing methods used sometimes varied
within a state or from state to state.

Figure 1: The Varied Cost-Sharing Methods Used for Eight Similar Fires We
Reviewed

aA complex consists of two or more individual fires located in the same
general area and managed by a single incident commander.

The costs for the two fires that we reviewed in Utah were shared using two
different methods, although both fires had similar characteristics. For
the Blue Springs Fire, federal and nonfederal officials agreed that
aircraft and engine costs of protecting an area in the wildland-urban
interface during a 2-day period would be assigned to the state and that
the remaining costs would be shared on the basis of acres burned. Federal
and state officials explained that, because the Blue Springs Fire
qualified for assistance from FEMA, state officials agreed to bear a
larger portion of the total fire suppression costs.12 In contrast, state
officials were reluctant to share costs in the same manner on the Sunrise
Complex of fires. Although these fires also threatened the wildland-urban
interface, they did not meet the eligibility requirements for FEMA
reimbursement of nonfederal costs. Consequently, federal and nonfederal
officials agreed to share costs for the Sunrise Complex on the basis of
acres burned.

The costs for the two fires we reviewed in Arizona were also treated
differently from each other. For the Cave Creek Complex, federal and state
officials agreed to share suppression costs using an acres-burned method
for the southern portion of the fire, which encompassed federal, state,
and city lands and required substantial efforts to protect the
wildland-urban interface. The federal government paid the full costs for
the northern portion of the fire, which burned almost exclusively on
federal land although some efforts had also been taken on federal lands to
protect an area of wildland-urban interface northeast of the fire. Forest
Service regional officials who conducted a postfire review expressed
concern about the method chosen for the Cave Creek Complex because they
believed that it did not equitably share the fire suppression costs among
the affected entities, especially the costs of protecting the
wildland-urban interface. The Arizona state forester explained, in
contrast, that he and local forest officials agreed to use an acres-burned
method because they did not believe that an unusually high amount of
suppression effort had gone toward protecting nonfederal lands and
resources.

Unlike the Cave Creek Complex, federal and nonfederal officials were
unable to reach any agreement on how to share costs for the Florida Fire
in Arizona. Officials from the affected national forest had proposed a
cost-sharing agreement, whereby the state would pay the costs of
firefighting personnel, equipment, and aircraft used to protect the
wildland-urban interface, and all other fire suppression costs would be
paid by the federal government. The state forester, however, did not agree
with this proposal. He explained that he believed that the Forest Service,
not the state, was responsible for protecting areas of the wildland-urban
interface threatened by the Florida Fire and that he was not authorized to
agree to the terms of the proposed agreement.13 Federal and state
officials were not able to reach agreement, and, according to federal
officials, no further discussions were planned.

12Under its Fire Management Assistance Grant Program, FEMA provides
financial assistance to nonfederal entities for the mitigation,
management, and control of any fire on public or private forest land or
grassland that would constitute a major disaster. Under this program,
nonfederal entities can be reimbursed for 75 percent of the allowable fire
suppression costs. FEMA evaluates the threat posed by a fire or fire
complex according to the following criteria: (1) threat to lives and
improved property, including threats to critical
facilities/infrastructure, and critical watershed areas; (2) availability
of state and local firefighting resources; (3) high fire danger
conditions, as indicated by nationally accepted indexes such as the
national fire danger ratings system; and (4) potential major economic
impact.

Methods used to share suppression costs for fires with similar
characteristics also varied among states. For example, costs for the fires
we reviewed in California and Colorado were shared using methods different
from those used for similar fires we reviewed in Arizona and Utah. In
California, federal and nonfederal officials agreed to share the costs of
two fires using the cost-apportionment method-that is, costs were
apportioned on the basis of where firefighting personnel and equipment
were deployed. Officials said that they had often used this method since
the mid-1980s because they believed that the benefit it provides in more
equitable cost sharing among affected firefighting entities outweighs the
additional time required to apportion the costs. In contrast, federal and
state officials in Colorado shared 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."14 Under these
principles, aviation costs for fires burning in the wildland-urban
interface are shared equally for 72 hours,15 and other fire suppression
costs, such as firefighting personnel and equipment, are shared on the
basis of acres burned. State officials said that they developed the
principles because they did not want firefighting officials to be
reluctant to order needed resources due to concerns about which entity
would pay for them. They added that using the principles is less
labor-intensive than cost apportionment and better distributes the cost of
expensive aviation assets than an acres-burned method alone. In addition,
for the Mason Gulch Fire, Colorado officials agreed to pay for some fire
engines that were used to protect homes in the wildland-urban interface
during one operational period.

13Specifically, the state forester said that under Arizona law, the state
had no responsibility to protect the private lands and resources in the
wildland-urban interface threatened by the Florida Fire because the fire
did not threaten state lands, and the private properties that the fire
threatened were not covered by cooperative fire agreements with the state.

14These principles were adopted in 2005, but the basic framework contained
in the principles was also used for the McGruder Fire in 2004. For the
McGruder Fire, however, equal sharing of aviation costs was not limited to
72 hours.

15The 72-hour count generally begins after a fire escapes initial
suppression efforts, or initial attack.

The Cost-Sharing Method Used Can Lead to Significantly Different Financial
Outcomes

Having clear guidance as to when particular cost-sharing methods should be
used is important because the type of method ultimately agreed upon for
any particular fire can have significant financial consequences for the
firefighting entities involved. To illustrate the effect of the method
chosen, we compared the distribution of federal and nonfederal costs for
the five fires we reviewed in which the actual cost-sharing method used
was not acres burned with what the distribution would have been if the
method used had been acres burned (see fig. 2).

