On Shaky Ground

by Nance, John J. ;

  There was no sleep for Scrivner or other city officials through the night as everyone worked to secure the town, reestablish essential services, and calm the people (many of whom had moved onto their front lawns for safety from aftershocks). By midevening, they were sure of the happy news that there was only one serious injury, no deaths, and no one left missing, despite the large number of collapsed buildings. Fifty-one major structures had made up the downtown area—forty-five were now either effectively demolished, or would have to be condemned and bulldozed within weeks. In the meantime, Scrivner and the others knew they had to keep everyone out of the damaged buildings which still stood in whole or in part. Aftershocks were occurring constantly, and if another heavy jolt hit while some store owner was picking through a perilous building, Coalinga could yet end up with a fatality. In addition to helping with the roadblocks on the edge of town, the Fresno County sheriff joined the city’s efforts to prevent further injury and ordered the downtown area fenced off (first by officers, later with a rent-a-fence from another city).

  By morning, media helicopters buzzed around the downtown area like angry hornets, taking pictures of an area made off limits to them. The idea that some city official could stand in the way of an American newsman was too much—especially since the city was (in the terminology of one TV reporter), “essentially bush-league.” Pressure had built through the previous evening to do something, and under the gun of a strange reality, the sheriff stepped in to defuse the anger by arranging guided bus tours for the newspeople through the center of town. (The newsmen, however, were decidedly not satisfied.)

  Sometime during the darkness of Monday night, Keith Scrivner and the city manager retreated to a back room at City Hall, closed the door, and looked at each other’s weary faces. The scope of the disaster was now clear, and it was painfully obvious that little Coalinga was going to need a lot of help in the form of dollars from the outside. Material help was on the way, or already there, but to survive as an operating community, there would be millions needed for demolition and rebuilding of water and sewer systems and streets and a myriad of other city responsibilities. To complicate the matter, citizens were sure to leave (a move that would progressively reduce the tax base), and property values were sure to decline (further reducing the tax base). And, the citizens were sure to have problems financially in just paying the taxes they already had. New levies and bond issues would be out of the question—Coalinga simply couldn’t recover on its own.1

  Here they were, though, an isolated community with no significant impact on anyone else but themselves. The only way to get federal help for the city government and for the people was to be declared a national disaster area, but that would take some fast political footwork. First the county had to declare Coalinga a disaster area—a relatively easy step. Then California’s governor would have to make a similar declaration, and further agree to ask President Ronald Reagan (himself a former California governor) for the national declaration.

  But there had to be political momentum and public sympathy for President Reagan to commit additional federal funds to anything, even a disaster. Thus, agreed Scrivner and the city manager, the nation had to want federal aid for Coalinga, or Coalinga wouldn’t get federal aid.

  And, the media people who could get that message out—the people who would be the key to that strategy—were the very ones who had been storming and fuming just outside the roadblocks of the town and later at the edges of the cordoned-off downtown area.

  The city manager and the mayor were similar men in their distaste for publicity. Both were independent people who cared little for public speaking, and even less for people who tended to grandstand on issues politically or otherwise. Yet what they were going to have to do was exactly that: play to the media—use the media—“play on the mercy of the media and use them to get the word out to the rest of the country as fast as possible.”

  Scrivner, with gritted teeth, immediately began talking into whatever microphones were pushed into his face, granting seemingly endless interviews to newspeople for whom he had little regard, and to whom he would never have given a moment of time were Coalinga not in need of what they could provide.

  But by Tuesday night, he’d had enough. Exhausted, unshaven, and feeling gamey, Scrivner had accepted the invitation of a friend to retreat for dinner and a warm shower (impossible in Coalinga) at the man’s ranch outside the city. Half dazed from lack of sleep, “a walking zombie” by his description, the mayor knew he had promised ABC Television News that he would be in the driveway of his parents’ home in Coalinga that evening (where they were setting up a direct satellite link with New York) to appear live on Ted Koppel’s Nightline. But after a hot shower and an extensive dinner prepared by his friend, Scrivner decided he didn’t want to deal with the media any further until morning. Promise or no promise, expensive satellite equipment and staff time or not, they could live without him, and despite amazed, desperate, and indignant pleas from the network, it was Coalinga’s equally harassed police chief rather than the mayor who appeared on TV screens nationwide from Coalinga, as correspondent Steve Bell (sitting in for Ted Koppel) began the interview. Scrivner, it seemed, could be pushed only so far (though his decision would net him another round of bad reviews from the press and the community alike).

  Despite the affront to ABC, the cascade of media attention worked, as newspapers, radio, and television all across the country carried the images and the stories of the shell-shocked residents of the small, California community that had been suddenly walloped by a devastating earthquake resulting from sudden breakage of a fault no one knew existed. American opinion was fast to form, and genuine, deserved sympathy for those who had lost so much penetrated the political consciousness of the White House as well: Within forty-eight hours, President Reagan had declared Coalinga a federal disaster area, making it eligible for a variety of federal programs.

