[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
                   SUBCOMMITTEE HEARING: ON THE SMALL
                   BUSINESS ADMINISTRATION'S RESPONSE
                        TO THE JULY 5 FLOODS IN
                      BEAVER COUNTY, PENNSYLVANIA

=======================================================================

              SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT
                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            AUGUST 23, 2007

                               __________

                          Serial Number 110-41

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


WILLIAM JEFFERSON, Louisiana         STEVE CHABOT, Ohio, Ranking Member
HEATH SHULER, North Carolina         ROSCOE BARTLETT, Maryland
CHARLIE GONZALEZ, Texas              SAM GRAVES, Missouri
RICK LARSEN, Washington              TODD AKIN, Missouri
RAUL GRIJALVA, Arizona               BILL SHUSTER, Pennsylvania
MICHAEL MICHAUD, Maine               MARILYN MUSGRAVE, Colorado
MELISSA BEAN, Illinois               STEVE KING, Iowa
HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska
DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia
GWEN MOORE, Wisconsin                LOUIE GOHMERT, Texas
JASON ALTMIRE, Pennsylvania          DEAN HELLER, Nevada
BRUCE BRALEY, Iowa                   DAVID DAVIS, Tennessee
YVETTE CLARKE, New York              MARY FALLIN, Oklahoma
BRAD ELLSWORTH, Indiana              VERN BUCHANAN, Florida
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
JOE SESTAK, Pennsylvania

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

               Kevin Fitzpatrick, Minority Staff Director

               SUBCOMMITTEE ON INVESTIGATIONS & OVERSIGHT

                 JASON ALTMIRE, PENNSYLVANIA, Chairman


CHARLIE GONZALEZ, Texas              LOUIE GOHMERT, Texas, Ranking
RAUL GRIJALVA, Arizona               LYNN WESTMORELAND, Georgia

        .........................................................


                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Altmire, Hon. Jason..............................................     1

                               WITNESSES


PANEL I
Mitchel, Herb, United States Small Business Administration.......     4


PANEL II
Geho, Patrick, Beaver County Chamber of Commerce.................    10
Colombo, Mary Elizabeth, B.F. Jones Memorial Library.............    12
Feher, John A., Boulevard Sports.................................    14
Spanik, Hon. Joe, Beaver County Commissioners....................    20
Pope, Terica.....................................................    25

                                APPENDIX


Prepared Statements:
Altmire, Hon. Jason..............................................    29
Mitchel, Herb, United States Small Business Administration.......    32
SBA Factsheet....................................................    36
Geho, Patrick, Beaver County Chamber of Commerce.................    38
Colombo, Mary Elizabeth, B.F. Jones Memorial Library.............    41
Feher, John A., Boulevard Sports.................................    44
Spanik, Hon. Joe, Beaver County Commissioners....................    45

                                 (iii)

  


                   SUBCOMMITTEE HEARING ON THE SMALL
                   BUSINESS ADMINISTRATION'S RESPONSE
                        TO THE JULY 5 FLOODS IN
                      BEAVER COUNTY, PENNSYLVANIA

                              ----------                              


                       Thursday, August 23, 2007

                     U.S. House of Representatives,
                               Committee on Small Business,
                 Subcommittee on Investigations & Oversight
                                                      Aliquippa, PA
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Aliquippa City Hall, Aliquippa, Pennsylvania, Hon. Jason 
Altmire [chairman of the Subcommittee] presiding.
    Members Present: Representative Altmire.

             OPENING STATEMENT OF CHAIRMAN ALTMIRE

    ChairmanAltmire. The meeting will come to order. I want to 
thank everybody for being here today. This is, as the witnesses 
have been told, this is an official hearing for the U.S. House 
of Representatives. We have a stenographer here representing 
the U.S. House and I appreciate the assistance from the 
Committee Chair, Nydia Velazquez, in allowing us to hold this 
field hearing today. She was unable to be here. She is back in 
her district in New York. But I do want to thank the Committee 
for allowing us to hold this hearing today.
    I am fortunate, as Chairman of the Subcommittee on 
Investigations and Oversight, in the wake of what happened here 
in Aliquippa, to be able to hold this hearing here and my goal 
is to bring the witnesses up and let them say firsthand what 
took place here and the aftermath and the needs that are 
necessary to help recover from this flooding. And we have two 
panels today; the first is Mr. Herb Mitchell, and I am very 
thankful that he came all the way up from Washington, D.C.
    He is the Associate Administrator for Disaster Assistance 
for the Small Business Administration. And the Small Business 
Administration came here almost immediately after the flood. 
They were very helpful in surveying the scene, making damage 
assessments and offering the low-interest loans that are 
available. Now, we are going to talk about that issue and maybe 
some other alternatives are available. I thank Mr. Mitchell for 
being here. And then we have a second panel of community 
leaders and businesses that were affected by the flooding and I 
am going to introduce them at the time of the second panel.
    I want to thank everybody for being here today. Today's 
hearing we will examine the role that SBA has in responding to 
the recent flooding here in Beaver County and I will also talk 
about Millvale and some of the flooding that took place in Ross 
and Shaler, Millvale and Etna in more recent weeks. But on the 
night of Thursday, July 5th, Beaver County and other parts of 
western Pennsylvania experienced violent isolated thunderstorms 
that caused some of the heaviest rainfall in recent memory. 
Official estimates report that at its height, the storms dumped 
as much as three and a half inches of rain in only two hours. 
Here in Aliquippa, a town of only 11,000 people, which is in 
the heart of the Fourth Congressional District, they took the 
worst of it.
    By late evening, July 5th, most of the waters had receded 
and on the morning of July 6th, residents got their first look 
at the damage the storms had left behind. I also walked through 
Aliquippa at that point and looked at some of the residences 
and the businesses, and I saw firsthand what had happened. Over 
500 homes and businesses were damaged. Ninety percent of the 
storms' damage occurred in Aliquippa alone. Downtown Aliquippa 
was covered in ankle deep mud; dozens of downtown businesses, 
the vast majority of which were small businesses, were forced 
to shut down for weeks. The damage was so extensive that some 
owners chose to close their doors for good rather than face the 
costly cleanup expenses required to reopen their businesses.
    These storms are yet another blow for the town already 
suffering from poor economic conditions. Ensuring that 
businesses of Aliquippa experience a speedy and effective 
recovery is essential to the region's overall prosperity and it 
is in this respect that the SBA can play a vitally important 
role. Since its inception in 1953, the SBA has included a 
disaster assistance component. The SBA's disaster assistance 
program provides timely financial assistance in the form of 
low-interest loans and working capital businesses and home 
owners devastated by a disaster.
    Today, the SBA's disaster loans are the primary form of 
Federal assistance for the repair and rebuilding of private 
sector losses and are not limited to small businesses. SBA 
loans can also help homeowners rebuild their homes and can help 
every disaster victim replace damaged personal possessions. SBA 
loans can even help businesses cover the economic losses they 
experience as a result of the disaster. By July 13th, a week 
after the storm, the SBA formally declared that SBA assistance 
would be available for the victims affected by the flooding and 
set up a disaster loan outreach center at Aliquippa Elementary 
School.
    We need to make sure that everyone affected by the flooding 
has had the chance to rebuild their lives and their community, 
and these loans will be an important step in that direction. In 
the days following SBA's announcement, many small business 
owners and homeowners expressed frustration about the fact that 
only loans, not grants, would be available. Due to the 
financial resources necessary to reopen a business following a 
disaster, such as the flooding that occurred right here in 
Aliquippa, many owners hoped that grants would be available, in 
addition to the loans, to help alleviate the financial burden 
to them.
    Unfortunately, rather than apply for SBA loans, some 
Aliquippa small businesses found it was more financially viable 
to close up businesses completely. As of August 7th, 120 loan 
applications have been submitted to the SBA by homeowners and 
small businesses from Aliquippa. The SBA has approved only four 
of the 120 applications that were submitted and provided a 
total of $204,300 in financial assistance. Of the four approved 
applications, out of the 120 total applications, one was a 
small business and three were homeowners.
    It is my hope that we will be able to receive guidance 
today on why more grants are not available or any grants are 
available for small business owners, as well as why the vast 
majority of applications for loan assistance for denied by the 
SBA. Despite this early progress, however, more can and should 
be done to ensure the people of Aliquippa receive the 
assistance they need to rebuild their community. The SBA has a 
great deal of discretion in deciding the terms of its disaster 
loans and should take every opportunity to give disaster 
victims as much flexibility as it can in repaying disaster 
assistance.
    The agency must also work to maintain its presence of the 
ground to ensure that disaster victims have the support they 
need when they receive loan applications, get answers to their 
questions and have help in the application process. The SBA 
must provide an adequate number of personnel to assist in its 
outreach mission and must also ensure the application deadlines 
are adequate for all victims from the disaster. As 
circumstances dictate, the SBA must maintain flexibility in its 
application deadlines.
    And while the focus of today's hearing is on the flooding 
that occurred in Aliquippa on July 5th, communities in 
Allegheny County and Westmoreland County, like Export, 
Millvale, Murrysville, Ross and Shaler, to name a few, were 
also severely damaged as a result of heavy rain and flooding on 
the nights of August 6th and the day of August 9th. More than 
1,000 single family homes and over 200 businesses were affected 
at an estimated loss of $4 million. Unfortunately, as was the 
case with the flooding in Aliquippa, the damage to those areas 
was not severe enough to warrant financial relief from FEMA, 
since the region did not sustain at least $15 million in damage 
to state-owned assets.
    The only agency that can provide Federal assistance to 
flood victims in this case is the Small Business 
Administration. I encourage the SBA to consider the testimony 
provided here today as it prepares to help the residents and 
small business owners in Allegheny County and Westmoreland 
County, as well as right here in Beaver County, and that all 
efforts are made to provide flood victims with the support they 
need at this critical time. We must also remain vigilant to 
ensure that the mistakes that plagued the SBA following 
Hurricane Katrina and Rita in 2005 are not revisited upon the 
people of Aliquippa. This community will be watching and will 
hold the agency to task for ensuring that loan applications are 
processed in a timely manner and that approved loans are 
dispersed to victims who are waiting for assistance. We must 
never again witness the problems and delays that we saw 
following the 2005 Gulf Coast hurricanes.
    We have often said that small business is the backbone of 
our community and nowhere is this more true than for our small 
communities. This is why it is important that we are here today 
to consider to SBA's role in providing disaster assistance in 
smaller communities. The overwhelming majority of disasters 
occur on smaller scales and SBA's response to these types of 
disasters goes to the heart of the disaster assistance mission.
    I look forward to hearing this and want to talk to the 
witnesses and I am thankful to Mr. Mitchell for being here 
today. And I would say, in turning it over to Mr. Mitchell, 
that the crux of the issue here is that these are small 
businesses that took a chance on Aliquippa. This is a town that 
has fallen on hard times recently. A lot of these business 
owners put their life savings into the effort to revitalize the 
downtown area, right here on Franklin Avenue, and 
unfortunately, they were wiped out in this flood. So it is 
devastating to think about the fact that the impact could have 
on this community if we lose those businesses and that is the 
focus of this hearing today.
    ChairmanAltmire. At this point, I would turn it over to Mr. 
Mitchell.

