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While Armos Koski went through his flood-wrecked home last summer, state lawmakers stood about 100 feet from his door promising to help the victims of northeastern Minnesota's devastating floods.
More than six months later, Koski has spent thousands of dollars out of his own pocket and accepted private donations and volunteer help to make his home in Thomson livable again. It could cost another $40,000 to repair all the damage, and Koski said, "I don't know how the heck we're going to pay for that."
One option Koski won't consider: borrowing money from the government. In fact, most of the $12 million allocated by the Legislature for disaster loans to homeowners remains unclaimed. Another $15 million in loans for flood-affected business remains untouched.
State Sen. Tony Lourey, DFL-Kerrick, said he's frustrated by what he calls "a huge underutilization" of the flood dollars.
"We set the money aside, and it hasn't been claimed by the individuals affected by the flood," he said. "I know that there are people who need help."
The explanations for the unclaimed assistance are varied: Flood victims didn't know about the loans, or if they did, didn't apply because they knew they couldn't pay them back. Others are hoping the government ultimately buys their property.
Of the more than 1,700 homes in northeastern Minnesota damaged from the floods, only about 392 of those have received state or federal aid for about $9.4 million, federal and state records show. Flood insurance payments wouldn't have helped many of the victims, since only 5-8 percent of affected homes were covered.
Lourey said he's willing to propose changes to the relief offered to flood victims in the Legislature, but he wants more information first.
"We need to look deeply to what the resistance has been, and I don't have the answer to that," he said.
Aid for infrastructure
The story is far different for state, tribal and local governments who needed to repair washed-out roads, bridges and sewers. About $35 million in federal dollars has gone to government agencies for repairs to flood-damaged public infrastructure, which was estimated at over $100 million, according to the Federal Emergency Management Agency.
In July, FEMA denied Gov. Mark Dayton's request for an Individual Assistance disaster declaration, meaning that homeowners affected by the floods would be eligible only for loans, not grants.
Thus far 522 applications for federal home repair loans have been made, and of those, 274 have been accepted -- a slightly higher approval rate than the Small Business Administration's seven-year average. The SBA, the federal agency in charge of approving those loans, has provided about $7.5 million in loan aid.
For Alan Johnson, whose home and photography studio in Thomson sustained about $60,000 in damage from the flood, being denied a loan by the SBA has meant spending money from his savings and relying on private donations for assistance.
'The money adds up'
"Even if you go out and buy 2-by-4s, the money adds up," he said. Still, Johnson hopes to get a $20,000 loan from the Minnesota Housing Finance Agency's Quick Start program, which can provide up $40,000 for home repairs. Those loans are no-interest and forgivable after 10 years, and can be tapped only if the applicant has been denied an SBA loan.
Thus far, 118 Quick Start loans totaling $1.8 million have been approved of the $12.2 million made available by the Legislature, according to the MHFA.
It's not for lack of effort that flood victims wouldn't know about the loans, said MHFA spokeswoman Megan Ryan.
"We have extended the deadline twice, sent out direct mail, phone calls, done door knocks," Ryan said.
Some homeowners who had minor damage simply paid for the repair work themselves, said Drew Digby, a special projects and long-term recovery manager for Carlton County.
"They just realized they needed to buckle down and pay for the repairs as fast as possible," Digby said. "They used savings, they had help from friends. Using one of those loans was really for people who had bigger damage, or didn't have other resources."
Business owners have also seen limited relief from federal and state money. State officials in July counted 107 businesses that were affected by the flood, sustaining an estimated $3.6 million in damage. Thus far, the federal SBA has received 29 applications for business disaster loans, approving seven of them for $278,000.
The Department of Employment and Economic Development (DEED) was assigned $15 million from the special legislative session to provide in interest-free loans to business owners.
Carlton County applied for about $1.8 million of that money on Nov. 2 to assist 24 businesses, according to Pat Oman, the county's economic development director. The county is being told that the approval is likely to come any day now, Oman said.
Business owners "understand that government sometimes is a little slow," Oman said. "But there is a frustration there."
Blake Chaffee, a spokesman for DEED, said the state had to wait for the county to also submit loan guidelines and get a resolution passed by its board, which are requirements to get the money.
He said the process to provide the business loan money is slower because of the need to be transparent. "These are public dollars," Chaffee said. "This is not going to be a next step, next day interaction."
Hoping for buyouts
Other flood victims say they're waiting to borrow until they hear if their home will be bought out by the state. The Legislature allocated $10 million for that purpose.
Depending on the extent of the damage and where their home is located, flood victims can get anywhere from 50 to 100 percent of the appraised value of their home prior to the flood, said Ceil Strauss, the DNR's state floodplain coordinator. Getting 100 percent reimbursement is rare and can happen only if local governments contribute matching dollars, Strauss said.
To date, 97 homeowners have expressed interest in obtaining a buyout, according to the Minnesota Homeland Security and Emergency Management division.
Ken Grey is still hoping for a buyout of his home south of Sturgeon Lake. He borrowed about $28,000 from the SBA, although the estimate for repairing his home is closer to $149,000.
Some of the federal money he's borrowed was put into minor repairs, such as a kitchen sink he installed two weeks ago.
But the home, Grey said, is still a shell of what it was. The kitchen sink, he said, is propped up by 2-by-4s.
"Do we want the buyout, or do we want to fix the place up and go into debt into our eyebrows?" he said. "I'm 56 years old. Our house was paid for. Now I'm looking at the possibility of going back to square one."
Staff writer Jane Friedmann contributed to this report.