STATEMENT OF MARDI WORMHOUDT, MAYOR, CITY OF SANTA CRUZ, CA

Ms. WORMHOUDT. We are very proud of Congressman Panetta, too. I began by thanking the Chairman for coming here. We appreciate this hearing.

I am the mayor of Santa Cruz. And although Watsonville share a small county, we are somewhat different in character and our problems following the earthquake have been somewhat different as well.

I would like to start by trying to evaluate the FEMA response to the disaster very briefly, and simply state that Federal bureaucracy is always an easy target. Everybody can point out the things that go wrong, the papers that get lost and the things that do not work. Thank God for the Federal bureaucracy after a disaster because really, you must think of the amount of effort that was brought to this community within days of the disaster; we were extraordinarily appreciative of those efforts, and continue to be.

I think that if there are some problems with FEMA, it is that often, the boilerplate FEMA plan just does not work very well to serve the needs of specific populations in local communities.

In Santa Cruz, for example, our loss was about 507 rooms of single-room occupancy hotel space. Now, these were spaces in older buildings in the downtown area, for the most part. And the people who lived there were, for the most part, people with very, very few resources—many of them elderly and on fixed incomes; others of them, quite frail; and others who are mental health patients and other people with physical disabilities. These are not people who can compete well in the housing market, even if we had a vacancy rate that made sense. But with a vacancy rate of 1 percent in the city of Santa Cruz, you can see that these people are not competitive.

Also, this is a special need population there; these are not people who can simply be placed anywhere in the community; they need very special services. And so, we found that the normal FEMA services that were available to this population were not particularly helpful immediately. It took a lot of personal work with each of these people to find the right situation. The motel vouchers do not work and they cannot afford housing on the housing market.

So, I think that if I had a recommendation to make to FEMA, it would be that if somehow the power is decentralized to some extent so that there is somebody in charge of local areas, who can begin to refashion the plans to meet the specific needs of local populations. Obviously, now our need is for permanent replacement housing for those people. Most of them are now located in interim arrangements that will not last forever; we have got to have new housing constructed. Now, the reason that the buildings they were in had cheap rent is that they were old, they had little, if any, debt service and were therefore available to this population. Obviously, new facilities that are constructed will not be affordable unless we get a lot of help in the way of either rent vouchers, supplements from grants or aid with construction as well.

Now, we have had help from HUD in this area and, of course, we have also had Red Cross funding. But, given the cost of construction and given their needs, these are not going to do the job.

So, I am going to conclude my remarks by simply saying that I think that FEMA did a good job within its purview and within its plan, but I do think that there needs to be a way to address very specific local needs. And of course, we are very, very much in need of help to place these people in permanent housing. As we count now, only about 12 months are left of that original 18-month support. And I really honestly do not know what will happen to this population during that entire period of time.

Thank you.

[The prepared statement of Ms. Wormhoudt can be found in the appendix.]

Chairman TORRES. Thank you very much, Ms. Wormhoudt, for a precise statement. And without objection, we will enter your statement in the record.

We were joined by Mr. Rios, I understand.

Mr. Rios. I am sorry that I was late.

Chairman TORRES. That is all right; the mayor was late, too. [Laughter.]

We had agreed that we would let the mayor go next. And so, Mayor McFarren, you have the Floor, sir.

Mr. McFARREN. Thank you.

Chairman TORRES. I am sorry, again, Mayor. We have a logistical problem that we want to take care of here. We want to sit you in the center where all the microphones are at so the press can pick up on your comments. We will be asking each of you to do that, as you make statements, please move toward the center. Mayor and Mr. Rios, I announced earlier that while you have statements and they will be printed in their entirety into the record, we ask you summarize your statements in 5 minutes so that we can allow for the other witnesses to have ample time.

You may proceed, Mr. Mayor.

STATEMENT OF TODD MCFARREN, MAYOR, CITY OF

WATSONVILLE, CA

Mr. McFARREN. Thank you. I would like to extend our welcome to the members of the committee. I certainly appreciate your presence and the opportunity to present some of our concerns.

