When a big disaster hits a broad geographical area and the impacts are felt in places large and small it is the "smaller" jurisdictions who will feel left out and abandoned.
It starts with the immediate impact of the disaster. News crews respond to the larger metropolitan areas where they have staff and where there is significant population and infrastructure impacts. It is only days or weeks later that the stories of smaller cities and counties start to be told. Hear one from a small town in Maryland that was on NPR today.
So you have a small city with few economic resources dealing with significant damages and they are not being declared for Individual Assistance by FEMA/the President. My guess is that in the end they will apply enough political pressure to reverse that decision. I'll bet you that Maryland doesn't have a disaster fund so it is either be bailed out by the Feds or individuals will be on their own.
This is why flood insurance is so critical a component for anyone living in the potential path of water. It might be the only resource you have when a disaster does strike your home.