Figure 2: Distribution of Costs under the Actual Cost-Sharing Method Used
Compared with an Acres-Burned Method

Note: For each illustrated fire, we estimated costs under an acres-burned
method by multiplying the total costs for each fire by the percentage of
affected acres under nonfederal and federal protection, respectively.
Dollars were not adjusted for inflation.

aData for these California fires, which occurred in 2004, reflect total
actual suppression costs.

bData for these Colorado and Utah fires-which, according to the fire
officials involved, were the best available as of March 2006-reflect a
combination of actual suppression costs and estimated costs, when actual
costs were not available. Because final actual shares of the costs had not
been determined for the Mason Gulch Fire at the time of our review, we
worked with federal officials to estimate the federal and nonfederal
shares on the basis of the fire's actual cost-sharing agreement. The
federal and nonfederal shares of total costs calculated at final
settlement by firefighting entities involved in the Mason Gulch Fire may
differ from these estimates.

We found that the distribution of costs between federal and nonfederal
entities differed, sometimes substantially, depending on the cost-sharing
method used. Of the five fires included in our review, the largest
differences occurred for the two fires in California. Officials shared the
costs for each of these fires using a cost-apportionment method. For the
Deep Fire, federal entities paid $6.2 million, and nonfederal entities
paid $2.2 million. Had the costs been shared on the basis of acres burned,
federal entities would have paid an additional $1.7 million, and
nonfederal entities would have paid that much less because most of the
acres burned were on federal lands. According to federal and state
officials, the nonfederal entities bore a larger share of the cost than
they would have under an acres-burned method because (1) substantial
aircraft, fire engines, and personnel were used to protect nonfederal
lands and resources, primarily in the wildland-urban interface, and (2)
the costs for protecting these nonfederal lands and resources were
assigned to the nonfederal entities. In contrast, for the other California
fire we reviewed, the Pine Fire, federal firefighting entities would have
paid about $2 million less, and nonfederal entities would have paid that
much more under an acres-burned method. Under the cost-apportionment
method, federal entities paid $5.2 million, and nonfederal entities paid
$8.1 million. According to a federal official who worked on apportioning
costs for that fire, the higher costs that the federal entities paid under
cost apportionment were largely due to extensive firefighting efforts on
federal land to ensure that the fire was extinguished.

In Colorado and Utah, which for three fires used cost-sharing methods
other than cost apportionment and acres burned, the differences in federal
and state entities' shares between the methods used and the acres-burned
method were less pronounced. This is likely because the cost-sharing
methods used still relied heavily on acres burned. In each case, federal
entities' shares would have been more and nonfederal shares less had an
acres-burned method been used, due to the efforts to protect the
wildland-urban interface. For example, the federal share of costs for the
Blue Springs Fire in Utah would have been about $400,000 more and the
nonfederal share that much less if an acres-burned method had been used
for the whole fire. In Colorado, we estimated that the federal share of
costs for the Mason Gulch Fire would have been about $200,000 more and the
nonfederal share that much less under an acres-burned method. For the
McGruder Fire, where the number of federal and nonfederal acres burned
were nearly identical and the total fire cost of about $800,000 was much
less than the cost of other fires we reviewed, the change in the
distribution of costs between the method used and acres burned-about
$30,000-was much less than for the other fires.

For two other fires we reviewed in which federal and nonfederal entities
had agreed to use the acres-burned method, nonfederal entities might have
borne a greater proportion of the costs had a different cost-sharing
method been used. For these two fires, in Arizona and Utah, federal and
state officials we interviewed had identified many aviation and ground
firefighting assets that went toward protecting nonfederal lands and
resources. Although we were unable to fully estimate a distribution of
costs using an alternative method due to limitations in the data
available, our analysis suggested, and many of the officials we
interviewed acknowledged, that the nonfederal entities would have borne a
larger share of the costs.

             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. First, some federal
officials said that because master agreements and other policies do not
provide clear guidance about which cost-sharing methods to use, it has
sometimes been difficult to obtain a cost-sharing agreement that they
believe shares suppression costs equitably. Second, nonfederal officials
were concerned that the emergence of alternative cost-sharing methods has
caused nonfederal entities to bear a greater share of fire suppression
costs than in the past. 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.
On the basis of our review of previous federal reports and interviews with
federal and nonfederal officials, we believe these concerns may reflect a
more fundamental issue-that federal and nonfederal entities have not
clearly defined their financial responsibilities for wildland fire
suppression, particularly for 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. For example, 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. For the Blue
Springs Fire, nonfederal officials agreed to pay a higher proportion of
the suppression costs than they would have paid had an acres-burned method
been used, because they recognized the substantial effort undertaken to
protect the wildland-urban interface and because most of the state's costs
for that fire were eligible for FEMA reimbursement. For the Sunrise
Complex, the federal official who negotiated the cost-sharing agreement
said that using a method other than acres burned might have better
recognized and distributed the costs of the suppression effort necessary
to protect the wildland-urban interface. Nonfederal officials, however,
said they were not willing to pay a higher proportion of costs for the
Sunrise Complex because for that fire, the state was ineligible for
financial assistance from FEMA. The federal official said that because of
the state officials' unwillingness to use a method other than acres
burned, and because of the lack of clear guidance about which cost-sharing
method should be used, he agreed to use an acres-burned method and did not
seek a cost-sharing agreement that would have assigned more of the Sunrise
Complex's costs to the nonfederal entities. Some federal officials in
Arizona expressed similar views, saying that the lack of clear guidance on
sharing costs can make it difficult to reach agreement with nonfederal
officials. For example, federal and state officials in Arizona did not
agree on whether to share costs for the Florida Fire in that state.

