Image: Hurricane Ike
Mayra Beltran  /  Houston Chronicle via AP file
Houston residents collect essential supplies such as water and ice from a FEMA distribution hub on Sept. 15, two days after Hurricane Ike made landfall.
updated 2/24/2009 6:42:21 PM ET 2009-02-24T23:42:21

Hundreds of businesses that provided transportation, portable toilets and other assistance after Hurricane Ike are still waiting to be paid six months after the storm, the result of a $134 million dispute between Texas and the federal government.

Small businesses around the country are struggling because of the delay, and many of them say next time a hurricane threatens the Texas Gulf Coast, they might be reluctant to help.

"I've just been working off my lines of credit," said Brian Touey, president of Central Coast Industries in Nipomo, Calif., which is owed nearly $1 million for supplying water and portable showers last summer after Ike and the smaller hurricanes Dolly and Gustav.

Touey secured credit before the financial crisis unfolded last fall. "Thank God that I did that because we needed to tap every bit of it."

Gov. Rick Perry blames the Federal Emergency Management Agency for the delay in payments. FEMA has said that Texas should pay the businesses, then seek reimbursement from the federal government.

The state owes money to 350 companies that accepted contracts to provide help after the hurricanes, according to a list of vendors obtained by The Associated Press through a Texas Public Information Act request.

After a lawmaker complained about the unpaid bills, Perry's office announced that money was being freed up to pay the businesses, though Perry said $120 million of the amount was owed by FEMA.

Businesses and nonprofit groups contacted this week said they had yet to receive any money.

Check is in the mail?
On Tuesday, Perry spokeswoman Allison Castle responded to an inquiry from the AP by saying the payments were "in the process of being made."

The governor's emergency management office e-mailed Touey in October to say invoices were being processed. But he still has not been paid.

Then the state told Touey that some vendors would be paid in two installments — 75 percent from FEMA and 25 percent from the state — and some would be getting all their money from FEMA.

More recently, Touey said, he heard Texas is making state funds available for full payment.

"I'm not really sure what the truth is," he said. "You can't get a straight answer."

Among those owed large amounts are the Salvation Army, a large grocery chain, a Baptist child and family charity, and scores of Texas cities, school districts and fire departments, as well as out-of-state bus companies.

Express Transportation Inc. of Orlando, Fla., is not eager to work with Texas again.

"That's sad, because the people in Texas didn't do this — the bureaucrats did," said co-owner C.W. Newman. The firm is waiting for $206,000 for providing eight buses during the hurricane response. He said he is having to adjust other payments and operational costs to account for the payment delay. The sinking economy compounds the problem and has led to company layoffs, he said.

"In today's economy, when you're waiting for $206,000 since September, it does put you behind the eight-ball," he said. "If I could afford to go out and do this as a charity, I would, but I can't."

No bailout
A smaller charter bus company, Bay Limousine Services in southeast Alabama, subcontracted with one of the big bus companies that is owed money by Texas.

BLS is waiting for about $90,000 in payments. The company halted insurance payments on three buses that are not being used to save about $3,000 per month. It also is giving fewer hours to its part-time drivers.

Manager Edwin Cherry said when another Texas disaster strikes, he's not sure he will be quick to take part.

"You can't afford to work like this. We're not getting a bailout."

The Texas Lions Camp in Kerrville normally runs summer camps for children with diabetes and cancer. But after Hurricane Ike arrived on Sept. 13, it cared for adult evacuees with medical needs. The nonprofit spent more than $317,000, including transportation.

"We're like every other charity in that every dollar matters," Executive Director Stephen Mabry said. "We need to those dollars to flow back to handicapped children."

Baptist Child and Family Services based in San Antonio is owed $1 million for hurricane shelters and $1.6 million for health and human services operations, state documents show. The organization said it hopes to be paid, but it's not threatening to withhold future assistance.

"Anytime we're not paid on time, from anybody, it presents challenges," spokeswoman Krista Piferrer said. "But our organization has managed and will stand ready to serve during the next emergency."

More on: Hurricane Ike | Hurricane Gustav

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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