    [From the U.S. Government Printing Office, www.gpo.gov]

     REPORT BY THE

     Comptroller General
                            ,                                       COASTAL ZONE
     OF THE UNITED STATES                                                      INFORMATION CENTER
                            /

    The Johnstown Area Flood Of 1977:

     A Case Study For The Future

     The  Federal Government  is spending about
     $261 million to help the Johnstown, Pennsyl-
     vania, area recover from the July 1977 flood
     that killed 76  people, injured or sickened
     2,700, and caused ai"estimated $330 million
     in damage.
     Some flood victims were protected under the
     National Flood Insurance Pro ram; proceeds
     totaled about S26 million.
     This report discusses the flood, insurance pro-
     gram, the emergency  response and recovery
     effort,  and  alleged  problem  areas covered
     during  interviews  with  individual  victims,
     business  representatives, and  Government
     officials.

    HG
    9 9 8 3        -
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    1 97 8

                              it.'ks, E :7f~~~~~~~~~i >CED-78-114
       _- ~     i~ XrA"-.,^�SMAY 5, 1978

                       COMPTROLLER GENERAL OF THE UNITED STATES
           "9~~~~~~ ~~~WASHINGTOC. D.C. 2054a

                                             property of CSC Library

                           COASTAL ZONE
          B-167790          INFORMATION CENTER

          The Honorable Thomas F. Eagleton
          United States Senate

          Dear Senator Eagleton:

               Pursuant to your July 22, 1977, request and subsequent
          meetings with your office, we have conducted a case study
          of the Johnstown area flood of 1977.  Specific answers to
          your questions are found, for the most part, in chapter 3.

               The report discusses the flood insurance program and
          the disaster assistance program by using the Johnstown area
          flood as an example. The report also discusses several
          problem areas alleged during our interviews.

               As your office directed, we plan no further distribu-
          tion of this report until 1 week from the date of issuance.
        At that time we will send copies to interested parties and
    C)    make copies available to others upon request.

               We trust that this report will assist you.
    0
                                             Sinoely yours,

              L4-+~~~~~~ ~Comptroller General
               ~~~~~~~C   ~of the United States
     O -

                                   o. I DEPARTMENT OF COMMERCE NOAA
             9&~~ -                   ~~~COASIAL SERVICES CENTER
                                   2234 SOUTH HOBSON AVENUE
             ~q,~~). Len             CHARLESTON, SC 29405-2413
               -'

         *  i,\ rVpo

    COMPTROLLER GENERAL'S                    THE JOHNSTOWN AREA
    REPORT TO THE                            FLOOD OF 1977:
    HONORABLE THOMAS F. EAGLETON             A CASE STUDY FOR
    UNITED STATES SENATE                     THE FUTURE

         D IG E ST
         On July 21, 1977, the President declared the Johnstown,
         Pennsylvania, area a major disaster area after a flood
         struck 136 communities within eight counties and killed
         76 people, injured or caused sickness to 2,700, and
         damaged an estimated $117 million worth of property
         within the city and $213 million in areas outside the
         city. (See P. 1.)

         Flood victims with flood insurance received nearly
         $26 million in insurance proceeds. All victims
         GAO interviewed said the-National Flood Insurers
         Association provided good claims service. (See pp. 18
         and 22.)

         No Federal disaster assistance was denied those who
         were not covered by flood insurance. As a condition of
         receiving financial assistance, however, victims were
         sometimes required to purchase flood insurance. (See
         p. 27.)

         Federal disaster assistance to the Johnstown area is
         expected to total $261 million. A wide variety of
         assistance was available to individual victims and
         State and local governments. Twelve agencies were
         responsible for 27 programs. Other agencies became
         involved through mission assignments by the Federal
         Disaster Assistance Administration. (See pp. 25, 26
         and 66.)

         Most of the 67 victims interviewed by GAO rated the
         Federal disaster response excellent or good. There
         were no complaints about coordination of the Federal
         response, but some victims had complaints about
         specific programs. Others had complaints on the
         number of different forms that had to be filled out
         for each agency. (See pp. 27-37.)

         Based on reviews of flood insurance and disaster
         assistance programs and on interviews of victims during
         the case study of the Johnstown area flood, GAO made
         the following observations:

     Ter he. Upon removal, the report  iCED-78-114
    cover date should be noted hereon.

    --A local flash flood warning system could have
      alerted authorities to the disaster much sooner.
      The National Weather Service partially relies on
      local observations in issuing weather'warnings and
      assists in developing flash flood warning systems.
      By providing such information a community -can assist
      the National Weather Service in its responsibility
     .to issue warnings. (See p. 12.)

    --An improved communications system could have
      provided better and quicker emergency assistance
      to the di'saster area. It took up to 3 weeks to
      establish communications; equipment was in poor
      condition, some of it was incompatible, and
      there was confusion over who was in charge of the
      communications operation. There is a need for
      the Defense Civil Preparedness Agency to assist
     .State and local governments in improving their
      emergency communications capability. (See io. 12.)

    --The establishment of the 100-year floodplain may
      be inadequate as the criteria for floodplain
      management ordinances. (See p. 24.)

    --The Federal coor-dinating officer was made independent
      from the Federai Disaster Assistance Administration
      in that he performed no other duties. This
      independence, seems to have contributed to the
      overall success of the Federal recovery effort.
      (See p. 43.)

    --The National Flood insurance Program had a significant
      effect on disaster assistance. Without the nearly
      $26 million in flood insurance proceeds paid to
      2,592 policyholders, additional loans and grants
      could have been required for disaster victims. (See
      p. 43.)

    --Johnstown flood victims had to file a separate
      application with each agency from which they desired
      assistance creatinq a hardship for them; an entire day
      could be spent applying for assistance. A common,
      interagency application form available to all agencies
      could help reduce the time victims spend applying
      for assistance and avoid duplication of benefits.
      For example, a victim's flood-damaged home can be
      repaired through flood insurance, the Department
      of Housing and Urban Development minimal repair
      program, a Small Business Administration home
      repair loan, a Farmers Home Administration loan,
      an individual and Family Grant, and private
      nonprofit organizations. (See pp. 43-44.)

        --Forty-five percent of the victims GAO interviewed
          complained about the minimal repair program--poor
          repairs, unqualified insp'ectors, too many contractors
          from out of town, difficulty in getting faulty repairs
          corrected, and contractors being paid two to five t'imes
          the local rate. Also, a volunteer group alleged that
          because the Disaster Relief Act of 1974 (Pub. L. 93-288)
          prohibits minimal repairs for rental properties,
          neighborhoods were deteriorating and there were
          insufficient rental units to house disaster victims.
          (See P. 44.)

        Furthermore, information developed during our review
        of the flood insurance program and its operation in
        the Johnstown indicates that the Federal insurance
        Administration did not

             1. adequately monitor community enforcement
                 of floodplain management regulations,

             2. adequately encourage communities to
                 participate in the flood insurance program,
                 and

             3. actively encourage property owners to
                 purchase flood insurance, particularly
                 those in the floodplain. (See p. 24.)

        Because GAO looked-at only the Johnstown flood
        experience and did not make an overall evaluation of the
        flood insurance and disaster assistance programs, no
        recommendations for program changes are presented in
        this report. However, the information and observations
        in the report should assist the Congress in understanding
        and evaluating these programs and help agency officials
        identify problem areas warranting further management
        attention.

        Oral comments were received from the Federal insurance
        Administration, the Federal Disaster Assistance
        Administration, and Minimal Repair Program officials.
        Their comments were considered in the report as
        appropriate.

    Tear Sheet

                          C on t ent s

                                                         Page

    DIGEST                                                    i

    CHAPTER

                 INTRODUCTION I

                     Federal disaster assistance I
                     Flood protection projects               2
                    Scope of review                         3

       2         BACKGROUND ON FLOOD WARNING AND
                  EMERGENCY OPERATIONS                      5

                    No flood warning                        5
                    Dam failures                            8
                     Lack of communications                  8
                    Civil defense operations               10
                     Initial rescue operations              11
                    Control of looting                     11
                    Control of explosions and fires        12
                    Observations                           12

       3         THE NATIONAL FLOOD INSURANCE PROGRAM       13

                    Background                             13
                    The flood insurance program
                       in the Johnstown disaster area       17
                     Other matters                          22
                     Observat ions                          24

       4         THE RECOVERY EFFORTI                        25

                     The cost of disaster assistance        25
                     Effect of flood insurance on
                       disaster assistance                  27
                     Organization of the recovery effort   28
                     Assistance to individuals              28
                     Concerns of the business community    40
                     Problems encountered by the city
                       of Johnstown                         41
                     Organizations and individuals
                       credited with outstanding
                       contribution to the recovery
                       effort                               43
                     Observations                           43

                                                             Page

    APPENDIX

       I         Request for GAO review of the Johnstown
                   area flood                                 45

      II         Map of disaster area                          47

     III         Map of Johnstown, Pennsylvania                48

      IV         Summary of interviews with 67 victims
                    of the Johnstown area disaster             49

       V          Summary of interviews with 14 business
                    representatives in Johnstown               54

      VI          Review locations                             57

     VII          Disaster assistance programs for
                    individuals and businesses                 59

    VIII          Disaster assistance programs for
                    State and local governments and
                    private, nonprofit institutions            66

      Ix         Emergency assistance provided by the
                    State                                      69

                             ABBREVIATIONS

    CETA         Comprehensive Employment and Training Act

    DAC          disaster assistance center

    DCPA         Defense Civil Preparedness Agency

    DFO          disaster field office

    DUA          Disaster Unemployment Assistance

    EOC          emergency operating center

    EPA          Environmental Protection Agency

    FCO          Federal coordinating officer

    FDAA         Federal Disaster Assistance Administration

    FIA          Federal Insurance Administration

    FmHA         Farmers Home Administration

    GAO          General Accounting Office

    GSA          General Services Administration

    HUD          Department of Housing and Urban Development

    IFG          Individual and Family Grant

    IRS          Internal Revenue Service

    NFIA         National Flood Insurers Association

    NWS          National Weather Service

    OFC          office of the Federal coordinator

    SBA          Small Business Administration

    SCS          Soil Conservation Service

    VA           Veterans Administration

                               CHAPTER I

                              INTRODUCTION

         In response to a request by Senator Thomas F. Eagleton
    (see app. I), we made a case study of the Johnstown area
    flood of July 19 and 20, 1977. This report provides infor-
    mation on (1) the National Flood Insurance Program in
    Johnstown, (2) the assistance provided the disaster
    area, and (3) the problems alleged during our interviews with
    individual victims; business representatives; Federal, State,
    and local officials; and representatives of volunteer
    organizations.

         The flood struck 136 communities in eight counties in
    the Johnstown, Pennsylvania, area. (See app. II. ) Seventy-
    six people wereakilled (10 more are missing) and 2,700 were
    injured or sickened. The U.S. Army Corps of Engineers
    estimated damages at $117 million in the city of Johnstown
    and $213 million in outside areas. The U.S. Geological
    Survey and the Corps of Engineers described the flood
    as being of a 500-year magnitude--a flood that would
    be equaled once every 500 years, on the average, with a
    0.2-percent chance of occurring in any given year.

         Johnstown is located at the bottom of a valley
    resembling a funnel. The downtown area lies between Stony
    Creek and the Little Conemaugh River, which merge to form
    the Conemaugh River. (See app. III.) Torrential rains began
    at 7:00 p.m. on July 19 and continued for 9 hours. 'Runoff
    from, the extreme rainfall rushed down the surrounding
    mountainsides toward Johnstown. Numerous small streams in
    the area rapidly swelled; high velocity water carried
    structural debris and automobiles. The pressure caused
    structures and bridges to give way. Accumulated debris caused
    blockages, which diverted water through streets and highways
    into residential areas. By dawn, Johnstown was under at
    least 6 feet of water; according to a city official, 64
    percent of the city's land area was flooded. The Laurel Run
    Dam broke at 4:00 a.m., and devastated nearby Tanneryville
    with a 15-foot wall of water. Six other dams failed,
    although four were unlicensed small dams and none approached
    the severity of damage caused by Laurel Run. The dam failures
    did not affect the level of water in Johnstown.

    FEDERAL DISASTER ASSISTANCE

         On July 21, 1977, the President declared that a major
    disaster existed in Pennsylvania. The Federal Disaster
    Assistance Administration (FDAA), an agency of the Department

                                1

    of Housing and Urban Development (HUD), named eight counties
    eligible for Federal assistance under the Disaster Relief Act
    of 1974 (Pub. L. 93-288). FDAA also designated an FDAA
    headquarters official as Federal coordinating officer (FCO).
    The FCO went to Johnstown for 12 weeks to insure efficient
    response by the dozen Federal agencies involved in the
    recovery effort. (See p. 28.)

         Federal assistance to the area is expected to total $261
    million--$155 million to individuals and businesses and $106
    million to the State and local governments. (See p. 26.)
    In addition, about $26 million in federally subsidized flood
    insurance was paid to 2,592 policyholders. There were
    7,236 policies with coverage of almost $151 million in the
    disaster area. (See p. 13.)

         Nearly 28,500 victims registered at joint Federal-State
    disaster assistance centers (DACs). The Red Cross reported
    that 413 houses, 135 mobile homes, and 52 apartments
    were destroyed, while 1,533 housing units sustained major
    damage and 5,256 sustained minor damage. Despite the wide-
    spread losses in the Johnstown area, 54 of the 67 victims we
    interviewed planned to remain in areas that were flooded--
    most in the same location as before the flood. (See p. 50.)

    FLOOD PROTECTION PROJECTS

         Johnstown's flooding history dates back to 1808. The
    1889 flood, which resulted in 2,209 deaths, was caused by an
    earthen dam breaking after 6 inches of rain had fallen.
    The 1936 flood from rain and melting snow killed 25 people
    and caused $50 million in damages. After the 1936 flood,
    the U.S. Army Corps of Engineers constructed an 8.7-mile
    channel project through Johnstown. The project was designed
    to control flooding along the major streams at the 1936
    level--approximately a 100-year flood, or a flood that would
    be equaled once every 100 years, on the average, with a
    1-percent chance of occurring in any given year. Because
    of the project, Johnstown became known as a flood-free city.
    For example, the 1977 American Automobile Association Tour
    Book states, "The U.S. Army Engineers completed, in 1943,
    channel rectification which now provides complete flood
    protection for Johnstown." Eighty percent of the victims
    we interviewed told us that, before the flood, they believed
    Johnstown was floodproof. Most cited the Corps of Engineers
    project as the reason for their belief. Many people said
    they did not buy flood insurance because they thought
    Johnstown was floodproof.

                                  2

         The intensity of -the runoff from higher elevations
    that caused the 1977 flood eventually overwhelmed the
    Corps of Engineers project. The chart below compares the
    flow the project was designed to control with the actual
    flow during the 1977 flood.

                Stream            Desiqn flow      Actual flow

                                    (cubic feet per second)

         Little Conemaugh River      34,000           44,500
         Stony Creek                 61,000           65,000
         Conemaugh River             81,500          120,000

    The Corps of Engineers estimates that, without the project,
    there would have been 11 more feet of water in Johnstown.
    In other words, instead of the basement and first-floor
    flooding that occurred in most cases, there would have been
    second- and third-story flooding.

         In addition to the project in Johnstown, there were
    seven other projects in flooded areas. At least three
    channel projects overtopped. The Corps of Engineers believes
    that damages would have been twice as much without the
    projects. In addition to the flood protection projects,
    there are several reservoirs in the area. According to the
    Corps of Engineers, protection to the 500-year level is
    not economically feasible because projects would be needed
    on all the numerous small streams in the area. They declined
    to estimate the cost of such an endeavor.