Officials from NASF and the Utah Division of Forestry, Fire and State
Lands raised a related issue-that existing guidance does not specify how
costs should be shared when one entity's management goals alter fire
suppression strategies and increase costs. For example, these officials
said that federal agencies may restrict the use of mechanized equipment in
wilderness areas or in sensitive wildlife habitat and increase the use of
aircraft instead. The officials did not believe that nonfederal entities
should have to pay for the resulting higher costs. Utah officials said
that although they have been able to reach cost-sharing agreements they
believe are appropriate in such cases, guidance should be improved to
recognize these situations.

Officials from the Forest Service's and the Department of the Interior's
national offices agreed that interagency policies for cost sharing could
be clarified to indicate under what circumstances particular cost-sharing
methods are most appropriate. They said that the acres-burned method, for
example, is likely not the most equitable method to share costs in cases
where fires threaten the wildland-urban interface. But they also said that
it would be difficult to develop universal guidance requiring a particular
cost-sharing method for fires with certain characteristics. They explained
that the organization, responsibilities, and funding of state and local
firefighting entities vary from state to state, and flexibility is
therefore needed. The National Fire and Aviation Executive Board was
developing a template for both master and cost-sharing agreements.16 As of
May 2006, this template had not been finalized, but our review of a draft
version indicated that the template might not provide additional clarity
about when each cost-sharing method should be used.17

16The National Fire and Aviation Executive Board is made up of the fire
directors from the five federal land management agencies and a
representative from NASF. The board reports to the Wildland Fire
Leadership Council, which is a group established to support the
implementation and coordination of the National Fire Plan and the federal
wildland fire management policy.

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. Nonfederal officials
also said that wildland fire suppression costs already posed budgetary
challenges for state and local entities and that using alternative
cost-sharing methods more often could exacerbate the situation. State
officials said that if a state's suppression costs in a given year exceed
the funds budgeted, they must seek additional state funds, which can be
difficult. Moreover, they said, in many states, protecting structures is
primarily a local responsibility, and many local entities are unable to
pay the costs of fighting a large fire that threatens the wildland-urban
interface.18 Although clarifying guidance about which cost-sharing methods
are most appropriate for particular circumstances could cause nonfederal
entities to bear more wildland fire suppression costs, over the long term,
such clarification would also allow each entity to better determine its
budgetary needs and take steps to meet them.

In addition to their concerns about increased costs, nonfederal as well as
federal officials were concerned that the federal government was treating
nonfederal entities in different states differently, thereby creating
inequities. 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.
For example, nonfederal officials in Utah said that even though they
agreed to pay certain aircraft and fire engine costs to protect the
wildland-urban interface on the Blue Springs Fire, they were uncertain if
this method was equitable, particularly if nonfederal entities were not
paying for similar costs in other states. Clarifying which cost-sharing
methods should be used in particular situations could increase nonfederal
officials' assurance that the federal government is treating them
equitably relative to other states.

17The draft template was very similar to the joint master agreement for
Oregon and Washington. The template described several cost-sharing methods
that can be used, but it did not specify that certain methods be used for
certain types of fires.

18Some states have provisions whereby wildland fires exceeding the
logistic and financial capabilities of local entities can be managed and
paid for by the state, but officials said that state funds to do so are
also limited.

Cost-Sharing Framework May Reduce Incentives to Mitigate Fire Risks in the
Wildland-Urban Interface

In addition to the concerns raised about obtaining equitable cost-sharing
agreements and about the increased costs to nonfederal entities, federal
officials said that the current cost-sharing framework insulates state and
local governments from the cost of protecting the wildland-urban
interface. A variety of protective measures are available to help protect
structures from wildland fire, although they are not consistently used in
areas at risk. Some federal and nonfederal officials noted that the
current framework for sharing costs-combined with the availability of
funds from FEMA for some emergency fire suppression costs-may reduce the
incentive for state and local governments to require that such measures be
taken.

  Measures Are Available to Mitigate Fire Risks in the Wildland-Urban Interface,
  but They Are Not Consistently Used

Firefighting officials and researchers have identified a variety of
measures that can mitigate the risk to structures from wildland fire. As
we have previously reported, key among these measures are (1) reducing
vegetation and flammable objects within an area of 30 to 100 feet around a

structure, often called creating a defensible space, and (2) using
fire-resistant roofing materials and covering attic vents with mesh
screens.19 In addition, fire-resistant windows and building materials can
help prevent structures from igniting. Other measures, such as designing
communities to ensure an adequate water supply for fighting fires and
access for emergency vehicles, can assist fire suppression efforts and
further reduce the risk to structures. Taken together, these measures can
help reduce the likelihood that a wildland fire will damage a structure.

Increasing the use of protective measures to mitigate the risk to
structures from wildland fire is a key goal of the National Fire Plan.
This plan-developed by federal wildland fire agencies and state
governors-encourages, but does not mandate, state or local governments to
adopt laws requiring homeowners and homebuilders to take measures to help
protect structures from wildland fires. Because these measures rely on the
actions of individual homeowners or on laws and land-use planning
affecting private lands, achieving this goal is primarily a state and
local government responsibility. The National Association of Counties
supports this goal.

