Technical Assistance Bulletin

Technical Assistance Bulletin<= /b>

Florida Association of Homes and Services for the Agi= ng

, Tallahassee, FL 32308<= span style=3D'font-size:11.0pt;font-family:"Times New Roman"'>

Phone: (850) 671-3700 <= span style=3D'font-size:11.0pt;font-family:"Wingdings 2";mso-ascii-font-family= :"Times New Roman"; mso-hansi-font-family:"Times New Roman";mso-bidi-font-family:"Times New R= oman"; mso-char-type:symbol;mso-symbol-font-family:"Wingdings 2"'>&ique= st;<= span style=3D'font-size:11.0pt;font-family:"Times New Roman"'> Fax: (850) 671-3790 <= span style=3D'font-size:11.0pt;font-family:"Wingdings 2";mso-ascii-font-family= :"Times New Roman"; mso-hansi-font-family:"Times New Roman";mso-bidi-font-family:"Times New R= oman"; mso-char-type:symbol;mso-symbol-font-family:"Wingdings 2"'>&ique= st;<= span style=3D'font-size:11.0pt;font-family:"Times New Roman"'> Web site: www.fahsa.org<= span style=3D'font-size:11.0pt;font-family:"Times New Roman";font-weight:norma= l'>

DATE:<= b>

September 18, 2008

TO:<= b>

FAHSA Members

FROM:<= b>

Carol A. Berkowitz, Esq., Senior Directo= r of Regulations and Compliance

SUBJECTS:

Disaster Strikes: To Evacuate or= Not to Evacuate?
SBA Disaster Loans

<= b>Subject # 1: DISASTER STRIKES: TO EVACUATE OR NOT TO EVACUATE?

<= b> &nbs= p; That is the question!

Recently FAHSA members have asked que= stions regarding evacuations during a disaster.= As the administrator or owner, you are ultimately responsible for = this decision (especially considering the safety and welfare of your residents= and staff). <= /p>

You will need to consider whether the= local emergency management services has officially issued a mandatory evacuatio= n in your area. Because o= f the destructive power of a hurricane, you should never ignore an evacuation order. Authorities will most likely direct you to leave if you are in a low-lying area, or within the greatest potential path of the storm.&nb= sp; If they have not issued a mandatory evacuation, consider the safety reasons for evacuation carefully.

In consideration of the safety and ne= eds of your residents, please see the following protocols:

Þ Shelter in Place -- If You are Ordered = Not To Evacuate and Plan to Shelter in Place: The great majority of injuri= es during a hurricane are cuts caused by flying glass or other debris. Other injuries include puncture = wounds resulting from exposed nails, metal, or glass, and bone fractures. Stay away from all windows and exterior doors, and seek shelter in a bathroom or basement. To get through the storm in the = safest possible manner:

1.= Monitor the radio or television for weather conditions.

2.= Stay indoors until the authorities declare the st= orm is over.

3.= Do not go outside or allow staff and residents to= go outside. Even if the weather appears to have calmed—the calm "eye" of the storm can pass quickly, leaving you outside when strong winds resume.

4.= Prepare to evacuate to a shelter or other designa= ted area if your facility is damaged, or if you are instructed to do so by emergency personnel.

Þ Shelter in Place -- Hosting Another Facility: If the facility is to be used as a shelter for an evacuating facility, the facility’s plan must describe the sheltering/hosting procedures that will be used once the evacuating facility residents arrive. Procedures should i= nclude the following:

1.= A description of the receiving procedures for arriving residents from the evacuating facility.

2.= Identification of the area where additional resid= ents will be housed. Provide a floor plan which identifies the space allocated= for additional residents.

3.= Identification of the provision of additional foo= d, water, and medical needs of those residents being hosted at receiving facility for a minimum of five days.

4.= A description of the procedures for ensuring 24-h= our operations.

5.= A description of the procedures for providing she= ltering for family members of critical workers.

6.= A description of when the facility will seek a wa= iver from the Agency for Health Care Administration to allow for the shelterin= g of evacuees if this creates a situation which exceeds the operating capacity= of the host facility.

7.= A description of procedures for tracking addition= al residents sheltered within the facility.

8.= Receiving facilities should also contact their Ag= ency for Health Care Administration Area Office to inform them of the acceptan= ce of new residents.

Þ Leaving Your Facility -- If You are Ord= ered to Evacuate: Because of the destructive power of any disaster, you sh= ould never ignore an evacuation order. If a hurricane warning is issued for your area or you are directed= by authorities to evacuate the area:

1.= Establish a plan to evacuate and prepare for it. = The National Weather Service will

issue a hurricane watch when there is a threat = to coastal areas within 24-36 hours.

2.= Prior to evacuating to another facility, an agree= ment should be reached as to supplies/resources that will be provided and by w= hom.