    SCOPE OF REVIEW

         Our review was intended to provide Senator Eagleton
    with information about the flood insurance program and
    disaster assistance by using the Johnstown area flood of
    1977 as an example. We did not completely evaluate specific
    disaster assistance programs. We discussed alleged problem
    areas in the report so that cognizant officials can consider
    the extent of the problem and whatever corrective action
    is required.

         Work was conducted at the Federal Insurance Admin-
    istration (FIA), the National Flood Insurers Association
    (NFIA), and FDAA. In Johnstown, Pennsylvania, we conducted
    extensive interviews of flood victims, businessmen, local
    officials, volunteer groups, and HUD disaster field office
    (DFO) personnel. Their observations are discussed in chapter
    4. Our interviews of flood victims (see app. IV) and
    businessmen (see app. V) comprised the following groupings:

                                  3

         --50 individuals selected at random from the HUED master
           assistance register for Johnstown (3 had flood
           insurance);

         --17 individuals taken from a random selection of
           flood insurance claimants;

         ~--5 businessmen taken from a random selection of flood
           insurance claimants; and

         --9 other businessmen who received flood damage
           and 1 certified public accounting firm.

    We also contacted numerous Federal agencies and some Stat.e
    officials to determine the extent of their involvement in
    the Johnstown recovery effort and their perceptions of the
    overall Federal response. Appendix VI lists locations
    visited during our review.

         To gain an understanding of the flood insurance claims
    process and the types of losses, we randomly selected 100
    claims for review. Although we cannot project our analysis
    of the 100 claims to the universe of claims at Johnstown,
    the information gave us an indication of the types of claims
    being filed. (See ch. 3.)

         We obtained from FDAA and from other Federal and
    State agencies providing disaster assistance their estimates
    of the total cost of assistance to the Johnstown area and
    an explanation of their programs. (See ch. 4 and apps. VII
    through IX.) Due to the large number of private-sector groups
    providing assistance, the report discusses only those that
    are federally recognized or chartered.

                                  4

                              CHAPTER 2

          BACKGROUNDON FLOOD WARNING AND EMERGENCY OPERATIONS

    NO FLOOD WARNING

         The Johnstown disaster area had no warning that a flood
    would occur. The National Weather Service (NWS) issued a
    flash flood warning at 2:40 a.m. on July 20, but flooding
    had already occurred. Even if a warning had been issued
    earlier, the city of Johnstown has no warning system or
    disaster plan.

         We interviewed 65 people who were in Johnstown
    when the flood struck. Nearly three-fourths received no
    warning and most of those who said they were warned cited
    their own observation of rising water. A few were warned
    by knocks on the door or by relatives or friends. About
    half said they~had no time to escape, although some others
    reported they had from a matter of minutes to an hour or
    more. Many people had no need to escape; they stayed in
    their homes throughout the flood. In general, however,
    people said they had neither time to escape nor time for
    other action, such as protection of property.

    Why there was no warnin

         The ability of NWS to forecast flash flooding in the
    Johnstown area was crippled by an inability to obtain
    rainfall data. The River Forecast Center in Cincinnati, at
    about 2:30 p.m. on July 19, advised NWS in Pittsburgh that
    3.9 inches of rain within a 3-hour period east of Pittsburgh
    would cause flooding. Throughout the day, NWS had forecast
    a 30-percent probability of thundershowers for that afternoon
    and evening. At 10:00 p.m., the forecast estimated a 40-
    percent chance of rain, ending overnight.

         NWS has two rain gauges in Johnstown, but they do not
    provide data to the forecasters in Pittsburgh. Instead,
    they record the data, which is later collected. The Corps
    of Engineers had observers in the area, but these observers
    were unable to contact the Corps of Engineers to report the
    rainfall statistics and there was no procedure for notifying
    NWS. Finally, NWS has an automatic gauging station that can
    be interrogated by telephone, but apparently the telephone
    was out of service.

         In the absence of actual rainfall data, the forecasters
    relied on weather radar, satellite data, and upper air reports.
    No ground observation reports were received from residents or
    officials in the area. An NWS official said it is difficult
    to estimate the intensity of rainfall with such data. Infor-
    mation from the radar, however, could have provided the basis
    for a rainfall estimate by 12:30 a.m. The forecaster assumed
    the storm was diminishing and spreading out over a larger area
    when, in reality, a series of violent storm cells dumped huge
    amounts of rain over the area.

         At 7:30 p.m. NWS, based on weather radar, issued a
    statement about moderate to heavy thundershowers in parts
    of what would become the disaster area (including the county
    where Johnstown is located). The statement said in part
    that "No severe weather has yet been reported--But brief
    heavy rain and minor urban flooding has occurred. Rainfalls
    have been one to one and a half inches." The National
    Environmental Satellite Service analyzed the data available
    on July 19. The analysis indicated that

         II* * * from 8:00 P.M. on July 19 to 4:00 a.m. on
         July 20 the associated thunderstorms cluster
         with many imbedded cells, passed over the
         Johnstown area with continued strong intensity."

         The forecaster on duty at 2:00 a.m. on July 20 was
    notified by a Pittsburgh radio station that they had
    received a report of automobiles floating down the streets
    of Johnstown. About 2:30 a.m. a Johnstown radio station
    called and asked if a warning had been issued. NWS then
    issued a flash flood warning. The 4:00 a.m. forecast did
    not mention flooding in the area.

         An independent meteorologist told us that although
    the prediction of such a storm is impossible, the storm
    cell formations were visible on radar and an earlier warning
    .could have been issued. He'also said that conditions were
    such that it was reasonable to assume that the Johnstown
    area was receiving a large amount of rain.

         In October 1977 the National Oceanic and Atmospheric
    Administration, Department of Commerce, issued a report on
    th'e performance of the NWS and the National Environmental
    Satellite Service related to the Johnstown flood. The report
    makes numerous conclusions and recommendations but the basic

                                  6

    conclusion is that neither the NWS component of the flash
    flood warning system nor that part of it involving local
    communities and civil defense did much good for anyone in the
    Johnstown, Pennsylvania, area.

    The effect of no-wa rning

         In the opinion of most local officials, too little
    warning is worse than no warning in a situation such as the
    Johnstown disaster. In most cases throughout the disaster
    area, people were safe in their homes. The primary exception
    was the separate incident of the Laurel Run Dam failure where
    houses were washed away and occupants killed. Fatalities
    usually occurred when victims were caught outdoors in rushing
    water. Had there been a general warning the night the flood
    occurred, the death toll probably would have been higher
    from people fleeing their homes.

         Some local officials believed, however, that the lack
    of warning was damaging to rescue and initial recovery
    efforts. Time was lost in alerting those officials and
    organizations who needed to organize and respond to the
    disaster. Authorities could have evacuated those in
    hazardous areas more quickly. Communications in the
    disaster area were disrupted to the point of virtually no
    contact with the outside world. (See p. 8.) In the
    opinion of some officials, a more timely flood warning
    could have brought help to the stricken area sooner.

    Local flash flood warning systems

         To supplement NWS, local communities can develop flash
    flood warning systems to detect and respond to adverse
    weather without external forecasts or warnings. NWS can
    assist localities in this effort by tailoring local forecast
    procedures based on rainfall and stream data and, in some
    cases, on automatic local flash flood alarms. By providing
    information on local conditions, the community can assist
    NWS in its responsibility to issue warnings.

         A State civil defense official told us that he would
    like the State to develop a flash flood warning system at
    the county level. He visualized a simple method such as
    volunteers reporting unusual weather conditions. Many
    rivers in Pennsylvania have attended or automatic gauges,
    but smaller streams are not monitored.

                                  7

    DAM FAILURES

         The heavy rains caused seven privately owned dams in
    the disaster area to break. Only one, Laurel Run, resulted
    in fatalities and substantial damage. Laurel Run was con-
    sidered a major dam but, with its 101 million gallon capacity,
    it was the second smallest of 13 major dams in the area.
    Two other darns that broke are considered minor dams. The
    remaining four were small dams built without State permits.
    The failures were due to spillways being inadequate to
    accommodate the severe runoff from the storm. The dams
    overtopped and subsequently breached. Some of the other dams
    overtopped without causing failure.

    Dam ins~e c tions

         The State conducted a routine maintenance inspection
    of the Laurel Run Dam and one of the minor dams in 1976,
    while the other minor dam was inspected in 1972. Maintenance
    inspections are visual and are intended to identify
    obvious structural deficiencies. They do not evaluate the
    integrity of the dam or its ability to release water.
    Subsequent to the disaster, 88 dams in the eight-county area
    were inspected and 7 required immediate attention, while
    20 to 25 others needed maintenance.

         The three main dams that failed had been listed in the
    Corps of Engineers inventory of dams. On a hazard scale
    of three, Laurel Run had been classified as "one," or pre-
    senting a high hazard to life and property in the event of
    failure. The other two were rated "three," or presenting
    little hazard. The ratings do not give an indication of
    structural integrity.

    LACK OF COM4MUNICATIONS

         According to the Defense Civil Preparedness Agency
    (DCPA) and local officials,.the greatest single problem in
    providing emergency assistance to the disaster area was a
    massive failure of communications. For the most part, the
    only link between Johnstown and the outside world were
    amateur and citizen band radios. Telephone service
    was disrupted for up to 5 days (and longer in downtown
    Johnstown where underground cables were damaged).

         Lightning put 41 local radio systems--including police
    and fire--out of service. The Johnstown police and fire
    department transmitting tower was disabled by 25 to 30
    lightning strikes. Due to power failures (generators were
    located in the flooded basement of the police department),

                                  8

    the police auxiliary station could not be used for 36 hours.
    The police had no communications for 12 to 14 hours until
    citizen band radios were used. The fire department was
    without communication for 4 or 5 days except for citizen
    band radios. The State has an emergency communications
    network but nothing could be received from or sent to the
    Johnstown area.

         The State Police began receiving reports of flooding
    shortly after midnight. However, they did not receive requests
    for assistance from local police or officials in the disaster
    area. The lack of communications affected their response
    to the disaster. They believe that portable telephone
    equipment and a single police emergency radio frequency
    (to be activated only in an emergency) would have enabled
    a more efficient response.

         After the disaster, FDAA requested DCPA to provide a
    radio communications coordinator. Communications experts
    worked from I to 3 weeks to establish radio communica-
    tions systems for the disaster area.

         In a letter to DCPA, the Governor of Pennsylvania stated
    that:

         "The July 19-20 flooding in the eight county area***
         has again demonstrated the inability of present county
         and local civil defense communications systems to
         properly function and provide the requisite warning
         and control dictated."

    The Governor requested assistance in developing a communications
    system that would provide a warning and for coordinating
    emergency response and recovery efforts at the State, county,
    and local level in the event of a future disaster.

    Problems encountered in
    establish ing communications

         There was some controversy over who was managing the
    communications operation after the flood. Under the National
    Communications System, the General Services Administration
    (GSA) provided a Federal disaster communications coordinator
    to support the FCO. DCPA provided a radio communications
    coordinator to assist the Federal disaster communications
    coordinator. The DCPA representative and military personnel
    received orders from both the Federal disaster communications
    coordinator and HUD. DCPA documents suggest that HUD
    operated independently to establish communications.

                                  9

         Other problems in establishing a Federal communications
    system as indicated in DCPA documents include:

         --much equipment initially received was damaged or
           in poor repair.

         --BUD equipment was not compatible with military
           equipment.

         --FDAA and HUD did not specify communications require-
           ments to enable the communications experts to know
           what equipment was required.

         --Some military personnel were improperly equipped
           and not skilled for the required tasks.

         --Some military personnel were reporting to HUD
           rather than the communications coordinator.

         The telephone company in Johnstown told us they were
    besieged with requests for telephone service from the
    numerous government agencies converging on the disaster area.
    Duplicate requests were received from some agencies. Further-
    more, the telephone company had no way of knowing which
    requests were the most urgent.

    CIVIL DEFENSE OPERATIONS

         Each of the eight counties stricken by the flood has
    a civil disaster preparedness plan. For example, Cambria
    County (where Johnstown is located) adopted its plan, a
    joint effort of the county, State, and DCPA, in 1972. The
    plan has a hazard analysis, which lists floods as the number
    one potential danger in the county. It further identifies
    specific locations where flooding can affect lives and
    property, including the confluence of the Little Conemaugh
    River and Stony Creek at Johnstown. The county has a fully
    equipped emergency operating-center (EOC) in Ebensburg,
    Pennsylvania, about 10 miles north of Johnstown. The EOC
    has radio communications with civil defense officials and
    capability to receive weather warnings. According to DCPA,
    less than half the county can be warned by sirens; Johnstown
    does not have a siren system. DCPA regularly evaluates county
    civil defense preparedness. Cambria County was evaluated
    4 months before the disaster.

                                 10

         DCPA conducted a special post-flood evaluation of the
    eight-county disaster area's civil defense response. The
    evaluation showed that:

         --Major flooding occurred in each of the eight
           counties before the weather warning was received
           from NWS through the Pennsylvania civil defense
           teletype system.

         --In almost all cases it was too late to warn the
           public.

         --Seven of the eight counties activated their EOCs.

         --Telephone land lines were not a reliable means of
           communications.

         --None of the counties had adequate communications
           equipment.

         --The Emergency Broadcast System was not used in
          most cases (most local broadcast stations were
           off the air, had there been an attempt to use
           the system).

         Also, DCPA officials told us that had trained staff been
    needed to operate disaster assistance centers or coordinate
    the emergency response or recovery effort, they would have
    provided personnel upon FDAA request.

    INITIAL RESCUE OPERATION4S

         The commander of the State Police Task Force Operation for
    the disaster stated that, in his opinion, some lives were lost
    because rescue-equipped helicopters were not available
    immediately. The State Police requested National Guard
    helicopters with rescue capability, but over 3 hours elapsed
    in obtaining authorization, calling in crews, and flying to
    the area. The helicopters rescued about 200 victims. To
    provide immediate rescue response in the future, the State
    Police hope to acquire some surplus military helicopters
    with rescue capability. See pages 69-70 for more details
    on State Police operations.

    CONTROL OF LOOTING

         There was some looting in downtown Johnstown on July 20,
    and the mayor ordered city police to shoot to kill. Local
    police were somewhat hampered by the loss of 9 out of 21
    vehicles and extremely limited communications. When the

                                 11

    State Police heard reports of looting they initially dis-
    patched 18 men to the city. The State Police do not have a
    shoot-to-kill policy in the case of looting. Several looters
    were arrested. By 10:00 p.m. the State Police had sealed
    off the city from looters and the curious by establishing
    posts at all roads into the area (30 posts--each manned by
    two or three State Policemen). Looting never became a serious
    problem in Johnstown and no looters were shot.

    CONTROL OF EXPLOSIONS AND FIRES

         Johnstown did not have the problem of widespread natural
    gas explosions and fires that have resulted from similar
    disasters. There were a number of fires caused by lightning.
    Because of flood waters, firemen could not reach some fires.
    After the immediate emergency, the fire department concentrated
    on checking for natural gas leaks. The fire department lost
    several vehicles in the flood.

    OBSERVATIONS

         --A local flash flood warning system could have alerted
           authorities to the Johnstown disaster much sooner. NWS
           partially relies on local observations in issuing
           weather warnings and assists localities in developing
           flash flood warning systems. By providing information
           on local conditions, the community can assist NWS
           in its responsibility to issue warnings.