19GAO, Technology Assessment: Protecting Structures and Improving
Communications during Wildland Fires, GAO-05-380 (Washington, D.C.: Apr.
26, 2005).

Federal and nonfederal officials told us that the use of measures to help
protect structures from wildland fires has become more common, but that
such measures are not consistently used in areas at risk. The increased
use of these measures in recent years is due in part to continuing federal
and nonfederal efforts to educate homeowners in the wildland-urban
interface and to state and local governments' adopting laws requiring that
such measures be used. Education efforts, such as the Firewise Communities
program,20 seek to increase the voluntary use of such measures by working
with community leaders and individual homeowners. As wildland fires have
become more severe and the number of damaged homes has grown, more state
and local governments have adopted laws requiring homeowners or
homebuilders to use measures to reduce the risk to structures from
wildland fires. Nevertheless, federal and nonfederal fire officials told
us that protective measures are not used consistently in many areas at
risk from wildland fire. Some homeowners and homebuilders, for example,
resist using fire-resistant landscaping and roofing because they are
concerned about aesthetics, time, or cost. As a result, federal and
nonfederal officials said, it can be politically difficult for state and
local governments to adopt-and enforce-laws requiring such measures, and
many at-risk areas have not done so. In 2004, the Western Governors'
Association reported that greater use of protective measures was urgent,
but the progress made was unknown.21

20The Firewise Communities program is the primary national effort to
educate homeowners about wildland fire risks. The program is jointly
sponsored by the International Association of Fire Chiefs, National
Emergency Management Association, National Association of State Fire
Marshals, NASF, National Fire Protection Association, FEMA, U.S. Fire
Administration, Forest Service, Bureau of Indian Affairs, Bureau of Land
Management, Fish and Wildlife Service, and National Park Service. Numerous
state and local fire and forestry officials also participate in this
program. See http://www.firewise.org/ for more information.

21Western Governors' Association, "Letter to the Secretary of Agriculture
and Secretary of the Interior," December 16, 2004,
http://www.westgov.org/wga/initiatives/fire/tempe-report04.pdf (downloaded
May 8, 2006).

The states and communities we visited exhibited various degrees of
progress in adopting laws requiring protective measures. Since 1965, for
example, California has required homeowners in the wildland-urban
interface to maintain 30 feet of defensible space around their homes, a
requirement that was increased to 100 feet in 2005. This law applies to
existing homes as well as to new construction and specifically allows
local jurisdictions to adopt stricter standards. In areas at particularly
high risk from wildland fires, California regulations also require new
structures to be constructed with fire-resistant roofing materials and
vents. The other states we visited do not have such statewide
requirements, but they are taking a variety of steps to require or
encourage protective measures. Utah, for example, passed a law in 2004
requiring its counties to adopt standards for landscaping and building
materials if they want to be eligible to receive state funds to assist
with fire suppression costs. According to state officials, exactly what
will be required under these standards was still being determined, but
once final, the standards will apply only to new construction, not
existing structures. Similarly, Arizona did not have any statewide
requirements, although it adopted a law in 2004 explicitly granting local
governments the authority to establish codes to mitigate wildland fire
risk in the wildland-urban interface. Finally, in Colorado, laws requiring
protective measures have been adopted primarily at the local, not state,
level. Although some counties, such as Larimer County, required owners of
new structures in the wildland-urban interface to use measures to help
mitigate fire risk, others-including the three counties affected by the
wildfires we reviewed-were educating homeowners about measures they can
use to reduce their risk, without requiring that such measures be used.

  Cost-Sharing Framework and Federal Assistance May Reduce the Incentive to
  Require the Use of Protective Measures

Although measures are available to help protect structures in the
wildland-urban interface from wildland fires, federal officials expressed
concern-and some nonfederal officials acknowledged-that the use of
cost-sharing methods that assign more costs to federal entities, and the
availability of federal emergency assistance, insulate state and local
governments from the cost of providing wildland fire protection. These
federal officials pointed out that wildland fires threatening structures
often require added suppression effort, such as an increased number of
aircraft and fire engines or firefighters to remove vegetation around
individual structures. Under some cost-sharing methods, such as acres
burned, federal entities often end up paying a large proportion of the
costs for these efforts. Some federal and nonfederal officials also noted
that the availability of FEMA assistance to nonfederal entities-which can
amount to 75 percent of allowable fire suppression costs for eligible
fires-further insulates state and local governments from the cost of
protecting the wildland-urban interface. Of the eight fires included in
our review, nonfederal officials were seeking reimbursement for the
allowable costs of the five fires that FEMA determined met eligibility
requirements.

Federal officials suggested that to the extent that state and local
governments are insulated from the cost of protecting the wildland-urban
interface, these governments may have a reduced incentive to adopt laws
requiring homeowners and homebuilders to use protective measures that
could help mitigate fire risks. Homeowner and homebuilder resistance make
it politically difficult to adopt and enforce such laws. Both federal and
nonfederal officials noted, however, that greater use of fire-resistant
building materials and landscaping could help reduce the cost of
protecting the wildland-urban interface. Some officials also said that by
requiring homeowners and homebuilders to take such measures, more of the
cost of protecting the wildland-urban interface would then be borne by
those who chose to live there. The Colorado State Forest Service, for
example, has reported that the expansion of the wildland-urban interface
has increased wildland fire suppression costs, but that these costs have
not been equitably divided because all taxpayers-not just those who live
in areas threatened by wildland fire-fund the cost of suppression.22

