Management & Operations

Operators slow to receive funds for Hurricane evacuations

Posted on April 1, 2009 by METRO Staff

Many motorcoach operators who provided transportation for Texas residents during Hurricanes Gustav and Ike evacuations in September, 2008, say they have yet to receive the funds they are owed, in some cases totaling millions of dollars.

“The last word I got is that FEMA paid Texas, and Texas hasn’t dispersed any funds, yet,” said Edwin Cherry, manager of BLS Charters in Dothan, Ala. BLS is owed $90,000 for its services during Hurricane evacuations, but is part of a larger group led by  Orlando, Fla.’s Crestline Coach Tours Inc., which is owed more than $3 million.

Cherry, like many motorcoach operators, went to their local and national associations to ask for help.

“The American Bus Association (ABA) has officially written to Gov. Perry to urge him to move more quickly for those small businesses that helped save tens of thousands of Texans by transporting them on buses to get them to safety as hurricanes Gustav and Ike pelted the Gulf Coast,” said ABA President and CEO Peter J. Pantuso.

Additionally, during its Expo 2009 in January, United Motorcoach Association officials announced that it voted unanimously to step up its efforts to help operators that had not received their funds and develop a model contract that could be used for future disaster transportation work.

Reimbursements, in general, have also been slow outside of the motorcoach industry. The counties of Smith and Lufkin-Angelina, for example, are still waiting for $190,000 and $3 million reimbursements, respectively, while the Salvation Army is still owed $3 million, according to an East Texas local television news report.

News was starting to look promising at press time, however, with C.W. Newman, vice president of Orlando, Fla.-based Express Transportation, receiving the $206,000 his operation was owed for his services in late February. “There were a number of promises when we would get paid for the job. Originally, it was supposed to be between 30 to 45 days,” he said. “We were very active in trying to attain what we were owed. In today’s economic atmosphere this could be a real tragedy for some operators.”

In fact, many in the industry were fearful that with a sour economy, independent bus operators, especially the smaller “mom-and-pop” businesses, could be severely impacted by Texas’ failure to pay for their services.

Both Cherry and Newman were quick to point out that the recession has forced them to make changes to lower their bottom line, but that the non-payment of funds exacerbated the problem. “We were considering getting another bus or two and expanding, but without this money and with the current economic climate, we’ve been forced to cut back,” said Cherry.

Steve McGraw, Perry’s state Department of Homeland Security director, said that $7 million has been dispersed already and the state is following up with an additional $25 million from FEMA. Perry and Lt. Governor David Dewhurst have been asked to allocate additional funds to pay motorcoach companies, after which Texas can be reimbursed for these funds from FEMA, according to the ABA.

Even after receiving his funds, Newman echoed Cherry’s sentiments that there may be more consideration given before volunteering in the future. “I never believed in my heart that Texas wouldn’t pay,” he said. “If this opportunity arises in the future and the economy is like it is right now, however, it would probably depend on if I was financially solvent enough to be able to absorb the delay before I took the work.”

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