Path of Least Resistance: Flood survivors struggle between the government maze or going it alone Business owners face a different road to recovery

By Cara Philbin
©2023 Telegraph Publishing LLC

The federal government unveiled its new Disaster Recovery Center in Springfield last Friday under yet another deluge of rain and crackling thunderstorms, a seemingly new normal for this part of New England.

Visitors to this new center, at 100 River St. in the Springfield Health Center, one of a handful in Vermont, are greeted by rows of representatives from the Federal Emergency Management Agency and the Small Business Administration. Each has its own workspace where disaster relief applicants answer questions meant to identify and catalog a variety of needs after some towns suffered some of the state’s worst flooding.

But with roughly a month left to file, many people remain confused on what types of assistance are available and how to apply.

Doug Marsh, a Proctorsville contractor who lost equipment and many personal possessions, is one of them. For Marsh, the problem is multi-layered. “All my tools, supplies…all of it was in my basement, which was covered in literally a foot of mud that I’m still digging out of,” Marsh said last week. He values his equipment loss, including tile and table saws, ratchet sets and his computer, at more than $15,000.

He said many of his personal items floated away, including clothes, furniture and sentimental items that he considers invaluable. And, like many others, he said he also forfeited weeks of wages due to the time it’s taken to clear mud and debris out of his home, which includes a large basement with a workspace.

When it comes to relief options, Marsh began with his flood insurance, which he holds through the National Flood Insurance Program. FEMA began administering the program following 1968 federal legislation aimed at property owners, renters and businesses located in floodplains who struggle to obtain flood insurance because claims are typically catastrophic.

Marsh says an adjuster arrived two days after the July 10 flood. But after only a few minutes, the adjuster told him that nothing could be done until an NFIP engineer came to certify what they could see with their own eyes: that Marsh’s foundation was unstable. Another two weeks of rain went by before the adjuster called to tell him that the NFIP fired their engineering firm and could not send an engineer for another couple of weeks, Marsh said.

Marsh said his frustration was compounded by the fact that his electric company shut off his power. He purchased a couple of generators “and had to fill those with gas every couple of hours. I did that for a couple of weeks.”

And, because of the unstable foundation, the Vermont State Fire Marshal red-tagged the home as unsafe for re-entry, Marsh said. That effectively bars him from hiring any contractors out of pocket. “They were afraid that if the house shifts, wires in the wall could be crimped off and start a fire, and I completely understand that,” he said. “So now I’m stuck in this loop while I wait for an engineer to tell me what’s extremely obvious.”

Because Marsh lost electricity and internet, “it’s been really tough to find a place to sit down to look for resources,” he said. “I can’t really do it on my phone because my fingers aren’t built for that; they’re built for hammers and nails. It would be easier from my computer, but that was destroyed.” He didn’t realize he could register separately for FEMA’s free immediate disaster relief until The Telegraph told him he could.

Navigating the FEMA-SBA maze

FEMA spokeswoman Brianna Summer Fenton said that’s out of the norm. “We have disaster survivor assistance teams going door to door in affected areas because it’s FEMA’s job to provide grants for basic work to make homes habitable, safe and sanitary again,” she said, stressing that FEMA representatives always show an official ID badge and will never ask for money in any form.

“FEMA is mostly for renters and homeowners in the immediate aftermath of an event … to let affected residents know there is assistance available and to help them register,” Fenton said.

At the Springfield Disaster Recovery Center, a FEMA representative explains that to Marsh, as she helps him navigate registering with the agency.  “FEMA covers immediate essentials following a disaster. That includes household essentials, like appliances and furniture, like beds.” Although Marsh lost two beds in the flood, she said FEMA will cover only one per person. “Maybe insurance will cover the other,” she added with a sympathetic smile.

The representative also told Marsh that FEMA will cover his computer only if he uses it for work (he does), but that most other business-related damages must be filed with and covered by a loan from the SBA.

According to Fenton, FEMA and the SBA work together to help disaster survivors. “FEMA is great for kick-starting the disaster recovery process and getting people back into a habitable home with grants … We can help financially with home repairs, replacement, temporary lodging, private wells, HVAC systems and other serious disaster related needs. Those could be medical or dental expenses, replacement of school supplies or appliances.”

She added that FEMA is also there for the uninsured and underinsured, and considers every case as unique. “Assistance is offered on a case-by-case basis. You may have gone through the same disaster as your neighbor, but your experience could be completely different.”

Fenton stressed the importance of registering with both agencies. “The SBA is great for long-term business disaster recovery because they offer low interest loans, and there is no obligation to accept a disaster loan if approved by the SBA. They cover a wider range of people, over a longer term, that includes homeowners, renters, and also businesses.”

• For more information on getting flood recovery help of all types, click here.

The FEMA representative at the Springfield Center echoed this sentiment, telling Marsh that even if survivors do not plan to accept a loan, they should still apply for two reasons. First, it helps the state and federal government establish just how much need is out there. Second, if a survivor is denied a loan or offered one with an exceptionally high interest rate, FEMA pulls that data and may offer them further grant money.