  To the newspeople, the story was rich in human dimensions: stunned citizens moving into pitiful tents on the front lawns of damaged or mauled homes, the downtown area destroyed, the city government’s “strange handling” of the situation, and the huge influx of fellow Americans coming to help. A giant circus tent was erected by the National Guard on Tuesday with an impressive field kitchen that began serving meals each hour to hundreds (including some reporters). The Red Cross was present, too, as were amateur radio operators (hams) who had provided the vital and unheralded help in the first few hours, and who stayed on, putting families in touch with worried out-of-town relatives with selfless use of their sophisticated gear.

  And within weeks, the various government agencies had set up a unified, one-stop center at the Elks Lodge, where people were supposed to flow through one by one, table by table, in order to receive everything from low-cost Small Business Administration (SBA) loans to emergency cash from the Fresno County Economic Development Agency. Federal Housing Authority (FHA) people were there, as were the representatives of FEMA, the California Office of Emergency Services, and more. The range of offered help seemed too good to be true—and in too many cases, that’s precisely what it was.

  The federal official leaned against a Coalinga building and gestured in the general direction of the shattered downtown area.

  “There is a standard myth to modern American disasters, born of our generosity as a people and our emotional commitment to each other—a generosity which erases [boundaries between us] most effectively when someone, or some community, gets trounced by a disaster. I see this all the time, and it can be very sad.”

  The veteran of many floods and tornadoes shook his head as he talked about the fact that Americans cannot stand the image of fellow countrymen standing beside ruined homes, their lives and hopes assaulted. “We use our tax dollars to help, we send donations and care packages, and we nod with profound approval when our presidents use their power to send in our tax dollars to help put our neighbors back on their feet.

  “The myth, however, is that disaster relief can p
ut Humpty-Dumpty back together again,” he said. “In a phrase, it cannot!”

  The wreckage of Coalinga’s downtown, visible behind him, had already come under the bulldozer. As he spoke, vacant lots now marked the spots where numerous downtown buildings had stood for seventy years.

  “People emerge from the wreckage of their homes after a tornado, or hurricane, a flood or earthquake, and make the disastrously wrong assumption that government aid will lift them back to parity, repair their home, restore their possessions, and make them whole again.”

  One of the reporters nodded, recounting the story of the wealthy owners of major San Francisco condominiums who had recently dropped earthquake insurance on their buildings because the premiums were too high. “When they were asked why by a professional municipal planner, they said they could get government aid if they got wiped out. Therefore, there was no point in the insurance.”

  “And so do homeowners.” The federal man agreed. “‘Why should we worry? The government will help us!’ Well, look around. Look at the residential area here. The United States government isn’t equipped to help beyond a certain point. These people have got to help themselves. And unless they’ve got insurance or deep pockets, they’re wiped out and have to start over.”

  The shock which had slowly, progressively accompanied the realization that the man’s words were true had crept in during the first few weeks after the quake, as slowly the people of Coalinga realized that they could be fed and temporarily housed, given some small amounts of money and medically cared for, but that the government would not rebuild their homes, repair or replace their businesses, or restore their economy. Such realities had begun to sink in with the trek through the Elks Lodge, where proud people were told at one of the first tables that they couldn’t talk to representatives at the next table unless they accepted food stamps—whether they needed them or not. The reaction of many was simply to turn and leave in confusion and upset. Businessmen such as Scrivner himself were asked whether they had credit available, and, if the answer was yes, were told they didn’t qualify for low-cost government loans from the Small Business Administration.2 And those who did qualify were horrified to find out that such loans would bear 8 percent interest rates, only four to five points below the prime rate.3

  And there were promises broken—promises which had been made with the purest of intentions by well-meaning government people who found later they had overstated their capabilities.4

  Such problems prompted Keith Scrivner to make a small but significant—and profound—point in a speech some days after the quake. Standing in one of the town parks, addressing several hundred people, complimenting their spirit and their determination, Scrivner had told them the ultimate truth:

  “Don’t expect the government to do it for you. If you’re going to rebuild and recover, you’ll have to do it yourself. Don’t sit and wait for a handout. That isn’t what all of this government aid is about. That isn’t what all these people roaming around here can do. You must do it on your own, or it won’t get done.”

  A slight wind rippled through his hair as Keith Scrivner paused, took a deep breath, and continued.

  “Government aid is to give you a hand up, not a handout. Remember that. Please.”

  Scrivner himself had lost over a hundred thousand dollars. But as he had watched his friends and neighbors, fellow businessmen and constituents, and members of his own family try to regain their bearings, it was obvious that there would be another victim of the Coalinga quake: public faith in the insurance industry.

  Paul Lopez’s new, earthquake-endorsed, replacement value policy did pay off. Within a month, plans were under way to build a new house for the family, this one worth far more than what he had paid for the original home so many decades ago—a home on which he had one, single remaining payment left to make on the day of its destruction.

  But Lopez was one of the few, clear winners. Throughout the remainder of Coalinga, the performance of the insurance industry had ranged from amazing to scandalous, friendly and sympathetic to cynical and hateful.