3.= Obtain a map of the evacuation routes. Follow the designated evacuation routes—others may be blocked—and expect heavy traffic.

4.= Take only essential items.

5.= Be sure that residents turn off stoves and remove= all items from the tops of stoves.

6.= In case you lose power, ask residents to empty th= eir refrigerators and freezers before they evacuate.

7.= If you do evacuate, please remember to notify a family member or close friend of

each resident and let them know where their lov= ed one will be taken.

8.= All evacuated residents should have some sort of identification (hospital bracelet,

name tag, etc.) on their person.

9.= Eva= cuated residents must be sent with clothes, food, medications and supplies for f= ive days. Clinical records and = staff must also accompany residents.

Þ Staff Preparation for Resident Evacuati= on: In the event of evacuation (i.e. flood, storm surge, structural damage) conf= irm:

1.= The availability and accessibility of pre-determi= ned locations where residents will

be evacuated.

2.= Person responsible for implementing facility evacuation procedure.

3.= Transportation arrangements for residents who don’t drive.

4.= Logistical support for moving medications.

5.= Process for moving records and necessities of dai= ly living.

6.= Method for tracking patients/residents/staff and communications to be used.

7.= Necessary medical supplies.

Þ Reporting to the Agency for Health Care Administration: The Agency for Health C= are Administration (AHCA) has developed a data system to allow providers (including ALFs and nursing homes) to enter emergency-related profile information through the Internet. This Web based system is called the Emergency Status System (ESS) and enables reporting = of information that has traditionally been collected through phone calls and= fax responses, including emergency contacts, evacuation status, power and generator status, available beds and more. ESS is available to AHCA-regul= ated providers that offer 24-hour care or a residential setting, and dialysis centers. Please access Emergency Status System (ESS) link: http://ess.myflorida.com/

Þ Re-Entry: Once a facility has been evacuated, procedures need to be in place for allowing residents to re-en= ter the facility. In order to set up the procedures:

1.= Identify who is the responsible person(s) for authorizing re-entry to occur.

2.= Identify procedures for inspecting the facility to ensure that it is structurally sound.

3.= Identify how residents will be transported from t= he host facility back to their home facility and identify how you will recei= ve accurate and timely data on re-entry operations.

5.= Prior to readmitting any residents to the facilit= y, you must notify the Plans and

Construction Office at the Agency for Health Ca= re Administration for them to

determine the facility safety (850) 922-6469 or (850) 487-0713.

Subject 2: SBA Disaster Loans

THE SBA’s DISASTER LOAN PROGRAM <= /b>

MAY SAVE YOUR BUSINESS

Submitted by Phyllis J. K= arno and David B. Senderowitz, SBA Disaster Loan Consultants, 9-15-08

To insure the safety of their residents, long-term care facilities make contingency plans for disasters. To protect their property, providers purchase liability, windstorm, flood and sometimes, business interruption, insurance. Unfortunately, after taking all of these precautions, providers may still be in trouble if they fall into a liquidity crisis by using the= ir working capital to make repairs, replace equipment and pay operating costs while awaiting their insurance settlement. After Hurricanes Katrina, Rita= and Wilma, many insurance companies used loopholes to deny coverage, underpaid claims and doled out payments over six to twelve months. The result was t= hat companies that thought they were using their working capital temporari= ly to recover were left with insufficient funds to restart operations.

One solution to this liquidity problem could be to increase your bank debt. However, although your bank may be helpful, in the face of physical damage and/or reduced census, it can be very difficult to convince the ba= nk of your creditworthiness. Moreover, the terms may be onerous and the inte= rest rate much higher than before the disaster event. A better solution to this problem may be a Disaster Loan from the Small Business Administration (SB= A).

The SBA Disaster Loan Program includes Physical Damage Loans for all businesses and Economic Injury Disaster Loans (“EIDL Loan= 221;) for not-for-profit and small for-profit businesses. Physical Damage L= oans can provide short-term financing while you await the proceeds of an insur= ance claim; any difference between the insurance company payment and your cost= of repairs and equipment replacement becomes long-term debt. In addition, if= you are a not-for-profit business or you qualify as a small business, the SBA will make a long-term EIDL Loan to you to replace working capital and inventory losses. Most importantly, the SBA makes these loans without reg= ard to collateral if none exists and will assume a subordinate position to existing debt.

SBA Disaster Loans are available to for-profit and not-for-profit business= es in most industries1 located in a major disaster area, once the Pre= sident authorizes aid through a major disaster or emergency declaration. When counties are declared eligible for the Program, deadlines are established= for submitting Disaster Loan applications. Typically the deadline for a Physi= cal Damage Loan is a couple of months following the effective date of the declaration while the deadline for an EIDL Loan is eight or nine months after.

