CUJ Q&A

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Hurricane season officially begins in June, and after four major, named storms in 2004, Florida's credit unions won't be taking the threat lightly. Among the hardest hit was Pen Air FCU, with some management and board driven to living at the credit union. Below, the CU talks about how it's prepared itself this year.

Hurricane season is once again approaching, and few Florida credit unions will take the threat lightly after four major storms hit the state during 2004's monstrous hurricane season. Among the hardest hit was Pen Air Federal Credit Union, which like much of the panhandle was directly in the path of Hurricane Ivan. Below CEO John A. Davis, Jr., who along with several board members literally lived at the credit union following the hurricane, shares what Pen Air FCU learned about disaster recover and will do differently this year.

CU Journal: How are you prepared now vs. last year? What happened last year? Did you have a disaster recovery plan in place and how have you tweaked it?

Davis: Pen Air Federal Credit Union, of course, is much more prepared now vs. last year. However, we were very prepared last year, too. Yes, we had a disaster recovery plan in place. In fact, it worked 99% very effectively. After the storm, I requested an "After Action Report" from all managers. From this, the Disaster Recovery Committee met to discuss our disaster recovery plan on what worked and what needed extra work. Some of the items that came up included:

* Communication: although the credit union had invested in the same type of radio phones used by our local 911 emergency management units, we found the phone ineffective in contacting our staff. So, we are currently looking into other two-way communication devices, which include text messaging, and satellite communication. Also, because it was so difficult for managers to contact their staff via a phone tree system, the Disaster Recovery Team, quickly implemented a "drive tree" system whereby, managers would drive to an employee's house to establish contact and inform them of the credit union's plans to be back in operation.

* Fuel: Pen Air FCU was the only credit union in Pensacola to have operational ATMs before, during and after Hurricane Ivan with no interruption. Plus, we had two offices ready to serve member due to pre-placed generators. However, fuel became an issue to operate those generators while power stayed out. We had a supplier of diesel fuel north of Pensacola, but it was also in the path of Ivan and was damaged and without power. So, we were very close to having another problem, but were saved due to the local power company being so quick to restore power. Because of this other near disaster, Pen Air FCU now has fuel contacts in Louisiana and in Georgia in the event we need fuel brought into us again and can't get it from our current provider. So, now we have East, West, and North of us covered.

* Water: Being in operation was one thing, but the other issue became the necessity to conserve water because the Hurricane tore up much of the county's sewage and underground pipes. Flushing toilets was something you did only if you had to-simply because you'd have to bring in your own water. Consequently, one of the areas we are adding to our Disaster Preparedness is supplies: having a couple hundred gallons of stored drinking water, tarps for leaks, and non-perishable supplies to help not only the credit union, but also help staff that also had the same problems at home.

Probably, the worst thing that happened after the storm was the fact that many of our bridges were closed due to damage, roads were blocked because of debris, and traffic lights were out due to lack of power. The county had initiated a "curfew" for people to be off the roads because of lack of proper lighting (and to discourage looting). Consequently, it could take two-to-three hours for a normal 20-minute drive home.

Plus, because there was so much out of town help (tree cutters, roofers, debris removal personnel, etc.), that there were no apartments, hotels, or rentable space available, leaving people with torn up homes having to stay in their wet, damaged environment until FEMA could send a trailer. Pensacola was quite a sight-especially with National Guard personnel manning intersections or standing guard next to gas stations to make sure everyone got just the gas they were rationing for that day. The same could be said for the designated FEMA sites that distributed food, water, ice and tarps for anyone in need.

CU Journal: You spent time living at the credit union. What was that experience like?

Davis: Our Disaster Recovery Plan included the furbishing of a "hot site" building that was actually the credit union's old data processing center. This "hot site" would be used in the likelihood there was a disaster and the credit union needed to set up a temporary office. The building was designed almost bunker style with brick-so that it could withstand a strong storm.