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 financial
responsibilities for wildland fire suppression, particularly those for
protecting the wildland-urban interface. Federal officials said that the
continuing expansion of the wildland-urban interface and rising fire
suppression costs for protecting these areas have increased the importance
of resolving these issues. First, federal wildland fire management policy
states that protecting structures is the responsibility of state, tribal,
and local entities; but the policy also says that, under a formal fire
protection agreement specifying the financial responsibilities of each
entity, federal agencies can assist nonfederal entities in protecting the
exterior of structures threatened by wildland fire.23 Forest Service
guidance defines actions to protect the exterior of structures to include
removing fuels in the vicinity of structures and spraying water or
retardant on structures or surrounding vegetation. Federal and nonfederal
officials agreed that federal agencies can assist with such actions, but
they did not agree on which entities are responsible for bearing the costs
of these actions. Federal officials told us that the purpose of this
policy is to allow federal agencies to use their personnel and equipment
to help protect homes but not to bear the financial responsibility of
providing that protection. Nonfederal officials, however, said that these
actions are intended to keep a wildland fire from reaching structures, and
financial responsibility should therefore be shared between both federal
and nonfederal entities.

22Colorado State Forest Service, State of Colorado Wildfire Hazard
Mitigation Plan, Colorado Multi-Hazards Mitigation Plan (Denver, Colo.:
July 2002).

Second, the presence of structures adjacent to federal lands can
substantially alter fire suppression strategies and raise costs. A
previous federal report and federal officials have questioned which
entities are financially responsible for suppression actions taken on
federal lands but intended primarily or exclusively to protect adjacent
wildland-urban interface. Fire managers typically use existing roads and
geographic features, such as rivers and ridgelines, as firebreaks to help
contain wildland fires. If, however, homes and other structures are
located between a fire and such natural firebreaks, firefighters may have
to construct other firebreaks and rely more than they otherwise would on
aircraft to drop fire retardant to protect the structures, thereby
increasing suppression costs. For example, for the Sunrise Complex fires
in Utah, federal and nonfederal officials agreed that if structures had
not been present, they could have used easily accessible roads to contain
the fire and would not have used as many aircraft. Nonfederal officials in
several states, however, questioned the appropriateness of assigning to
nonfederal entities the costs for suppression actions taken on federal
lands. These officials, as well as NASF officials, also said that
accumulated fuels on federal lands is resulting in more severe wildland
fires and contributing to the increased cost of fire suppression.24 They
also said that federal agencies are responsible for keeping wildland fires
from burning off federal land and should, therefore, bear the costs of
doing so. Federal officials in the states we visited recognized this
responsibility, but some also said that with the growing awareness that
wildland fires are inevitable in many parts of the country, policy should
recognize that wildland fires will occur and are likely to burn across
jurisdictional boundaries. In their view, those who own property in areas
at risk of wildland fires share a portion of the financial responsibility
for protecting it. Previous federal agency reports have also recognized
this issue and have called for clarifying financial responsibility for
such actions.25

23Department of the Interior, Department of Agriculture, Department of
Energy, Department of Defense, Department of Commerce, Environmental
Protection Agency, Federal Emergency Management Agency, and the National
Association of State Foresters, Review and Update of the 1995 Federal
Wildland Fire Management Policy (Washington, D.C.: January 2001).

                                  Conclusions

Wildland fires are an enduring part of the landscape, and they will
continue to affect both federal and nonfederal lands and resources.
Federal, state, and local firefighting entities have taken great strides
to develop a cooperative fire protection system so that these entities can
effectively work together to respond to these fires. Nevertheless, where
federal and nonfederal lands and resources are adjacent or intermingled,
particularly in the wildland-urban interface, different views prevail
about which entity is responsible for the costs of protecting these lands
and resources. Without explicit delineation of each entity's firefighting
financial responsibilities, federal and nonfederal entities' concerns
about how these costs are shared are likely to continue. In addition, lack
of clarity about respective financial responsibilities can also make it
more difficult for both federal and nonfederal entities to accurately
forecast and plan for future budget needs. As the wildland-urban interface
continues to become a more prominent feature of the fire suppression
landscape, contributing to rising suppression costs, the need for clarity
is becoming more acute. Improved guidance that clearly delineates federal
and nonfederal entities' financial responsibilities for suppressing
wildland fires could assist all entities in better planning for, and
during, a fire season.

24GAO has previously reported on fuel conditions on federal lands. See
GAO, Wildland Fire Management: Update on Federal Agency Efforts to Develop
a Cohesive Strategy to Address Wildland Fire Threats, GAO-06-671R
(Washington, D.C.: May 1, 2006); Wildland Fire Management: Important
Progress Has Been Made, but Challenges Remain to Completing a Cohesive
Strategy, GAO-05-147 (Washington, D.C.: Jan. 14, 2005); and Western
National Forests: A Cohesive Strategy Is Needed to Address Catastrophic
Wildfire Threats, GAO/RCED-99-65 (Washington, D.C.: Apr. 2, 1999).

25Department of Agriculture, Secretary of Agriculture Independent
Cost-Control Review Panel: FY 2004 Large Cost Wildfires Report
(Washington, D.C.: Mar. 23, 2005); and Department of Agriculture and
Department of the Interior, Consolidation of the 2003 National and
Regional Large Incident Strategic Assessment and Oversight Review Key
Findings (Washington, D.C.: Sept. 22, 2003).

                      Recommendations for Executive Action

To strengthen the framework for sharing wildland fire suppression costs,
we recommend that the Secretaries of Agriculture and the Interior, working
in conjunction with relevant state entities, take the following two
actions:

           o  provide more specific guidance as to when particular
           cost-sharing methods should be used and
           o  clarify the financial responsibilities for suppressing fires
           that burn, or threaten to burn, across multiple jurisdictions.