Shortly after Tropical Storm Fay hit us in late August, ten Florida counties were= declared primary disaster areas. These counties are eligible for Physical Damage a= nd EIDL Loans. In addition, there are 23 counties contiguous to these primary ones that are eligible for EIDL Loans only. The map below details the pri= mary and contiguous counties. The deadline for a Physical Disaster Loan application is October 27, 2008, and for an EIDL Loan application is May = 26, 2009.

SBA Disaster Loans have saved many businesses. Although they require consider= able historical financial data and can involve frustrating “red tapeR= 21;, their rapid dispersal, low interest rates and long repayment period make = the effort to secure such a loan worthwhile. If you have a loan on your facil= ity, depending upon the situation, a Disaster Loan may be able to refinance so= me, or all of, or be subordinated to, the existing debt. However, all princip= als who own 20% or more of the business applicant must be prepared to persona= lly guarantee the loan and provide their residences or other real estate as collateral—even if the residences are already encumbered. But, unli= ke a bank, the SBA will NOT deny a loan if a business or its principals do not= own a home or lack other significant assets.

The key to receiving a Disaster Loan on a timely basis is to submit an application as quickly as possible. The majority of = the SBA’s processing delays occur when a surge of 50,000 to 100,000

= applications arrive at the SBA’s process= ing center. If you can send in your application immediately, your application will be processed without delay. Wait four to six weeks after a major disaster and it may take as long as a month or two to process your application.

Physical Disaster loans are available to businesses of any size. These loans are available to un-insured, under-insured as well as insured businesses. The proceeds are for the uninsured repair and/or replacement cost of damaged assets, including any deductible, or the cost of repairs and replacements while awaiting the proceeds of an insurance policy.

Only Small Businesses and not-for-profit businesses are eligible for an EIDL Loan. These loans are ba= sed on a business’s ongoing financial obligations that it could have met h= ad the disaster not occurred and its ability to repay. The business does not need to suffer physical damage to qualify for an EIDL Loan, but must be located in the declared area.

Generally speaking, a= Small Business is an independently owned and operated business of a cer= tain size. The SBA sets a limit on revenue or number of employees for business= es in each industry. These limits can be found at http://www.naics.com/sb= a_sizestandards.htm. As shown below, the determination for a healthcare business is based on t= otal revenue. For example, a for-profit nursing home is considered to be a = Small Business so long as the revenue reported on its most recent federal t= ax return was no more than $12.5 million.

¹Businesses in certain industries such as gambling, land development and lending are not eligible.

NAICS Code	NAICS U.S. Industry Title: = Nursing and Resi= dential Care Facilities =	Max Rev ($MM)
623110	Nursing Care Facili= ties	$ 12.50
623210	Residential Mental Retardation Facilities	$ 9.00
623220	Residential Mental = Health and Substance Abuse Facilities	$ 6.50
623311	Continuing Care Ret= irement Communities	$ 12.00
623312	Homes for the Elder= ly	$ 6.50
623990	Other Residential C= are Facilities	$ 6.50

Unlike the limitation on revenue or number of employees used to qualify as a = Small Business, there is no size limitation for qualification by a not-for-profit business.

<= /span>

What information m= ust you provide to the SBA? Like all government agencies, the SBA runs on forms. Forms can be downloaded from = the web at: http://www.sba.gov/services/disasterassistance/= businessesofallsizes/applyforloan/index.html

APPLICATION REQUIREMENTS

Filing Requirement for All Applicants:

1. SBA Disaster Busi= ness Loan Application (SBA Form 5)

2. Fee Disclosure Fo= rm and Compensation Agreement for Agent Services, if applicable (SBA Form 159D= )

3. Copies of the applicant’s three most recent Federal Income Tax Returns and all Affiliates’ most recent Federal Income Tax Returns

4. Tax Information Authorizations for Applicant and all Affiliates (IRS Form 8821)

5. A balance sheet, = profit & loss statement and schedule of liabilities, all dated within 90 d= ays of application (SBA Form 413 and SBA Form 2202)

6. A personal financ= ial statement dated within 90 days of application for (i) each proprietor; (ii) each limited partner who owns 20% or more interest and each general partner, or (iii) each stockholder or entity owning 20= % or more of voting stock. (SBA Form 413)

Additional Requirements for Physical Damage Loan Applicants:

1. A brief descripti= on of damage to the real estate and business contents

2. Insurance informa= tion including name of insurance company, name and telephone number of your agent and/or claims adjuster, policy number, copy of your proof of loss= (if available) and declaration page of your insurance policy

Additional Requirements for Economic Injury Disaster Loan Applicants: <= span style=3D'font-size:8.0pt'>

1. SBA Form 1368

2. Brief explanation= of the economic loss caused by the disaster, including how the loan funds will= be used

3. Monthly sales fig= ures beginning three years prior to the disaster event and continuing through the most recent month available

4. Details of the business’s operating exp= enses

Here are some key elements to consider:

1. What constitutes a 20% ownership interes= t in a company when two or more of the principals are related, i.e., a father and son? If a father owns 15% and his son owns 5% of the business, each is considered a 20% owner and both must provide personal Federal Income Tax returns and personal financial statements.

