HOUSTON CITY HALL – Facing what Houston Mayor Bill White calls the " most massive debris removal effort ever of any American city,” the state of Texas has asked the federal government to extend the so-called “100 percent reimbursement” window. The extension would allow Houston to spend money on public safety and debris removal with assurances that FEMA will continue pick up the tab.

AP photo

People continue to remove debris from their homes.

White says the request has pushed through Washington’s bureaucratic channels and is now heading to President Bush’s desk.

“I cannot conceive the White House would let us down in that regard, but we will see,” White said. At a briefing this morning, he hinted to members of the Houston City Council that a failure to reimburse roughly $200 million in Ike-related expenditures could affect the city’s “liquidity,” which bond markets use to judge a city’s financial stability. Currently, Houston enjoys a strong position in municipal bond markets – which allows it to borrow money at low interest rates.

Given the shaky state of the global economy, White said it is “inconceivable” that the federal government might allow one of the nation’s largest cities to suffer a credit crisis during a natural disaster.

Houston has already applied for $137.5 million in federal funds to pay for debris removal, and is working to put a price tag on costs related to public safety and infrastructure. The city is also working with roofers and contractors to repair roofs for homeowners in low-income areas that do not have sufficient insurance. White says he expects FEMA to reimburse those costs as well.