               Agency Comments and Our Evaluation
		   
		   We received written comments on a draft of this report from the
           Forest Service and Interior. Both agencies generally concurred
           with our findings and recommendations. The Forest Service stated
           that it will clarify the guidance to the field regarding the most
           appropriate cost-share method to use in a given situation, which
           will serve as a place to begin negotiations with its partners. We
           recommended, however, that the Secretaries of Agriculture and the
           Interior work in conjunction with relevant state entities to
           develop more specific guidance. If the Forest Service
           independently clarifies guidance without engaging state entities
           that also will be affected by any changes, there is no assurance
           that these state entities will agree to the changes in
           cost-sharing methods. Interior stated, however, that it would work
           closely with the Forest Service and state agencies to clarify such
           guidance to the field.

           The Forest Service also stated that its financial responsibilities
           are clearly defined in policy. Several federal officials with whom
           we spoke during our study disagreed, however, stating that these
           policies do not clearly delineate federal entities' financial
           responsibility for fire protection, especially in regards to the
           wildland-urban interface. Although Forest Service policy states
           that structural fire suppression is the responsibility of tribal,
           state, or local governments and the Forest Service's primary
           responsibility and objective for structure protection is to
           suppress wildland fire before it reaches structures, it does not
           clearly define what this would constitute. Officials told us that
           such actions could include efforts on Forest Service lands to keep
           fire from crossing jurisdictional boundaries or suppression
           actions in closer proximity to a structure, such as removing
           vegetation or other flammable objects. Without a clear definition
           of each entity's protection and related financial
           responsibilities, it will be difficult to determine how to
           appropriately share the costs of the efforts. The Forest Service
           also provided additional comments that we have incorporated in
           this report where appropriate. The Forest Service's and Interior's
           letters are reprinted in appendixes III and IV, respectively,
           along with our evaluation of specific Forest Service comments in
           appendix III.

           In addition to these federal agencies, we also sought comments
           from NASF because of our report's potential financial implications
           for states and other nonfederal entities. NASF provided both oral
           comments and a written response to our report. NASF did not agree
           with our recommendations, stating that developing national
           guidance specifying appropriate cost-sharing methods and
           clarifying financial responsibility for fire suppression costs
           would not provide the flexibility needed by local federal and
           nonfederal officials to address the variability in local
           circumstances and state laws. We agree that a certain amount of
           flexibility is needed. However, without more specific guidance to
           assist federal and nonfederal officials when developing
           cost-sharing agreements for particular fires, inconsistencies in
           the methods used-as well as perceived inequities in how costs are
           shared between federal and nonfederal entities, as expressed by
           many officials with whom we spoke-are likely to continue. A copy
           of NASF's letter and our evaluation of its specific comments are
           included in appendix V.

           As agreed with your office, unless you publicly announce the
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           Secretaries of Agriculture and the Interior, the Chief of the
           Forest Service, the Director of the Bureau of Land Management, and
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           be found on the last page of this report. Key contributors to this
           report are listed in appendix VI.

           Sincerely yours,

           Robin M. Nazzaro Director, Natural Resources and Environment

                   Appendix I: Scope and Methodology
		   
		   To determine the general framework for how federal and nonfederal
           entities share suppression costs when fires burn or threaten both
           their lands and resources, we reviewed federal laws and
           interagency policies governing cost sharing for cooperative fire
           protection efforts. To identify similarities and differences in
           the cost-sharing framework and available methods from state to
           state, we obtained and reviewed master agreements between federal
           and nonfederal entities for 12 western states.1 Although wildland
           fires can affect all states, we focused our review on these
           western states, which have substantial federal lands and often
           experience wildland fires.

           To identify how cost-sharing methods are applied in different
           states, we selected a nonprobability sample of four
           states-Arizona, California, Colorado, and Utah-that used a variety
           of different methods to share wildland fire suppression costs
           between federal and nonfederal entities. In each of the four
           states, we selected a nonprobability sample of two fires that
           occurred in 2004 or 2005 and were managed by either the Forest
           Service or the Bureau of Land Management.2 The eight fires all
           burned or threatened to burn both federal and nonfederal lands,
           burned or threatened both natural resources and wildland-urban
           interface areas, and were of sufficient size and complexity to
           require type 1 or type 2 incident management teams for a portion
           of the fire. For each of the eight fires, we reviewed available
           records on firefighting personnel, aircraft, and equipment used
           for fire suppression efforts; reviewed fire cost data; reviewed
           the cost-sharing agreement that federal and nonfederal officials
           negotiated, if any; interviewed federal and nonfederal officials
           to identify the process used to select the cost-sharing method;
           and obtained agency estimates of total suppression costs that were
           based on data collected by federal agencies for each fire. Using
           this information and working with federal and nonfederal
           officials, we estimated the federal and nonfederal shares of the
           suppression costs. To determine the effect of the cost-sharing
           method selected on the relative proportion of costs borne by
           federal and nonfederal entities-for the five fires that used a
           cost-sharing method other than acres burned-we compared the
           estimated federal and nonfederal shares of costs resulting from
           the cost-sharing agreement to our estimate of what the federal and
           nonfederal shares of costs would have been if an acres-burned
           method had been used. We used estimates of suppression costs for
           some of the fires because the entities had not yet determined the
           actual total cost for all eight fires we reviewed. To determine
           the reliability of the data used, we reviewed previous audits of
           the federal financial systems used for the accounting of fire
           costs; interviewed federal officials knowledgeable about these
           systems to identify how data are entered into the system and what
           steps are taken to help ensure accuracy; and, working with federal
           and nonfederal officials, reviewed data on the specific
           firefighting assets used and the related costs for the eight
           fires. Because we were primarily interested in the relative
           proportions of fire costs borne by federal and nonfederal entities
           using different cost-sharing methods, we determined that these
           data were sufficiently reliable for the purposes of this study.
           The 12 master agreements reviewed, the four states visited, and
           the two fires we reviewed within each state are all nonprobability
           samples. The results of these samples, therefore, cannot be used
           to make inferences about all master agreements, states, or
           wildland fires.