  State Farm had been first on the scene. A major court battle had been lost the previous year, when a California court ruled that a homeowner’s policy which said “all risk” meant exactly that. Small-print exclusions on the inside were ruled ineffective, and the company was forced to pay on claims it had tried to deny.

  State Farm’s people, therefore, knew what was coming at Coalinga as soon as they heard about the disaster. Within days of the quake, their claims adjusters were visiting their “all risk” policy-holders one by one, assessing the damages, and simply writing checks then and there, on the spot.

  At the same time, however, other insurance companies with “all risk” policies informed their policyholders (some within forty-eight hours, while their clients were still sleeping on their front lawns) that if they had not paid for specific earthquake coverage, they could forget about getting any money for their damages (other than coverage for broken glass or fire).

  And there were those in between, companies which would pay off a huge claim on one home in a development of identical and similarly damaged homes, then because of appraisals by a different adjuster, deny coverage to the one next door, even though the policies were the same. Lawsuits became a growing bank of storm clouds on the horizon as families with unoccupiable homes and defiant insurance companies wondered what to do: walk away from the mortgage and default (some banks permitted devastated homeowners to simply sign over the deed; other tried to sue), or try to rebuild without insurance.5

  Homeowners who owed very little on their damaged or destroyed homes—many of them retired residents whose life savings were the equity in their houses—were faced with taking out new mortgages during a period of 12 percent interest rates in order to raise the necessary money to rebuild or repair. People on fixed incomes were suddenly realizing that to get back in their houses, they would be saddled with an extra payment of five hundred dollars per month or more for decades—provided they could even qualify for a loan.

  In many instances, damage to the homes of those who did have earthquake riders was in the thousands, but not expensive enough to get beyond the deductible. Seven thousand dollars in collapsed chimneys and ruined walls against a ten-thousand-dollar deductible on an earthquake-endorsed policy meant no payment, and no help.

  And businesses with standard policies and no specific earthquake coverage—especially those with ruined, bulldozed buildings in the downtown area—faced a bleak future with no financial help. Some who complained, often and loudly, eventually reached settlements with insurance companies that were not inclined to pay otherwise. Others—longtime merchants such as John and Florence Bunker, whose building had been condemned and bulldozed after the quake—received nothing.6

  John Bunker had invested much of his life in his business. Suddenly it was rubble, and through the first few weeks of trying to salvage what he could from the debris and stay ahead of the bulldozing of the building which had been ordered by the city, John Bunker knew he couldn’t rebuild. The physical labor, the stress of losing so much, and the heartbreaking hollowness of realizing that there were no magic solutions for recovery pressed on him like a lead weight. More than a few fellow residents began worrying about him, spotting John one afternoon several weeks after the quake as he sat on a curb and stared into space, oblivious to greetings, oblivious to a future, his world in tatters.

  And within days, he was dead—felled by a heart attack, as were numerous others in Coalinga, which had been a city heavy with retirees. For Florence Bunker, of course, the loss of her husband made discussion of the monetary loss emotionally insignificant—but that monetary loss was anything but financially insignificant: They had accumulated more than two hundred thousand dollars of hard-earned equity in the store in thirty years. But with the utter rejection of their insurance claims, not a penny of it survived.

  “The thing that really got us during that summer was the uncertainty.” The Coalinga re
sident, a man whose home had been catapulted from its foundation and condemned while covered by an “all risk” policy (which the insurer at first refused to honor), gestured to his rebuilt home as he spoke.

  “Two years of hell to get them to pay. Two years of uncertainty. Would we be able to rebuild? What would we do without an insurance settlement? Could we afford a new mortgage?”7

  He talked about the uncertainty of the city itself over the deteriorating tax base, the deepening oil depression, the flight of Coalinga residents to Fresno to do their shopping (in the absence of Coalinga merchants) in the first months, and the inability to get them to start trading again with reestablished local shops. And he talked of the overall reality that Coalinga had still not recovered—might never recover. Vacant lots still bordered Elm Street, several new retail businesses were on the verge of closing for lack of patronage, and real estate values had dropped so far that many people were now, as the man put it, “prisoners of our own equity. We can’t sell; therefore, we can’t leave.”

  And he talked of the irony that despite the good intentions of those who came to help, and the good intentions of the government agencies and representatives, in the end a tremendous amount of tax money was spent with little long-term benefits to show for it. It had been a very uneven, and inequitable, recovery, with some Coalingans going bankrupt, some walking away from mortgages and homes, others collecting full insurance settlements and rapidly rebuilding. Some SBA loans went to people who didn’t need them, while some people who needed them, couldn’t get the so-called low-cost money. The government couldn’t repair the economy of Coalinga—not even Coalinga seemed able to do that—nor could they end the recession in the oil industry, which had hurt the city further. Recovery programs, in other words, might help some, but they were obviously not the answer.

  The Coalinga native smiled again, raising his index finger as he raised his eyebrows, eager to press home an important point.