Just briefly, an overview. We did have about $60 million of structural losses here in Watsonville, with 1,900 buildings damaged. Six hundred and fifty residents' homes were red-tagged and about 800 people are in temporary housing.

And what I think really needs to take place is a focus on the specific circumstances of Watsonville. Namely, we had multifamily victims, poorer residents, a lot of people living in single residences. This is difficult for FEMA to process. FEMA, I think, did a remarkable job under the circumstances, but I know that every disaster has its own specific characteristics. This is an ongoing problem that we have here; certain people have fallen through the cracks of the regulations.

And we have people living in a motel voucher program now, which is currently being provided through a community action group. And it would be great if those people could be considered once again for possible trailers. We need to get people out of the motel voucher programs at some point, and perhaps, FEMA mobile homes will be an answer.

I think that we also need to eliminate and minimize the mixed messages that we give to the people in the FEMA trailers. And this is no ones fault in particular, I don't think, it is just a matter of coordinating FEMA with State and local agencies, to facilitate people to move people on, out of the trailers into some other accommodations. Obviously, that is a complicated problem. But I think we need to work together so there are clear messages. There are valuable workers out there who can facilitate the process of moving people to the next step.

In a larger sense, we need land to place new single-room housing on. We need to stretch the financing of our farm worker housing, partly from the Farmers Home Administration funds of $5 million; that is only 20 percent of the need. We need more rental subsidies for very low income agricultural workers. We need more section 8 certification and voucher programs. And we need rehabilitation funds for 300 units, through the 516 Loan Program and CDBG funds.

Those are our specific requests. And again, I appreciate your con

cern.

[The prepared statement of Mr. McFarren can be found in the appendix.]

Chairman TORRES. Thank you, Mayor, for your statement. Obviously, we are taking your wish list into account; this is why we are having this hearing.

And I am going to ask you to shift chairs again, there, Mr. Rios; if you and the mayor could just exchange chairs there.

Next on our list of testimony is Mr. Rios; you may proceed, Mr. Rios.

STATEMENT OF OSCAR RIOS, COUNCIL MEMBER AND VICE MAYOR, CITY OF WATSONVILLE, CA

Mr. Rios. Buenos dias, good morning. I would like to welcome you all to Watsonville. On behalf of all of us in Watsonville, thank you for coming.

I think that both of the speakers have said most of the things that I also feel. I would just like to make one additional comment, particularly because in Watsonville, the majority, we are Latinos. Sixty-nine percent are Latinos, and with this census, that could reach 85 percent. That is very unique here in Watsonville. It is very unique because of the effect on the local incomes hit us the hardest. It is no coincidence that today the people live in trailers, the people have motel vouchers, low income, large families. We live in a city that has neglected for a long time the building of homes; building for the needs of the people who farm, cultivate and plant throughout the valley here. And I think that quake just hit us in the face with what had been neglected for years.

While we, here, can see it very clearly. I do feel that we are going through a very emotional time right now. Already, as it is, $6.30 to $6.35 to $7 is not enough to pay for $700 for one-two-bedroom apartment. We need to build more low-income homes; we need to build for the quake victims. But nobody wants to build it,

anyway.

So, we are right now confronted with a situation, the farm workers coming here for the seasonal strawberries. We need to develop the housing situation. FEMA and those agencies that work here, there was particularly discrimination, particularly for Latinos. There are many cases here of people who were treated like sheep, like cows; people scattered about. I feel that, even with all the services that FEMA and the Red Cross gave us, which are very appreciated, they also need to learn how to treat people and how to communicate with people who are not of the same kind. We are all human beings. And in particular, they need to learn the language that we all speak, Spanish.

I would really like to thank you for being here.

Chairman TORRES. Thank you, Mr. Rios. Thank you for your comments. And once again, if you may trade places there.

Ms. Levy.