    STATEMENT OF HERB MITCHELL, ASSOCIATE ADMINISTRATOR FOR 
     DISASTER ASSISTANCE U.S. SMALL BUSINESS ADMINISTRATION

    Mr.Mitchell. Good morning, Chairman Altmire, and thank you 
for the invitation to come today and certainly, obviously, the 
walking tour this morning was certainly enlightening in terms 
of actually staying and talking to individuals that have been 
personally impacted, but I also have to express, too, that the 
enthusiasm of the individuals to want to rebuild their 
community and the commitment to get the job done and we ought 
to be looking for ways of how we help individuals and business 
owners basically get back on their feet after such a 
devastating event.
    On July 5th, Beaver County experienced flash flooding 
caused by over four and a half inches of rain in a two-hour 
period. The rainfall filled streams and creeks and overflowed 
rivers, causing overland flooding throughout the area. On the 
following Monday, July 9th, SBA received the request from 
Governor Rendell to declare Beaver County a disaster area so 
that low-interest loans could be made available to affected 
businesses and homeowners.
    SBA arranged a damage assessment with the Commonwealth, 
which was conducted on the following day, July 10th. The 
assessment concluded that there was enough damage to support 
the declaration request and it met the agency requirements for 
declaration, and Administrator Preston signed the declaration 
on July 12th. SBA opened a temporary local office on Saturday, 
July 14th, with four employees on site. Within five days of 
receiving the Governor's request, SBA was on-site providing 
one-on-one help to disaster victims.
    In the first four days of operation, disaster personnel 
conducted 71 home and business interviews. SBA is still on-site 
providing assistance to victims at the Disaster Loan Outreach 
Center in the Aliquippa Fire House located at 1499 Kennedy 
Boulevard. And for those who are not able to get in, and we try 
to make the hours as flexible as possible, they certainly can 
call us on our customer service line at 1-800-659-2955.
    Regardless of the size of a disaster, each victim's need 
for assistance following a disaster is of the foremost 
importance and concern. As a result of this declaration, SBA 
can provide assistance to residents in the form of disaster 
loans to those affected by the severe storms and flooding. 
Loans up to $200,000 are available to homeowners to repair or 
replace damaged or destroyed real estate. Homeowners and 
renters are also eligible for up to $40,000 to repair or 
replace damaged or destroyed personal property.
    For businesses, SBA can offer loans for physical damage, as 
well as Economic Injury, and this is working capital to sustain 
the operation, for up to $1.5 million. Economic Injury loans, 
as I have already stated, are for working capital for small 
businesses and small agricultural cooperatives to assist them 
through the disaster recovery period. It is only available to 
applicants and their owners who cannot provide for their own 
recovery from non-government sources.
    Businesses of all sizes, and that is, I guess, one of the 
misnomers about the disaster loan program and I guess that the 
message we want to get out, is not obviously limited to small 
business, but it is available to homeowners, renters and 
businesses of all sizes, non-profits, as well, that have 
suffered physical damage. The staff assigned to the Disaster 
Loan Outreach Center assists in the initial application process 
and provides guidance to the applicant. Once the application is 
filed and submitted to our processing center in Fort Worth, it 
is assigned to a loan officer and case managers there, again, 
working with the applicant so that folks understand the 
process, what they are entitled to and what is needed to 
process the application.
    For applications that are declined, and certainly we will 
talk more about that, and I certainly will answer any questions 
relative to the decline process so we can address those issues, 
but once they are declined, they receive a letter that outlines 
all of the reasons for decline, the process for reconsideration 
and what information they need to submit to be reconsidered in 
the process.
    For applications that are approved, they receive a closing 
package and instructions on how to get the loan closed. 
Generally, they can either call in or come in to the assistance 
center for assistance on how to basically close the package, if 
they need assistance with closing. Generally, the way we 
disburse, depending on the amount of the loan, we disburse as 
the repairs are being made, so once you get a contract and a 
permit to rebuild, the disbursement process can start. But 
initially, we can disburse up to $10,000 just by the borrower 
signing the note and the loan agreement, just basically 
agreeing to the terms and conditions, then they can follow up 
with the additional paperwork in order to get additional 
disbursements.
    One of the challenges here, and we are focusing on and 
obviously, you have already raised the issue, the number of 
applications versus the number that have been approved, from 
our numbers and the numbers that I have gotten updated as of 
yesterday, we have interviewed about 150 individuals who 
actually have contacted us. Most of these folks, I guess, about 
half of them, actually come in to the center; the others by 
phone. We have issued 132 applications. We haven't gotten all 
of those back yet. We have gotten back 47 applications and all 
of those have been processed except one. There have been five 
approvals. I think three home loans and only two business loans 
for a total of about $377,000.
    The challenge here is that if there is a balance between 
obviously providing disaster assistance and providing that in 
the form of a loan. What we try to do is be as flexible as 
possible in terms of taking--what is the criteria. Obviously, 
we have the ability to go to 30 years irregardless of the 
amount of the loan. What we try to do is determine what that 
individual or business can afford to pay, first of all, and 
then we back in to the term of the loan. Generally, in the 
marketplace, terms of the loans are tied to the life of the 
asset. You are going to go get a car loan, a car loan generally 
could be anywhere from three to seven years, depending on the 
model and make. Well, if you can only afford to pay $50 a month 
and it is going to take you 30 years to pay it, we can make you 
a 30 years loan.
    What we have seen so far, and obviously you are certainly 
aware of the low-income and in most cases, the initial 
applications we have seen, folks just can't afford a loan. You 
know, there are situations where we look at the cash flow and 
individuals only have $15 or $20 left over at the end of the 
day and that is after they paid their debt. That is before they 
even address just the cost of living. So it wouldn't serve any 
of us well to put people in that kind of a situation and 
obviously, you know, we just can't make a loan, even with the 
most flexible criteria.
    And so certainly, we should have a discussion around what 
is needed; how do we basically bring the resources of the 
local, State and Federal, if there are the resources available 
in a situation like that where people's basic needs can be 
addressed. And I certainly would be willing to answer any 
questions and have a discussion in terms of where do we go from 
here to make sure people get the help that they need.
    [The prepared statement of Herb Mitchell may be found in 
the Appendix on page 32.]