         --An improved communications system could have provided
           better and quicker emergency assistance to the disaster
           area. It took up to 3 weeks to establish
           communications; equipment was in poor condition, some
           of it was incompatible, and there wa's confusion
           over who was in cha~rge of the communications operation.
           DCPA, even though much of their expertise is in
           communications, had little involvement in Johnstown.
           There is a need for DC-PA to assist State and local
           governments in improving their emergency communications
           capability.

                                 12

                               CHAPTER 3

                  THE NATIONAL FLOOD INSURANCE PROGRAM

         Of the 136 communities affected by the Johnstown area
    flood, 116 participated in the flood insurance program.
    Therefore, individuals and businesses in the participating
    communities could have purchased insurance on their structures
    and contents before the flood. There were 7,236 policies with
    coverage of almost $151 million in the participating
    communities. Nearly $26 million in flood insurance claimrs
    were paid to 2,592 policyholders in the disaster area.
    Within the city of Johnstown, there were 1,518 policies
    with total coverage of $36 million. Claims payments to
    1,210 policyholders in the city amounted to over $17 million.

    BACKGROUND

         The National Flood Insurance Program, established under
    the National Flood Insurance Act of 1968 (Pub. L. 90-448),
    is administered by FIA, an agency within HUD. Until recently,
    the program had been a cooperative effort between FIA and
    a pool of over 120 private insurance companies comprising the
    NFIA. Under a contract between HUD and NFIA, member companies
    sold and serviced flood insurance policies.. The companies
    provided risk capital and shared in NFIA's profits or losses.
    Effective January 1, 1978, a new agent took responsibility
    for marketing, servicing, and claims settlement.

         The intent of the program is to make flood insurance
    available to property owners in the 100-year floodplain--the
    standard adopted by FIA for the identification of special
    flood hazard areas and as the base flood elevation for the
    adoption of land use controls. Flood insurance is available,
    however, to anyone in a participating community regardless
    of where the property is located.

         There are two phases to a community's participation
    in the program. The first phase is the emergency program
    which communities can enter once they have submitted an
    application and have adopted preliminary land use measures.
    Once FIA has identified a community as having a flood
    hazard and has issued a flood hazard boundary map, they
    have I year to qualify for the program. Once qualified,
    flood insurance at subsidized rates is available to property
    owners in the community.

         The second phase is the regular program which communities
    can join after ETA conducts its detailed flood insurance study
    and issues its rate map. The rate map delineates flood-hazard

                                 13

    areas and flood elevations. Based on the degree of risk,
    actuarial rates are charged for coverage beyond that
    provided under the emergency program. The community has
    6 months to adopt and enforce floodplain management
    ordinances in accordance with program standards.

         As of January 31, 1978, 19,824 communities nationwide
    had been identified as having a flood hazard--14,155 were
    in the emergency program and 1,643 were in the regular
    program. Also there were 1.2 million policies with $37.1
    billion in coverage. The remaining communities were either
    not participating in the program or were suspended.

    Effect of nonparticip2at ion

         If a community does not join the emergency program
    within I year of notification of a flood hazard, FIA may
    invoke sanctions to prohibit Federal assistance for con-
    struction or acquisition of buildings in flood-hazard areas.
    if a community joins the emergency program but does not
    join the regular program within 6 months of the issuance
    of the rate map, FIA can suspend the community from the
    program. Flood insurance cannot be sold or renewed in
    suspended communities.

         The Flood Disaster Protection Act of 1973 (Pub. L.
    93-234) made participation in the flood insurance program
    a mandatory condition for-~Federal financial assistance in
    communities identified as having a flood hazard. For
    those communities that had chosen not to participate by
    July 1, 1975, or within 1 year after notification of
    a flood hazard, whichever came later, the act prohibited

         --federally supervised, regulated, insured or
           approved lending institutions from making,
           increasing, extending, or renewing any loan
           secured by real property within the floodplain and

         --Federal funding for acquisition or construction in
           the floodplain.

    A 1977 amendment to the 1973 act, however, removed the
    prohibition against such loans mentioned above. Instead,

                                 14

    under that amendment, the lender is required to notify
    borrowers as to whether disaster assistance would be
    available for the property if flooded. The 1973 act,
    as amended, prohibits, in the event of a flood, Federal
    disaster assistance under the Disaster Relief Act of 1974,
    for any type of flood-related acquisition or construction
    of property in an identified flood hazard area unless the
    community in which the property is located is participating
    in the flood insurance program and the property is covered
    by flood insurance.

    Flood insurance coverage and rates

         Property owners in a participating community can buy
    flood insurance on structures and contents from any insurance
    agent licensed in the State where the property is located.
    Flood insurance covers direct losses by general flooding
    (but not from seepage or sewer backups unless directly
    caused by a general condition of flooding). Coverage at
    full replacement cost is provided for single family dwell-
    ings insured at 80 percent or more of the structure's
    replacement cost or to the maximum amount of insurance
    available under the program, whichever is less. In all
    other cases, loss adjustments are based on actual cash
    value--replacement cost less depreciation--of the property
    at the time of the loss. A deductible of $200 is applied
    separately to structure and contents. Losses by fire, even
    if flood-induced, are not covered by flood insurance. In
    the case of flood and fire, flood insurance covers damages
    below the water line and fire insurance covers damages
    above the water line.

         The following table shows the types and limits of flood
    insurance coverage and rates under both the emergency and
    the regular programs (except in Alaska, Hawaii, the
    Virgin Islands, and Guam).

                                 15

                         Emergency L:ec'q[m   Regular program
                           (first layetr      (second layer
                            of coverlaje]      of coverage)       . Total
                                 Subid Lzed           ctuarial  limits of
       Type of covezf.F9    Limit   rate       Limit      rate    coverage
                                 (Pel_ 1(pe 0  lO D---per -10O
                                    of                   of
                                 coverage)            coverage)

    Stcuctlre--Single    $ 35,000    $,25    $150,000 Based on  $185,000
      family dwelling                                   degree of
                                                    risk
    Structure--Other      100,000     .25      150,000     "       250,000
      residential

    Contents--Residential   10,000    .35       50,000     "        60,000

    Structure --NOn-      100,000     .40      100,000     "       200,000
      residential
    Contents--Non-        100,000     .75      100,000     "       200,000
      residential
    Structure--Small      100,000     .40      150,000     "       .: ,,000
      business
    ;ontents--Small       100,000     .75      200,000    "         . .,,BO
      business

    Irnementation of the_ rggram

         FIA's responsibilities in implementing the flood insurance
    program include

         --identifying communities having flood-hazard areas;

         --notifying identified communities and providing them
           with flood hazard boundary maps so they can enter the
           emergency program and adopt the minimal floodplain
           management regulations necessary to retain eligibility;

         --making and publishing flood insurance studies and
           rate maps so that communities can adopt the more
           stringent floodplain management regulations necessary
           to become eligible for the regular program; and

                                    16

         --requiring communities to adopt and enforce land use
           and control measures based on the studies and rate
          maps furnished by FIA to guide land development in
           flood-hazard areas.

         To carry out the flood insurance program and fulfill the
    Federal Government's financial responsibilities, HUD was
    authorized to establish a National Flood Insurance Fund in
    the U.S. Treasury to

         --subsidize the private industry pool through
           premium equalization payments and

         --provide a Federal program of excess~ loss
           reinsurance to assist the industry in the
           event of catastrophic losses.

         As noted earlier, NFIA was responsible for writing and
    processing flood insurance policies and settling claims.
    Within each State, insurance agents dealt with an NFIA-
    designated servicing company that provided information
    and application forms and processed policies and claims.

         When a loss occurred, the policyholder reported it to
    the agent from whom he bought the policy. The agent
    reported the loss to the servicing company, which then
    assigned it to an NFIA-approved adjuster. The servicing
    company had authority to approve claims under $5,000.
    Claims over $5,000 were approved by NFIA. NFIA reviewed,
    after the fact, all claims approved by the servicing company.
    NFIA also maintained master policy and claims records and
    billed the policyholders for renewals.

    THE FLOOD INSURANCE PROGRAM
    IN THE JOHNSTOWN DISASTER AREA

         As previously mentioned, 136 communities within eight
    counties were affected by the Johnstown area flood of
    1977. The following chart shows the status of program partici-
    pation among these communities at the time of the disaster.

                                  Number of
              Program status      communities        Percent

         Emergency program       ill                   81
         Regular program                5               4
         Not participating             16              12
         Withdrew from program      I      I
         Hazard not identified          32

              Total                   136             100

                                 17

         In the 116 participating communities, there were 7,236
    policies in effect with coverage of almost $151 million at
    the time of the flood. Nearly $26 million in flood insurance
    claims were paid to 2,592 policyholders in the disaster area.

         We contacted 14 of the 16 communities that were not
    participating in the flood insurance 'program at the time of
    the flood. F'our of those contacted had joined the program
    since the flood, while three others were in the process of
    meeting requirements. The others still were not partici-
    pating for the following reasons:

         --Opposed to zoning restrictions.

         --Never flooded before or only prone to minor flooding.

         --No development in the hazard area.

         --Residents not interested.

         An FIA official told us there is currently no
    followup to encourage participation in the program.
    Communities that failed to join the program within the
    required year after identification as a flood-prone
    community were, in the past, sent form letters. This
    practice, according to the FIA official, was discontinued
    as not being cost effective. Another PTA official told us
    that regional offices make visits to nonparticipating
    communities to review the severity of the flood hazard
    and to encourage participation in the programn.

         FIA officials told us that as of January 1977 there
    were 3,385 nonparticipating communities nationwide and that
    of that number 2,169 (64 percent) contained'less than 1,000
    persons and less than I square mile of special flood hazard
    area. The officials said they do not follow up on such
    communities because they believe it is not cost effective.
    They also said that floodplain management ordinances
    are too costly for smaller communities, the areas are
    mostly rural, and development is not likely. The
    officials told us that FIA is presently studying why
    smaller communities are not participating in the flood
    insurance program.

         FIA identified a flood-hazard population of 29,934 or
    about 7 percent of the 436,126 total disaster area population.
    It also identified over 13,000 structures in flood-hazard
    areas. FIA, however, had no information indicating how many
    of the 7,236 flood insurance policies were for properties
    within the flood-hazard areas. It seems to us that
    FIA, as manager of the program, would want to know
    which structures in flood-hazard areas are not insured
    so that it could direct its efforts to the owners
    of those structures to obtain flood insurance.

    The flood insurance program
    in the city of Johnstown

         Flood insurance was first available in Johnstown in
    August 1972. Until boundary maps were available to show
    flood-prone areas, the entire city was designated as a
    flood-hazard area. Under this designation, owners of
    existing structures were able to purchase flood insurance.
    Owners of new construction or sustantially improved
    structures begun after the effective date were ineligible
    for coverage until the flood-hazard areas were identified.
    The flood-hazard boundary map for Johnstown was not
    published until January 1974. Johnstown entered the
    regular flood insurance program in April 1977 when the
    flood insurance rate map, based on a Corps of Engineers
    study, was issued. According to FIA, the city adopted a
    comprehensive flood-plain management ordinance in June 1977,
    in compliance with program requirements.

         Most of Johnstown is outside the 100-year floodplain.
    Although the city is in a valley and at the confluence of two
    rivers, the 100-year floodplain is for the most part con-
    fined to the river channels because of the Corps of Engineers
    flood protection project mentioned in chapter 1. There are
    smaller, unprotected streams in the city which account for
    most of the 100-year floodplain.

         An NFIA official stated that in most communities the
    100-year floodplain is extremely narrow and that most
    flood losses occur outside the designated flood-hazard
    area where the floodplain management ordinances do not
    apply. Therefore, he concluded that such ordinances adopted
    in accordance with the flood insurance program are
    practically meaningless. We asked FIA to comment on this

                                 19

    and they said that, based on a 1976 study of flood
    damage information from 1959 to 1974, approximately
    60 percent of the total damage reported was caused by
    floods greater than 100-year floods. FIA pointed
    out, however, that most of the damage occurred in
    the 100-year floodplain.

         There were only 60 policies in Johnstown as of
    January 1977. Because of a severe winter and the potential
    for spring floods, the Governor conducted a campaign to
    warn the residents of Pennsylvania of the flood danger and
    to publicize the availability of flood insurance. During a
    1-month period, almost 1,500 policies were purchased in
    Johnstown. Although spring flooding did not take place, the
    threat caused many people to obtain a flood insurance policy
    so that when the flood occurred in July there was $36 million
    in coverage in Johnstown. The chart below shows the number of
    policies and amounts of coverage in Johnstown before the
    flood.

                 Policies      Percent      Coverage       Percent

    Dwellings      1,048          69       $16,703,000        46
    Business         470          31        19,267,000        54

         Total    1,518          100       $35,970,000       100

    The 1,210 insurance payments in the city of Johnstown totaled
    $17,338,694.  NFIA reports do not indicate the amount of
    payments to individuals versus businesses or for structures
    versus contents.

    Enforcement of Johnstown's
    floodplain management
    regulations

         Communities must implement and enforce floodplain
    management regulations in the 100-year floodplain as a
    condition of participating in the flood insurance program.
    New construction and substantial improvements to existing
    structures must either be elevated or floodproofed to
    protect against a 100-year flood. In the case of
    flood-damaged structures, the substantial improvement
    rule applies to the cost of improvements equaling
    or exceeding 50 percent of the market value of the structure
    before the flood (not including costs necessary to
    meet health, sanitation, and safety code specifications).
    To comply with this rule, a substantially damaged
    structure cannot be repaired or rebuilt in the flood-
    hazard area unless it meets elevation or floodproofing
    requirements.

                                 20

         In order to enforce floodplain management regulations,
    responsible city officials should know the extent
    of the 100-year floodplain. Yet, there was disagreement
    on its size in Johnstown. A city official told us that,
    while an estimated 64 percent of the city was affected
    by the flood, there was no precise figure on the percentage
    of Johnstown within the 100-year floodplain. One city
    representative involved with code administration matters
    estimated that less than 20 percent of the city's land
    area is in this floodplain. A HUD contractor who prepares
    flood-hazard boundary maps for FIA estimated that 8
    percent of the city's land area was within this flood-
    plain. As a result, there was no data on how much of
    Johnstown's $117 million in damages occurred within the
    100-year floodplain and, therefore, we were unable to obtain
    information on flood damaged structures for which the
    50-percent rule would apply.

         Johnstown does not seem to be fully enforcing its
    floodplain management regulations. As a result one
    house was constructed in the flood-hazard area. The
    city code administrator told us that, from the time
    Johnstown joined the emergency program until the
    flood, there had been no construction in the floodplain
    that would have required compliance with floodplain
    management regulations. He said that the area has
    been fully developed for years and there was no
    open space for construction. Before June 1977 the
    city had no floodplain management ordinance. According
    to the code administrator, as of December 1977 only
    one house had been rebuilt in the 100-year floodplain
    since the flood. He said the builder was required to
    meet the various floodplain requirements established
    in the recently adopted ordinance.

         We inquired about another house that appeared to us
    to be in the floodplain. Initially the code administrator
    stated that the house was outside the floodplain and the city
    could not enforce floodplain management requirements.
    However, since the house was next to a stream in an area
    which suffered considerable damage during the flood, the
    administrator agreed to review the applicability of
    floodplain ordinances. Subsequently, upon review, city
    personnel determined that the house was in the 100-year
    floodplain, but the city did not know what action could
    be taken since construction had been completed for several
    months.

                                 21

    Johnstown insurance claims

         We selected a random sample of 100 claims from Johnstown.
    Our review showed that for the overall sample, 34.5 percent
    of the losses were on structures and 65.5 percent were on
    contents. The following is the percentage of losses between
    dwellings and commercial properties.

