O.C. Qualifies for U.S. Aid as Costs From Storms Soar : Disaster: The federal designation releases millions for low-interest loans, short-term aid and cleanup expenses.

Orange County qualified for federal disaster relief Wednesday, as an updated damage estimate threatened to climb beyond $63.5 million after a series of devastating storms that left dozens of homes crippled by landslides, roads washed out and a coastline polluted by failed sewer systems.

The declaration issued by President Clinton is expected to make millions in federal aid available to cities and towns for cleanup under a program that provides 75% federal reimbursement for their costs.

The county’s recently updated damage total far outstrips last month’s estimate of about $40 million, ranking it second only to San Diego County.

Board of Supervisors Chairman Harriett M. Wieder, who only Tuesday voted to extend a countywide state of emergency, welcomed the Clinton declaration.

“The overall picture of the state doesn’t give you much hope for drawing blood from a stone,” Wieder said, referring to the state government’s bleak financial position. “Now, maybe there’ll be the funds necessary for cleanup.”

The emergency aid package, requested in a Jan. 27 letter from Gov. Pete Wilson, will be managed by the Federal Emergency Management Agency and includes housing assistance, counseling, and grants and low-interest loan programs for damaged homes and businesses.

More than 20 people were killed and 1,000 residences and commercial properties were damaged statewide by the series of storms last month.

In Orange County, residents whose homes and businesses were either damaged or destroyed during last month’s torrential rains can expect no more than $100,000 per home or $500,000 per business in low-interest loans.

More than three-quarters of the county’s total loss estimate-$47.6 million-was in Anaheim Hills, where the storms’ aftermath continues to threaten 43 upscale homes in an ancient landslide area. Three other homes have been declared total losses. Although city officials pegged actual damages at $3.8 million, the county estimates forwarded to the White House last week include the potential destruction of all 46 homes.

For those victims--many of whom have lost million-dollar-homes--the potential federal aid will fall far short of their losses.

“One hundred thousand dollars isn’t going to buy a garage in Orange County,” said Gerald Steiner, who was forced to evacuate his $1.2-million Anaheim Hills home last month. “That isn’t going to help these houses. The (federal) assistance might be good for the city, but it’s not that great for the homeowners.”

Since their evacuation, Steiner and his family have been sleeping on the floor of his Fullerton office, he said.

In Laguna Beach, owners of two canyon homes awaiting demolition were grateful Wednesday to hear that they may be eligible for financial assistance to clear away the rubble and rebuild.

“I am thrilled. We had been waiting for that and praying,” said Marjean Hanson, whose home was left uninhabitable by last month’s devastating Mystic Hills mudslide.

Hanson said the prospect of government assistance is especially important to the family since it is unclear whether her homeowners insurance would cover the damage.

According to county estimates, damage in Laguna Beach now totals $2.6 million.

In San Clemente, Don Genovese said federal assistance could be “a godsend” in helping his 80-year-old mother, Jennie, pay the $13,000 cost of demolishing the family’s restaurant, Ernesto’s Italian Villa, and an adjoining motel at 1832 N. El Camino Real in San Clemente.

He does not expect the federal government to lend the estimated $750,000 cost of rebuilding the businesses. “We are almost sure we will clean the property up and sell it,” he said.

Within the next few days, officials are expected to establish two centers where residents may apply for needed federal aid. One will be in Anaheim Hills, on the parking lot of the Festival Shopping Center. Another site is planned for an undetermined city in South County, said Mark Johnson of the Orange County Emergency Management Division.

Beginning today, federal officials are also providing toll-free telephone numbers that victims may call for instruction on how to apply for immediate assistance.

The various disaster aid programs will be coordinated by the Federal Emergency Management Agency’s San Francisco regional office and include:

* Rental payments for temporary housing for up to 18 months.

* Grants for minimal repairs to make homes habitable.

* Grants up to $11,900 to cover disaster-related needs not covered by other federal programs.

* Unemployment payments to workers who temporarily lost jobs and do not qualify for state benefits.

* Low-interest loans from the Small Business Administration to cover property losses.

* Farmers Home Administration loans for losses to agricultural equipment and crops.