STATEMENT OF ROBLEY LEVY, CHAIR, COUNTY OF SANTA CRUZ BOARD OF SUPERVISORS, SANTA CRUZ, CA

Ms. LEVY. Good morning. I am Robley Levy, chairman of the board of supervisors for Santa Cruz County. And I too want to welcome you to Watsonville and to Santa Cruz County.

The evidence is visible right outside the door of what has happened in our community. You see the devastation to the business community of Watsonville; the same thing has occurred in Santa Cruz. If you walk to the other side of the city hall, you can see the homes that have been shored up, damaged, sagging and half-demolished.

In human terms, the destruction has been extraordinary; the loss of housing stock is critical. Approximately 2,500 homes in our community suffered major damage, including some 400 single-room occupancy units that the mayor of Santa Cruz referred to. More than 700 homes were completely destroyed. In terms of the loss for our colleagues, 4 percent county-wide, 8 percent in Watsonville. And in Watsonville, 25 percent of that was low-income.

In terms of the people who were sheltered after the earthquake, there were nearly 3,000 people within the first few weeks. Over the first few months, some 38,000 people were sheltered.

The economic impact is obviously enormously severe on our commercial centers in this community, and will have rolling impact, not only on individuals and businesses, but on local government also.

We are here to talk about housing issues. I wanted to restate a few points I made to the Subcommittee on Policy Research and Insurance in February-Congresswoman Pelosi was there-with respect to what I see as needs coming out of the earthquake. There is a need for an increase in a tax on the available funds, for loans to individuals and businesses. In California, in an area of high land

costs, the tax on individuals is $100,000 and businesses is $500,000 do not permit real recovery. We need far better coordination of State and Federal disaster response, and we need that coordination to work with local government effectively.

We are very fortunate here in our Congressman, both in his personal effort on behalf of our community and also with respect to his position as Chairman of the Budget Committee, which has a salutary effect on bureaucrats who come before us.

He has dealt with meetings in our community every week for 21⁄2 months after the disaster, bringing together all of the players. And it is only through those meetings that we have been able to get a kind of a very real response, even in terms of what the law requires now.

A significant example of that is the example of the trailers. We have been talking about the need for housing; a number of people have testified to it. This community understood that early on and made the point that we had to have some kind of interim housing. FEMA was incredibly resistant. It was only through persistence, perseverance and political arm-twisting that those trailers came in. They came in, they are serving a need; there is a greater need that must be responded to.

I would like to talk briefly with respect to immediate shelter, then, interim shelter, and then to long-term issues. With respect to the immediate shelter, in Watsonville, what the city council has been faced with-and Mr. Rios referred to this-is the fact that bureaucrats dealing with disaster victims could not speak Spanish; the forms were not available in Spanish; that outreach was not done in Spanish until the pressure was insistently put on. And it took time that need not have been taken; that response could have been swifter, more effective and more humane if that clear need had been responded to by the Federal Emergency Management Agency. And I am sure that that need was as heavy in Puerto Rico as it was here. I would be concerned that they would have had the same kind of problems.

With respect to the placement of individuals for that initial shelter, we had problems because of the response to folks who were refusing to go into the shelters. And again, this was a question of cultural understanding and inability to communicate. And to use the agencies and organizations of the local community, who can carry out that communication; in this case there were local organizations in place who could have made FEMA's job easier if they had known how to take advantage of that.

With respect to interim housing, I mentioned the issue of the trailers. Additionally, Mayor McFarren mentioned the current HUD program for folks living in hotels and motels. This is a population which is considered as not qualified for FEMA assistance; these are people whose lives were devastated by the earthquake but they do not meet the bureaucratic parentheses; they do not fit into them; they do not have the paper trail to certify the to fact that they have the money in the community. In some cases, they were in multifamily situations where they were not the tenant who had the evidence of tenancy. Or in some cases, in the single-room occupancy hotels, the kind of population that is not included in working with the bureaucracy, does not maintain records and