                              Dwellings     Commercial

                                     (percent)

              Structure          52.5             26.6
              Contents           47.5             73.4

         The sample accounted for 78 claims for structure losses
    and 83 claims for contents losses.  Most of these claims--54
    structure and 45 contents--were covered entirely by the
    policyholder's insurance. The remaining other claims were in
    excess of the policy limits and thus were restricted to the
    policy amount. This is shown in the following table.

                 Claim covered by Claim restricted
                 _policy amount   to 1policvamount       Total 1
                 Number Percent   Number Percent   Number Percent

    Dwelling:
      Structure    46      81         11     19         57     100
      Contents     37      66         19     34         56     100

    Commercial:
       Structure    8      38         13     62         21     100
       Contents      8     30         19     70         27     100

         We interviewed 20 individuals and 5 businessmen in
    Johnstown who had filed flood insurance claims. The
    policyholders were pleased with the quality of claim
    service they received. None-complained about the
    timeliness of insurance payments. Many individuals
    said they were thankful for the coverage, and they
    preferred to control repairs to their property rather
    than having to rely on the HUD minimal repair program.

    OTHER MATTERS

    FIA monitoring of community compliance
    with floodplain management regulations

         FIA is not doing all that it could to monitor community
    compliance with floodplain management regulations. An FIA
    official told us that there has only been limited followup to
    determine if communities are enforcing floodplain management

                                 22

    ordinances. In a 1976 report (RED-76-94, Apr. 22, 1976)
    on the program, we concluded that FIA had not established
    an effective system for monitoring community efforts
    to adopt and enforce floodplain management regulations.
    FIA began some monitoring of compliance in 1976 through
    visits to participating communities. Less than 80
    communities have been visited, and none was in the
    Johnstown disaster area. FIA hopes to visit 60 commu-
    nities per region during fiscal year 1978. The official
    told us that the emphasis has been on the mapping of commu-
    nities rather than enforcement of program requirements.

         An FIA official informed us that FIA is capable of
    generating data on insured properties which fall under the
    substantial improvement criteria. However, at the time of
    our review, FIA had not determined if any structures in the
    Johnstown area fell under this rule.

         Participating communities are required to submit an
    annual report to FIA. FIA uses annual reports to monitor
    unusual activity in flood-hazard areas. An FIA official
    stated that report forms were mailed to 829 communities
    in January 1977, but 199 had not responded as of December 31,
    1977. FIA decided not to follow up on the nonresponding
    communities. We were told that in the past FIA required
    annual reports only from communities participating in the
    regular program. An FIA official stated that beginning
    in 1978 a computerized system will permit them to review
    annual reports from all communities in both the emergency
    and regular programs.

    Government purchase
    of flood-pronle properties

         NFIA expressed concern that Section 1362 of the
    National Flood Insurance Act of 1968 as amended, which
    allows the Government to purchase insured properties
    in flood risk areas which had incurred repeated flood
    damage, or had suffered flood damage beyond repair, had
    not been funded. He explained that there are numerous
    insured properties throughout the country which have
    been flooded year after year and insurance proceeds
    are paid each time. The NFIA official believed that
    in many cases the properties could have been purchased
    by the Government for less than the amount of the
    insurance proceeds. An FIA official told us that
    FIA has a research project underway to study the
    feasibility of purchasing flooded properties under

                                 23

    Section 1362. The project is scheduled for completion
    in early 1979. In the interim, FIA is taking steps
    to plan for limited implementation of Section 1362.

    OBSERVATIONS

         Information developed during our review of the flood
    insurance program and its operations in Johnstown indicates
    that

        --the establishment of the 100-year floodplain
          may be inadequate as the criteria for floodplain
          management ordinances;

        --FIA did not adequately monitor community
           enforcement of floodplain management
           regulations;

        --FIA did not adequately encourage communities
           to participate in the flood insurance program; and

        --FIA did not actively encourage property owners
           to purchase flood insurance, particularly
           those in the floodplain.

                                24

    ordinances. In a 1976 report (RED-76-94, Apr. 22, 1976)
    on the program, we concluded that FIA had not established
    an effective system for monitoring community efforts
    to adopt and enforce floodplain management regulations.
    FIA began some monitoring of compliance in 1976 through
    visits to participating communities. Less than 80
    communities have been visited, and none was in the
    Johnstown disaster area. FIA hopes to visit 60 commu-
    nities per region during fiscal year 1978. The official
    told us that the emphasis has been on the mapping of commu-
    nities rather than enforcement of program requirements.

         An FIA official informed us that FIA is capable of
    generating data on insured properties which fall under the
    substantial improvement criteria. However, at the time of
    our review, FIA had not determined if any structures in the
    Johnstown area fell under this rule.

         Participating communities are required to submit an
    annual report to FIA., FIA uses annual reports to monitor
    unusual activity in flood-hazard areas. An FIA official
    stated that report forms were mailed to 829 communities
    in January 1977, but 199 had not responded as of December 31,
    1977. FIA decided not to follow up on the nonresponding
    communities. We were told that in the past FIA required
    annual reports only from communities participating in the
    regular program. An FIA official stated that beginning
    in 1978 a computerized system will permit them to review
    annual reports from all communities in both the emergency
    and regular programs.

    Government purchase
    of flood-prone _properties

         NFIA expressed concern that Section 1362 of the
    National Flood Insurance Act of 1968 as amended, which
    allows the Government to purchase insured properties
    in flood risk areas which had incurred repeated flood
    damage, or had suffered flood damage beyond repair, had
    not been funded. He explained that there are numerous
    insured properties throughout the country which have
    been flooded year after year and insurance proceeds
    are paid each time. The NFILA official believed that
    in many cases the properties could have been purchased
    by the Government for less than the amount of the
    insurance proceeds. An FIA official told us that
    FIA has a research project underway to study the
    feasibility of purchasing flooded properties under

                                 23

    Section 1362. The project is scheduled for completion
    in early 1979. In the interim, FIA is taking steps
    to plan for limited implementation of Section 1362.

    OBSERVATIONS

         Information developed during our review of the flood
    insurance program and its operations in Johnstown indicates
    that

         --the establishment of the 100-year floodplain
          may be inadequate as the criteria for floodplain
          management ordinances;

        --FIA did not adequately monitor community
           enforcement of floodplain management
           regulations;

        --FIA did not adequately encourage communities
           to participate in the flood insurance program; and

         --FIA did not actively encourage property owners
           to purchase flood insurance, particularly
           those in the floodplain.

                                 24

                              CHAPTER 4

                         THE RECOVERY EFFORT

         This chapter discusses the cost of disaster assistance,
    the effect of flood insurance, and the organization of the
    recovery effort. It also discusses allegations and obser-
    vations made during our interviews concerning assistance
    for individuals, businesses, and the city of Johnstown.

         Federal disaster assistance to the Johnstown area is
    expected to total at least $261 million. We believe that
    without flood insurance the amount of Federal disaster
    assistance would have been greater. We found, however,
    that the lack of flood insurance coverage at the time of
    the flood did not effect an individual's eligibility for
    Federal disaster assistance.

         Our interviews showed that, in general, victims were
    pleased with the Federal recovery effort, but some problems
    were mentioned by victims, volunteer groups, government
    officials and others. Most criticism was directed at the
    HUD minimal repair program, which is intended to make flood-
    damaged homes habitable.

    THE COST OF DISASTER ASSISTANCE

         Of the estimated $261 million in disaster assistance to
    the Johnstown area, $155 million (59 percent) is for
    assistance to individuals and businesses--$71 million in
    free assistance, $83 million in loans, and $1 million in
    tax refunds--while $106 million (41 percent) is for
    assistance to the State and local governments and nonprofit
    institutions in the form of grants or direct assistance.
    The assistance was provided by 12 agencies through 27
    programs. Seven agencies alone were responsible for 11
    disaster assistance programs for individuals and businesses,
    while numerous volunteer organizations assisted individuals
    and emergency workers. (See app. VII.) Six agencies through
    16 programs assisted the State and local governments and
    nonprofit institutions under the general category of "public
    assistance." (See app. VIII.) The State provided much
    emergency assistance of its own (see app. IX), and three
    federally chartered or recognized private organizations
    (Red Cross, Salvation Army, and Mennonite Disaster
    Service) also provided assistance to individuals. The table
    below shows the cost of Federal assistance by program.

                                 2 5

                        Assistance To The Johnstown Disaster Area

                                                Programs to assist
          Programs to assist                     State and local
           individuals and                       governments and
             businesses              Cost          institutions                Cost

    Federal Disaster Assistance                Federal Disaster
      Administration (note a)                    Assistance
        Individual and Family                    Administration
          Grant                   $ 5,212,000      Debris clearance      $  8,900,000
        Temporary housing          46,128,000      Protective measures      3,500,000
        Disaster unemployment                      Road systems            17,000,000
          assistance               17,424,000      Water control
        Crisis counseling             220,000        facilities             5,400,000
                                                   Public buildings         3,600,000
    Agricultural Stabilization                     Public utilities        14,000,000
      and Conservation Service                     Facilities under
        Emergency conservation                       construction             100,000
          measures                     55,756      Private nonprofit        6,500,000
                                                   Other                    1,000,000
    Food and Nutrition Service
        Emergency food stamps       2,495,595  Federal Highway
                                                 Administration
    Veterans Administration                         Federal-aid roads
        Adjustments to Federal                       and highways          31,059,389
          loans                             0
            Total--free                        Soil Conservation
              assistance         $71,535,351    Service
                                                   Emergency watershed
    Internal Revenue Service                         protection             9,767,442
        Total--casualty
          loss refunds            $ 1,142,000  Corps of Engineers
                                                   Debris removal--
    Small Business Administration                     Corps projects           909,490
        Loans to individuals    $ 16,170,000       Supplies and services       27,425
        Loans to businesses        66,500,000      Rehabilitation of
                                                     Corps projects         1,260,000
    Farmers Home Administration
        Emergency loans               126,960  Department of Labor
                                                   Comprehensive
            Total--loans         $ 82,796,960        Employment and
                                                     Training Act
    Total                        $155,474,311         disaster
                                                     assistance            1,422,000

                                               Office of Education
                                                   Assistance to
                                                     school districts      1,099,232

                                               Total                     $105,544,978
    Total of all assistance: $261,019,289

    a/ FDAA did not manage the programs.
        (See app. VII.)

                                          26

         Although FDAA lists 83 Federal programs, about 50 were
    available to the Johnstown area for disaster recovery. The
    other programs were preventative or preparative in nature
    or did not apply to the conditions in the area (e.g., earth-
    quake hazard reduction and beach erosion control programs).
    Of those programs available but not used, they either were
    not needed, were met by State resources, or can be applied
    for at a later date.

    EFFECT OF FLOOD INSURANCE
    ON DISASTER ASSISTANCE

         We found no flood victims in the Johnstown area
    who were denied Federal disaster assistance because they
    were not covered by flood insurance at the time of
    the flood. Victims who lived in flood-hazard areas were
    required to purchase flood insurance as a condition of
    receiving loans or grants but not for other types of direct
    assistance. An NFIA official indicated that even if flood
    insurance had been required before the disaster struck, the
    flood-hazard area in Johnstown is so narrow that relatively
    few people would have been affected by such a requirement.
    (See p. 19.)

         Within our interview sample, 47 flood victims did not
    have insurance before the disaster. Seventeen victims said
    they were required to purchase it as a condition of receiving
    Federal financial assistance (12 for grants and 5 for loans).

         A State public assistance official told us that 1,327
    out of 3,000 grant recipients, or 44 percent, were required
    to purchase flood insurance. A Small Business Administration
    (SBA) official advised us that, based on a sample of 250
    cases selected at random, 22 percent of the individuals
    and 20 percent of the businesses receiving loans were required
    to purchase flood insurance as a condition of receiving the
    loan. The official told us that the reason for such a
    relatively low percentage is that few applicants were located
    in the 100-year floodplain.

         The National Flood Insurance Program had a significant
    effect on disaster assistance provided in Johnstown. If
    flood insurance coverage had been more extensive, the effect
    on reducing disaster assistance expenditures would have been
    greater. We believe that the nearly $26 million in flood
    insurance proceeds paid to 2,592 policyholders resulted
    in fewer loans and grants to disaster victims. In addition,
    HUD minimal repair program expenditures were reduced because
    flood victims receiving insurance proceeds are required to
    reimburse HUD for repairs made under the program or did
    not use the program.

                                 27

    ORGANIZATION OF THE RECOVERY EFFORT

        On the day the President declared Pennsylvania a major
    disaster area, an FCO was sent to Johnstown to establish the
    office of the Federal coordinator (OFC). The Governor of
    Pennsylvania met with hi'm to outline the extent of damage
    and the status of the emergency response.

         The FCO was made independent from FDAA in that he held
    no other duties and had authority to establish, organize,
    staff, and fund the coordinating office. This independence
    was a deviation from previous FDAA practice. In other
    disasters, FDAA named as FCO their regional director for that
    particular area. In such cases, the position of FCO was a
    collateral duty with the management of the FDAA region and
    its programs.

         In Johnstown the FCO, while not having decisionmaking
    authority over agencies' programs, was responsible for
    coordinating the entire recovery effort. His office was the
    focal point for all information on the recovery effort.
    Daily meetings open to the press were held with agency
    representatives to discuss the progress and problems of
    the recovery. At the height of the recovery effort, the
    OFC had a staff of 58 (including 12 volunteers to provide
    hotline telephone assistance) for such functions as DAC
    managers, public information office staff, administrative
    and clerical personnel, and various liaison personnel.

         The first of eight DACs opened on July 23. The DACs
    were one-stop centers where victims could apply to agency
    representatives for various types of assistance. DACs were
    staffed by Federal and State agencies. OFC personnel
    registered flood victims at the centers. I'n addition to
    the fixed DAC sites, mobile units were sent throughout
    the disaster area to 26 locations and in many cases made
    one or two repeat visits. ACTION agency personnel conducted
    an outreach service to inform victims of the assistance
    available. Each of six DACs registered from 1,000 to 10,000
    of the 28,500 victims who applied for assistance.

    ASSISTANCE TO INDIVIDUALS

         Most flood victims we interviewed said they were pleased
    with the Federal recovery effort in general. We interviewed
    67 individuals and 15 business representatives. (See apps.
    IV and V). Eighty-eight percent of the individuals and

                                 28

    almost 80 percent of the business representatives rated the
    Federal response as excellent or good. However, many cited
    specific problems in various programs or raised other issues
    that deserve attention. The program which received the
    most complaints during our interviews was HU.D's minimal
    repair program. (See p. 51.)

         State and local government officials and representatives
    of volunteer organizations generally were complimentary
    of the Federal response, but some of them also mentioned
    weaknesses in programs or other disaster-related problems.
    Observations made during our interviews are discussed
    below.

    Problems with the HUD
    minirepair program

         HUD's minimal repair program, known as the minirepair
    program, was the primary exception to disaster victims' highly
    favorable opinion of the Federal recovery effort. Forty-five
    percent of those we interviewed who received minirepairs
    criticized the program. The complaints were categorized
    as follows:

         --Poor workmanship.

         --Unqualified inspectors.

         --Too many out-of-town contractors.

         --Difficulty in getting faulty repairs corrected.

         Examples of victims' comments on the minirepair program
    follow.

         --The work was of poor quality. The cellar door
           was installed with a wide crack around it. The
           kitchen floor was replaced, except under movable
           cabinets. Gas piping was used for the water
           line to the hot water tank. The HUD inspector
           approved the work. They should take the time
           to do the work right the first time.

