Federal Quake Relief Pool Drying Up

The federal government has yet to spend roughly 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--that even the 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 of all. Already, some local officials hint that they may sue 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 each other 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 in 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- and 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 is the 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 shuttering the hospital for good. So far, FEMA has offered $18 million out of the $134 million the county requested for repairs to just two of the County-USC facilities, saying that local authorities are trying 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. LAUSD 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.

“Initially after the earthquake, there was an outpouring of support,” said Margaret Scholl, who heads LAUSD’s earthquake recovery office and has been working well into the evening lately to meet FEMA deadlines. “Now, after all the funding battles in Washington, FEMA has become very narrow and strict in its interpretation of who gets aid.”

One of her biggest headaches has been Kennedy High School in Granada Hills, the hardest-hit campus in the San Fernando Valley. As she recounts the tale, Scholl sighs frequently.

The quake destroyed one of Kennedy’s buildings completely, and two others suffered major damage. A separate gymnasium was knocked hard as well. It is roof repairs at one of the academic buildings that has driven Scholl up the crack-filled walls.

FEMA initially told her that the agency would pay only $20,000 to patch the roof on one hard-hit building, and not replace it completely. School officials had roofers do the job, and when the repaired roof began to leak during subsequent storms, they thought they had proved their point.

But FEMA questioned the quality of the patching job and has refused to pay for a new roof, saying the roof was 21 years old when the quake hit and had been patched 20 times before.

“I sometimes wonder how long I want to keep banging my head before I give up,” said a frustrated Scholl, who has filed a formal appeal with FEMA.

FEMA’s Goodman responded, “We are going to bring the roof back to pre-earthquake condition, nothing more, nothing less.”

The disputes center around 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.

“This is no exact science,” explained Wallace E. Stickney, an engineer who was FEMA director under President George Bush. “Qualified structural engineers can come to very different conclusions. Disputes are inevitable.”

Led by civil engineer Christopher Doyle, FEMA has assembled a team of architects and engineers in Pasadena to review the deluge of damage claims. And Doyle’s technical staff frequently clashes with local officials.

In the case of hospitals, the state argues that rules issued by the Office of Statewide Health Planning and Development should apply to quake-damaged hospitals, even though they were approved after the quake and call for damaged hospitals to be brought up to current, stricter code standards.

In FEMA’s eyes, the state is attempting to change the rules after the quake to get more repair funds for hospitals.

Another dispute centers around 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 a formal 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 Mother Nature’s torments since she joined FEMA at the agency’s creation in 1979.

“This is a very intense job,” said Stahlschmidt, who responded to the quake on Day One. “The Northridge earthquake may not be new news, but it is still the largest disaster in the agency’s history and major decisions remain.”

Disagreements that Stahlschmidt can’t resolve go to officials at FEMA’s Downtown headquarters, and eventually reach the desk of FEMA Director James Lee Witt in Washington. Knowing that he is a friend of President Clinton, everyone from Mayor Richard Riordan to the congressmen representing quake-torn neighborhoods has been jockeying for Witt’s ear.

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 SBA loaned $4 billion to nearly 125,000 homeowners and business people. HUD has spent close to $1 billion, which includes more than 20,000 Section 8 housing vouchers to low-income residents, a program recently extended through the end of the year.

Since the temblor hit Jan. 17, 1994, numerous assistance programs have come and gone.

After six extensions, FEMA’s deadline for accepting individual aid applications ended in March. The popular quake debris pickup program also shut down this week, although Riordan is still lobbying for some additional funds. Earlier this year, the 11 emergency service centers closed their doors.

An array of initiatives remain, however. A FEMA help line still receives a steady stream of calls, and the city is still actively doling out housing loans for those turned down by other programs.

Various nonprofit organizations, from the Los Angeles Family Housing Corp. in North Hollywood to the Asia Pacific Counseling and Treatment Center in Downtown, are using federal grants to offer job counseling, tenant skills and business development to quake victims.

“We’re no longer getting calls from people saying they’re out on the street or falling through the cracks,” said Eric Rose, field deputy for Los Angeles City Councilwoman Laura Chick.

But the earthquake is nowhere near a distant memory, and the day after Rose spoke, he received a letter from Holly Martin, a 24-year-old single mother forced out of her damaged condominium in Reseda.

Out of savings, Martin said times are tough even with the 70% HUD subsidy she receives for the rent on her Mission Hills apartment.

“I could not have made it this long without the quake assistance,” said Martin, who works for an aerospace company. “But I’m still struggling. It may be 18 months since the earthquake, but this month may be the month I’m out on the street.”

John Rooney of the Valley Economic Development Center knows of businesses in similar financial straits: “You can just drive around Reseda, Northridge or Sherman Oaks and see that there’s still suffering. Some of these businesses are going to go under.”

FEMA officials keep trying to bring expectations into line with reality by emphasizing that the nation’s largest relief project, no matter how successful, cannot jump-start every business or turn every house back into a home.

Said FEMA’s Goodman: “Just because God knocked your facility to hell, doesn’t mean the federal government [by itself] can put it all together again.”

* CHORUS OF COMPLAINTS: CSUN president accuses FEMA of stalling on campus aid. B4

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Quake-Aid Update

Institutions Still Awaiting Aid (Dollars in Millions)

Approved to Date Requested Aid Cal State Northridge $182 $350 UCLA Medical Center Complex $930 County-USC Medical Center $17 to $18 $1.400 Valley Presbyterian Hospital $10 LAUSD $90 $550*

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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.

SBA Loan Breakdown (As of June 26)

Home Loans

193,979 applications

$2.47 billion approved

50.76% of applications approved

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Business Loans

39,102 applications

$1.42 billion approved

55.58% of applications approved

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Economic Injury Loans

17,269 applications

$115 million approved

19.52% of applications approved

Source: 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 LACEY / Los Angeles Times

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Government Quake Aid

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

Active Assistance Programs: Federal Government

All federal programs

Amount Allocated: $16.9 billion

Still Available: $8 billion

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Active Assistance Programs: Federal Emergency Management Agency

Amount Allocated: $9.7 billion

Still Available: $6 billion

Disaster Housing

Amount Allocated: $1.2 billion disbursed

Individual and family grants

Amount Allocated: $200 million disbursed

Crisis counseling

Amount Allocated: $1.7 million disbursed

Public Assistance

Amount Allocated: $1.4 billion disbursed

Small Business Administration

Home and business loans

Amount Allocated: $4.7 billion

Still Available: $700 million

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Department of Commerce

Economic Development Administration grants to 14 local governments and community organizations for job skills training

Amount Allocated: $85 million

Still Available: $11 million

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Housing and Urban Development

Section 8 grants for displaced renters. Program began January, 1994 and will last till Dec. 31.

Amount Allocated: $200 million

Still Available: unknown

Mobility Plus grants to nonprofits to offer career counseling, apartment hunting tips and money-management skills.

Amount Allocated: $4 million

Still Available: $2 million

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State of California

Individual Family Grant Program (last resort for those who don’t qualify for SBA loans)

Amount Allocated: $300 million

Still Available: $250 million

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City of Los Angeles: (as of 6/30/95)

Community Development Department grants to nonprofit community organizations for urban living skills.

Amount Allocated: $150 million

Still Available: unknown

Earthquake Emergency Housing Loans for ghost towns/multifamily and single family homes (for those who don’t qualify for SBA or state Individual Family Grant Program)

Amount Allocated: $309 million

Still 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 LACEY / Los Angeles Times