$8 Billion Left in Quake Aid, but Claims Exceed That : Recovery: Public projects make up bulk of remaining cases and are extremely costly. Scores of disputes need to be resolved.

The federal government has yet to spend roughly one-half of the nearly $17 billion in aid it has earmarked for the Northridge earthquake. But authorities are already bracing for an inevitable post-disaster truth: Even that hefty sum won’t be enough to handle all the pleas for help.

The 18-month quake anniversary marks a dramatic shift as aid to individuals and businesses begins to dry up and federal emergency officials and their counterparts in state and local government butt heads over how to spend the remaining $8 billion, much of it to repair the hospitals, public buildings, sewers and schools ravaged by the quake.

Payouts for these public projects will be the costliest and most controversial earthquake repairs. Already, some local officials hint that they may file a lawsuit to force the Federal Emergency Management Agency, which oversees most of the disaster aid, to pay more for scores of disputed repair projects.

“I’m concerned about the disagreements we have over our hospitals and schools. These are essential facilities and I’m frustrated with the amount of time it’s taken FEMA to reach decisions--and with the decisions themselves,” said Richard Andrews, director of the state Office of Emergency Services.

Andrews and others complain about FEMA officials overruling one another and sending aid documents back for clarification while critical projects hang in the balance.

FEMA agrees that the speed of quake aid payments has decelerated since the frantic initial days. Morrie Goodman, a former television newscaster who is FEMA’s public affairs director, compared the Los Angeles area in the weeks after the quake to “a patient lying on the road needing emergency medical care.”

Now, Goodman says, the region is out of intensive care and on the way to long-term recovery. And that means disputes are inevitable as FEMA engineers scrutinize the complicated damage reports and engineering studies for the remaining big-ticket quake projects.

“Things will get worked out,” Goodman said. “These issues will be resolved outside of court.”

In a sign of just how long it will take to distribute the funds, FEMA recently took out two- or three-year leases on several floors of a Pasadena office building where more than 200 federal workers are processing the remaining 3,000 disaster claims.

One unsettled claim involves County-USC Medical Center, where some buildings remain closed and quake-damage cracks are commonplace. Local officials estimate the quake damage throughout the massive complex at $1.4 billion, a huge tab for a county so awash in budget woes that it talks of closing the hospital for good. So far, FEMA has offered $18 million out of the $134 million the county requested to repair just two of the County-USC facilities, saying local authorities are attempting to get the federal government to rebuild the hospital better than it was before the quake hit.

Other big projects still awaiting FEMA rulings are UCLA Medical Center (which pegs its quake damage at $930 million), Cal State Northridge (which has received more than half its $350-million estimate), Valley Presbyterian Hospital (with quake damage claims of about $10 million), and the Simi Valley School District (about $8 million requested).

At the Los Angeles Unified School District, officials contend that FEMA has misinterpreted building codes, causing it to skimp on its federal aid obligations. The district has received approvals from the federal government for about $90 million of its roughly $150 million in school damages, but scores of campuses still await repairs.

The disputes center on the Stafford Disaster Relief and Emergency Assistance Act, which calls for the federal government to repair public projects up to current standards, with FEMA paying at least 75% of the tab.

After the Northridge temblor, President Clinton directed FEMA to pick up 100% of the costs in the initial days, and since then, Clinton has expected the federal government to pick up 90% of longer-term costs, with local and state governments funding the rest. After an earthquake bond measure failed last year, the state had to borrow its share of the tab from the city of Los Angeles and FEMA.

Despite those guidelines, just how much FEMA must pay is hazy, as officials debate the extent of the damage to particular properties, and which standards to apply.

Another dispute centers on FEMA’s special mitigation fund, money set aside to go beyond simple repairs and pay for the rebuilding of some structures to make them even stronger than they were before.

For instance, if a single ceiling tile fell from a classroom, or a single light fixture was jarred loose, the entire campus could qualify for more quake-proof ceilings or lights, courtesy of FEMA’s mitigation fund. In Los Angeles, many schools fit that bill. But school officials are still struggling over FEMA regulations that provide a lot less money for schools in which the tiles or lights stayed put.

For disputes that cannot be resolved, FEMA has an appeals process.

Temporarily in the hot seat in Pasadena is Patricia K. Stahlschmidt, the local FEMA earthquake director responsible for taking a first crack at the tough calls. She has handled a string of disasters since she joined FEMA at the agency’s creation in 1979.

Disagreements that Stahlschmidt can’t resolve go to officials at FEMA’s Downtown Los Angeles headquarters, and eventually reach the desk of FEMA Director James Lee Witt in Washington.