         --The carpentry work was pathetic. The contractor
           put the cellar door on the rotten frame and
           left gaps.

         --The gas company tagged the repaired furnace as
           unsafe. I cannot contact HUD to get it repaired.

                                 29

        --The furnace was improperly installed and leaks
          required seven repair calls. HUJD should insure
           that slipshod repairs do not occur.

        --The furnace was repaired but does not heat the
          radiators. The water heater flue was not sealed.
          The inspector said the contractor should return
          but he never came.

        --After they replaced the water heater there was
           no water in the kitchen. Mud was in the line.
           They damaged washers in the kitchen and the
           faucets now leak. Local people should be used--
           they would be more conscientious and do better
          work than out-of-town contractors.

         A Chamber of Commerce official stated that he was aware
    that some contractors engaged in minirepairs were doing shoddy
    work. In his opinion many of the repairs will fail in time.
    He said that some homeowners at their own expense hired local
    repairmen to redo the work done by minirepair contractors. He
    also told us that many excellent local repairmen were unable
    to get HUD contracts for minirepair jobs, but that some slip-
    shod contractors from out of town did get HUD contracts.

         Secton 310 of the Disaster Relief Act of 1974 (Pub.
    L. 93-288) states, among other things, that, for Federally
    funded reconstruction work, preference shall be given, to
    the extent feasible and practicable, to those organizations,
    firms, and individuals residing or doing business primarily
    in the disaster area. We found that, of the 79 minirepair
    contractors, 27 (34 percent) were from the disaster area,
    22 (28 percent) were from elsewhere in Pennsylvania, and
    30 (38 percent) were from 12 other States.,

         One volunteer organization that helped victims who had
    problems in receiving assistance made the following
    allegations about the program.

         --Repairs were of poor quality; most could be described
           as crude.

         --Victims often approved the work before they realized
           the repairs were faulty.

         --The quality of inspectors was very poor.

         --HUJD did not adequately check on the qualifications
           of the contractors performing repairs.

                                 3 0

         --HUD did not always have shoddy repairs redone.

         --Contractors were paid from 2 to 5 times the
           normal local rate.

         --Many contractors left town after making repairs,
           and they cannot be reached.

        We discussed with the director and staff of HUD's DFO the
    dissatisfaction with the repair work. The director agreed
    there were some problems in the program, but he said a
    HUD questionnaire that was mailed to all minirepair recipients
    showed a high level of satisfaction. Responses from 95
    percent of the recipients showed that on a scale of I to
    5 (poor to very good), the average rating for general repairs
    and heating assistance was 3.57 to 4.03, respectively.
    Fifty-nine percent rated general repairs as very good
    or good, while 77 percent rated heating assistance as very
    good or good.

         The director stated that many of the contractor-furnished
    inspectors were apparently unqualified, and that the
    inspectors accepted work that should have been rejected.
    According to the director, HUD is following up on complaints
    to make sure all necessary rework is done. In his opinion,
    HUD should use its own personnel for inspections whenever
    possible. HUD officials told us that unqualified contractor-
    furnished inspectors were weeded out through DFO quality
    control inspections.

         The DFO contracting officer also expressed doubts about
    the qualifications of contractor-furnished inspectors. The
    inspectors were supposed to have either a college degree with
    1 year of field construction trades experience or 3 years of
    such experience. Six firms--from Pennsylvania, Massachusetts,
    Michigan, Oklahoma, Alabama, and Mississippi--provided 129
    inspectors. HUD also used an average of about 45 of its own
    inspectors. Because of his concern about the fulfillment
    of contracts by the firms who supplied the inspectors, the
    DFO contracting officer plans to review DFO quality control
    records and obtain ratings of the inspectors by minirepair
    contractors. He will then decide whether to issue the final
    payments to the inspection contractors.

         According to the DFO quality control officer, the duties
    of the inspector include

         --making an initial damage assessment to determine
           if the house is repairable within the program
           limits;

                                 3 1

        --determining specifically what work is required,
           including decisions on whether to repair or replace;

        --writing a work specification (which is approved by
           the DFO minirepair chief);

        --conducting a followup inspection jointly with
           the repair contractor to determine whether the
           specifications need to be modified (the earlier
           inspection could have been done while the house
           still had water or mud in it that hindered a complete
           inspection);

         --monitoring the contractor's work;

         --conducting a final inspection to determine if the
          work was done properly and in accordance with the
           specifications; and

         --signing a certification that work was completed
           and accepted.

         The quality control officer told us the homeowner was
    given a copy of the original work specification but said
    that HUD neglected to inform homeowners of modifications.
    After the work is completed, the homeowner signs the
    certification--as does the inspector and DFO program chief--
    that the work was done and accepted. The quality control
    officer also told us that a random selection of repaired
    houses is inspected to insure that work done matches the
    specifications.

         The quality control officer said that minirepair
    recipients who have problems with repairs are supposed
    to call the contractor. If the contractor cannot be reached
    or will not correct the problem, the recipient is to contact
    the DFO, and HUD will attempt to have the contractor correct
    the problem. If the DFO cannot reach the contractor after
    72 hours, another contractor is sent and the original con-             k
    tractor is billed. He said that heating contractors were
    required to have a service representative in the area for
    I year to handle complaints.

                                 32

         The contracting officer stated that prospective
    contractors had to complete a capability questionnaire
    on the size of the firm, number of employees available
    for disaster work, type of equipment, capabilities of
    the firm, the firm's banker, and previous disaster
    experience. He said that, due to the hectic pace in the
    early stages of disaster assistance, contractors probably
    were not screened in the detail that would have been done
    under normal circumstances.

         HUD officials told us that all contractors had to be
    approved and licensed by the city of Johnstown. They said
    that, due to the emergency situation, both labor and sup-
    plies were more costly than under normal circumstances.
    They pointed out, however, that all contracts were awarded
    competitively and every effort was made to utilize local
    contractors. For example, the HUD officials told us that
    if a local contractor's bid was within 30 percent of a low
    out-of-town bidder, the local contractor was provided the
    opportunity to accept the contract at the lower amount.

         Contractors were assigned about 20 houses per work
    order and were paid based on specific line items in their
    contracts. Payment for work not specified in the contract
    was negotiated. The contractor had to guarantee his work
    for at least I year, and HUD withheld 15 percent of their
    payment until the contractor made provisions for the
    guarantee. The contractor also was supposed to give the
    homeowner information on how to contact him should problems
    arise. One contractor told HUD he mailed instructions
    on his guarantee to all homeowners for whom he did repairs.
    HUD sampled 20 percent of the homeowners who received
    repairs from the contractor; none had received instructions
    on the guarantee.

         We did not conduct a detailed review of the minimal
    repair program in Johnstown and thus did not verify allega-
    tions which victims made about it. In a report entitled
    "Some Improvements Needed in Administration of Minirepair
    Program" (B-167790 dated Dec. 11, 1973), we evaluated the
    program as implemented in the Wyoming Valley, Pennsylvania,
    flood after Tropical Storm Agnes. Our findings at that
    time showed that

         --about one-third of the victims sampled were not
           satisfied with the quality of the repairs (we
           verified that some repairs were done
           poorly);

                                 33

        --some required work was not done; and

        --much of the work was done at premium prices,
          but we could not conclude that the costs were
           unreasonably high considering the crisis
           conditions.

    There have been changes in the program since our report,
    including a transfer of program management from the Corps of
    Engineers to HUD. Many victims of the Johnstown area flood,
    however, believe that the problem of poor quality repairs
    persists.

         Reimbursement required of
         victims with flood insurance

         FDAA regulations state that

         "Minimal Repair Program recipients shall repay the
         Government the cost of any repairs or replacement
         completed under the Minimal Repair Program which
         are covered by insurance, or the amount received
         from insurance proceeds for the damaged item
         repaired under the program, whichever is less."

         Of those in our interview sample who had flood insurance,
    50 percent said they were never informed of the requirement to
    reimburse HUD for minirepairs. The DFO administrative staff
    told us that all applicants should have been informed
    orally of the requirement, but perhaps in some cases the re-
    quirement was not explained. They also said that due to the
    hectic post-disaster conditions, some people could have
    forgotten or might not have understood that HUD had to be
    reimbursed out of flood insurance proceeds for minirepairs.

         We noted that the "Agreement to Participate in the
    Minimal Repair Program" states the following:

           "*   *I (we) hereby agree to reimburse HUD for
         repairs made to my (our) dwelling unit under the
         Minimal Repair Program if such coverage is provided
         by my (our) insurance."

         Because of the requirement, victims with flood insurance
    had to reimburse HUD for the emergency temporary repairs that
    those without flood insurance obtained for free. Several
    victims who received minirepairs complained about the require-
    ment--particularly if they thought the repairs were done,

                                 3 4

    poorly. One of the victims who had flood insurance said he
    withdrew his application for minirepairs because he would
    not be allowed to get his own repairman, would have to reim-
    burse HOD for the work, and HUD would not be liable for
    subsequent failures.

         The HUD DFO Director said that in his opinion,
    reimbursement should be required only for permanent repairs
    or installations (e.g., replacement of a furnace).  He
    further stated that most repairs under the minirepair
    program are temporary and will eventually be torn out and
    replaced by permanent repairs paid for by the flood victim.
    He did not believe that permanent repairs and temporary
    repairs are duplicative types of assistance.

    Duplication of benefits and
    the appication process

         Some assistance programs are potentially duplicative.
    Most duplication could occur through assistance from two or
    more agencies for the same purpose or, to a lesser extent,
    by a victim or other family members applying more than once
    for one specific type of assistance. Home repair assistance
    and food stamp assistance are discussed below.

         Flood victims can have their homes repaired through the
    following programs:

         --Flood insurance.

         --HUD minimal repair program.

         --SBA home repair loan.

         --Farmers Home Administration (FmHA) emergency loan.

         --Individual and Family Grant (IFG) (depending upon the
           purpose of the grant).

         --Volunteer organizations.

         We discussed with the HUD DFO Director the potential
    for duplication of assistance under the minimal repair
    program and other programs. He told us that he was aware
    of some cases of duplication and was planning to identify
    other cases. His two areas of concern were flood insurance
    and SBA loans, because he was not provided lists of those

                                 35

    receiving payments under the two programs. Lists of grant
    recipients, he explained, had been screened against mini-
    repair applicants, and there were few if any FmHA loans
    for home repairs.

         The Director said he tried without success to obtain a
    list of approved flood insurance claimants. Unless the
    applicant for minirepairs volunteered the information when
    the application was taken, HUD had no way of knowing whether
    the applicant had flood insurance and therefore was required
    to reimburse HUD for minirepairs. HUD subsequently mailed
    a certification form (along with the questionnaire mentioned
    on p. 31) asking minirepair recipients to indicate whether
    they were covered by insurance at the time of the flood.
    If so, they were to authorize the insurance company to re-
    lease an itemized report of the insurance proceeds to HUD.

         The Director also stated that little information was
    exchanged between SBA and HUD on the recipients of their
    respective assistance. In our report on the minirepair
    program (B-167790, dated Dec. 11, 1973), we stated that

         "Lack of effective coordination of the SBA disaster
         loan program and the minirepair program precluded
         any assurance that homeowners were not receiving
         financial assistance under both programs for the
         same repairs."

         In early January 1978, we asked SBA how they avoid
    duplication of benefits. They explained that an exchange of
    information with HUD to identify cases of duplication had
    just begun. The effort would center on identifying those
    who received money for furnaces with an SBA loan and also
    received a free furnace through HUD's minirepair program.
    The SBA representative, however, said that SBA stopped allow-
    ing money for furnaces after the minirepair program began,
    but duplication could have occurred in the early stages
    of the recovery effort. The'duplication of benefits screen-
    ing was to be limited to furnaces, he said, because most
    minirepairs are temporary while SBA loans money for perma-
    nent repairs. Thus, he did not consider the two programs
    duplicative. Regarding grant recipients, SBA said it cross-
    checked applicants with the State for those receiving
    both types of assistance. SBA provided the State with
    information on the amount and purpose of the loan and
    the extent of the victim's loss.

         The State told us that some people obtained food stamps
    illegally by applying at more than one disaster assistance
    center. The State Department of Welfare was trying to iden-
    tify such cases and obtain reimbursement. About $10,000

                                 36

    has been recouped. Because of the emergency, investigations
    of applicants were not undertaken; food stamps were provided
    on the spot if the information on the application showed
    the victim to be eligible. The State mentioned some confu-
    sion over the Department of Agriculture's rules on eligi-
    bility of food stamps, particularly a requirement that
    income be temporarily reduced or inaccessible. According
    to the State official, many elderly needed food stamps
    but did not have an interruption of income except, perhaps,
    in the case of a late social security or pension check.
    The State provided food stamps to needy victims even though
    in their opinion, there was not an interruption of income.
    We did not evaluate (1) the extent of the State's verifi-
    cation of information on food stamp applications, (2) the
    applicants' eligibility, or (3) the effectiveness of the
    State's efforts to identify duplicate issuance of food
    stamps.

         Lack of a common ap~plication form

         HUD DFO staff and others told us that flood victims had
    to file a different form, or set of forms, for each agency
    to which they applied for disaster assistance. Although in
    many cases the agency representative took the information
    orally and filled out the form, the process was long; the
    victim could spend an entire day at the disaster assistance
    center going from one agency to the next to apply for
    assistance. Victims could not apply for all assistance at
    one desk.

         The DFO Director told us that in his opinion a common,
    interagency application form for disaster assistance to
    individuals would help prevent duplication of benefits.

    Lack of continuity amnon
     ~jecyrepres~entatives

         One private volunteer agency told us that as agencies
    rotated employees in and out of their disaster field offices,
    the quality of service declined. There was little transfer
    of experience from one representative to the next. It was
    often difficult to contact the appropriate person within
    an agency. These problems seemed to be particularly
    acute at HUD. We confirmed numerous personnel changes
    at HUD. For example, neither the director nor the section
    chiefs with whom we dealt were in those positions originally.
    The contracting officer told us he was the ninth person
    to fill that position since the field office opened.

                                 3 7

    Timeliness of grants
    and loan payments

         Four victims complained about slow payments for IFG
    grants and SBA loans. Grant recipients, whom we interviewed,
    provided the following information concerning the time it
    took from date of application to receipt of their grant.

                   Number                Number of
                   of days           grant recipients

                     30                      4

                     45                      3

                     60                      4

                     90                      5

         Grants are designed to assist those in relatively
    extreme need who are unable to qualify for loans or other
    types of assistance. It was necessary for the IFG applicant
    to have been turned down for an SBA loan before qualifying
    for the grant. According to one private volunteer agency,
    this requirement slowed IFG processing time. An official
    of the State welfare department, which administers the
    program, told us that processing time averaged about 30 days.
    FDAA officials said that processing time depends on a State's
    efficiency and varies between 10 days and 5 or 6 months; in
    the case of Johnstown, the first 400 checks were issued about
    6 weeks after the disaster.

         An SBA representative stated that the average processing
    time for home repair loans in Johnstown was 20 days.  Loan
    recipients whom we interviewed provided the following
    information concerning the time it took from date of
    application to receipt of loan.