           To identify concerns that federal and nonfederal entities may have
           about the existing cost-sharing framework, we reviewed previous
           reports on wildland fire suppression, including large fire cost
           reviews conducted by the Departments of Agriculture or the
           Interior, a series of reports by the National Academy of Public
           Administration, and reports by state entities. We interviewed
           federal officials from the Department of the Interior's and Forest
           Service's national offices and the National Interagency Fire
           Center in Boise, Idaho; Forest Service officials from the four
           regional offices and other Forest Service officials involved with
           the fires we reviewed; and Bureau of Land Management officials
           from the two state offices and several district offices involved
           with the fires we reviewed. We also interviewed additional federal
           officials in other regions and states to obtain a broader
           perspective on any concerns with the cost-sharing framework.
           Nonfederal officials that we interviewed included state-and, in
           some cases, local-officials from the four states we visited, as
           well as officials from Montana, Oregon, and Washington. We also
           reviewed reports by or interviewed officials from the National
           Association of State Foresters (NASF), the Western Governors'
           Association, and the National Association of Counties. To better
           understand the concern officials raised about the cost-sharing
           framework and incentives to increase the use of protective
           measures, we reviewed federal policies and reports on protecting
           the wildland-urban interface, including the National Fire Plan and
           the federal wildland fire management policy; federal laws and
           regulations governing Federal Emergency Management Agency (FEMA)
           assistance; and reports by GAO,3 the American Planning
           Association,4 and state audit entities.

           We performed our work in accordance with generally accepted
           government auditing standards from May 2005 through May 2006.

           Source: GAO analysis of data from the Forest Service and the
           Department of the Interior.

           aIncident management teams (IMT) are assigned to manage wildland
           fire suppression efforts on the basis of fire size and complexity.
           Type 1 IMTs typically handle the most complex fires. The IMTs
           listed in the table represent the IMT type on each fire during its
           peak size and complexity.

           The following are GAO's comments on the USDA Forest Service's
           letter dated April 18, 2006.

           The following are GAO's comments on NASF's letter dated May 5,
           2006.

                        1. We modified the language of our report to clarify
                        that the cost-sharing method chosen can have
                        significant financial consequences for the entities
                        responsible for providing fire protection to the
                        lands involved. Although we agree that fires
                        affecting the wildland-urban interface may be costly,
                        regardless of the method used, it is precisely these
                        high costs that make it critical for federal and
                        nonfederal entities to agree on appropriate
                        cost-sharing methods.
                        2. We modified the language of our report to clarify
                        that for the two fires discussed, nonfederal entities
                        would likely have borne a greater proportion of the
                        costs if another cost-sharing method had been used
                        that better recognized the many aviation and ground
                        firefighting assets that went toward protecting
                        nonfederal lands and resources. We are not implying
                        that costs should be shifted to the state or
                        nonfederal entities without any basis. Rather,
                        federal and nonfederal partners need to agree on
                        cost-sharing methods that appropriately distribute
                        wildland fire suppression costs on the basis of the
                        federal and nonfederal lands and resources requiring
                        fire protection and the extent of firefighting assets
                        used to protect each.

                        1. NASF stated that it believes that the national
                        template currently being developed for master
                        cooperative agreements will provide appropriate
                        guidance for cost-sharing agreements. As NASF noted,
                        the draft template lists several options for sharing
                        suppression costs but does not provide definitive
                        guidance as to when each cost-sharing method should
                        be used. NASF stated that it does not believe that
                        further efforts to define the specific circumstances
                        that would warrant the selection of one cost-sharing
                        method over another would be either productive or
                        helpful. We continue to believe that more specific
                        guidance-which could consider local characteristics
                        and conditions-would assist local federal and
                        nonfederal officials in negotiating cost-sharing
                        agreements for individual fires. Without such
                        guidance, inconsistencies in how costs are shared are
                        likely to continue, along with perceived inequities
                        within and among states.
                        2. NASF strongly believes that it is not the
                        responsibility of the Secretaries of Agriculture and
                        the Interior to clarify the financial
                        responsibilities for suppressing fires that burn or
                        threaten to burn across multiple jurisdictions. We
                        agree with NASF that the Secretaries alone cannot
                        clarify these responsibilities, and for that reason,
                        we recommended that the Secretaries do so in
                        conjunction with relevant state entities. Further,
                        NASF stated that it is neither feasible nor
                        appropriate to attempt to define at the national
                        level the financial responsibilities for these fires.
                        Ultimately, however, one or more entities will end up
                        paying for the costs of fighting a particular fire,
                        whether by explicit agreement beforehand or by
                        negotiation afterward. To avert decision making after
                        the fact, we maintain that federal and nonfederal
                        entities-which have developed an effective
                        cooperative firefighting relationship-need to further
                        clarify their respective financial responsibilities
                        in guidance articulated in advance of the fire
                        season.

