Disaster relief not flowing to Western Pa. flood victims
Federal disaster relief flowed to only a few homeowners and no businesses in the nearly three months since flash flooding submerged neighborhoods and towns across Western Pennsylvania.
The U.S. Small Business Administration, which offered relief to Allegheny County after the July 10 floods, approved 27 loans for less than $500,000 by the end of September, all to homeowners, the agency reported. More loans could be approved, said SBA spokesman Jack Camp: 37 homeowners, five businesses and one nonprofit are still waiting to hear from the administration on the status of their loans. The SBA would not disclose who has received assistance and who still waits.
Many others decided to forgo federal aid and undertake repairs on their own, spending thousands out of savings accounts and borrowing money from commercial banks.
“My goal was to get that day care open,” said Desi Kramer, who used insurance money and borrowed from banks to reopen his Kids Korner day care in Oakdale in August after flood waters damaged the building and washed toys out the front door and down the street. “If I sat around and waited, it wouldn't have happened as fast.”
On the morning of July 10, 3 inches of rain fell in two hours in Oakdale, Bridgeville, Elizabeth Township and many communities in Allegheny County's South Hills. The rain pooled on saturated ground and swelled normally docile creeks into violent torrents.
The Pennsylvania Emergency Management Agency estimated $3.7 million in damage to buildings and infrastructure. Elizabeth Township expected repair bills to top $200,000 from floods.
By the end of July, the SBA, which typically provides loans and other support to small businesses, announced low-interest loans available to homeowners, renters and businesses the flood affected. The administration set up a Disaster Loan Outreach Center at the Allegheny County Airport in West Mifflin, but few took advantage.
Only 88 people inquired about the loans and 69 submitted applications, Camp said. Bridgeville sent 300 disaster loan applications to residents, but officials don't know if anyone filled one out. Oakdale Mayor Paul Hennemuth made applications available at an August council meeting.
“A couple people stopped by the table and picked them up, but I don't know if anybody actually completed the applications,” Hennemuth said, adding that less than 70 returned for the entire county seemed low given the damage caused by the floods.
Businesses that took out SBA loans in 2004, after the remnants of Hurricane Ivan hit Western Pennsylvania, passed this time around.
“We're still paying on that — it hit us hard,” said Dan Tambellini, who took out a 10-year, $400,000 SBA loan for his Tambellini Bridgeville restaurant after Ivan. “We didn't want to take out another one, so we just paid out of pocket on a lot of stuff.”
Tambellini pays $3,600 a month on his Ivan SBA loan. To repair his basement banquet room and reopen after the July 10 floods, Tambellini spent $130,000 out of his own pocket.
Kristin Burke, who owns Pepperoncini's with her husband, Tom, in Oakdale, has lingering SBA debt from Ivan. This time, the couple spent about $40,000 from their savings to cover what flood insurance would not. They reopened their restaurant a month ago.
The SBA has faced criticism in the past. After Superstorm Sandy last October, a House Committee on Small Business report found slow processing times, low approval rates and long delays for disbursement. The Government Accountability Office found a backlog of 204,000 applications four months after Hurricane Katrina in 2005.
“We're going to approve every loan we can,” Camp said. “We do have to balance our role as a provider for disaster relief with our obligation to the taxpayer to make sound decisions.”
Interest rates from the SBA range from less than 2 percent for homeowners to 4 percent for businesses with terms as long as 30 years. Collateral, credit score and other financial data can dictate the structure of a loan, but the SBA said monthly payments on a loan to a homeowner could be as low as $52; payments for a business could be as low as $69 a month.
While the interest rates are competitive with what a bank could offer, some people may feel it is not worth the time and effort to work with a federal agency for a loan, said Howard Kunreuther, a professor at the University of Pennsylvania's Wharton School. He said the SBA program accomplishes its goal of getting disaster funding to those in need, but many people do not know about the program or how to take advantage of it.
Clint and Jessica Williams decided to give the SBA's program a shot. The small creek behind their Elizabeth Township home flooded five times during two weeks in July, flooding their underground garage and basement. The water ruined tools, appliances and a heating-oil tank.
Jessica Williams, 33, filled out a 62-page application for an SBA loan and was approved at a nearly 5 percent interest rate. She said the minimum loan amount was about $20,000 to $30,000.
“She could've gotten a better rate through her credit union. It didn't make sense at that point,” her husband, Clint, 42, said.
“We weren't in a position to take out $30,000 for belongings,” she added.
The couple declined the loan. Friends, family and strangers lent a hand. At one point, more than a dozen volunteers helped the couple clean up. One friend brought construction equipment to clear debris and drain the area.
“The community is what saved us and why we're still here,” Clint Williams said.
Aaron Aupperlee and Adam Smeltz are Trib Total Media staff writers. Reach Aupperlee at 412-320-7986 or firstname.lastname@example.org. Reach Smeltz at 412-380-5676 or email@example.com. Staff writer Megan Guza contributed.