Johnstown area flood of 1977 a case study for the future : report

[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
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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
-'

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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

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.

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:

--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.

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

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.

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),

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.

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.

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

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.

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

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,

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).

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

--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

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

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.

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.

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

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

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.

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

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.

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.)

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.

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

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.

--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.

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);

--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

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

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

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

3 7

Timeliness ofjgrnts
and loan payments

Number Number of
of days grant recipients

30 4

45 3

60 4

90 5

Number Number of
of days loan recipients

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

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

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.

--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.

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.

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?

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

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

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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

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

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.

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

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

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.

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.

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.

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.

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,

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)

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