                   Number               Number of
                   of days           loan recipients

                     10                     1
                     14                     1
                     21                     1
                     30                     5
                     45                     1
                     60                     2
                     90                     5

                                 38

    has been recouped. Because of the emergency, investigations
    of applicants were not undertaken; food stamps were provided
    on the spot if the information on the application showed
    the victim to be eligible. The State mentioned some confu-
    sion over the Department of Agriculture's rules on eligi-
    bility of food stamps, particularly a requirement that
    income be temporarily reduced or inaccessible. According
    to the State official, many elderly needed food stamps
    but did not have an interruption of income except, perhaps,
    in the case of a late social security or pension check.
    The State provided food stamps to needy victims even though
    in their opinion, there was not an interruption of income.
    We did not evaluate (1) the extent of the State's verifi-
    cation of information on food stamp applications, (2) the
    applicants' eligibility, or (3) the effectiveness of the
    State's efforts to identify duplicate issuance of food
    stamps.

         Lack of a common a-Pplication form

         HUD DFO staff and others told us that flood victims had
    to file a different form, or set of forms, for each agency
    to which they applied for disaster assistance. Although in
    many cases the agency representative took the information
    orally and filled out the for~m, the process was long; the
    victim could spend an entire day at the disaster assistance
    center going from one agency to the next to apply for
    assistance. Victims could not apply for all assistance at
    one desk.

         The DFO Director told us that in his opinion a common,
    interagency application form for disaste,-r assistance to
    individuals would help prevent duplication of benefits.

    Lack of continuity amopl
     Ale~lrepresentatives

         One private volunteer agency told us that as agencies
    rotated employees in and out of their disaster field offices,
    the quality of service declined. There was little transfer
    of experience from one representative to the next. It was
    often difficult to contact the appropriate person within
    an agency. These problems seemed to be particularly
    acute at HUD. We confirmed numerous personnel changes
    at HUD. For example, neither the director nor the section
    chiefs with whom we dealt were in those positions originally.
    The contracting officer told us he was the ninth person
    to fill that position since the field office opened.

                                 3 7

    Timeliness ofjgrnts
    and loan payments

         Four victims complained about slow payments for IFG
    grants and SBA loans. Grant recipients, whom we interviewed,
    provided the following information concerning the time it
    took from date of application to receipt of their grant.

                   Number                Number of
                   of days           grant recipients

                     30                      4

                     45                      3

                     60                      4

                     90                      5

         Grants are designed to assist those in relatively
    extreme need who are unable to qualify for loans or other
    types of assistance. It was necessary for the IFG applicant
    to have been turned down for an SBA loan before qualifying
    for the grant. According to one private volunteer agency,
    this requirement slowed IFG processing time. An official
    of the State welfare department, which administers the
    program, told us that processing time averaged about 30 days.
    FDAA officials said that processing time depends on a State's
    efficiency and varies between 10 days and 5 or 6 months; in
    the case of Johnstown, the first 400 checks were issued about
    6 weeks after the disaster.

         An SBA representative stated that the average processing
    time for home repair loans in Johnstown was 20 days. Loan
    recipients whom we interviewed provided the following
    information concerning the time it took from date of
    application to receipt of loan.

                   Number               Number of
                   of days           loan recipients

                     10                     1
                     14                     1
                     21                     1
                     30                     5
                     45                     1
                     60                     2
                     90                     5

                                 38

    Miscellaneous pro blems alleged
    about hosn   ssistanc

         The following allegations or recommendations by a
    private volunteer agency deal with housing in general,
    including HUD's temporary housing assistance program and
    SBA's home repair loans:

         --HUD should better inform victims of the temporary
           housing assistance options available instead of
           deciding which option HUD thinks is best for the
           victim.

         --Rental property should be eligible for the minimal
           repair program; victims in rental housing were
           made homeless and many rental units are now off
           the market and deteriorating.

         --Flood victims should not have to ask landlords for
           a foreclosure or eviction notice to obtain mortgage
           or rent payment assistance from HUD.

         --Rents should be frozen for a certain period after
           a disaster to prevent landlords from taking
           advantage of the housing shortage brought on by
           the flood.

         --Flood victims housed in HUD mobile homes should
           not have to pay a deposit for propane gas supplies
           (an initial tank of gas is provided with the
           mobile home).

         --HUD should make sure that recipients understand the
           intent of the minimal repair program. Victims thought
           the repairs were to restore their homes to preflood
           condition rather than just make the residence
           habitable.

         --FDAA and HUD should make sure there is no confusion
           about their respective roles and authority.

         --SBA should make sure their home repair loans are
           understood. Older victims were reluctant to apply for
           SBA home repair loans because they feared that, should
           their economic condition change, SBA would
           foreclose.

                                 3 9

    Reluctance by some Victims
    to apply for assistance

         According to a private volunteer agency, some victims were
    reluctant to apply for Federal assistance until they were
    personally convinced to do so by a close friend, relative, or
    clergyman. Some had difficulty reaching a disaster assistance
    center. The volunteer agency believed that extensive door-to-
    door outreach should have been provided to notify victims
    of the types of assistance available and, in many cases, to
    fill out application forms in the victims' homes.

    Need for a disaster
    assistance guidebook

         One private volunteer group suggested that the Government
    provide disaster victims with a comprehensive guidebook showing
    what assistance programs are available and the eligibility
    requirements for each.

    CONCERNS OF THE BUSINESS COMMUNITY

         The State reported that about 500 businesses were affected
    by the flood, and losses totaled over $119 million. According
    to the Chamber of Commerce, 80 percent of the businesses in
    Johnstown were affected. One downtown department store with
    $1 million in damages ($2.6 million for the entire corporation)
    closed; 400 jobs were lost. The largest employer in the area,
    a steel mill, permanently reduced its work force from 11,000
    to 9,000. The layoffs, however, probably would have occurred
    eventually due to overall economic conditions, but were hastened
    by the flood. The company closed for 26 days and sustained a
    $39 million loss.

         The unemployment rate for the Johnstown metropolitan
    area in June and July 1977, was 4.6 percent (5,000 unemployed)
    and 6.1 percent (6,700 unemployed), respectively, but
    in August--the month following the flood--the rate increased
    to 17.1 percent (19,200 unemployed). Although the rate
    dropped to 7.3 percent in October and November, it climbed
    to 10.2 percent (preliminary) in December.

    SBA loan application process

         Among the 14 business representatives we interviewed,
    seven had applied for SBA business repair loans. Two re-
    ceived their loans in 60 days, one in 90 days, and four
    had not received their loans 4 months after the disaster.
    Several businessmen complained about the processing time

                                 40

            and the paperwork required to apply. A Chamber of Commerce
            official said that the amount of paperwork SBA required
            was the primary complaint of the business community. He
            said that some businesses got their repair loans from banks,
            although the interest rate was higher, to get the money
            quickly and avoid the SBA application process. Nonetheless,
            the business community was complimentary of SBA's assistance
            in general.

                 One certified public accounting firm that handled 50
            SBA loan applications for its clients said that SBA's
            processing time was about 2 months. The firm indicated
            that although the application forms were lengthy, they
    A       ~~were not complex. SBA told us that processing included
            damage assessment, credit investigation, eligibility
            screening, legal review, etc., and took an average of 48
            days for a business repair loan.

            PROBLEMS ENCOUNTERED BY
            THE CITY OF JOHNSTOWN

                 City officials said that FDAA did an excellent job of
            processing Johnstown's application for assistance and did
            so in a timely manner. The city was pleased with the dis-
            aster assistance received but pointed out the following
            problems:

                 --Johnstown did not have the expertise or personnel
                   to manage a recovery effort, including the
                   applications for Federal assistance. The city
                   hired a consultant to prepare and follow up on
                   its applications. Administrative costs are not
                   reimbursable through FDAA. The city's disaster
                   claim to FDAA will probably reach $10 million;
                   the entire city budget is only $6 million. A
                   revenue loss of $1 million is expected because of
                   the flood.

                 --There is a question over who has responsibility
                   for demolishing damaged structures. The Corps of
                   Engineers razed 39 structures that it considered
                   in imminent danger of collapse. The city has
                   identified 118 additional buildings that should
                   be demolished.   The Corps will not do the work
                   either because the structures were not in imminent
                   danger of collapse or because the condition of the
                   structures was not the result of the flood.

                                         41

        --The city was confused over the Environmental
          Protection Agency's (EPA) role. The city was
          working through FDAA, but EPA was planning to
          undertake some projects (removal of hazardous
          materials and inspection of water treatment
          plants) on its own. EPA did not coordinate
          its activities with the city except for obtaining
          the assistance of some firemen to identify gas
          leaks and other problems. I/

        --The Federal Highway Administration and the
          Pennsylvania Department of Transportation
          estimated the damage to highways and streets.
          The estimates understated repair costs by
           $2 million. They probably did not consider
           subsurface damage or the cost to repair under
          current State standards.

        --There was confusion over which Federal agency
          had responsibility for cleaning up and restoring
           streams. The city assumed that the Corps of
          Engineers would undertake the work but nothing
          was done after 4 weeks. The city was then notified
           that the Corps of Engineers would only do work
          on its own flood control project. The Soil
          Conservation Service eventually did some work of
           its own choosing, but much more needed to be done.
           In October, FDAA told the city to award contracts
           for the work.

        --The city lost some vehicles in the flood including
          dump trucks. FDAA allows book value or repair cost.
          The trucks are 10 years old with minimal book values.
          The city cannot afford to replace the vehicles.

        --The city cannot properly assess the damage to sewer
          lines 2/ without costly television inspection
           ($100,000 to $150,000). FDAA has resisted funding

    1/FDAA explained that EPA originally planned to undertake
     two projects in Johnstown under its own program authority
     but found it could not do so. FDAA then gave EPA mission
     assignments to do the work.

    2/There is a widespread belief in Johnstown among those we
     interviewed that failure to regularly clean sewer lines
     contributed to flood damage and, in particular, caused
     water and sewage to back up through drains into victims'
     basements.

                                 42

           the use of television inspection, but said that
           FDAA might reimburse the cost of such an inspection
           if damage to the sewer line is found.

    ORGANIZATIONS AND INDIVIDUALS CREDITED
    WITH OUTSTANDING CONTRIBUTION TO THE
    RECOVERY EFFORT

         Through our interviews of flood victims, volunteer
    organizations, and public officials, several individuals or
    organizations consistently received praise for outstanding
    assistance to the disaster area. Among those credited with
    outstanding effectiveness were

         --the Federal coordinating officer;

         --Members of the Congress from Pennsylvania; and

         --the Mennonite Disaster Service.

         Numerous others such as the National Guard, State Police,
    and Salvation Army were frequently cited for their excellent
    work. All organizations and agencies as a whole--even those
    whose programs received some criticism--were praised by the
    flood victims for the assistance provided.

    OBSERVATIONS

         Based on our interviews during the case study of the
    Johnstown area flood, we made the following observations:
         --In the Johnstown disaster, the FCO was made independent
           from FDAA in that he performed no other duties.
           In previous disasters, the regional director was
           assigned FCO as a collateral duty. This independence,
           seems to have contributed to the overall success of
           the Federal recovery effort.

         --The National Flood Insurance Program had a significant
           effect on disaster assistance provided in Johnstown.
           Without the nearly $26 million in flood insurance
           proceeds paid to 2,592 policyholders, we believe
           additional loans and grants could have b~een required
           for disaster victims.

         --Johnstown flood victims had to file a separate ap-
           plication with each agency from which they desired
           assistance. This situation created a hardship for
           disaster victims, who could spend an entire day
           applying for assistance. It seems that a common,

                                 4 3

     interagency application form could be developed
     and filed at one desk in the disaster assistance
     center and thus be available to all agencies. A
     common form might assist agencies in exchanging
      information to help avoid duplication of benefits.
     For example, a victim's flood-damaged home can be
     repaired through flood insurance, the HUD minimal
     repair program, an SBA home repair loan, an FmHA
     loan, an IFG, and private, nonprofit organizations.
      In Johnstown it was also possible for a victim to
     apply for the same assistance at different disaster
     assistance centers or for more than one member of
      an immediate family to apply in their own names
      for the same assistance.

    --Forty-five percent of our interview sample complained
      about the minimal repair program, that is, poor re-
      pairs, unqualified inspectors, too many contractors
      from out of town, difficulty in getting faulty re-
      pairs corrected, and contractors being paid two to
      five times the local rate. Also, a volunteer group
      alleged that because the Disaster Relief Act of
      1974 (Pub. L. 93-288) prohibits minimal repairs for
      rental properties (even for a rented duplex when
      the owner lives next door), neighborhoods were de-
      teriorating and there were insufficient rental
      units to house disaster victims. Both aspects seem
      contradictory to overall BUD housing goals. The
      fewer the number of private rental units available
      in a disaster community, the greater the cost for
      HUD to acquire, transport, set up, and manage mobile
      homes for housing disaster victims.

                            44

    APPENDIX I                                                APPENDIX I

             JOHN L. MCCLELLAN, ARK., CHAIRMAN
      WIRRIN 6. MAGNUSON, WASH.  MILHTON R. YOUNG, N. DA,.
      JOHN C. STENNIS, MISS.  CLIFFORD P. CASE, N.J.
      ROBERT C. BYRD, W. VA.  EDWARD W. BROOKE, MASS.
      WILLIAM PROXMIRE, Wls.  MARK 0. HATFIELD, OREO,
      DANIEL K. INDOUY, HAWAII  TED STLVENS. ALASKA
      ERNIST F. HOLLINOS, S.C.  CHARLES MCC. MATHIAS, JR., MDO.
      IRCnH  AYN, IND.  RICHARD S. ISCWEIKER, PAi
      THVA11 1. 1AGELLTOIN, MCO  HENRY  ELLLMON, OKLA.
      LAWTON CHILES, FLA.  LOWELL P. WEICKER, JR., CONN.  COMMITTEE ON APPROPRIATIONS
      J. BENNETT JOHNSTON. LA.
      WALYTER 0. HUDODLSTON, .                    WASHINGTON, D.C. 20510
      CUENTIN N. DU"DICK, N. OAK.
      PATRICK J, LEAHY. YT.
      JAMES R. SASSER, ENN.
      DENNIS DECONCINI, ARIZ.
                 JAMES,. RCALL.OWA             July 22, 1977
             CHIEF COUNSEL AND STAFF DIRECTOR

             Mr. Elmer Staats
             Comptroller General of the United States

             Dear Mr. Staats:

                   The federal flood insurance program has been in
             operation since 1968 and on a mandatory basis since 1973.
             In that time, I know of no in-depth study of how the
             program actually impacts on a community to limit its
             exposure to property damage prior to and after a flood;
             how it interacts with other federal disaster assistance
             and flood control projects or to what extent it adequately
             indemnifies flood victims. Such information would be of
             great assistance to Congress in understanding and evaluating
             on-going flood assistance programs.

                   It seems to me that the recent Johnstown flood presents
             an excellent opportunity for such a case study and I want
             to request that the GAO undertake the survey.

                   Obviously, in an area as large as that involved in the
             Johnstown disaster, it would not be possible to do a house-
             by-house canvass. However, it should be possible through
             agency records and reports as well as sample interviews
             with affected property owners to put together a represen-
             tative profile.

                   Examples of the types of questions that should be
             addressed by the survey are:

                   How many (pct.) of the communities hit by the flood
             were participating in the insurance program and how many
             property owners (pct.) within those communities actually
             had purchased insurance?

                   What kind of help was given to property owners who
             were eligible but did not buy flood insurance?

                   To what extent did flood insurance compensate those
             who had such policies?

