Letter to Governor George E. Pataki
July 21, 2006
Governor George E. Pataki
State Capitol
Albany, NY 12224
Dear Governor Pataki:
I am writing to you with urgency regarding the economic impact of the recent Con Edison power outage affecting approximately 100,000 people in the Queens, NY communities of Sunnyside, Woodside, Maspeth, Long Island City, Astoria and Ravenswood. As the Congressional Representative for many of these communities, I request that you declare this area a disaster area, making area businesses eligible for relief from the Small Business Administration (SBA).
As you are aware, this week's power outage is negatively impacting many small businesses. In leaving many of our nation's small companies without electricity or clean water for several days, the power outage has severely impacted their near-term profitability and jeopardized their long-term financial future. Some shop owners are reporting losses upwards of $25,000, with days more of power loss predicted by Con Edison representatives. Among those small businesses most affected are restaurants, grocery stores and other food service companies that rely on perishable goods and clean water. Many of these businesses were not equipped with backup generators, and have lost revenue in spoiled food stocks.
Small businesses tend to have little cash reserves, limited ability to raise capital, and often can afford only the most basic insurance. Therefore, many companies are unable to meet the financial demands when unforeseen disasters occur. The loss of just three business days may bankrupt many small businesses struggling to meet monthly rent, utility, and payroll obligations. Working capital is critical for these small businesses to continue their operations and remain viable.
SBA disaster loans play a pivotal role in preserving the financial health of our nation's local economies. In most circumstances, SBA disaster loans permit small businesses to access capital and stave off bankruptcy as they regain their financial stability. As a result, local economies are stabilized and the prospects of future economic growth are emboldened.
Under Section 3(k) of the Small Business Act, a "disaster" is defined as a "sudden event, which causes severe economic damage." The power outage clearly meets this definition both in terms of the swift and unexpected nature of the loss of power, and the preliminary evidence of substantial economic damage. While the SBA typically makes it funds available in response to natural events, including snowstorms, tornados, and floods, the agency should also meet its statutory duties by aiding those small businesses severely impacted by the blackout. The scope and effect of the power outage are consistent with those of previous instances in which the SBA has provided disaster assistance.
Accordingly, I request that you declare the affected communities a disaster area so the SBA can make funds available to those small businesses that now face economic hardships due to the power outage. I thank you in advance for your consideration of this urgent matter.
Sincerely,
Nydia M. Velázquez
Ranking Member, House Small Business Committee
http://www.house.gov/velazquez/PressReleases/2006/pr072106.htm