Unused portions of superstorm Sandy victims' Small Business Administration loans will no longer be counted as part of their total federal storm recovery benefit, the governor's special adviser for storm recovery on Long Island said Tuesday.

Jon Kaiman, the special adviser, informed the public of the change, which benefits them, at a meeting of the Long Island Regional Planning Council at Hofstra University in Hempstead. A standing-room-only crowd of more than 75 people turned out for the meeting, which at times grew contentious as some Sandy victims complained about the slow pace of reimbursement from the state's 2-year-old NY Rising recovery programs. And Kaiman offered an aggressive defense of the agency's work to help homeowners and businesses.

Jamie Rubin, the executive director of the Governor's Office of Storm Recovery, was scheduled to appear at the meeting as well, but Kaiman said Rubin attended another meeting in Manhattan.

DataNY Rising LI projects

NY Rising is responsible for distributing $4 billion in federal money to help homeowners and businesses recover from damages resulting from Sandy in 2012 and tropical storms Irene and Lee in 2011.

Kaiman said under the original rule affecting SBA loans, if a homeowner were awarded a $100,000 loan, for instance, but did not take it, or spent only a portion of it, "We, under our program, would have to deduct $100,000 from their [NY Rising] benefits because they were eligible for it." He said the agency could not run afoul of federal "duplication of benefits" rules.

The agency also provided documents showing that before the rule change, NY Rising had to conduct a "case-by-case hardship analysis" to determine when the SBA loan was a cost burden for homeowners. The agency had asked to waive the requirement to do an individual hardship analysis. Kaiman said yesterday that the rule change meant "we're not going to charge it," he said of unused SBA loans, and "we're not going through the hardship process."

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Kaiman credited the efforts of Gov. Andrew M. Cuomo and the state's U.S. senators to get the federal Department of Housing and Urban Development to agree to the SBA rule change, which NY Rising officials said affects about 1,900 people.

Kaiman said NY Rising had awarded more than $500 million to nearly 10,000 Long Island homeowners.

During the question-and-answer session, Kaiman defended the agency after listening to complaints from Fred Smith of Massapequa.

"I have a number of problems with the way the program's being managed," Smith said, describing communication with NY Rising as "awful," adding, "When you call to ask what's happening, nothing's happening." He criticized NY Rising reimbursement rates that were below his costs for things such as flood vents for his home. And he questioned the competence of NY Rising staff.

Kaiman replied, "To be critical that someone doesn't know the answer and doesn't know what they're doing, how offensive . . . These are talented people committed to doing the right thing," Kaiman said of NY Rising's case workers.

"People come to these meetings and call them all sorts of names," Kaiman said. "Now I understand people are frustrated, and I'm frustrated too. The governor is frustrated because this is hard. How do you get people through a crisis during a disaster that's never happened before in our region in our state?"

Kaiman told the audience that homeowners have a responsibility to repair their homes. "We're not buying you new houses," he said. "In order for us to distribute this money, we're not telling you we're going to buy every vent. That's not what the program does. . . . We come in with dollars that the federal government says you can have as long as you meet the rules."

After the meeting, Jean Damico of Long Beach told Kaiman that if weren't for NY Rising, "We would have nothing."