           In addition to written comments, NASF also commented orally about
           two other issues discussed in our report. First, NASF officials
           expressed concern about our example illustrating the influence of
           FEMA assistance on the selection of a cost-sharing method for a
           particular fire. They said that, in their experience, the
           availability of FEMA assistance does not influence a state's
           willingness to use certain cost-sharing methods, some of which may
           lead states to pay higher costs. Although we did not attempt to
           determine how often the availability of FEMA assistance affected a
           state's choice of cost-sharing method, we believe that our example
           illustrates how, without specific guidance, costs for similar
           fires have been shared in different ways. In its written comments,
           Interior also raised a related concern about federal assistance
           such as FEMA's. Interior commented that it has already seen the
           issue arise several times this year, when states have requested,
           then canceled, federal firefighting resources seemingly on the
           sole basis of whether federal reimbursement was available. Second,
           with regard to state and local governments' incentives for
           protecting the wildland-urban interface, NASF officials said that
           reducing the potential loss of life and property provides
           sufficient incentive for state and local governments to adopt laws
           requiring the use of protective measures against wildland fire. As
           we noted here and in a previous report, however, many
           jurisdictions at risk from wildland fire have not yet adopted such
           laws. We have incorporated other NASF comments into our report as
           appropriate.

                                 GAO Contact
		   
		   Robin M. Nazzaro (202) 512-3841 or [email protected]

                               Staff Acknowledgments
		   
		   In addition to the contact named above, David P. Bixler, Assistant
           Director; Ellen W. Chu; Jonathan Dent; Janet Frisch; Timothy
           Guinane; Kevin Jackson; Richard Johnson; Chester Joy; Winchee Lin;
           Tom Moscovitch; and Jena Sinkfield made key contributions to this
           report.

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1These states were Alaska, Arizona, California, Colorado, Idaho, Montana,
Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

2Of the federal firefighting agencies, the Forest Service and the Bureau
of Land Management spend the most funds each year on wildland fire
suppression.

3GAO, Technology Assessment: Protecting Structures and Improving
Communications during Wildland Fires, GAO-05-380 (Washington, D.C.: Apr.
26, 2005).

4James Schwab et al., Planning for Wildfires (Washington, D.C.: American
Planning Association, 2005).

Appendix II: Characteristics of the Eight Fires That GAO Reviewed

                                 Number of acres burned           
                                 (percentage of total)            
                                                            Total             
                            IMT                             acres 
State/Fire   Date      typea      Federal  Nonfederal   burned  Total cost
Arizona                                                        
Cave Creek   June-July     1      231,171 15,543 (6%)  246,714 $19,413,000 
Complex      2005                   (94%)                      
Florida Fire July 2005     1  22,549 (97)     634 (3)   23,183   6,217,000 
California                                                     
Deep Fire    August        1   2,928 (93)     220 (7)    3,148   8,412,000 
                2004                                              
Pine Fire    July 2004     1   4,180 (24) 13,238 (76)   17,418  13,311,000 
Colorado                                                       
Mason Gulch  July 2005     1   9,124 (80)  2,233 (20)   11,357   7,054,000 
Fire                                                           
McGruder     July 2004     2   1,404 (50)  1,402 (50)    2,806     805,000 
Fire                                                           
Utah                                                           
Blue Springs June-July     2  10,331 (84)  1,955 (16)   12,286   3,497,000 
Fire         2005                                              
Sunrise      July 2005     2  18,186 (85)  3,272 (15)   21,458   2,043,000 
Complex                                                        

Appendix III: Comments from the USDA Forest Service

Note: GAO comments supplementing those in the report text appear at the
end of this appendix.

See comment 2.

See comment 1.

                                  GAO Comments

Appendix IV: Comments from the Department of the Interior

Appendix V: Comments from the National Association of State Foresters

Note: GAO comments supplementing those in the report text appear at the
end of this appendix.

See comment 1.

See comment 2.

                                  GAO Comments

Appendix VI: GAO Contact and Staff Acknowledgments

                                  GAO Contact

                             Staff Acknowledgments

(360586)

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www.gao.gov/cgi-bin/getrpt? GAO-06-570 .

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Highlights of GAO-06-570 , a report to the Chairman, Subcommittee on
Public Lands and Forests, Committee on Energy and Natural Resources, U.S.
Senate

May 2006

WILDLAND FIRE SUPPRESSION

Lack of Clear Guidance Raises Concerns about Cost Sharing between Federal
and Nonfederal Entities

Wildland fires burn millions of acres each year, requiring substantial
investments of firefighting assets. Since 2000, federal suppression costs
alone have averaged more than $1 billion annually. 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. Cooperative agreements between federal and nonfederal
firefighting entities provide the framework for working together and
sharing costs. GAO was asked to (1) review how federal and nonfederal
entities share the costs of suppressing wildland 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.

What GAO Recommends

GAO recommends that the Secretaries of Agriculture and the Interior,
working with relevant state entities, provide more specific guidance on
when to use particular cost-sharing methods and clarify the financial
responsibilities for fires that burn or threaten to burn across multiple
jurisdictions. The Forest Service and Interior generally agreed with the
findings and recommendations. The National Association of State Foresters
disagreed, stating that the recommendations would not provide the
flexibility needed to address the variability in local circumstances and
state laws.

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. 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
financial responsibilities for wildland fire suppression, particularly
those for protecting the wildland-urban interface.
*** End of document. ***