    ChairmanAltmire. Thank you, Mr. Mitchell. I would ask you 
to start. Now, we toured the downtown area here with the time 
available before the hearing and I was curious what maybe your 
impressions were for seven, going on eight weeks after the 
flood, now what you saw.
    Mr.Mitchell. Well, I am surprised, though, we have got a 
lot of applications still out and a lot of that may be 
attributed to the fact that folks know that they can't afford 
loans, so it certainly wouldn't serve them to submit 
applications in a situation where they know that they can't or 
they are not willing to certainly take on debt if they are in 
business and don't see the process of how do I basically make 
my business successful at the same time I am burdened with 
additional debt. It doesn't add any value. And so I think there 
needs to be some discussion around what resources are there or 
may be available that can be brought to bear to at least start 
addressing some of the basic needs.
    On the individual side, obviously, the charities are here 
and they certainly show up in every disaster and I think that 
is what we need to make sure that those big ticket items like 
refrigerators and stoves and those kind of things, people have 
the ability to get those, that they are not able to basically 
get on their own.
    ChairmanAltmire. And I appreciate the updated numbers, too, 
that we now have one more business is qualified and it is five 
out of approximately 158, I think you said.
    Mr.Mitchell. Yes. I think there were only--so far we have 
only got eight business applications and like I said, two of 
those have been approved.
    ChairmanAltmire. It would seem to me that the circumstance 
that you described, low-income businesses can't afford to 
qualify for the loans, obviously, they are not going to be able 
to afford helping their own business and paying to clean out 
and reopen. What options are available? It would seem to me 
those are exactly the kind of people, exactly the kind of 
businesses that you would want to assist. They are the ones 
that need the help the most, and as a result of the way the 
system works, they aren't able to qualify and they are the ones 
that need the help the most. What would your advice be to those 
folks?
    Mr.Mitchell. Well, I can tell you, from my experience in 
terms of other situations and what some other communities have 
done, I mean, obviously some States, in terms of where they 
have certainly prone to disasters, have brought funds to bear 
with revolving loan pools where basically part of it is a 
grant, part of it is a loan. There is forgiveness, obviously, 
if you stay in a community for a certain period of time. It is 
tied not only just to helping that business, but it is also 
tied to how that business can make a commitment to that 
community.
    I mean, the last thing you want to do is provide a grant 
and then somebody moves out of that community. And I don't know 
what discussions are taking place in that regard, you know, 
short of Federal assistance. I know sometimes there are CDDG 
funds and there are challenges there if you don't get any 
emergency supplemental to get additional funding, how do you 
basically reallocate what you have and obviously, you know, 
Allegheny County and some of the others, there are competing 
demands throughout the State.
    ChairmanAltmire. Is it fair to assume that if there is no 
supplemental funding that becomes available, that the other 
funding for your agency and other disaster agencies has already 
been allocated somewhere, it is already budgeted to go 
somewhere else?
    Mr.Mitchell. Well, that is correct. And here, as you all 
know, Katrina and some other major events, supplementals are 
not made available for every disaster. I mean, that is 
generally on an exception basis. So generally, most of the 
Federal agencies are operating under the existing authority and 
existing funding that has been made available through the 
annual appropriation process and in this case, the criteria was 
not there for a Federal major declaration through FEMA and 
obviously, by the president, and so the only thing that was 
available is the SBA, which places, even with that, places the 
responsibility for recovery on the individual because it is in 
the form of a loan, so you know, it is a demonstration of the 
ability to repay.
    ChairmanAltmire. And I would point out to those that are 
watching this hearing that the SBA is the only Federal 
organization that came to assistance and there might be some 
disenchantment with folks who were denied and declined, but I 
do think--I want to thank you for the fact that you are the 
only Federal agency that came in here and offered assistance. 
But these businesses that can't afford to take on the 
additional burden of a loan, why, and I know you don't speak 
for FEMA, but if you could comment on that and also, certainly, 
the SBA's role, why are there no grants available? Why is there 
no funding along those avenues available to these people?
    Mr.Mitchell. SBA doesn't have the authority. It doesn't 
have the authority to provide grant assistance and even if FEMA 
was involved at this point, FEMA doesn't have the authority to 
provide assistance to business. FEMA's assistance goes to the 
individual and obviously, in terms of in the public sector, in 
terms of the emergency response. Generally, the way grants come 
about is through the emergency supplemental process where 
oftentimes community development block grant funds are made 
available to the State and localities to then shape a program 
that best fits its need, so you don't have a lot of limitations 
or restrictions and obviously, that didn't happen in this case.
    ChairmanAltmire. Right. Do you think--is that a policy 
change that you think Congress should explore, to give you the 
authority to offer grants? What is the upside or the downside 
if that were to be the case?
    Mr.Mitchell. Well, certainly not in a position to answer 
that today, but certainly, I think there needs to be a 
discussion around this issue of how do we respond to disasters 
at every scale, you know, when it is not large enough for a 
Federal declaration, but certainly on an individual basis, the 
needs are the same as in a catastrophic event, as well.
    ChairmanAltmire. And you said eight businesses have 
applied, so I mean, theoretically, there are eight businesses 
here that had an issue and felt like they would seek 
assistance, so the vast majority of the people who have applied 
are residences, individuals, 90 plus percent?
    Mr.Mitchell. Right. There have been 38 applicants that have 
been individual home owners or renters.
    ChairmanAltmire. Okay, 30. So you said that the grants were 
not available to businesses. Is there any other avenue for 
those individuals, for homeowners, residences that have 
suffered damage? Is there anything else you can think of that 
they could seek out assistance from?
    Mr.Mitchell. Well, my understanding already, and this 
happens in most disasters and we are fortunate in this country 
to have charitable organizations. In my experience, they are 
here already in this community and have had some discussion 
with them and they are providing and they are doing some intake 
in working with individuals already. That certainly-- 
obviously, people can have the ability to do the cleanup, but 
the big ticket items like, you know, the refrigerators, the 
stoves and that kind of thing, the basic things people need to 
live on but don't have the resources just to go out and buy, so 
the charities are certainly trying to address those needs.
    ChairmanAltmire. And we are going to hear from some of them 
today.
    Mr.Mitchell. Right.
    ChairmanAltmire. And I am thankful that they are here, so 
hopefully, you will be able to stick around and hear what they 
have to say, too.
    Mr.Mitchell. Sure, absolutely.
    ChairmanAltmire. You toured with me the library before we 
came in here and that is obviously not a for-profit enterprise, 
it is not a residence. It is unique to this community, having 
been built in the 1920s, and what are the types of assistance 
that is available for an organization like that, that doesn't 
fit neatly into the business or residential side?
    Mr.Mitchell. And obviously we have already received an 
application. The challenge there is, as I understand, and I 
have just been briefed on it last night and so we will go back 
and take a look at it to really try to determine what is the 
ownership. We are limited--by authorization, we can only make 
loans to the private sector or a non-profit, a private non-
profit. The initial report that I have gotten back so far is 
that the library is owned by the city, which would make it 
ineligible for SBA assistance. Now, in obviously, discussions 
this morning, it is my understanding that the city provides a 
minimal amount of funding and that there is an organization 
that operates it and the question is can we basically establish 
that there is a legal private non-profit that is in there and 
what would they be entitled to and how is the property deeded 
and structured. And so we will take a look at that to see if 
there is a way that we can provide assistance.
    ChairmanAltmire. Well, anything that I can do and 
certainly, the local community can do to help you make that 
determination, we are available to do that.
    Mr.Mitchell. Sure.
    ChairmanAltmire. The last question I would have and again, 
I very much appreciate you being here today, is there any 
advice, and I know you are hesitant to offer advice, but I am 
asking you for it, as the chairman, is there any advice you 
have on potential legislation, regulatory changes that we could 
recommend that would make it easier for the SBA to help people 
in need, especially in low-income communities like this? Is 
there anything that Congress could do that you are prevented 
from helping us, in a way that we could change the law and 
offer more assistance?
    Mr.Mitchell. Well, the challenge is when the primary 
assistance for long-term recovery--I mean, obviously, emergency 
assistance is pretty much all grant funds and the funds are 
made available, but the way disaster response is structured 
today, the primary responsibility in long-term recovery falls 
on the individual and the primary assistance is in the form of 
a loan and I think we have a great deal of flexibility. The 
unfortunate part is that it is still a loan and at some point, 
you have to show repayment ability, you know, and we can take 
that out. But again, I think there needs to be a joint 
discussion around what is going to be the Federal role in 
response in particularly, long-term recovery, you know, how do 
we basically structure something that is really helpful where 
you don't get in a situation where, in this case, 90 percent of 
the folks who basically have been impacted are not being 
helped.
    ChairmanAltmire. I know I said that was my last question, 
but I thought of one more. You cover, your agency, your 
department covers the whole country, right?
    Mr.Mitchell. Correct.
    ChairmanAltmire. It is not just a region. So from your 
experience, knowing the scale of what happened here in 
Aliquippa, how often, around the country, how many times does 
something on this scale--what are you dealing with, exactly?
    Mr.Mitchell. I have actually been amazed. I have been in 
the disaster office for a little over 12 years. I have been 
with the agency now close to 29 years. Almost every day of the 
week something happens somewhere in this country. I mean, 
obviously, a lot of disasters don't make the news and front 
page, but I can tell you that almost every day of the week 
something happens somewhere, if it is not a flood, it is a fire 
or it is an explosion or whatever the event is. There is 
probably not a day that doesn't go by in the last 12 years that 
I have been in this job that something doesn't happen.
    ChairmanAltmire. Well, I really appreciate you being here. 
If it is okay with you, I would like you to listen to what the 
next panel has to say and if you wanted to make any comments 
after that panel, you are welcome to do so.
    Mr.Mitchell. Sure. Sure, I would be glad to.
    ChairmanAltmire. Thank you.
    Mr.Mitchell. Thank you for the opportunity.
    ChairmanAltmire. I will call the second panel up now. Do 
you have name tags? We are going to have three witnesses right 
now and then there are going to be two others. Commissioner 
Spanik is going to join us a little bit later, then there will 
be one more person following these three. We have before us, 
and we will go in this order, because this is the order I have 
on the list, Mr. Patrick Geho, who is the president of the 
Beaver County Chamber of Commerce and has certainly been very 
active in helping some of the businesses in this area recover 
and receive assistance. We have Mary Elizabeth Colombo, 
Executive Director of the BF Jones Memorial Library, right next 
door where we toured right before this hearing. I very much 
appreciate her being here. And Mr. John Feher, owner of 
Boulevard Sports, and he is going to talk about the damage that 
took place with his business. So at this point, I welcome Mr. 
Geho.