                                           45

    APPENDIX I                                                                           APPENDIX I

            JOHN L. MCCLELLAN, ARK., CHAIRMAN
    WARREN 0. MAGNUSON. WASH. MILTON . YOUNGO, N. DAK.
    JOHN C. STENNIS, MISS.    CLIFFORD P. CASE, N.J.
    IROERT C. BYRD, W. VA.    EDWARD W. BROOKE, MASS.
    WILLIAM PROXMIRE. WIS.   MARK O. HATFIELD. OREG.
    DANIEL K. INOUYE, HAWAII   TED STEVENS. ALASKA
    ERNEST F. HOLLINGS. S.C.   CHARLES MCC. MIATHIAS. JR., MD.    re          s es   e ae
    BIRCH BAYNH. IND.   RICHARD S. SCHWEIKER, IA.               cut     Zz Zen
    THOMAS F EAGLETON. MO.   HENRY BELLMON, OKLA.
    LAWTDN CHILES. FLA.  LOWELL P. WEICKER, JR.., CONN.           COMMITTEE ON APPROPRIATIONS
    J. BENN-FT JOHNSTON, LA.
    WALTER 0. HUDDLESTON. KY.                                       WASHINGTON. D.C. 20510
    QJUENTIN N. URDICK. N. OAK.
    PATRICK J. LEAHY, YT.
    JAMES R. SASSER, TENN.
    DENNIS DECONCINI, ARIZ.
                 JAMES R. CALLOWAY
            CHIEF COUNSEL AND STAFF DIRECTOR

                   To what extent were losses to contents rather than
            to structures?

                   Under the 50% damage standard of the Federal Insurance
            Administration, how many of the damaged properties will be
            affected by flood management ordinances?

                   Do property owners who were flooded out intend to rebuild
             in a higher area or move back into their old places?

                   What flood control projects were in place at the time
            of the flood and were they designed to protect against a
            100-year flood?

                   What percent of the damage caused by the flood occurred
            outside the 100-year level?

                   If your staff has questions about this request they
            may call Jack Lewis in my office at 224-9741.

                                                                Sincerely_

                                                                Thomas F. Eafleton
                                                                United States Senator

            TFE:dh

                                                46

    APPENDIX II                                                                                 APPENDIX II

                                                 MAP OF DISASTER AREA

                                      JEFFERSON

                                       /   A      ^            CLEARFIELD

            E.NINEER                    / FOINDIANA
                      i hW9~~~~~                  / CAMBRIA

                                                                      BLAIR

                   WESTMORELAND    ohntown

           LEGEND
       *  CORPS OF              /         SOMERSET                 BEDFORD
           ENGINEERS FLOOD
           CONTROL PROJECTS

                                         .r2>~~~~~~~~ // ~~~~~                           nst own

                              L - - -L - - - - - - - - - - - - - - - - -ittsburgh

                                                                                                   PhtIldephia

                                                      47

    APPENDIX  III                                                  APPENDIX  III

                           MAP OF JOHNSTOWN, PENNSYLVANIA

                          STRAYER RUN

                          ST. CLAIR RUN

                                 ELK RUN.     _
                                                       CONEMAUGH RIVER

                                                            HINKSTON RUN

                          DOWNTOWN
                          JOHNSTOWN

                        STONY CREEK

                                                            LITTLE CONEMAUGH
                                                                  RIVER

     CHENEY RUN

                                                         OLOMON RUN

                                       SAS RUN

     NOTE: SHADING REPRESENTS FLOODED AREAS.

                                          48

    APPENDIX IV                                      APPENDIX IV

                 SUMMARY OF INTERVIEWS WITH 67 VICTIMS
                    OF THE JOHNSTOWN AREA DISASTER

    1. What property was lost or damaged?

                                               Total     Partial
                  Item                         loss        loss

        House                                     6         41
        Basement contents                        56          9
        First floor contents                     19         11
        Automobile                               32           9
        Other structures (garage,
          shed, etc.)                             3          6
        Lawn, trees, plants, shrubs, etc.         2         14
        Driveways, sidewalks, etc.                2           8

    2.  Was the residence owned or rented?

        Owned     47
        Rented    20

    3.  Did the victim have flood insurance?

        Yes       20
        NO        47

    4.  Type of insurance coverage.

        Structure and contents      15
        Structure only               0
        Contents only                5

    5.  How the victim knew flood insurance was available?*

        News media           15
        Insurance agency      5
        Public officials      4

    6.  Reasons for not purchasing flood insurance.*

        Thought Johnstown was floodproof            25
        Thought location was floodproof             12
        Never thought about it                       7
        Too expensive                                3
        Was advised against it                       3

    *Denotes multiple response to a question.

                                  49

    APPENDIX IV                                  APPENDIX IV

        Insurance not available prior to flood       2
       Thought losses would be minimal              2
       Decided to take risk I
       Did not know insurance was available         1
        Public officials said there would not
         be another flood                           1
        Premium versus depreciation not worth
         the cost I
       No particular reason                          1

    7.  Will the victim remain in an area that was flooded?

                                         Number     Percent

        Plan to move back or have
          moved back to same home            21            31
        Never left home                      32            48
        Plan to move to another area
          that was flooded                    1             2
        Plan to move or have moved to
          an area that was not flooded        5             7
        Plan to move away from Johnstown    1               2
        Considering purchase of HUD
         mobile home                         4             6
        Undecided                             3             4

    8.  Reasons for moving back to original area or to another
        location that was flooded.

        Home was only partially damaged and
          is being repaired                       51
        Cannot afford to live elsewhere            2
        Lived in area all of life I

        Additional reasons included: it is worth the risk, would
        not think of-moving elsewhere, and storm was a rare
        occur rence.

    9. Types of disaster assist ance received.*

                                          Number     Percent

        Food stamps                           47            70
        HUD minimal repairs                   42            63
        IRS tax advice                        19            28
       Grant                                 16            24
       SBA loan                              16            24

    *Denotes multiple responses to a question.

                                50

    APPENDIX IV                                      APPENDIX IV

         HUD mobile home                       14            21
         Disaster unemployment assistance       6              9
         HUD private rental housing             2             3
         Non-Federal assistance
             Red Cross                         30            36
             Cleanup                           24            36

    10. Problems encountered in receiving assistance.*

         None                                            38
         Difficulty with minimal repair program          17
         Have not received assistance applied for
             SBA loans                                    3
             Grant                                        2
         Too long to get assistance
             SBA loans                                    3
             Grant                                        1
         Complicated forms                                3
         Miscellaneous                                   13

    11. Was the victim required to buy flood insurance to
         receive assistance?

         Yes                               17
         No                                30
         Already had flood insurance       20

    12. Types of assistance for which flood insurance was
         required.

         Grant           12
         SBA loan         5

    13.  Did the victim believe Johnstown was floodproof?

         Yes             53
         No 14

    14. Reasons for thinking Johnstown was floodproof.*

         Corps of Engineers project                41
         Never thought about the possibility    22
         News media said so                         5
         Have not had flood in a long time          4
         Public officials said so                   3
         Miscellaneous                              6

     *Denotes multiple responses to a question.

                                   51

    APPENDIX IV                                       APPENDIX IV

    15.  Were individuals warned of the flood?

         Yes            17
         No             48
         Out of town     2

    16.  Types of warning received.*

         Saw rising water                             8
         Knock on door                                5
         Police scanner                               3
         Warned by relatives or friends               3
         Ringing church bells                         I

    17.  How much time did the individual have to escape?

         None                                       32
         5-10 minutes                                2
         15-20 minutes                                4
         30 minutes                                  I
         I hour                                       4
         90 minutes                                  2
         2 hours                                     2
         3 hours                                     I
         4 hours                                     I
         Did not need to escape                       8
         Not at home                                  7
         Slept through storm                          3

    18.  Actions taken when victim knew of the flood.*

         Too late to take action                     37
         Drove or walked to safety immediately       10
         Tried to floodproof house                    9
         Moved valuables to safety                    5
         Did nothing                                  4
         Moved to upper floors                        4
         Miscellaneous                                5

    19.  Victims' rating of the Federal Government's response
         to the disaster.

         Excellent      31
         Good           28
         Fair            3
         Poor            2
         No opinion      3

    *Denotes multiple responses to a question.

                                 52

    APPENDIX IV                                       APPENDIX IV

    20.  Selected miscellaneous remarks aiqut the repovery effort
         or other matters.

         Thought recovery was handled well           29
         Need better flood warning system              8
         sewers and streams prior to flood were
           not maintained regularly                   8
         Contractors did poor quality work             9
         Sewer backups caused flood damage            5

                                  53

    APPENDIX V                                          APPENDIX V

                SUMMARY OF INTERVIEWS WITH 14 BUSINESS
                     REPRESENTATIVES IN JOHNSTOWN

    1. Number employed.

        Before the flood          14,574
        After the flood           12,088

    2.  How the business was affected.*

        Layoffs                                8 businesses
           Number of employees affected        Ranged from 1 to
                                                2,000
           Duration                            Ranged from 2 weeks
                                                to permanent
        Shutdown                               11 businesses
           Duration                            Ranged from 2 days
                                                to permanent
        Structural damage                      13 businesses
        Damage to equipment                    14 businesses
        Damage to stock                        14 businesses
        Reduced sales                          11 businesses
        Increased sales                        1 business
        unable to get material or supplies   3 businesses
        Power disrupted                        11 businesses
           Duration                            Ranged from 3 days
                                                to 1 month
        Communications disrupted               12 businesses
           Duration                            1 week to 2 months

    3.  Did the business have Federal flood insurance?

        Yes                   10
        No                     1
        private insurance      3

    4. What did the Federal insurance cover?

        Both structure and contents        8
        Contents only                      2

    5. How the business knew Federal flood insurance was
        available .*

        News media                         5
        Insurance agent                    8
        Public officials                   1

    *Denotes multiple responses to a question.

                                54

    APPENDIX V                                            APPENDIX V

    6. Reasons for not purchasing flood insurance.

        Decided to take the risk           ]

    7. Will the company remain in an area that was flooded?

        Yes                               13
       No                                 I

    8. Reasons for remaining in same location.*

        Investment in current site is too large        9
       Damage is repairable                            7
       There will probably not be another flood        I
        Can absorb flood losses                         I
        It is worth the risk                           I

    9.  Types of Federal disaster assistance applied for and how
        long it took to receive it.*

        SBA business repair loan                         7

             60 to 90 days        3
             Not yet received    4

        Other SBA loan                                   3

             Not yet received    3

    10.  Problems encountered in receiving assistance.

         Complicated forms                                 2
         Required information not readily available        2
         Took too long to get assistance                   2
         Difficulty in reaching disaster center            I
         SBA did not always have forms                     I
         SBA offices changed locations                     ]
         Too much red tape with SBA ]
         Conflicting information from SBA                  I

    ]I. Was the business required to purchase flood insurance
         to receive assistance?

         Yes ]
         No                        10

    *Denotes multiple responses to a question.

                               55

    APPENDIX V                                      APPENDIX V

    12. How was the business warned about the flood?

         No warning received       13
         Telephone call             1

    13.  Before the flood, did the business believe Johnstown
         was floodproof?

         Yes                        7
         No                         7

    14. Reasons for thinking Johnstown was floodproof.*

         Corps of Engineers flood control project        5
         Public officials said so                        I
         News media said so                              I
         Have not had a flood in a long time             2
         Never thought about the possibility
           of a flood                                    1

    15. Rating of the Federal Government's response to the
         disaster.

         Excellent      8
         Good            3
         Fair           0
         Poor            I
         No opinion      2

    Note: We also interviewed representatives of a local
           Certified Public Accounting firm concerning their
           views on the SBA loan application process. This
           firm is not included in the above statistics.

    *Denotes multiple responses to a question.

                               56

    APPENDIX VI                                     APPENDIX VI

                           REVIEW LOCATIONS

             Name                           Locat ion

    Federal insurance
      Administration                  Washington, D.C.

    National Flood Insurers
      Assoc iat ion                   Arlington, Virginia

    Federal Disaster Assistance       Washington, D.C., and
      Administration                    Philadelphia, Pennsylvania

    U.S. Army Corps of Engineers      Washington, D.C., and
                                       Pittsburgh, Pennsylvania

    Small Business Administration    Washington, D.C., and
                                       Pittsburgh, Pennsylvania

    Department of Agriculture

      Farmers Home Administration      Washington, D.C., and
                                        Har risbur g, Pennsyl vania

      Food and Nutrition Service       Washington, D.C.

      Agriculture Stabilization        Washington, D.C., and
        and Conservation Service         Harr isburg, Pennsylvania

      Soil Conservation Service        Washington, D.C., and
                                         Harr isburg, Pennsylvania
      Forest Service                   Washington, D.C.

      Animal and Plant Health
        Inspection Service             Washington, D.C.

      Rural Electr ification
        Administr at ion               Washington, D.C.

    Internal Revenue Service           Pittsburgh, Pennsylvania

    Veterans Administration            Washington, D.C.

    Federal Highway                    Washington, D.C., and
      Administr at ion                    Harrisburg, Pennsylvania

    Department of Labor                Washington, D.C.

    Office of Education                Washington, D.C.

                                 57

    APPENDIX VI                                    APPENDIX VI

             N ame                             Location

    Geological Survey                 Pittsburgh, Pennsylvania

    National Weather Service          Pittsburgh, Pennsylvania

    Defense Civil Preparedness
      Agency                          Olney, Maryland

    Department of Housing and         Washington, D.C., and
      Urban Development                 Johnstown, Pennsylvania

    City Hall                         Johnstown, Pennsylvania

    Police Department                 Johnstown, Pennsylvania

    Fire Department                   Johnstown, Pennsylvania

    Chamber of Commerce               Johnstown, Pennsylvania

    Red Cross                         Johnstown, Pennsylvania

    Salvation Army                    Johnstown, Pennsylvania

    Mennonite Disaster Service        Johnstown, Pennsylvania

    '77 Center for Flood Relief       Johnstown, Pennsylvania

    Homes of flood victims            Johnstown, Pennsylvania

    Businesses                        Johnstown, Pennsylvania

    Pennsylvania State Pol ice        Greensburg, Pennsylvania
    State Council of Civil
    Defense                           Harrisburg, Pennsylvania

    Pennsylvania Department of
      Environmental Resources         Harrisburq, Pennsylvania

    Note: In addition to the above, we contacted numerous
           agencies by telephone to determine if they were
           involved in the Johnstown recovery effort.

                                58

    APPENDIX VII                                    APPENDIX VII

                     DISASTER ASSISTANCE PROGRAMS
                    FOR INDIVIDUALS AND BUSINESSES

    FEDERAL DISASTER ASSISTANCE
    ADM I NIST RATION

         FDAA, through the President's Disaster Relief Fund,
    provided money for the following programs: Individual and
    Family Grant, Temporary Housing Assistance, Disaster Unem-
    ployment Assistance and Crisis Counseling. The purpose and
    management of the four programs are discussed below.

    Individual andFamily Grant

         The IFG program allows up to $5,000 to cover approved
    expenses for items such as housing, medical and dental care,
    personal property, funerals, transportation, and temporary
    accommodations. The grants are intended to be a last resort
    form of assistance, and victims must demonstrate that they
    were unable to obtain loans or help under other programs.
    The State provides 25 percent 1/ of the grant money and
    manages the program. Over 3,000 flood victims qualified for
    grants totaling over $5 million, an average grant of $1,716.

    Temporary Housing Assistance

         The temporary housing program is intended to house flood
    victims until they can make permanent housing arrangements.
    The program in Johnstown was managed by the HUD disaster
    field office. Assistance is normally provided for up to
    1 year, but every 90 days the recipient must be recertified
    as eligible. Eligible victims of the Johnstown flood could
    receive the following types of temporary housing: minimal
    repairs, mobile homes, private rental units and Government-
    owned or assisted housing.

