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FEMA reimbursements mainly benefit higher income groups

SUN-SENTINEL INVESTIGATION

By Sally Kestin, Megan O'Matz and John Maines
Staff Writers

December 11, 2005

A Hollywood surgeon got FEMA money for Hurricane Wilma for a generator.

A Plantation lawyer received $274 more from the agency than he paid for his generator.

Yet, a Fort Lauderdale teen with serious medical problems had to insert catheters by candlelight when the Oct. 24 storm knocked out power. His family couldn't afford a generator.

A FEMA program to reimburse applicants for generators and storm cleanup items has benefited middle- and upper-income Floridians the most and so far cost taxpayers more than $332 million for the past two hurricane seasons, the South Florida Sun-Sentinel found in a continuing investigation of disaster aid.

For Wilma alone, the Federal Emergency Management Agency had spent $84 million as of last Monday on generators for 101,028 people in 13 Florida counties, including Broward, Palm Beach and Miami-Dade. Another $6 million paid for chain saws for 27,394 applicants.

"I see people making $200,000 a year putting in for a rebate for a generator," Davie Fire Chief Don DiPetrillo said last month, as the town scrambled to open a shelter for people left homeless by Wilma. "This is just not a good use of public resources."

By agreement with the state, which pays 25 percent of the cost, FEMA reimburses for generators, chain saws, dehumidifiers, air purifiers and wet/dry vacuums purchased for home use after a disaster.

For the four Florida hurricanes in 2004, the reimbursements amounted to $242 million. Eighty percent of the money went to applicants in middle- and upper-income areas, including 45 residents of the moneyed island of Palm Beach and 221 people in a posh Orlando suburb with sprawling estates on lakes and fairways.

FEMA imposes no income restrictions."You could make $100,000 a year and still live paycheck to paycheck," said Randy Bartell, community assistance consultant with Florida's Division of Emergency Management.

FEMA leaves it up to states to choose what will be reimbursed in each disaster. States can elect to exclude certain items or limit eligibility, for instance, reimbursing for generators only for the medically needy, for instance. Other states have imposed limits, but Florida's policy remains one of the most generous of the hurricane-vulnerable states."It's absolutely disgusting," said David Bronstein, an insurance fraud lawyer in Plantation.

Bronstein put in a claim for a generator he bought when his Davie home lost electricity from Wilma. He said he "makes six figures" and could "certainly afford my own."

"My thought was, `Well, if I'm eligible, I'll take it because I certainly pay enough in taxes,'" he said.

Bronstein was surprised that he qualified but even more surprised when his government check arrived for $836, the maximum amount. He paid $562, including tax.

"I profited from the hurricane," he said. "It's crazy."

Dr. Arthur Palamara of Hollywood, a vascular surgeon and candidate for the state House of Representatives, got an $836 check from FEMA for a generator he bought a week after Wilma, and he now is debating whether to cash it.

"My sons are giving me a hard time, saying, `You don't really deserve the money,'" said Palamara, who lives in a home assessed at $1.1 million. "My wife says we pay taxes. It's not like we're doing anything illegal or dishonest."

Still, Palamara, a former vice president of the Florida Medical Association, wonders whether it's "morally correct."

"There are people probably who need this money more than I do," he said.

When Wilma knocked out power to Debbie Springston's Fort Lauderdale home, she begged FEMA for a generator for her 18-year-old son, Marcus, who was born with heart and kidney ailments.

"FEMA said, `Go buy a generator' and they'll reimburse us for it, but we didn't have money," she said.

Springston does not work, and the hurricane left her construction worker husband nemployed. "There was no pay coming in," she said.

Marcus uses catheters several times a day to remove bodily wastes. With no electricity, he performed the task using light from a battery-operated lamp and, when that failed, some small candles. "I could barely see," he said.

After a week, the family moved to a motel paid for by their homeowner's insurance.

"The government needs to get their priorities right," Marcus Springston said.

Dolores Morris, 63, of Hollywood, who suffers from lupus, pulmonary hypertension and diabetes, also lost power in Wilma. The part-time hospital computer programmer needs electricity to run a machine that feeds her oxygen. She also needs refrigeration for her insulin. Her husband, Robert, is a disabled Florida Power & Light Co. worker.

When the couple told FEMA they couldn't afford a generator, a worker suggested she go to a hospital if she ran out of oxygen. Dolores Morris said she conserved the supply she had in portable tanks and tried "not to get upset" so she wouldn't breathe too much.

"I don't think FEMA is set up for the poor person," she said.

FEMA did not respond to requests for comment.

Federal law says disaster aid is for people unable to meet disaster-related expenses "or needs through other means." Generators are part of a miscellaneous category under which states determine items covered each time a disaster is declared.

Florida's goal is to keep people in their homes and out of public shelters. Generators help people stay comfortable and keep food cold, and chain saws are needed to cut up debris blocking access to homes, said Frank Koutnik, deputy state coordinating officer for recovery in the state Division of Emergency Management.

"You've got to show this is why I needed this chain saw, and you've got to be able to document that you were without power to be eligible for the generator," he said.

But the way the program is set up puts the poor at a disadvantage, the Sun-Sentinel found.

Other types of FEMA aid help mostly low-income applicants. Money for home repairs or damaged belongings, for example, is available to those who are unable to repay a loan from the Small Business Administration and have no insurance to cover the losses.