      STATEMENT OF PATRICK GEHO, PRESIDENT, BEAVER COUNTY 
                         COMMISSIONERS

    Mr.Geho. Yes. Thank you, Congressman Altmire. I want to 
thank you for arranging this today and congratulations on your 
chairmanship. It is already paying dividends for the district. 
Unfortunately, it brings us to this unfortunate incident today 
that we are speaking about. But I just want to thank you and 
the SBA for being here today. I know, and certainly want to 
allow one of our chamber members and a few of our chamber 
members to talk about their specific instances, but one of the 
opportunities we saw, at the Chamber, as we moved forward from 
this situation is to talk about how we move forward from this 
is, I think, is a big issue is emergency preparedness and how 
do we move forward from this incident. This community has done 
battle on the gridiron on the steel mills industry and 
certainly, with Mother Nature. No matter what is seemingly 
thrown at this community, it rises to the occasion.
    But this recent battle with Mother Nature, this is one game 
that no one saw in the schedule. One lesson that we all must 
take away from this is that we must be prepared. Ironically, 
weeks prior to the July 5th flood, our chamber, in conjunction 
with our 911 center, and Wes Hill, the director, who is here 
this morning, began working with the Pittsburgh Regional 
Business Coalition for Homeland Security and Region 13 task 
force to identify and catalog business assets, including 
trucks, pumps, warehouse space and subject matter experts. Our 
emergency responders would call upon these assets in times of 
need.
    I applaud the SBA for its informative web site and 
information regarding emergency preparedness. The Institute of 
Business and Home Safety web site also includes a section 
called Open for Business that includes the kind of things a 
small business should consider in preparing for a disaster and 
it can be found at www.ibhs.org. As a chamber and SBA, we need 
to encourage small business owners to develop a disaster 
preparedness plan. Just as important as developing--it is just 
as important as developing a business plan. Having a disaster 
plan in place can make a difference between being shut down for 
a few days and losing your livelihood.
    Getting back to business after a disaster depends on 
preparedness planning done today. Small business owners invest 
a tremendous amount of time, money and resources to make their 
ventures successful and yet, while the importance of emergency 
planning may seem self-evident, it may get put on a back burner 
in the face of more immediate concerns. For small business 
owners, being prepared can mean the difference between staying 
open following a disaster.
    An estimated 25 percent of businesses do not open following 
a major disaster, according to the Institute of Business and 
Home Safety, and according to some of those statistics we heard 
here today regarding the applications, I sure hope that is not 
the case for our friends in Aliquippa. We believe our 
businesses should have recovery communications plans in place. 
Key employees need to be assigned as spokespeople so they can 
contact suppliers, creditors and other employees, customers, 
media and utility companies to get the word out that their 
business is still viable. Also, a spokesperson can keep the 
public informed of rebuilding efforts, if necessary.
    Aliquippa doesn't need a Monday morning quarterback or any 
football player, for that matter. They do well enough on their 
own. However, all business and homeowners can learn a lesson 
from the misfortune of our neighbors not only here in 
Aliquippa, but in Millvale, that are recovering from another 
flood. We should all be better prepared for emergencies.
    I would like to thank the SBA for quickly establishing the 
SBA Disaster Loan Outreach Center in Beaver County to provide 
assistance to those residents and businesses that were affected 
by the flooding. I understand that 120 applications have been 
filed by residents and business owners and I sure hope there is 
more good news to come from those. Much of our responses at the 
Chamber has been referring business owners to the SBA, the 
Small Development Business Center at Duquesne University and 
Pitt, that we work closely with. We assisted the community 
action group, ARISE, which I am sure you will be hearing from, 
in fundraising and seeking dumpsters for garbage removal and 
also, the Chamber is looking to be active in hosting upcoming 
events for Aliquippa business owners so they become more 
engaged in the Chamber and work on our resources to network 
with other Chamber members.
    We believe with working with not only our members, but our 
banks and others within the community of our chamber, hopefully 
they can be strengthened and pick themselves up from this 
unfortunate turn of events. But I guess those are my initial 
comments and I certainly want to open up to those that lived it 
day to day and want to yield the remainder of my time, Mr. 
Chairman, to those that were directly affected.
    [The prepared statement of Patrick Geho may be found in the 
Appendix on page 38.]

    ChairmanAltmire. Thank you. Now, let us go to Ms. Colombo.

  STATEMENT OF MARY ELIZABETH COLOMBO, EXECUTIVE DIRECTOR, BF 
                     JONES MEMORIAL LIBRARY

    Ms.Colombo. Good morning, Congressman Altmire, Mr. Mitchell 
and other invited guests. Thank you for granting me time to 
testify on our recent experiences with the Small Business 
Administration. I am Mary Elizabeth Colombo, director of the BF 
Jones Memorial Library, a not-for-profit corporation serving 
the residents of the greater Aliquippa as its public library. I 
am representing the Board of Directors and the many citizens 
who are customers of the public library. We are located at 663 
Franklin Avenue in Aliquippa.
    As you are aware, just seven weeks ago the Aliquippa 
community experienced a devastating event. Within a few short 
hours, excessive rain brought devastating flooding to the 
Franklin Avenue corridor, the valley between the hills upon 
which this great industrial community was built. The lives of 
many individuals, businesses, organizations and city government 
were changed as the flood waters roared down Franklin Avenue. 
Anyone who knows the library's national historic landmark 
building and its stately position well above street level, 
would have thought that we escaped the flooding. However, we 
took the hit when more than six inches of water, mud and 
assorted debris rolled in every below-grade door as a result of 
runoff from the hillside behind the library.
    In less than two hours the library sustained over $200,000 
worth of damage to the building and its contents. Our 7500 
square foot lower level is, by Federal flood insurance 
definition, a basement. This basement is home to our Children's 
Learning Center and Children's Library, as well as many other 
library functions, including all the mechanicals for the 
building. In 2006, following some very aggressive grant writing 
to secure the funds and with careful planning, we renovated the 
space to create the Children's Learning Center. The cost was 
over $240,000.
    The library did have minimal flood insurance coverage, but 
as I already mentioned, because of it being categorized as a 
basement, many of the losses will not be covered, including 
anything that is defined as contents. This catastrophic event 
has been and will continue to be a learning experience for all 
of us at the library.
    I would now like to direct my comments to our experiences 
with the SBA Disaster Loan procedure. I want to commend 
Congressman Altmire and his staff for their prompt action in 
securing the services of the SBA at a field office in 
Aliquippa. Having knowledgeable staff available locally that we 
could consult with was extremely helpful to us. While we had 
hoped that there would be a FEMA declaration for Beaver County 
as a result of the flooding with opportunities for grants, the 
library board realized that we needed to be proactive in 
securing a loan to make the necessary repairs to the building 
and its mechanical equipment. We also needed funds to replace 
the more than 3,000 books and other learning materials that 
were lost. To return the library to its pre-flood status, we 
determined, would require over $200,000.
    Within days of the opening of the field office, a 
representative of the library board made his first of several 
visits to consult the SBA staff. Each visit was informative. We 
came away with both written instructions and verbal advice as 
to what we needed to do to apply for a loan. If the field 
office had not been available, I am certain that we would still 
be floundering around trying to figure out who to call and what 
to do.
    On July 25th, we again went to the field office with our 
application in hand. The staff reviewed our application for 
completeness and requested some additional information, which 
we were able to supply that day. Our application was 
overnighted to the loan processing unit in Texas. Two days 
later, an estimator for the SBA was on site to prepare the 
necessary reports to document our loss and our need. During the 
following week we received a series of phone calls from our 
assigned loan officer as he reviewed our application. We 
continued to supply requested documentation to determine our 
eligibility for a loan. The process moved very quickly and 
efficiently, in large part due to the support and technical 
advice from the field office representatives.
    On August 9th, just four weeks following the flood, when we 
got the call from the SBA, we thought we got the news we wanted 
to hear, your loan is approved for $183,400. However, a few 
hours later we received another phone call that brought us the 
news that upon further review, the library was not eligible 
because it was viewed as a city agency rather than a not-for-
profit corporation. We do have the right to appeal the 
decision. On August 20th we submitted a letter from the mayor 
of the City of Aliquippa to the SBA loan office that we are 
hopeful will clarify our status as a not-for-profit 
corporation. We are waiting a decision on that appeal.
    Our overall impression of the work of the SBA is a positive 
one. Before closing, I would like to offer some suggestions for 
making a good process even better.
    Proved the loan reviewers with up-to-date information 
regarding the status of FEMA declarations. While it was useful 
to have a loan officer suggest we delay the process of our 
application review until we applied for a FEMA grant, it would 
have only delayed the process because we knew Congressman 
Altmire's staff, that there were no grants possible.
    As a librarian and a purveyor of information, it would be 
useful for the SBA to have more of an informational presence in 
public libraries. Had it not been for the announcement in the 
media that the SBA loans would be available, I am not sure that 
the library board would have thought of the SBA as a source of 
help in this disaster. It would be useful for the general 
public to know more about the SBA and its services in a 
disaster. It would be good for SBA services to come to the 
public's mind at a time of disaster, just as the Salvation 
Army, the Red Cross and FEMA.
    I would like to conclude my remarks with sincere 
appreciation to Congressman Altmire, his staff, the SBA field 
office staff and public information officer and the SBA staff 
in Texas who have worked with us to secure a loan to restore 
the library to its pre-flood condition. Thank you all.
    [The prepared statement of Mary Elizabeth Colombo may be 
found in the Appendix on page 41.]