2. Do you have sufficient funds available to y= ou from (i) your personal assets, (ii) the compa= ny that sustained the damage or (iii) from another company in which you have= an ownership interest? This is called the Credit Elsewhere test. Essentially, this test attempts to determine if you need the SBA’s = help to recover from a disaster. After analyzing your personal and corporate Federal Income Tax Returns, if the SBA determines that you have funds to repair your building, then it may designate your application as Credit Elsewhere.

For a Small For-Profit Business, the Credit El= sewhere designation makes you (i) eligible for an 8%, three-year Physical Damage Loan of up to $2 million and (ii) ineligible f= or an EIDL Loan. For a not-for-profit business, the Credit Elsewhere designa= tion makes you eligible for a 5.25%, three-year Physical Damage and/or EIDL Lo= an of up to $2 million. The tests used to determine Credit Elsewhere are complex; some assets are excluded such as cash surrender value of life insurance and funds set aside for retirement. Although an 8% loan at first glance may seem unattractive, especially given current conventional inter= est rates of 6% or 7%, the SBA will take a subordinate position to your curre= nt lender and can act relatively quickly.

If you fail the Credit Elsewhere Test, then yo= u can qualify for a Physical Damage and/or EIDL Loan of up to $2,000,000. These loans currently carry a 4% interest rate= that can vary in length between 15 and 30 years. Most importantly, the SBA cannot deny a loan due to a lack of collateral. For example, if your inventory is destroyed, your accounts receivable are pledged to another lender, you have no meaningful personal savings, and you live in a rented apartment, then you essentially have no collateral. Although no ba= nk is likely to lend to you under these circumstances, the SBA will -- provi= ded your projection shows that you can repay the loan!

3. Current licensing is key. A business applicant must be registered to do business, referred to as a State Certificate of Good Standing. The SBA does not ask for or review healthca= re licenses.

4. Reporting and paying taxes are a must. With respect to taxes, the applicant must (i)= have filed, or filed an extension for, its Federal Income Tax Return; (ii) not= be delinquent on corporate and personal federal income taxes; and (iii) have made employee withholding payments. If you have not filed or your comp= any has not filed income taxes, don’t apply. Your application will = be refused. However, if you have an agreement with the IRS to repay taxes, t= hen apply-- the SBA may grant you a Disaster Loan. <= /p>

Most importantly, ASK QUESTIONS, ASK FOR HELP. Although there are always exceptions, the SBA’s Disaster Centers’ personnel really try = to help. Go to the Disaster Assistance Center<= /st1:PlaceType> nearest you or call the SBA’s Disaster Recovery Center in Ft. Worth, Texas at 1-800-366-6303. =

<= /span>

CONTACT INFORMATIO= N:

Phyllis J. Ka= rno (pkarno@optimum.net; 914 833 7031)

David B. Send= erowitz (dbsend@fdn.com; 954 981 1305)

SBA Disaster Loan Consulting and A= dvisory Services

______________________________________________= __________________________________ Submitted by Phyllis J. Karno and David B. Senderowitz= , SBA Disaster Loan Consultants, 9-15-08

DECLARED DISASTER COUNTIES IN FLORIDA

DUE TO TROPICAL STORM FAY, AUGUST 2008 =

For Tropical Storm Fay, as of September 1, 2008, eligible businesses in the primary areas may apply for Physical Damage and/or EIDL Loans. Eligible b= usinesses in counties contiguous to the primary ones may apply only for EIDL Loans.= The map and chart below highlight the primary and contiguous counties in blue= and yellow, respectively.

The deadline for a Physical Disaster Loan application is October 27, 2008, and for an EIDL Loan application is May 26, 2009.

PRIMARY COUNTIES	CONTIGUOUS COUNTIES
Brevard	Baker	Lake
Duval	Broward	Liberty=
Hendry	Charlotte	Marion<= /st1:City>
Lee	Clay	Martin
Leon	Collier	Nassau<= /st1:City>
Okeechobee	Flagler	Orange<= /st1:City>
Saint Lucie	Franklin	Osceola
Seminole	Gadsden=	Palm Beach
Volusia	Glades	Polk
Wakulla	Highlands	Putnam
&n= bsp; = ; &n= bsp; = ; &n= bsp; = ; &n= bsp; = ;Indian River&n= bsp;	Saint Johns
&n= bsp; = ; &n= bsp; = ; Jefferson <= /p>

The = information contained in this correspondence is not intended as a substitute for legal advice. Please discuss any information gathered from this or any other FA= HSA publications with your legal counsel in the context of your particular situation before implementing new policies or procedures.