Under those programs, FEMA sends a check without the applicant paying up front. But cleanup items and generators, which can cost $500 or more, are prohibitive for people who don't have the money or credit to buy the items and wait for government reimbursement.

Koutnik said those unable to afford the purchases "would have to know a friend" who could help or make other arrangements. "The system is strictly set up as a reimbursement process," he said.

FEMA reviews claims "on a case-by-case basis" and reimburses up to the $836 for generators, according to the agency. Applicants who paid less than the maximum are reimbursed their actual cost, said spokesman Jim Homstad.

But 10 people told the Sun-Sentinel that FEMA reimbursed them for more than they paid.

FEMA officials did not respond to questions about the extent of overpayments or what people should do with the excess money.

The state's cost of the program for last year's four hurricanes topped $60 million. So far for Wilma, Florida is responsible for $22 million.

In Virginia, after the total tab hit just $8 million for Hurricane Isabel in 2003, officials ended the reimbursements.

"We were concerned that people who had the economic means to buy their own generator or buy their own chain saw would use that money simply because they could," said Marc LaFountain, spokesman for Virginia's department of emergency management. "We're simply trying to get the aid dollars where they're most needed and where they're going to do the most good."

Virginia officials also thought the policy sent "the wrong message," LaFountain said. "We want people to be prepared ahead of time."

North Carolina does not pay for chain saws, and only people with serious medical needs are eligible for reimbursement for generators, said Phil Myers, chief of operations for the state's division of emergency management.

Florida officials have not considered limiting their policy, Koutnik said.

"As far as we can tell, it has [worked]," he said.

A run on generators

In the weeks after Wilma, South Floridians flooded home improvement stores, some carrying a list of the items FEMA paid for and the reimbursement amounts, which were publicized by the media.

At Davie Boulevard and U.S. 441, Dave Fraser sold generators out of a semitrailer truck with a banner that read "FEMA Grants Available." Fraser said he sold about 200 in two days -- before Fort Lauderdale police forced him out Nov. 2 because he didn't have an occupational license.

Outside Burkhard's Tractor & Equipment Inc. in Davie, almost two weeks after the storm, police directed crowds lining up to buy generators and chain saws. More than half the customers had heard about the FEMA reimbursement, owner Richard Burkhard said.

"[Some said], `I don't have a need for the saw, but if I can get reimbursed, I'm buying,'" he said. "I don't see anything wrong with that. It's there. You might as well take advantage."

In Richard Goldman's Coral Springs neighborhood, "People are treating it as one hell of a joke," Goldman said, adding that he is still waiting for a FEMA inspector to examine damage to his home. "It's a gift from FEMA."

In the upscale Idlewyld neighborhood of Fort Lauderdale, builder William Massey planned to file a claim for a generator he used to chill his wine collection. "I'll seek it because it's there," he said.

Some employees of the Sun-Sentinel also submitted claims and were reimbursed for generators or chain saws.

Tracking the money

It will be months before the final tab is in for Wilma. The government is accepting applications through Dec. 23.

FEMA officials did not provide county breakdowns of the amounts paid so far for generators and chain saws, despite repeated requests from the newspaper. Last year, people in all 67 Florida counties were reimbursed by FEMA for generators, the most popular item claimed. Some applicants also got money for fuel for their generators or chain saws.

The government, citing privacy concerns, refuses to identify aid recipients by name. The Sun-Sentinel analyzed reimbursements for generators and the other items from the 2004 hurricanes by ZIP code and matched the payments to income data from the U.S. Census Bureau and Claritas, a leading U.S. demographics research firm.

Statewide, $195 million went to areas with median family incomes above $41,520, defined by the federal government as the starting point of middle income in Florida. FEMA reimbursed applicants in the richest 15 percent of the state's ZIP codes $27.5 million.

In the Windermere area southwest of Orlando, home to business tycoons and celebrity athletes, 221 residents collected $177,411.

In Vero Beach on the east coast, where the town Web site says "America's cultural and corporate elite" close business deals "on a handshake during a round of golf," FEMA reimbursed 860 applicants of one ZIP code $609,777.

In Jupiter Farms, where many homes sit on an acre or more and some come with airstrips, half the households -- 1,875 -- got generators or chain saws paid for by the government. The cost: $1.5 million.FEMA even reimbursed residents of the island of Palm Beach, a winter playground for the world's famously rich. In the island's ZIP code, 45 applicants collected $22,839.

"I don't think people of a certain income should be reimbursed," said Palm Beach councilman William J. Brooks. "I think FEMA could spend its dollars, in that particular area, elsewhere."

Yet, after Wilma, the town itself publicized the government program.

"As a resident of a county declared for FEMA Individual Assistance, you will be considered for reimbursement of a generator purchase that was made on or after the onset of the hurricane and was required because you lost power," Palm Beach's official Web site noted Nov. 3.

The town decided to advise residents after "the rumor got around that FEMA was reimbursing up to $800 for generators," said Assistant Town Manager Sarah E. Hannah. "Not everybody on the island is filthy rich."

Staff Researcher Barbara Hijek contributed to this report. Sally Kestin can be reached at skestin@sun-sentinel.com or 954-356-4510.

Copyright 2005, South Florida Sun-Sentinel

http://www.sun-sentinel.com/news/local/southflorida/sfl-fema11xdec11,0,167093.story?coll=sfla-news-front