Recovery Continues as Costs Rise

With Northwest Arkansas blanketed in ice and blackouts, they came from miles around braving slick roads and the cold.

They waited calmly in line, showing patience with their fellow man while seeking the most precious of commodities for surviving days in the dark — beer.

At the height of the ice storm’s aftermath on Jan. 27, Wedington Liquor was busier than The Home Depot after a fresh delivery of generators.

Working until dark calculating sales tax by hand and taking only cash, owner Brandon Elliott and his staff busted out cases of Bud Light and Keystone until they couldn’t see and the last car pulled away.

“It was amazing that night,” Elliott said of the “Field of Dreams”-like line of cars snaking through the shopping center off Steamboat Drive. “We were backed up all the way to Snap Fitness and then to the Harps front door.”

Damage estimates are still being calculated for the two-day ice event that left more than 350,000 customers without power throughout Arkansas, but preliminary reports already put the cost of cleanup and repair at more than $20 million in the two-county area. That figure — which includes estimates from Benton and Washington counties, utilities and cities — is expected to keep rising.

As FEMA forwards its early damage assessment to President Barack Obama, Arkansas Governor Mike Beebe sought disaster designation for 25 counties and put the total tab for the state’s repair and recovery efforts at $77 million on Feb. 4.

FEMA and state reimbursements could reimburse up to 87.5 percent of costs incurred by cities and counties.

FEMA has already authorized $5 million following the initial disaster declaration signed by President Obama immediately after the storm, and three of the area’s four major cities are holding back from spending on anything more than overtime for municipal workers until the FEMA funds start flowing.

Cities Coping

Only Rogers, flush with a $15 million reserve fund, has allocated any money to storm recovery. On Feb. 2, the Rogers City Council approved a $2 million appropriation from reserves that is “all-inclusive,” said Mayor Steve Womack.

“It’s for any expense related to the storm,” Womack said. “We wanted to capture it in a single line-item. We asked for the authority to execute contracts for debris removal without having to wait for the next council meeting to kick-start the program. We’ll use the receipts and accounting to show FEMA what we’ve spent.”

Womack said there is no time to wait when it comes to restoring Rogers to a pre-storm state of normalcy.

“It doesn’t matter if there will be [FEMA] reimbursement or not,” he said. “The work has to be done. There’s a great consequence in waiting. If I had to clean this up with organic forces, it would take until the summer.”

In Fayetteville, finance director Paul Becker said the city is using operating funds to cover added payroll costs. For cash-strapped Springdale — which has been hurt by declining sales tax revenues for nearly two years and is using more than $4 million from its Capital Improvement Program to cover its budget shortfall — waiting on FEMA is the only option.

Springdale outlaid funds to cover hotel rooms for 40 National Forest Service workers and to operate shelters.

“In the meantime, we cannot really afford to contract with outside companies unless we get FEMA money,” said Springdale finance director Wyman Morgan. “We’ll just use our normal crews working normal hours.”

Bentonville, which has a $7.5 million reserve fund and a $90 million annual budget, has so far only hired 14 outside electrical professionals to help restore the city’s self-contained electrical utility.

Bentonville’s unique utility situation meant that by the Friday after the storm, only 12 households and one business remained without power as tens of thousands in other counties and cities remained in the dark.

“Most expense is a fixed cost with our employee base,” said Bentonville mayor Bob McCaslin. “For overtime or the cost of using equipment, we’ll be able to file for reimbursement.”

“Noah’s Ark Around Here”

One of the biggest beneficiaries of the ice storm was hotels.

Families flocked to hotels seeking lodging, warmth and hot food, and many hoteliers responded with discounted rates and waiving restrictions on pets.

Roger Davis, general manager of the Holiday Inn & Convention Center in Springdale, said he cut rates from $124 per night to $89 and waived the normal $25 pet fee and a 25-pound limit.

The hotel has a large generator that powered the building’s core systems, including the kitchen. For periods when power was out, there were plenty of cold sandwiches and hot food heated with Sterno.

The Holiday Inn’s 206 guest rooms stayed full, compared to a normal occupancy rate of around 60 percent. Families came from as far as 60 miles and Davis estimated he answered 1,500 phone calls on the storm’s first day.

“With the size of our hotel, we have a significant inventory of food and beverage,” Davis said. “We were lucky the power came back up. It really helped us and the community.”

In Fayetteville at the Clarion Inn, manager Chris Smith knew trouble was coming a week early when AEP called and booked 125 of his 197 rooms.

Smith said he dropped his rates by 20 percent and dropped the ban on pets.

“It’s been Noah’s Ark around here,” said Smith.

Not surprisingly, with AEP at the Clarion in force, Smith said power was only out about seven hours over the course of the week.

“We’ve been full, and this time of the year it’s usually about 40 percent,” Smith said. “You don’t want to get business this way, but it has been fortunate for us. By and large, people were so thankful for a place to go.”

At the Candlewood Suites in Rogers, located in the Scottsdale Center, manager Susan Grimes didn’t cut rates but did lower the pet fee from $75 to $25.

While several hotels in Rogers experienced outages, the Candlewood’s power kept flowing.

“We were very blessed to be able to help folks out,” said Grimes, adding she was impressed by the acts of kindness she witnessed during the storm and aftermath. “It’s a testament to Northwest Arkansas.”

Businesses who were able to stay open may have cemented long-term customers.

Grimes said many locals had never stayed at a Candlewood before who now may when they travel.

“Most folks were blown away,” Grimes said. “They’d say, ‘I had no idea what was inside.’ I was thrilled with that and I was glad we could help.”

Elliott heard similar things at Wedington Liquor, which recently moved into a new, well-appointed store from its former shabby digs across the street.

“We had people from all over town who said they’d never been in before,” he said. “It was some good exposure for us.”

Nursery Spared by Ice Storm

The choice between losing power at her office or in her greenhouse was no choice at all for Lissa Morrison.

The owner of White River Nursery in Fayetteville didn’t get to make the choice, but certainly benefited as her 10,000 SF of greenhouses lost power only for about four hours during the ice storm.

“Had it been longer than that, the systems would have failed,” Morrison said. “We have gas heaters, but it requires electricity to fire them off. Without electricity, the couplings won’t fire and the thermostats don’t work. We were really grateful that didn’t happen.

“We haven’t lost any stock.”

Morrison isn’t sure how her spring business will be affected from the storm.

“We hope and expect replacements will happen,” she said. “City specs say you have to have two-inch caliper and up trees. There should be a decent demand for that this spring. Hopefully there is an upside for some businesses. We’ll have to wait and see.”

Morrison said about 15 percent of her annual sales are trees, and she offers all the kinds of shade trees such as maples, oaks and pines that took the worst damage.

She said a good rule of thumb for pricing is about $100 per inch of caliper, and her two-inch trees start around $180 with her largest being four inches.

“There’s no way to predict if it will be a decent spring for sales,” she said. “I don’t expect there to be a radical, huge increase in sales. There has to be money to be spent.”