Flood Aid Fills Needs -- at a Cost

President Bush’s decision to declare a state of emergency in Southern California could provide a financial life preserver to thousands of homeowners who had water and mud damage during last month’s record storms that wasn’t covered by insurance.

The declaration means that the federal government will provide damage grants of up to $26,000 as well as low-interest loans for much more to business and residents with damage insurance companies won’t cover.

Local governments also benefit because the Federal Emergency Management Agency will cover 75% of the costs for repairing roads, bridges and other infrastructure damaged by the storms. The federal agency will also reimburse governments for overtime paid to paramedics, firefighters and police officers because of the storm. These costs are estimated at $300 million or more for the five-county area.

Insurance companies have received 21,400 storm-related claims from property owners. But officials have warned that most Southern California policyholders are not covered for water damage caused by floods and that fewer are covered for mudslide damage.

“A lot of people file claims for things that are not covered,” said Candysse Miller, executive director for the Insurance Information Network of California. “For people like that, [the state of emergency declaration] is very good news.”

But Insurance Commission John Garamendi said the federal help also can have negative effects.

Because they can get grants and loans to fix damage, he said, some homeowners are likely to forgo purchasing better insurance coverage or doing more extensive damage-prevention work around their homes. Federal help also will make it easier for people living in inherently unstable areas, such as slide zones and flood plains, to stay where they are rather than move to safer ground.

Garamendi said that when he was a deputy secretary of the Interior Department, the federal government frequently bailed out people who lived in flood areas near the Mississippi and Ohio rivers.

“It’s a good thing, because people need help,” Garamendi said. “But people also need to take responsibility for themselves and not be depending on the largess of the federal government or political decisions of state or local governments.”

For Callum MacSween, 52, a resident of Oak View in Ventura County, the federal declaration is good news, although he said he’s not sure exactly what it’s going to mean for him.

His house is on the edge of a cliff gnawed at by the Ventura River during last month’s storms. Although the house was not damaged, MacSween said, he fears another large storm will cause more of the bluff to slough away and, with it, take his house.

MacSween said he does not have flood insurance, adding that his insurance carrier has told him that even if he did, it would not cover him if his house fell into the river.

“There’s no erosion insurance,” he said. “I see the water flowing and watch the weather reports, and I think, ‘Please, no more rain.’ ”

MacSween said FEMA’s involvement gives him hope that the county will get money to help do something about the river.

“It seems like it took forever to declare a federal emergency,” he said. “But maybe this will get the river redirected, which would at least eliminate the immediate problem.”

FEMA officials said that even if a house were destroyed more than a month after January’s storms, property owners could qualify for aid as long as it could be shown that the storms were the cause.

Horst Ringhof, 59, of Casita Springs in Ventura County said he and his wife, Jackie, 60, still aren’t sure what’s going to happen with their property, which was overrun by a torrent of mud, rocks and broken trees.

“It looks like a bomb was dropped inside my house. Everything was moved,” Ringhof said.

His insurance company said his property was not covered for the kind of damage it sustained, he said.

“I think FEMA will come through. Some of my neighbors are pessimistic, but I’m not,” Ringhof said. “I think the government is full of good people. It’s bureaucratic, and it takes time, but I think it’s going to work out.”

The federal decree means homeowners will get help that can include grants for temporary housing, minor repairs and funeral costs and loans from the U.S. Small Business Administration.

Homeowners can get loans of up to $200,000 and renters can get as much as $40,000, provided the government believes they can repay the debt, said Rick Jenkins, a spokesman for the agency. Business can get as much as $1.5 million in loans, he said.

However, second homes and vacation homes do not qualify for federal loans, which generally have interest rates of 3%, Jenkins said.

Whether home repair assistance is provided will depend in large part on whether building permits are reissued for specific homes, said James Shebl, a FEMA spokesman.

“One of the questions is what about homes that are in imminent danger, which means you can’t live there or shouldn’t live there,” Shebl said. “Some of the assistance is going to depend on a county’s stance on permits.”

One place where residents are not guaranteed federal repair funds is La Conchita, where a massive mudslide buried homes and killed 10 people on Jan. 10. FEMA is providing temporary lodging to displaced La Conchita residents. But because the area is in an active landslide and county officials have urged resident not to return, it’s unclear whether federal rebuilding assistance will be available.

The storms that pounded Southern California last month dropped 16.47 inches of rain on downtown Los Angeles during the city’s wettest 15-day period on record. Rainfall amounts were higher in Ventura County’s foothill cities of Ojai, Santa Paula and Fillmore, triggering washouts and widespread flooding on narrow rural roadways.

Roads were especially hard hit.

Los Angeles County alone faces about $45 million in repairs, with about $36 million for roads and about $9 million for damage to the county’s flood-control and water-supply systems.

At its height, more than 100 roads were closed countywide by the storms.

The federal disaster declaration issued Feb. 4 by Bush was the first for a winter storm in the state since February 1998, when the region was soaked by strong El Nino.