    ChairmanAltmire. Thank you. Mr. Feher.

        STATEMENT OF JOHN FEHER, OWNER, BOULEVARD SPORTS

    Mr.Feher. Yes. Thank you, Congressman, for allowing me to 
be here. It is a privilege to be here to discuss this.
    Back whenever this flood started, this wasn't like the 
first time I ever got water in my basement. I have had water in 
my basement on three other occasions due to the fact that the 
creek that runs beside not only my property, but other people's 
property on Kennedy Boulevard, has been totally neglected since 
all hurricanes have come through, whether it was Katrina, Rita, 
Ivan or just go backwards in time. This last time, I had 11 
feet of water in the basement. Water came through my front 
door, it came through all of my doors and I don't think a lot 
of people understand the severity of the damage that was done. 
I have already filled three dumpsters. I have no idea what the 
financial losses are. I shall be able--I will be able to 
comment.
    I am disappointed with the SBA. I filled out an 
application. I never got a declining letter. I never got 
anything back in writing from SBA and today, I believe we are 
at August 23rd. I filled the paperwork out, I believe it was 
about the 8th of July. So I found, as one of these business 
people that I guess I am out in limbo here where the SBA 
doesn't care about me, because if they did, they would have 
written to me. I had contacted someone by telephone. The 
individual I talked to on the phone said I would be receiving a 
letter in about 10 days. Well, over a month has gone by and I 
have not received anything.
    The people up on Kennedy Boulevard, where I am at, the 
water backed up from the creek. Whether it came through where 
the tunnel was down below, if it was blocked or whatever seemed 
to be the problem, no one said anything. I have heard people 
talk about how clean the tunnel is. If it is clean, where is 
the video? Let me see something that says it is clean as a 
whistle. I have heard other people say there was a gate 
blocking the entrance where mattresses piled up, everything 
else piled up and it just back dropped completely up.
    I mean, where I am at, on my business, up on Boundary 
Street, the water from the city just comes rolling down over 
the hillside. All the debris ends up in the creek. The creek 
bed, itself, has probably risen eight feet since I bought the 
building in 1985. I used to do my work in my basement. Now I 
have enough that I could have mud baths in there. And as far as 
any aid goes here, I mean, I know Wes Hill was sitting here. 
Back in a meeting we held up at the Aliquippa Middle School, 
they were going to form committees to see what was going to be 
done. Well, you know what? There hasn't been a damn thing done.
    Up to this date, there have been people walking up and down 
the street, supposedly surveying. You know, we don't need 
anybody on a recreational survey. The money should be used to 
start excavating the debris in the creek and not everybody out 
there looking to see what it looks like. It is just the whole 
scenario is just, I think, beyond comprehension, that all this 
time has gone by and there hasn't been anything done and it 
doesn't leave much hope for the people up above on Kennedy 
Boulevard. Everybody had said they didn't know there was water 
up there. I have photos with me that show water coming through 
my front door.
    The water coming up out of the creek exceeded over four 
feet. I have photos of all the water marks. Besides what money 
I had lost in my business, I have a gentleman that owns Emerald 
Productions. He prints all his paperwork, everything on the 
floor was thrown into a dumpster. There is a guy next door to 
me, he has Center for Storage. He received all kinds of flood 
damage and his buildings down below, they have been undercut, 
the asphalt and everything from the creek not being taken care 
of. You know, I just need to hear someone give me real answers 
and I don't want to hear spins. I am too old anymore to hear 
spins. And I would just like to see someone give me something 
positive from all this, you know, whether it is from you, the 
SBA or anything. And that is really all I have to say.
    [The prepared statement of John Feher may be found in the 
Appendix on page 44.]