Fenton said the process goes like this: When a survivor registers with FEMA, they will be contacted by a representative to set up an inspection. After the inspection, they will receive a letter about their application status, including information on funds and grants, how to appropriately use those and how to respond. If an applicant does not hear from an inspector
within a few days, they should call the FEMA helpline at 1-800-621-3362.

The SBA offers most loans of 2.5 to 4 percent. The SBA accepts
loan applications for physical damage through Sept. 12 and |
applications for economic injury loans through April 15, 2024.

FEMA is accepting initial applications through Tuesday, Sept. 12, but Fenton added that a denial may be caused by “something as simple as needing to add proof of insurance or of occupancy. That’s why it’s really important that survivors read the information very carefully and apply as soon as possible.” She said survivors have 60 days from receiving their determination letter to submit an appeal, and that FEMA often reverses its initial denial.

As for how long it takes to be processed by the SBA, FEMA representative Shirley “Jann” Tracey said, “Once a complete SBA application is submitted — that includes all requested documents — the average time to process a loan application is 2 to 3 weeks. The first disbursement is generally made within 3 to 5 days after receiving the signed Loan Closing Documents.”

Marsh told SBA representative Stephen Clark, “I’ve said from the beginning, I don’t want a loan, especially at 8 percent.”

Clark said that the SBA mostly offers most loans of 2.5 to 4 percent. He added that the SBA accepts loan applications for physical damage through Sept. 12 and applications for economic injury loans through April 15, 2024.

Skepticism over filing for SBA loans

Marsh remained unconvinced that he should apply for a loan that he doesn’t plan to take. He isn’t the only skeptic.  John Seward, a co-owner of Mojo Cafe in Ludlow, told The Telegraph that he believes “the SBA interest rate is 8 percent over a 30-year loan” and that he is “mystified why the SBA needs to make money off our losses.”

He said the small restaurant with four employees, including himself and his wife, had almost 5 feet of water in the basement, causing structural damage and loss of wages and equipment, including walk-in freezers, and mixers, as well as their electric panel, water heater and a near total loss of inventory.

“When (you take a) a catastrophic loss at a time where margins were the tightest I’ve ever seen, the last thing you need is a high-interest loan,” Seward said. “We are a business in the practice of paying our bills promptly (and) have a good credit rating … it is the taxes we paid into the system that we are asking for back.” He added that when they applied to FEMA, they were told FEMA prioritizes homes, not business, and are “currently looking at our options for assistance.”

Other business owners are just as confused. While most are filing with their own insurers, some have been footing the bills themselves.

“We were on the track for getting flood insurance (when the floods occurred), and then it never happened,” said Suzanne Garvey of Ludlow’s Mary W. Davis Realtor & Associates and Inside Edge Rentals. “They were looking for a better quote.” Garvey says their general insurance will cover some things, like equipment, but that the business has been “writing our own checks like crazy because we want to keep moving.”

She estimates the damage to the tandem real estate offices to be around $150,000, and Inside Edge was only about a year old. “We just barely finished renovating the whole office,” she said. “Now the carpets, all the new cubbies, desks, all the new flooring, everything, it all had to get ripped out.” Most of their real estate signs floated away, along with “a bunch of marketing materials we hadn’t even opened yet.”

Her family’s property management business, Garvey and Garvey, has been helping with clean up. “We happened to own a box trailer storage, and were able to get it all out of there quickly, the day after the flood. So we were lucky to not have to deal with mold. Then we got a visit from Ludlow Electric saying they had to shut our power off because we had to have it inspected by a licensed electrician.” Additionally, all employees were displaced from the offices. “My three administrators are working upstairs in an apartment at my house,” she told The Telegraph.

When asked if they’ve considered applying for an SBA loan, Garvey said, “We’re just getting into that now. One of my partners is an insurance person by trade; that’s his day job. It seems that what we’re learning is that there’s no grant money for businesses.”

Troy Caruso, who owns a number of restaurants in Ludlow, including Sam’s Steakhouse, and a golf course, said that collectively, his businesses suffered hundreds of thousands of dollars in damage. He said that while he submitted SBA applications for three of his establishments, “We can’t get a direct contact out of FEMA. We can’t even get anyone to answer us.”

Caruso called his contact with the Department of Environmental Conservation, Kyle Medash, with The Telegraph present, and asked Medash if he knew why it seemed difficult to contact FEMA.

“They’re very busy, so it’s not surprising you haven’t heard back. The best thing to do is fill out this form online,” said Medash.

In the meantime, Caruso has been footing his own bills, housing employees and other local residents and contributing free labor and machinery to Ludlow’s clean-up efforts. “There’s a lot more work to be done, but the state and federal governments are going to hinder that. They just take too long,” he said.

As in other natural disasters, such as Tropical Storm Irene in 2011, Vermonters have largely stepped in to help each other. “I think people up here take care of themselves and their neighbors much more than other places, they pull on their boots and get in their tractor and they get it done,” said Marsh. “Waiting is not our thing.”