         The temporary housing program cost over $46 million
    and served 5,667 individuals or families. The number of
    people receiving housing assistance is shown below by type
    of assistance.

    l/FDAA advanced Pennsylvania its share of the grant money
      because of legislative problems that prevented the State
      from immediately funding the program.

                                 59

    APPENDIX VII                                     APPENDIX VII

                                     Approved
       Type of assistance            applications         Percent

    Minimal repairs                      4,187                74

    Mobile home                          1,119                19

    Private rental                         324                 6

    Government owned/assisted               37                 1

         Total                          5,667                100

    The specific programs are discussed below.

         Minimal repairs

         The purpose of the "minirepair" program is to make a
    flood-damaged house safe, secure, and sanitary so the home-
    owner can occupy the house. Most of the repairs are temporary
    except for the installation of new equipment such as furnaces.
    None of the work is intended to restore the house to preflood
    condition; the repairs are meant to make the house habitable.
    The maximum amount of repairs is established by HUD based on
    the average annual rental cost in the disaster area. In
    Johnstown the limit was $4,000. Alternative housing assist-
    ance can be provided if the home is damaged too extensively
    to be made habitable through minirepairs.

         Minirepairs are classified as general or heating.
    General repairs include installation or repair of electrical
    wiring, floors, doors, windows, porches, foundation walls,
    water heaters, etc. Heating repairs, if authorized by HUD
    based on weather conditions, can involve either replacing
    the furnace or fixinq it depending upon the extent of damage.

         Mobile homes

         HUD provides mobile homes for temporary housing of
    disaster victims. The mobile home can be placed at a HUD
    group site, at a commercial site or at a private site, such
    as the victim's damaged or destroyed home. The mobile homes
    are rent-free, but occupants must pay utility costs.

         Of the 1,119 temporary housing applicants (4,453 people)
    who were provided HUD mobile homes in the Johnstown area,
    891 were placed in 18 HUD-managed group sites, 180 in private

                                60

    APPENDIX VII                                      APPENDIX VII

    sites, and 48 in commercial sites. FDAA gave the Corps of
    Engineers a mission assignment for the development of the
    group sites. The Corps of Engineers' contracts for this
    work totaled over $4 million. The cost of the mobile homes
    was not separated from the overall temporary housing program
    cost.

         Private rental and Government-owned
         or-assistedhous3ing

         Depending upon the housing resources in the community,
    HUD will place flood victims in private dwelling units or
    federally owned or supported housing. The victim is not
    charged rent while occupying the unit on a temporary basis.

         Miscellaneous housingassistance

         HUD's temporary housing assistance program includes
    many other types of help, some of which are discussed below.

         Furniture loans and purchase option--HUD will loan
    furniture to recipients of temporary housing if their own
    was destroyed in the disaster. Flood victims, however, are
    expected to apply for an SEA loan or a grant so they can
    purchase furniture on their own. Loaned furniture subse-
    quently may be purchased at large discounts. For example,
    over the first 3 months of use, upholstered furniture is
    depreciated 34 percent and other furniture is depreciated
    20 percent. If the disaster victim purchases the entire set
    of loaned furniture, an additional 50-percent discount is
    given. These discounts are in addition to the initial
    discount HUD received when it purchased the furniture.
         Mobile home purchas  adrnlopis--A flood victim,
    after 1 year in a HUD mobile home, can either rent the mobile
    home until permanent housing is found or purchase the mobile
    home as a permanent residence. Rents and purchase prices are
    based upon the victim's ability to pay and the depreciated
    value of the mobile home.

         Living kits--HUD supplies basic household items to those
    eligible for temporary housing if the victim lost such items
    in the disaster. The living kits contain such items as
    cleaning supplies, kitchen articles, linens, etc.

         Mortgage or rent payment assistance--If a financial
    hardship occurs due to a disaster, the victim can receive

                                 61

    APPENDIX VII                                      APPENDIX VII

    assistance from HUD in making rent or mortgage payments. The
    Disaster Relief Act of 1974 requires that the applicant re-
    ceive a written notice of eviction or foreclosure. A HUD
    official told us that few disaster victims have taken advan-
    tage of this assistance. This is probably because notices
    of eviction or foreclosure are not usually issued to disaster
    victims and the victims are reluctant to request such credit-
    damaging notices.

    Disaster unemployment assistance

         The Pennsylvania Bureau of Employment Security imple-
    mented the Disaster Unemployment Assistance (DUA) program
    in the Johnstown disaster area, with coordination through
    the Department of Labor. All funding is through FDAA.
    Nearly 9,300 victims received a total of $5 million, but an
    additional $12 million is expected to be paid.

         Victims who qualified for regular unemployment compen-
    sation received it instead of DLJA. DUA was provided only if
    the applicant was unemployed as a direct result of the
    disaster. Those who exhausted regular benefits could apply
    for DUA if continued unemployment was flood-related.

    Crisis counseling

         The National Institute of Mental Health awarded a
    contract for crisis counseling to the Cambria County Mental
    Health and Mental Retardation Program. The purpose of the
    contract was to develop and implement a crisis intervention
    counselinq service for flood victims who suffered emotional
    or behavioral disorders due to the disaster. Outreach and
    outpatient services were to be provided over a 6-month
    period to an estimated 5,000 victims. The'program cost is
    over $200,000.

    SMALL BUSINESS ADMINISTRATION

         SBA makes disaster loans to individuals and to
    businesses. Individuals can obtain loans to repair or
    replace personal property, including homes. Businesses can
    obtain loans to repair or replace property or, with an
    economic injury loan, to meet debts or provide working
    capital. SBA made $16 million in personal property loans to
    2,299 people and $28 million in loans to 618 businesses. An
    additional $38 million in business loans is expected to be
    made. The interest rates for SBA loans are stated below.

                               62

    APPENDIX VII                                     APPENDIX VII

         Primary home or personal property:

              1 percent for first $10,000
              3 percent for next $30,000
              6-5/8 percent for amounts over $40,000

         Business property:

              3 percent for first $250,000
              6-5/8 percent for amounts over $250,000

         Economic injury to businesses:

              3 percent for first $25,000
              6-5/8 percent for amounts over $25,000

    DEPARTMENT OF AGRICULTURE

         Three agencies within the Department of Agriculture
    provided assistance to Johnstown area flood victims. The
    programs are discussed below.

    Farmers Home Administration

         FmHA provides emergency loans to farmers or ranchers
    for losses involving farm property or production, including
    related expenses and debts. Loans are also available for
    construction or improvement of buildings, including homes,
    and for the purchase of livestock. In the Johnstown area at
    the time of our review, eight loans totaling over $125,000
    were made for crop losses (other loans are pending, but the
    amounts are not available). No loans were made for home
    repairs. Under an agreement with SBA, loans for home re-
    pairs are to be made by SBA whenever possible. The Yates
    for FmHA emergency loans for actual losses are stated below.

         Dwelling and related personal property:

              1 percent for first $10,000
              3 percent for next $30,000
              5 percent fox amounts over $40,000

         Buildings, crops, livestock, etc.:

              3 percent for first $250,000
              5 percent for amounts over $250,000

                                63

    APPENDIX VII                                     APPENDIX VII

    Food and Nutrition Service

         The emergency food stamp program provided over $2 mil-
    lion in free food stamps to 60,241 applicants in the
    Johnstown area. The program was operated by the Pennsylvania
    Department of Welfare but funded by the Department of Agri-
    culture, including 50 percent of the State's administrative
    costs. Six of the eight declared disaster counties were
    certified for the program.

    Agricultural Stabilization
    and Conservation Service

         The Emergency Conservation Measures program provided
    nearly $56,000 for 241 projects involving

         --removing debris from farmland,

         --reconstructing existing conservation measures, and

         --grading, shaping, and leveling streambanks.

    Assistance is requested by individual farmers through a
    county committee. Emergency conservation measures assistance
    was provided to victims in five of the eight disaster
    counties.

    INTERNAL REVENUE SERVICE

         The Internal Revenue Service (IRS) provides tax advice
    and processes amended tax returns for refunds based on
    casualty losses. In the Johnstown disaster, IRS made refunds
    of $1 million to over 1,000 taxpayers. IRS also advised over
    12,000 individuals or businesses and conducted seminars for
    small businesses and others to discuss the rules and proce-
    dures for casualty loss deductions.

    VETERANS ADMINISTRATION

         Twenty Veterans Administration (VA) borrowers requested
    assistance in obtaining forebearance on their VA-guaranteed
    loans. Local lenders had agreed on forebearance by the time
    VA contacted them. In the case of three out-of-State lend-
    ers, VA obtained forebearance on behalf of the borrowers.
    Veterans who reauested assistance for home repairs were re-
    ferred to HUD.

    VOLUNTEER ORGANIZATIONS

         Although numerous nonprofit organizations provided
    assistance to the Johnstown area, the Red Cross, Salvation

                                64

    APPENDIX VII                                        APPENDIX VII

    Army, and Mennonite Disaster Service are federally-recognized
    disaster-relief organizations. A description of their activi-
    ties follows.,

    Red Cross

         The Red Cross provided nearly $2 million in direct free
    assistance to flood victims. The types of services included
    mass care, food and clothing, household furnishings, medical
    and nursing care, and occupational supplies and equipment.
    A small amount was spent for home repairs. Nearly 8,000
    individuals or families registered with the Red Cross. The
    Red Cross also received 20,000 inquiries concerning the
    welfare of flood victims.

    Salvation Army

         The Salvation Army estimated its assistance at over
    $1 million. Over 8,000 families were given groceries and
    cleaning supplies. Over 1,300 families received free cloth-
    ing and bedding. Some also received furniture. Mobile
    canteens served over 1.3 million food and beverage items.

    Mennonite Disaster Service

         The Mennonite Disaster Service provided extensive
    cleanup services and home repair and rebuilding. About
    5,500 homes received cleanup services and several hundred
    received repairs or rebuilding. Workers went from house to
    house and any victim who wanted cleanup help received it.
    Other work was based on need.

                                65

    APPENDIX VIII                                   APPENDIX VIII

         DISASTER ASSISTANCE PROGRAMS FOR STATE ANDLOCAL
          GOVERNMENTS AND PRIVATE, NONPROFIT INSTITUTIONS

    FEDERAL DISASTER ASSISTANCE ADMINISTRATION

         FDAA, through grants (project applications) or by
    mission assignments to other Federal agencies, funded nine
    types of public assistance programs. A description of each
    program follows.

    Debris clearance

         A total of $9 million was provided for general cleanup
    of the disaster area and for demolition of flood-damaged
    structures that endangered public safety. The Corps of
    Engineers under a mission assignment awarded contracts for
    over $2 million. The remaining $7 million was for debris
    removal project applications by the State or local
    governments.

    Protective measures

         Protective measures assistance is for costs associated
    with such things as police overtime, pumping operations,
    boarding up public buildings, and other public safety
    measures. The cost under this program was over $3 million,
    including $400,000 for an EPA mission assignment to remove
    hazardous materials.

    Road sy~stems

         Project applications for non-Federal aid highways were
    funded at $17 million. The assistance is for repair or re-
    placement of toads and bridges that were damaged or destroyed
    by the flood.

    Water control facilities

        Over $5 million was expended on repairs to drainage
     systems. Other eligible purposes include flood control
     and irrigation.

    Public buildings and related equipment

        Repair or replacement of damaged or destroyed public'
    buildings cost nearly $4 million. Eligible public buildings
    (with equipment) include hospitals, police and fire stations,
    public office buildings and public libraries.

                               66

    APPENDIX VIII                                   APPENDIX VIII

    Public utilities

         Repair or replacement of damaged or destroyed publicly
    owned utilities such as water, power, gas, and sewage cost
    $14 million.

    Facilities under construction

         Reimbursement for repair or restoration of facilities
    under construction when damaged or destroyed by the disaster
    amounted to $100,000.

    Private nonprofit facilities

         Assistance for repair or restoration of private
    nonprofit educational, utility, emergency, medical, or
    custodial care facilities amounted to over $6 million.

    Other

         Miscellaneous assistance cost $1 million. This
    category covers such areas as emergency communications,
    temporary transportation to meet emergency needs, community
    disaster loans for local government operations and repair
    or replacement of parks and recreational facilities.

    FEDERAL HIGHWAY ADMINISTRATION

         Federal-aid roads and highways in the disaster area
    are being repaired or replaced at an estimated cost of $31
    mill ion.

    SOIL CONSERVATION SERVICE

         The Soil Conservation Service (SCS) initiated 47 stream
    restoration projects in the disaster area for a total cost
    of $10 million.  FDAA advanced $7 million while SCS sought a
    supplemental appropriation. The projects involve clearing
    debris, restoring the streambank, and planting vegetation.

    CORPS OF ENGINEERS

         The Corps of Engineers has or will provide three types
    of assistance for an estimated total of over $2 million. This
    was in addition to the FDAA mission assignments for debris
    removal, demolition, and preparation of HUD mobile home sites.
    The public assistance portion dealt with rehabilitation of
    Corps projects, debris removal from projects and general
    supplies and services.

                                67

    APPENDIX VIII                                   APPENDIX VIII

    DEPARTMENT OF LABOR

         Disaster relief under the Comprehensive Employment and
    Training Act (CETA) of 1973 totaled over $1 million. CETA
    workers were used to help clean up the disaster area.

    OFFICE OF EDUCATION

         Eleven school districts in the disaster area received
    $1 million for repair or replacement of structures and
    contents.

                                68

    APPENDIX IX                                      APPENDIX IX

              EMERGENCY ASSISTANCE PROVIDED BY THE STATE

         The initial response to the Johnstown area disaster was
    emergency rescue and assistance by local authorities, such as
    police and fire departments, and by the State. The assist-
    ance provided by the State through the National Guard, State
    Police, and State Council of Civil Defense is discussed below.

    NATIONAL GUARD

         over 3,000 National Guard personnel were activated to
    conduct operations such as

         --air rescue and emergency transportation of personnel;

         --transportation of food, water, and supplies to
           affected communities;

         --debris removal, road clearance and temporary bridge
           constr uct ion;

         --assistance to State Police to control looting and
           traffic;

         --searching for victims;

         --pumping mud from utility lines; and

         --administrative support to the State.

         The National Guard conducted 60 rescue operations and
    air evacuated 200 people. Over 500,000 pounds of cargo were
    airlifted to Johnstown. In all, 4,200 air missions were
    flown with 48 helicopters and 2 fixed-wing aircraft.

         Some of the equipment utilized included 615 trucks, 70
    generators, 110 radios, and 19 water trailers (173,625 gal-
    lons were transported).

    STATE POLICE

         The Pennsylvania State Police began its Task Force
    Operations before 6:00 a.m. on July 20. By that afternoon,
    150 State Policemen were on duty. A total of 689 personnel
    eventually were assigned to disaster duty. According to the
    Commander, there were no manpower shortages. The operations
    consisted of search, rescue, looting control, security,
    establishing and maintaining morgues and identifying bodies,

                                 69

    APPENDIX IX                                     APPENDIX IX

    establishing command posts, and providing recovery assistance.
    Three separate command posts were established in the disaster
    area, and on July 22, a command post was established in
    Johnstown with the National Guard and the State Council of
    Civil Defense.

    STATE COUNCIL OF CIVIL DEFENSE

         The Director of the State Council of Civil Defense was
    named State Agency Coordinator to manage all State agencies
    in the recovery effort. The civil defense council operated
    emergency operating centers at headquarters and at Johnstown.
    Forty-five personnel were involved, and numerous amounts of
    equipment were provided such as communications equipment,
    generators, water pumps, cots and blankets. The State had
    no estimate on the amount of disaster assistance provided
    by State agencies.

       (0680O3)

                                 70

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