    ChairmanAltmire. Thank you. Thank you. I will give Mr. 
Mitchell, since you brought up the situation with your specific 
case, you applied on July 8th, you still have not heard a 
response. Do you want to respond to that, Mr. Mitchell, since 
you are here?
    Mr.Mitchell. Has the inspector been out to--
    Mr.Feher. I haven't received anything. I haven't even 
received a letter saying you have been declined. So when you 
have nothing, where do you go? You can't go forward with 
anything. Like, I heard, you know, Mary Elizabeth mention the 
fact that she was able to appeal it. How can you appeal 
something if you don't even have a letter to say this is my 
docket number, this is my loan number, this is something?
    Mr.Mitchell. I have already e-mailed them to get me an 
answer.
    ChairmanAltmire. Do you think this is a mistake that took 
place or is that a typical type--
    Mr.Mitchell. We are going to find out, but this shouldn't 
be happening. I mean, somebody should have been in contact, at 
least at this point. The inspection of the property should have 
taken place, but we will find out.
    ChairmanAltmire. Okay. Well, thank you. Hopefully that is 
something that can come out of this. Just going in the order, 
Mr. Geho, you represent the whole county for the Chamber. Have 
you seen any similar situations like this take place anywhere 
else in the county and do you have any comments on SBA and 
activities throughout the county?
    Mr.Geho. I think, not to rehash a lot that was said, I 
think, you know, I share some of their--you know, when Mary 
brought up about it is always about getting information out and 
letting people know about these opportunities, I think we all 
can do a better job and I know the SBA and the administrator 
said they are dealing with crises every day. I think, until 
someone gets into that situation, it is always such a Catch-22, 
that no one thinks about it until it lands on your doorstep and 
you got to react to it and it is just one of those tough 
situations and I think that has a lot to do with it. We haven't 
heard much activity from our business owners, I think, and that 
is a result of the few people that have filed, unfortunately, 
for the SBA, like, you know, encourage and see many more people 
do that. I know John did, actually.
    I was at the store and what he is saying, I mean, it is 
just unbelievable and I encourage you to go over there. I mean, 
the amount of damage and you just cannot believe what 11 feet 
of water reaching his basement looks like, because I saw where 
the line went and I mean, it is just unbelievable. So he is 
rightly frustrated and if it is something that is reoccurring 
and it sounds more of an environmental issue with the creek 
over there, you know, the micro bursts that occurred, you know, 
that we talked about on Franklin Avenue. There must be a real 
issue with the creek bed over there that needs to be looked at.
    ChairmanAltmire. Can you talk about specific Aliquippa and 
the Kennedy and Franklin Avenue corridor, talk about the 
importance of small business to this neighborhood and how 
devastating it would be if we lost these businesses as a result 
of this?
    Mr.Geho. I think, as you said in your opening remarks, that 
so many people put their livelihood, you know, for so many 
years these stores remained vacant, boarded up and now we are 
seeing some rebirth down here, from coffee shops and daycare 
centers and so much good has happened and the tremendous 
streetscape project that has just transpired down here and you 
know, when I first heard the news of all this happening here, 
that ran through my mind, not only the businesses, but I 
thought oh my God, all that beautiful streetscape and all that 
money and thankfully, many of the sidewalks and Federal monies 
that had happened, that the sidewalks and all that had survived 
and sustained so much damage. But we know this is a resilient 
town and I hope that resiliency holds.
    You know, it is going to be a tough road for many of these 
people because I think, exactly like you said, many people put 
it all on the line the first go-around and it is a grave 
concern to think if they are going to have that backing and I 
applaud Governor Rendell and all our legislators and yourself, 
you know, having those opportunity grants to take care of the 
interest portion of those SBA loans because even if someone 
could get a loan, once again, that interest portion would kill 
them on there, so I mean, that was a very creative and great 
way our State stepped in to aid these individuals that I think 
needs to be applauded, as well. So I think that was a very 
great hand-up to help individuals, as well.
    ChairmanAltmire. And you talked about preparedness planning 
and how important it is. Do you have any ideas on how what 
types of planning you are talking about to prepare for this? Is 
the Chamber in any way available to help folks with this type 
of planning?
    Mr.Geho. Sure. And I think, as I pointed out, Wes Hill, he 
is working with Region 13 and the SBA has a lot of great 
information on their sites that are really the, you know, 
pretty much the tools and resources, the how-tos for not only 
homeowners, but individuals, because I think a lot of people 
down here never saw the situation occurring down here in 
Aliquippa, so there is a lot of tools and the how-tos and what 
to think about, you know, not keep all your records on-site and 
back up your computer files off-site because if you lose them, 
I mean, you are going to lose them and there are some startling 
statistics and I think when you learn that 25 percent of 
businesses don't recover from a situation like that, a lot of 
it is financial, some of it is just because they lose it all.
    They lose all those records that they are never able to 
recover from, so I applaud Wes and he was ahead of the curve 
because he was working on, you know, with the Region and they 
are really taking an inventory of like, all our resources from 
what does all the other communities have, what do our 
businesses have, that if something like this happens, that they 
could step up and who has dumpsters, who has street sweepers, 
who has some trucks that could come in when we have a situation 
like this that can bring immediate needs and immediate help and 
I think we are getting smarter. It always is very frustrating 
that it takes a situation like this to make us smarter and 
brighter, but I think it is another situation that is causing 
that, but you know, hopefully we are smarter for it.
    ChairmanAltmire. And I do want to publicly recognize Wes 
Hill, who you mentioned a couple of times, who did just 
incredible work that day and the succeeding days. If he could 
stand up and let everybody take a good look at you.
    Mr.Hill. I am Wes Hill.
    ChairmanAltmire. Yes. I can't tell you the countless ways 
that he helped our office work our way through this and helped 
the community, so I am glad that Wes Hill is here today.
    Ms. Colombo, what happens if the funding doesn't arrive? 
What is the difference between you getting the funding that you 
are requesting and you not getting it? What is going to be the 
difference a year from now at the library?
    Ms.Colombo. I think we are probably going to see that a lot 
of the things that we lost were not replaced. There are some 
things, as I mentioned when you were on the tour today, we have 
a sump pump that we need to replace, probably $25,000 or more. 
We have to do this whether we get funding or not and if we 
don't get an SBA loan, we are going to have to look at a loan 
someplace else, which will be more of a debt because the 
interest rates will be so much higher and probably we would not 
be able to qualify for any of the State help that came in that 
Pat mentioned, to help us pick up the loan.
    While we have to be reactive to what happened, I think all 
of us need to be proactive, too, and say what is it that we can 
do to prevent this from happening another time and in our 
situation, it is going to be looking at the infrastructure 
within the library, such as the sump pump, that needs to be 
replaced because we need to get that out of there, as well as 
looking at what we can do to divert and control water that is 
coming from hillsides that are behind the library so that we 
keep that water out of the building. As far as with replacing 
materials, computers, those are going to be things that depend 
upon how responsive people in the private sector are going to 
be to our fundraising to try to do that, so it is certainly 
something that we need help to be able to do.
    And if I can just comment a little bit about the need to be 
with disaster plans, well, we have a plan that we wrote at the 
library quite a long time ago because it was something that was 
encouraged in our profession. We realized that was good. It 
probably helped us prevent our loss from being half a million 
dollars as opposed to where we are at 200 and some thousand 
because we were able to know what we had to do within that 
first 24 hour period to make the building as safe as we could 
from all of the, what I call the evils that lurk in mold and 
mildew and whatever, aside from the mechanicals that have to be 
done, so I encourage whomever can have training on disaster 
preparedness, even if it is just up in your head rather than on 
a piece of paper, it is very good.
    ChairmanAltmire. And I want to thank you for the advice 
that you gave both for Congress and the SBA based on your 
experience. It is unfortunate that you had to go through the 
process of having that experience. But it sounds like, with the 
exception of the final result, which is still up in the air, 
you had a relatively smooth experience with the SBA?
    Ms.Colombo. Yes, we did.
    ChairmanAltmire. Except for the hiccup with the 
notification.
    Ms.Colombo. Yes, and we are going to get past that. We are 
very confident that we can work through that.
    ChairmanAltmire. And I was going to give Mr. Mitchell the 
opportunity, if he wanted to comment on she got the $184,000 
approval letter and then gets notified no, it was a mistake and 
then what happens now?
    Mr.Mitchell. Well, if--and I haven't seen the letter that 
she submitted for reconsideration, but I suspect where it is 
right now, it is with an attorney to look at the legal aspects, 
where is the ownership and what is the status of the private 
non-profit, what the private non-profit is responsible for and 
what you control, you know, are the assets controlled by the 
city or the structure and how far do we go with the private 
non-profit in terms on the eligibility and that is how we 
basically take a look at it.
    ChairmanAltmire. And without commenting on the specifics of 
the library, itself, but private non-profits are eligible for 
SBA assistance, correct?
    Mr.Mitchell. Private non-profits are eligible. In this 
case, the city is somehow in there and we just need to figure 
that out, whether or not it is a private non-profit or the city 
actually owns and controls the assets.
    ChairmanAltmire. Right. Thank you. And thank you, Ms. 
Colombo.
    Ms.Colombo. You are welcome.
    ChairmanAltmire. Mr. Feher, you talked about the dollars 
that we should use to prevent this from happening again and I 
just wanted to assure you that we are doing two things, at 
least with what I am involved in, and one is trying to get to 
the bottom of what did happen on July 5th and why it happened. 
Was it a situation where it could have bee prevented, that 
there was a blockage that could have been removed and wasn't? 
Was it just a 100-year occurrence, which you are seeing, 
unfortunately, more and more around the region due to the 
antiquated infrastructure that exists?
    And perhaps nobody is at fault, but we are going to get to 
the bottom of it and I just don't want you to think that there 
is any--anyone that is ignoring this issue and moving forward, 
so we are trying to figure that part out. But more importantly, 
to prevent this from ever happening again, we are, at the 
Federal level, trying to provide the funding to this region, 
and I am trying to direct it here to Beaver County, to do the 
infrastructure improvements that are necessary to update our 
waterway system and our sewage system. And this is a situation 
that has not been dealt with over time due to the expense, more 
than anything else.
    We just passed a water resources bill out of the House that 
has $90 million for this region, specifically dedicated to this 
region, through the Army Corps of Engineers for them to come in 
here and resolve some of these issues because we can't have a 
situation in Aliquippa, anywhere in Beaver County, or Millvale, 
Ross and Shaler, where every time it rains, the next day we are 
having a question on where is the Federal aid going to come 
because of the flood. We want to prevent the floods from 
happening in the first place and I think that is the point that 
you are making.
    So I want to assure you that we are working with the Army 
Corps of Engineers and I am working with them on a personal 
basis to get their attention and get them in here as quickly as 
possible and do the infrastructure improvements on a permanent 
basis that is going to prevent this type of situation from 
happening. And while we are doing that, we are trying to figure 
out what happened and who is responsible and what is the 
accountability that is necessary because of what happened, 
specifically, on July 5th.
    So you are a big part of why that is happening, because of 
the story you have to tell. Unfortunately, you have to tell it. 
I wish it hadn't happened. But I do want to thank you for 
coming today and give you the opportunity to respond, if you 
want.
    Mr.Feher. You know what, I am glad she mentioned sump 
pumps. I have only had to replace three. It seems the creek has 
risen higher than the bed of my basement and I know--it seems 
kind of strange. I am standing in my own business and watching 
water come through the front door and through my floors in the 
basement. Never in my wildest dreams did I think it would 
happen. One of the sad things that I had encountered, there 
were some volunteer groups coming to help me clean out the 
basement area and I had about 14 inches of water in the 
basement about 10 days ago and I went down to see the local 
fire department. It seems the local fire department doesn't 
pump anybody's basements. And I sit there and I think to 
myself, I am taxpayer here; they don't pump basements, but at 
the same time, when you walk in, they got a wide screen TV.
    I don't even have a wide screen TV. And I find it hard that 
they can enjoy all these nice benefits, but they couldn't 
afford to buy a pump, a submergible pump, just drop it in my 
basement to get the water out so that these wonderful people 
that have come from all over the area to help me clean up could 
have come to work. And it just seems that the people that have 
come to help, none of them were from around this area. People 
have come from Somerset to help me, people from Greensburg, 
people from Zelienople, people I will probably never see again, 
but it is a shame that you couldn't get any of the help from 
your own locals. That is where the big disappointment falls 
into.
    ChairmanAltmire. Well, thank you for telling your story and 
I am going to ask the panel to stay here while Commissioner 
Spanik gives his remarks because he may something that I would 
like you to comment on, so at this time, we will introduce the 
chairman of the Beaver County Commissioners, the Honorable Joe 
Spanik. Thank you.