The clashes highlight the fact that once the federal government spends the $16.9 billion earmarked by the federal Office of Management and Budget for Northridge quake aid, no more money is expected. Already, the Northridge temblor is the costliest natural disaster in the country’s history, surpassing Hurricane Andrew and about 50 other disasters that have occurred since the quake that have kept FEMA busy.

Along the way, the Clinton Administration has been engaged in delicate political maneuvering to free up quake aid funds.

Originally, the government sent a huge, $8.6-billion relief package to Southern California, involving 27 federal agencies and departments in the effort. Another several billion in aid came from various federal agencies besides FEMA.

And this year, when it became clear that even $8.6 billion would not be enough, FEMA returned to Congress for $4.6 billion more. That last piece of quake funding has been bogged down in the Senate for weeks amid partisan wrangling over budget cuts, although both parties expect approval of the FEMA quake aid any day.

Besides FEMA, the Small Business Administration loaned $4 billion to nearly 125,000 homeowners and business people. Housing and Urban Development has spent close to $1 billion, including more than 20,000 Section 8 housing vouchers to low-income residents, a program recently extended through the end of the year.

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Quake Aid Update Institutions Still Awaiting Funds (Dollars in Millions) *

Cal State Northridge Requested Aid: $350 million Approved to Date: $182 million

*

UCLA Medical Center Complex Requested Aid: $930 million Approved to Date: zero

*

County-USC Medical Center Requested Aid: $1.4 billion Approved to Date: $17 million**

*

Valley Presbyterian Hospital Requested Aid: $12 million Approved to Date: zero *

Los Angeles Unified School District Requested Aid: $550 million. Approved to Date: $90 million *

SBA Loan Breakdown. As of June 26 Home Loans: 193,979 applications $2.47 billion approved

50.76% of applications approved *

Business Loans: 39,102 applications $1.42 billion applications approved

55.58% of applications approved *

Economic Injury Loans: 17,269 applications $115 million approved

19.52% of applications approved *

Quake Assistance Allocated (Dollars in Millions) Twenty- seven federal agencies and departments will contribute aid to the Northridge quake recovery. Here is a partial list of federal aid as of March 31. FEMA: $9.700

SBA: $4.700

HUD: $837

Transportation: $777

Education: $203

Veterans: $147

Others: $318

* $150 million for damages and $400 million in mitigation funding.

Sources: Federal Office of Management and Budget; California Dept. of Finance; FEMA and the city of Los Angeles; State Office of Emergency Services; Researched by MARC LACY / Los Angeles Times

*

Sources of Help The federal government has set aside nearly $17 billion for recovery from the Northridge earthquake, with about half the money, already disbursed. Many relief programs have spent all their funds, but here is a look at some of the continuing aid efforts and rough estimates of how much remains. *

Active Earthquake Assistance Programs: Federal Government

All federal programs Allocated: $16.9 billion Available: $8 billion *

Active Earthquake Assistance Programs: Federal Emergency Management Agency Allocated: $9.7 billion Available: $6 billion *

Disaster Housing Allocated: $1.2 billion* Available: N/A *

Individual and Family Grants Allocated: $200 million* Available: N/A

*

Crisis Counseling Allocated: 1.7 million* Available: N/A

*

Public Assistance Allocated: $1.4 billion* Available: N/A

*

Active Earthquake Assistance Programs: Small Business Administration Home and business loans Allocated: $4.7 billion Available: $700 million

*

Active Earthquake Assistance Programs: Department of Commerce Economic Development Administration grants to 14 local governments and community organizations for job skills training

Allocated: $85 million Available: $11 million

*

Active Earthquake Assistance Programs: Housing and Urban Development

Section 8 grants for displaced renters. Program began Jan. 94 and will last till Dec. 31, ’95 Allocated: $200 million Available: N/A

*

Mobility Plus grants to nonprofits to offer career counseling, apartment hunting tips and money-management skills. Allocated: $4 million. Available: $2 million

*

Active Earthquake Assistance Programs: State of California Individual Family Grant Program (last resort for those who don’t qualify for SBA loans) Allocated: $300 million Available: $2 million *

Active Earthquake Assistance Programs: City of Los Angeles (as of June 30, 1995) Community Development Department grants to nonprofit community organizations for urban living skills. Allocated: $150 million Available: N/A *

Earthquake Emergency Housing loans for ghost towns, multifamily and single-familyhomes (for those who don’t qualify for SBA or state Individual Family Grant Program) Allocated: $309 million Available: $175 million Sources: Federal Emergency Management Agency, federal Office of Management and Budget, California Dept. of Finance, State Office of Emergency Services and the city of Los Angeles. Researched by MARC LACY / Los Angeles Times