I, along with two of our board members, John Cihota and Maurice Johnson, decided that someone needed to be at the "hot site." So, we evacuated our families and stayed at the building during the storm. The storm struck Pensacola in the early morning hours when all was dark outside.

Because the "hot site" was also diesel powered, plus had an outside camera for monitoring, it was very eerie to look though our monitor and see that we had the only lights on (from the parking area) and could see the 100-plus mph winds whirling trees, pieces of roofs, scraps of metal from signs, and all kinds of debris over and all around where we stayed-safe.

The best memories come from right after the worst part of the storm passed. Our two board members and myself immediately went over the closest office and began cleaning up debris. We worked hard for a couple of days while still living together- because roads were still not useable. We grilled together and got to know each other.

It was also great to see that in a short amount of time that our Disaster Recovery Team and Plan was able to make contact with all our staff and to see 95% reporting in to work that very Monday. Without them, no amount of planning would have worked. It takes great, motivated staff. And, that's what Pen Air FCU has.

CU Journal: Did all that living together bring with it any certain, um, "odors?"

Davis: Because of lack of power and water, we made every day for at least a month casual day. Plus, to compensate for the long drives home and to meet the county-mandated curfew, we cut our operating hours as well. At the "hot site" we had power, but no water-so we washed ourselves from a bucket. We are sure most people were doing the same thing for weeks after the storm.

CU Journal: Have you shared advice with other credit unions?

Davis: Yes, in fact, just days before Hurricane Ivan hit Pensacola, I had been talking with Tropical Credit Union (in Miami) to offer them our Mobile Service Center, which is basically a branch on wheels with a cash machine because they had just been hit by a smaller storm. They were about ready to accept our offer when new weather developments began airing and putting us under hurricane threat. Rather than risking personnel on the road, it was decided to wait. As it turned out, it was a good decision, because we did need it and used it extensively while outlying Pen Air offices came back online with power.

CU Journal: What does this year hold?

Davis: We will continue to pick up the pieces and get our Pen Air North Office back in operation by July 2005. The hurricane season is approaching us again and although we hope that no storm ever hits us like that again, we do feel our credit union is much more prepared.

CU Journal: How has the area been affected and what effects can still be seen?

Davis: Pensacola was hit so hard, there is no doubt in my mind that should something like this ever threaten the Gulf Coast, we'll see more people want to evacuate. The decision to close up to allow for proper evacuation and home preparedness we know now will have to come sooner, since we know many will want to make sure they have a hotel somewhere to stay in, and we now know how quickly those fill up. Although we stay open as long as we can for our members-we also acknowledge that our employees are members, too.

The effects of Hurricane Ivan are still with us today. Our busiest office had its roof totally cave in, destroying all contents. Reconstruction after a disaster like we experienced comes slow because of waiting for permits (there was a six week wait because of the number of people wanting to start repairs), waiting for supplies, and waiting for contractors and subcontractors to start. So, meanwhile, our member traffic is now being split to our two nearest offices which were not designed to handle such overflow which causes parking problems, longer teller lines, etc. Also, two of our busiest ATMs got damaged as well.

So, how do you react to member frustration? You refund foreign ATM fees when necessary; you overlook late payments by not charging fees, and refund NSF fees when necessary. Basically, you do whatever it takes to keep your members happy and stay in business too.

CU Journal: Are your members better prepared?

Davis: Yes, the local residents will remember this for a long time and will take precautions to protect their homes and families sooner. This will include getting more funds from their accounts sooner. Even our out-of-town members, I believe, will be more prepared as they understand that there will be phone issues. And, that because power is out, access to ATMs may be limited. The local U.S. Post Offices were closed for three days, which also caused problems with mailed checks. So, members will know not to stick something in the mail the day before a storm and expect the mailperson to pick it up.

However, if nothing else, our members also know that their credit union will do everything possible to make sure they have access to their funds and have a place that the member can do business.

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