 STATEMENT OF JOE SPANIK, CHAIRMAN, BEAVER COUNTY COMMISSIONERS

    Mr.Spanik. Thank you. I apologize that I am late. It has 
just been a busy morning. I had a public meeting today, so I 
have been rushing around, but I think this is important. This 
is something that, as John had indicated, something that is 
going to be ongoing for quite some time if we don't take care 
of some of these issues that are out there, but good morning. 
On behalf of my fellow Beaver County Commissioners, Dan 
Donatella and Charlie Camp, I would like to thank Congressman 
Altmire for holding these hearings in Aliquippa today and for 
bringing much needed attention to the needs of those impacted 
throughout Beaver County by the July 5th storm.
    First, I would like to commend the Pittsburgh office of the 
Small Business Administration for the quick and effective 
response. Working in close cooperation with the SBA, our local 
teams were able to assess damages to homes and businesses and 
secure the SBA disaster declaration that, to date, has provided 
over $376,000. I can tell you, when I was there on Thursday, 
when we first got the call to sign off on a declaration on a 
county and moving it forward to the State level, our assessment 
folks, Mike Coleman and his folks, were out there trying to 
assess those damages and trying to meet those guidelines to do 
that and the SBA helped us out quite a bit throughout that 
series and I just want to commend them for coming in. We truly 
appreciate their work and want you, Congressman Altmire, to 
know that his Federal agency did a great job.
    One of the biggest surprises of the storm was where it 
caused the problems, primarily on Franklin Avenue. I never 
thought, anybody thought Franklin Avenue would be flooded with 
three to four feet of water. Over the past 10 years this region 
has seen several terrible flooding events, but most of these 
occurred along rivers, streams or other bodies of water, an 
area that we almost expected flooding to occur. For instance, 
in 2004, as you well remember, the flood at the Green Garden 
Plaza, not once but twice in Aliquippa flooded two times, in a 
short period of time, in part because of stream that overflowed 
its banks during a heavy rain storm.
    When these rains started in July, there was some concern 
that Green Garden would again flood, but nobody was really 
paying attention to Franklin Avenue. And I believe this shows 
that more areas are prone to this type of flash flooding then 
we previously thought and that all of our communities need to 
be increasingly aware of places where problems could occur.
    Because of this, I am hoping that the Federal government 
begins to look at creating more programs that will allow local 
governments to identify issues such as stream beds that need to 
be cleaned out before they back up and fix them. It is not only 
Aliquippa or Beaver County that faces this problem. As you well 
know, Millvale in Allegheny County, and I know the county has 
gone through this issue several times with Millvale and I know 
the Army Corps of Engineers started to--clean that out. 
Hopefully, that might happen here in Beaver County at the same 
time to some of these stream beds.
    While I understand that FEMA and PEMA both have mitigation 
funds that we have used successfully in Beaver County to try to 
resolve some of these problems in advance, I am asking Congress 
to take a look at expanding these programs, increasing their 
funding and making them easier to access by local governments. 
As they say in football, the best offense is a good defense and 
we all need to start looking for problem areas before they 
occur.
    The other issue that I would like to address is the need 
for more flexibility in determining eligibility for State and 
Federal disaster declaration. It appears to me that many of the 
Federal programs are designed to respond to major flooding 
disasters where rivers overflow and damage large land areas, 
not to respond to more localized flooding like we experienced 
along Franklin Avenue.
    And I believe one of the issues SBA had told us, because 
that flash flood occurred in Beaver County, an isolated area, 
and then several weeks later, in Allegheny County, he says if 
it would have happened all of southwestern Pennsylvania, well, 
we don't wish it on anybody, but these are the ways of floods 
that are occurring on these flash floods, because it is 
isolated areas that doesn't create enough of the dollars to 
meet those guidelines to help the residents and the business 
owners. And so I would like the Federal government to take a 
better look at how these floods occur and the equation of where 
it meets the guidelines to get the Federal funding help 
available; we are just not meeting those.
    When we struggle to find enough damage to qualify for 
Federal assistance, even after checking again and again, we 
were just able to meet the minimum standards for SBA loans, but 
no grants or no assistance for public property that was 
damaged. Nevertheless, the people, business and public agencies 
throughout Beaver County did suffer great losses. Whether it is 
10 homes or a thousand, the effects of the damage who live 
there is devastating and often long-term. Some businesses may 
never reopen or reopen with a larger debt than before.
    Most homeowners will receive no government help and as you 
are well aware, the City of Aliquippa's police department and 
municipal buildings were affected but again, do not qualify for 
Federal government assistance. Thankfully, the Commonwealth and 
the governor was able to provide the police department with 
replacement police cars and some additional aid, but in 
general, this community is forced to deal with the loss of its 
government infrastructure on its own.
    Congressman Altmire, I am asking you to examine the minimum 
standards that any community across the country must meet to 
qualify for additional Federal assistance and see if these 
programs can be adjusted to account for small disasters that 
have an equally big impact on families, businesses and local 
government. As county commissioners, we are grateful for the 
many organizations and people who did help. Police and fire 
departments from across the county showed up immediately to 
help local departments and once again, I know Wes Hill, our EMS 
director and his staff was on the job immediately.
    Region 13, southwestern Pennsylvania's 13 counties, I 
think, John, you indicated, where they come from all over, this 
is something that we talk about, regionalization, we talk about 
cooperation. As you can see, on Thursday and Friday, the type 
of assistance we got, this is immensely needed when we have 
these type of smaller disasters and I just want to thank Region 
13 and all those emergency--and county commissioners who 
represent that, to pitch in when communities like ours needed 
help.
    Our own county department assisted local responders with 
expertise and assistance. The Commonwealth also stepped forward 
with those special grants and a program to pay interest for the 
businesses who qualified for SBA loans. And of course, we 
cannot forget the many private groups that helped; the Red 
Cross, the Salvation Army, churches, community organizations, 
others. As you well know, they are still ongoing. I believe 
there is a project out there called ARISE who is still out 
there in the community trying to raise funds to help these 
businesses and homeowners to get over these damages that have 
occurred.
    We, as a community, did pull together and I am really proud 
of that. In conclusion, I would once again like to thank you, 
Congressman Altmire, for holding these hearings in Beaver 
County, and I know that you are well aware of the challenges we 
face every day and have continued to provide advice and 
advocacy in Washington, D.C. I do hope that what you have heard 
today from our community will help you go back into Washington 
and work with your colleagues in Congress and the appropriate 
Federal agencies to continue to develop new programs and new 
funding sources to help all Americans in these situations. 
Thank you very much.
    [The prepared statement of Joe Spanik may be found in the 
Appendix on page 45.]

    ChairmanAltmire. Thank you, Commissioner Spanik, and I 
really appreciate you not only coming today, but all the work 
that you have done on this issue from July 5th forward. I don't 
think there was anyone that was on the scene more often than 
you were. I know every time I was here and every time I had 
some of my staff here, you were there, too, and you really 
deserve a lot of credit.
    Mr.Spanik. I appreciate that. And just to say, you know, 
you elect me as county commissioner. I believe that is our role 
and responsibility, taking care of the needs of our community. 
And if we are not there to me, that just shows that we don't 
care and I can honestly tell you, we do care about our 
community, whether it is Aliquippa Center, Big Beaver, Freedom, 
Economy, Ambridge, no matter where it is at in this county, we 
do want to be there to help assist businesses and homeowners in 
their plight of what is going on.
    ChairmanAltmire. And you talked about the minimum standards 
and asking that I go back to Washington, which I will, and 
review the minimum standards. The purpose of this hearing is 
specific to the SBA, as you know, and I wonder if you could 
comment on your experience. You touched on it, but maybe go 
into some more detail with the SBA, in particular, as you went 
around the community after the disaster.
    Mr.Spanik. Well, just like anything else, when this 
disaster hit, it was called upon the local government of 
Aliquippa to sign off on a declaration and we were called in to 
sign off on a declaration, but then the county assessed the 
damage and as you know, floods hit, five inches of rain in two 
hours, you just can't get around. The first responder was to 
make sure the needs of the people, getting to safety, was the 
first thing on everybody's mind and I can honestly tell you, 
that did happen, because there could have been some tragic 
losses.
    Some experiences that I heard when I was out and about 
within those damaged areas, that there could have been some 
loss of life and I got to agree that the first responders who 
were there on a local side, county side, made sure the safety 
of the public was at hand first. Secondly, it was the part 
beginning the cleanup and as you all know, we only have a small 
group of folks to go out and assess these damages with the Red 
Cross and our assessors team, when, in fact, that these 
declarations happen, then that puts on place the SBA. And when 
I believe Jim Bachman came in, he had his team ready to go and 
he assisted us immensely to create and help us get to that 
minimum limit to make sure that we are able to meet those 
standards.
    And once again, this is not the first time that SBA has 
been in there. Just last year, I believe it was last year, I 
know--would say this at any time we have any type of disasters, 
the SBA, at a local region and also on the national level, has 
always been there. We had a terrible train wreck in New 
Brighton which created some hazardous material and they were on 
the spot immediately that evening. And once again, I cannot say 
enough about the staff that does it. And once again, it is not 
their hands that are making us tied up with these limits that 
we have to meet, it is just regulations that are imposed by the 
Federal government to meet these criteria.
    As far as the SBA is concerned, I can go back to when I 
first started out with the United Way. I was on the job for 10 
days and we had a Category 4 tornado that hit all of western 
Pennsylvania. It actually was less than a mile from the home 
where I lived in North Sewickley and they were there and as you 
can see, a tornado, the damage it creates, was a lot more 
extensive and we are basing these criteria on would it be a 
Hurricane Ivan or a Hurricane Katrina or Hurricane Dean or a 
Category 4, Category 5 tornado, where they cause immense 
damages.
    Well, we have these spot floods. When it hits certain 
areas, there is no way they are going to create the type of 
damage, the amount of money that is needed to meet these 
criteria. These are a different type of operation, but at the 
same time, the homeowners, the businesses, the government 
entities, non-profits, are still impacted, whether it is a huge 
disaster or a small one. We got to meet a higher level than 
expected and I don't think anybody wants a Category 5 or the 
type of devastation that happens, but I think assistance coming 
from SBA, FEMA that understands that we need to change the 
regulations when these type of disasters hit because it is 
happening time and time again, that these homeowners, who, like 
I said, some are staying, some aren't; businesses staying, some 
are not, that is devastating to them to keep on going, dipping 
into their pockets.
    As you all know, this is not a flood prone area and if you 
had flood insurance, it still never would have been covered. So 
people are trying to make do and as you know, our economy isn't 
back to where it once, 10, 15, 20, 25 years ago, when the great 
town of Aliquippa and Midland and Beaver Falls and Ambridge and 
the great steel mills and the type of economy that was 
thriving, it is not like that anymore and we have a large 
community of senior citizens that are on fixed income and this 
has impacted them. And so once again, I think the SBA steps in, 
no doubt, on a first responder basis. They are there to help us 
out, but their hands are tied. We need a change of regulation 
in trying to assist our community or any community in America 
to try to help these folks out and get by through the problem.
    ChairmanAltmire. Well, thank you. I want to thank the 
panel, thank Commissioner Spanik, Mr. Geho, Ms. Colombo and Mr. 
Feher. I really appreciate you telling your story. I know it is 
not easy to do, in many cases, but it is critical to our 
mission of trying to improve the situation for what happened 
and make sure that it doesn't happen again. So thank you and if 
we could make room, we will have one more--a couple of people 
speak here. I wanted to bring up one renter who applied for an 
SBA loan and was rejected, and if she could very briefly tell 
her story, Ms. Terica Pope, and I am going to ask--Commissioner 
Spanik mentioned ARISE, the community organization that has 
been just fantastic in working with the community and trying to 
help some of the people who have been harmed by this flood, so 
I am going to ask Felicia Mycyk to come up and introduce Ms. 
Pope. And again, I would remind you this is an official hearing 
for the U.S. House, so what you say is being recorded and will 
be entered into the record for the U.S. House and if you could 
keep the introduction to two minutes and then Ms. Pope's 
remarks to five minutes, that would be appreciated.