* Crisis counseling, income tax assistance, and help for veterans and Social Security recipients.

Of the 19 California counties included in the federal disaster proclamation, Orange County’s damage total ranked second only to San Diego, which suffered nearly $67 million in losses, Johnson said.

Teams of federal inspectors toured the county on Jan. 21 and 22, calculating damage both to public and private property.

“We got just about everything we asked for,” said Franz Wisner, a spokesman for Gov. Wilson. “The governor applauds President Clinton’s action and his quickness. This is assistance California can definitely use.”

The one drawback, Wisner said, was the federal government’s decision to fund only 75% of the costs of repairing damage to public buildings or property, instead of the 100% requested by Wilson.

“We will continue to work with the Clinton Administration with the hope that the federal government ultimately will pick up 100% of those costs,” Wisner said.

Aware of the state’s precarious financial position, local officials were generally relieved by the federal action.

Supervisor Gaddi H. Vasquez said he wasn’t sure that the state could have carried the financial burden of providing storm relief by itself.

“The thought (of state relief) is so dreadful I don’t even like to think about it,” Vasquez said. Overall, the supervisor said he was “pleased with the swift response” from the federal government.

“Given the tally of damage and losses . . . it’s going to be a good help to us and to property owners in getting their lives back in order.”

John Sibley, chief deputy director of the county’s Environmental Management Agency, said the declaration should especially help the county recover some of the $6.5 million in damage to its roads, public buildings, flood-control channels and storm drains. The cost of repairing flood-control facilities alone was expected to top $4.5 million.

Much of the repair money is needed to restore a Mission Viejo flood-control channel that collapsed at the height of last month’s storm.

“We were hoping the (the federal government) would come through, naturally,” Sibley said. “It’s important for repairing county facilities, but it’s even more important for private homeowners, especially in Anaheim Hills.”

In Anaheim, city officials said they would be meeting with members of the Federal Emergency Management Agency to establish the federal assistance center at the shopping center in the 8000 block of East Santa Ana Canyon Blvd. The facility is expected to be available within two days.

In addition to the damaged homes, City Manager James D. Ruth said the federal financial assistance would help the city recover the costs of repairing cracked streets, broken sewer and water pipes and severed underground utility lines.

“We’re pleased with the President’s action,” Deputy City Manager Tom Wood said Wednesday. “This will go a long way in helping the city and its residents in dealing with this natural disaster.”

Times staff writers Eric Bailey, Leslie Berkman, Eric Lichtblau and Matt Lait contributed to this report.

* QUAKE-SLIDE CONNECTION: Landers quake might have caused Anaheim landslides. B4

Snapshot of Storm Damage

Orange County has estimated it suffered $63,546,840 in damage from last month’s storms. A city-by-city look at preliminary damage estimates:

City Damage Estimated cost Anaheim Flooding, ground slippage $47,589,580 Laguna Beach Flooding, landslides, evacuations 2,650,000 San Clemente Mudslides, flash floods, evacuations 2,410,000 Lake Forest Tornado 1,200,000 Dana Point Mudslide 1,000,000 San Juan Capistrano Mudslides, evacuations 572,715 Buena Park Tornadoes 193,000 Brea Flooding 28,500 Garden Grove Flooding 23,500 Newport Beach Structural damage 20,000 Irvine Mudslides 13,545 La Habra Mudslides 10,000

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Who Gets Federal Aid

Low-interest loans between 4%-8% are now available to individuals and businesses who suffered property damage during the storms. What’s available and how to apply:

Individuals: May apply for loans up to $100,000 for primary residence; $20,000 for personal property, including renter losses.

Small businesses: Those suffering disaster-related cash-flow problems may apply for loans up to $500,000.

Farmers, ranchers, aquaculture operators: May apply for loans up to $500,000 to cover production and property losses, excluding primary residence.

How to apply: Call the Federal Emergency Management Agency at 1-800-462-9029. Hearing- and speech-impaired applicants can call 1-800-462-7585 (TDD) from 8 a.m.-6 p.m. PST.

Sources: Orange County Emergency Management Division, Federal Emergency Management Agency

Researched by CAROLINE LEMKE / Los Angeles Times