                   STATEMENT OF FELICIA MYCYK

    Ms.Mycyk. Well, I wanted to make mention, first, thank you 
for allowing me to speak. We came together, working with Wes 
Hill, actually, with the voluntary organizations, all the 
organizations; Salvation Army, Beaver County Behavioral Health, 
Lutheran Services. There is a number of organizations that we 
are working with and to make sure that all of those 
organizations and their donations get allotted properly, we put 
together a long-term recovery group which is called ARISE. We 
are based at Common Grounds and we have a caseworker on board 
with us who is actually going into the homes and seeing what 
actually is needed and with these loans being denied and 
without the help, as Bill was saying from, Boulevard Sports, it 
is not immediate. People aren't seeing the people out on the 
street and just because they are surveying it is not immediate, 
so what we are trying to do is show them that we are putting a 
long-term recovery process together for them. I wanted to make 
sure that the people heard from a renter, because that is what 
the majority of the residents here are that are getting denied.

                    STATEMENT OF TERICA POPE

    Ms.Pope. Hello. My name is Terica Pope. My family and I 
lost our home as a result of the flood on July 5th. I went 
seeking help from many organizations trying to get help for me 
and my family. I went to the elementary school two or three 
times to apply for the SBA loan. The first time I went, the 
representative there discouraged me and my husband and telling 
us that we didn't make enough money and that our credit was not 
good enough. She told us all of that without even knowing what 
our financial situation was. She only had our address and she 
got a paper from in the box for people who would be denied for 
the SBA loan. So me and my husband turned around and walked 
away, looking for answers to our many questions.
    A few days later, my husband and I decided to go back to 
apply for the loan. We did get to fill out the application this 
time, but the second representative that we talked to said that 
it was likely that we wouldn't get approved, but we could fill 
out the application, anyway. About two weeks later, we received 
a denial letter for the SBA loan. So here we are, homeless with 
four children, wondering what we are supposed to do now. The 
second representative from the SBA loan did, however, inform us 
that if we were denied the loan, that they would give us names 
of organizations that would be able to help people like us.
    We have not received any information concerning this 
matter. My husband and I applied for the loan because we lost 
everything, including our pet dog. Some things that we lost are 
replaceable; however, we lost a lot of things, such as my 
wedding dress, pictures of our deceased loved ones, that are 
not replaceable. This money was going to help us get a new 
start in the right direction. So my husband and I still have 
many questions, but the biggest one of them all is what happens 
now and what do people in our condition do.
    My prior landlord contacted me two weeks after the flood. 
At that time, he had informed me that he was going to do the 
repairs in the house so we could move back in. He contacted me 
and told me, later, that we could move back in, but that we 
knew that the house had to be inspected, so I asked him at that 
time if the house was inspected and he told me that it was up 
to me. We had a lot of electrical stuff, our whole entire 
basement was under water. Our first floor, our living area, our 
dining area, everything was under water, so we had to have an 
inspector come in and the house had to be tagged for us to move 
back in and that wasn't done. So not only did I have to find 
someone to inspect the house, but I had to pay for it, too.
    About a week later, he again contacted me and told me that 
he would give me my deposit and he recommended that I find 
another place to live because this was costing him too much 
money. I did find another house only to find out that he gave 
me a bad reference, saying that me nor my husband had paid him 
rent for July, which was the month of the flood, nor August. 
But me and my family was not able to live in the house because 
it is not in livable condition. I called him to see what the 
problem was and he told me just to get what we could salvage 
out of the house and just to basically just leave the house. I 
asked him about my deposit and he hung up the phone. Since 
then, me and my family have gone from living in hotels to 
living with my mother-in-law. So I stand here in front of you, 
asking you what are people in my condition supposed to do now?

    ChairmanAltmire. Thank you for telling your story and 
specific to the SBA and your process, you mentioned that you 
were told you were going to receive a list of other 
organizations that could help you.
    Ms.Pope. Yes.
    ChairmanAltmire. Who told you that?
    Ms.Pope. Whoever, the second time that we went out there to 
the elementary school, the second representative, I can't 
remember her name. It was weeks ago. But she did say that we 
would be provided with--
    ChairmanAltmire. That was a representative from the SBA?
    Ms.Pope. Yes.
    ChairmanAltmire. Or was it--
    Ms.Pope. No, it was a representative from the SBA loans.
    ChairmanAltmire. Okay. And before you applied, before you 
sent in your application and they discouraged you from doing 
so, why did they say that you shouldn't apply?
    Ms.Pope. She didn't have any of our financial information. 
Basically, all she had was our address and that was it. She 
had, like, just our names. That was it. She didn't know--I 
mean, I work, I pay tax dollars, you know. My husband, again, 
he works, too. She did not know our financial situation at all, 
but she went on, you know, and drew her own conclusion without 
knowing anything.
    ChairmanAltmire. And I don't want to get into your personal 
financial situation, but do you feel like you and your husband 
are in a position to take on additional debt and repay a loan 
over time?
    Ms.Pope. Yes, I do. Yes, I do.
    ChairmanAltmire. Okay. Well, thank you for telling your 
story. I would ask Mr. Mitchell if he maybe wanted to step up 
and respond to what you have heard.
    Mr.Mitchell. Well, obviously we want to make sure you have 
a better experience and I surely can't speak to the specifics, 
but I can tell you how the process should work. When you come 
into the center, you should be explained what is available to 
you, what is the eligibility criteria and how to apply. Nobody 
can keep you from applying, okay? You can apply. And no matter 
what you are told, you have a right to fill out the application 
and submit the application and get an official decision.
    What normally should happen is, in the interview process 
there should be some questions about what is your family size, 
what is your income and obviously, we don't have credit 
information. What they are trying to do is determine whether or 
not you can afford a loan, which is we have what we call 
minimum income guidelines. If you, for example, you have a 
family of three and your only annual income is $5,000 a year, 
it is reasonable to assume that you are not going to be able to 
take on any debt. And generally, what happens in a situation 
where there is a Federal declaration, we can take that 
information and without putting somebody through an application 
process, we can get them to FEMA immediately, okay? That is the 
goal.
    Hopefully, and maybe we need to do a better job in making 
sure we don't discourage people through that interview process, 
but I am telling you, your rights, as a citizen, you have the 
right to file an application no matter what you are told and we 
can make sure we get the application, we can make sure we get 
the information we have on available other resources that are 
available to you, as well, in the community in terms of 
charitable organizations.
    ChairmanAltmire. And Ms. Pope, you did end up filing an 
application, is that correct?
    Ms.Pope. Yes, we went back and we did file.
    ChairmanAltmire. Okay.
    Mr.Mitchell. Okay.
    ChairmanAltmire. And that you were denied?
    Ms.Pope. Yes.
    Mr.Mitchell. Okay.
    ChairmanAltmire. Okay. Well, I would ask Mr. Mitchell, if 
you could maybe take a second look at that particular 
application and give it a second review and do the appropriate 
thing.
    Mr.Mitchell. Absolutely.
    ChairmanAltmire. But I am happy that you were here to at 
least hear some of the concerns. I know that the SBA does the 
best they can in these situations, but there are some examples 
where it doesn't go as smoothly as I am sure you would like and 
certainly not the community would like.
    Mr.Mitchell. And usually I get most of those. I don't see 
it when it goes right.
    ChairmanAltmire. Good. Well, thank you, Mr. Mitchell, and 
thank you both for coming up here. Did you have something else?
    Ms.Mycyk. Yes, one of the things that the group is doing, 
we are going out and we are cleaning creek beds, businesses--
this past week we had about 60 people go out and actually help 
and we have a video that we want to pass on to you.
    ChairmanAltmire. Oh, great. I will take a look at it.
    Ms.Mycyk. Thank you.
    ChairmanAltmire. Thank you. Thank you to the SBA for coming 
here. Thank you to our second panel. Thank you to the two of 
you. And I very much appreciate Aliquippa for allowing us the 
use of the space here in the town hall to hold this hearing. I 
am going to go back to Washington and incorporate some of these 
things, as we move forward. And again, as you know, my office 
is here in Aliquippa and I put it here for a reason, because I 
want to be part of this community and I want you to use that 
office when you have any questions about this issue or any 
other issue of concern to you. Please be in touch with us. We 
are here to help. So with that, the meeting is adjourned.
    [Whereupon, at 11:35 a.m., the Subcommittee was adjourned.]

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