[FoCHAT] CHATNews: LRA Double Std: Damage & Appeals for Charity Hospital vs. of RH Homes

Tue Sep 1 19:40:40 CDT 2009

Sept. 1, 2009 

Dear CHAT Members, 

At the Field Hearing held by Rep. Waters last month, LRA Executive Director Paul Rainwater proposed removing the $50,000 limit on Additional Compensation Grants (ACG) to low-income applicants. These supplementary grants were meant to compensate for low land values making many regular RH grant inappropriately small vs. the high repair costs. 

However, as LRA knows, many low-income applicants would not be helped at all by raising this limit because the ACG is even more frequently limited by the estimated cost of damage, which was determined by the former contractor, ICF International, often with blatant mistakes. LRA is not suggesting fixing shortchanging damage estimates, which have been usually notoriously resistant to correction by appeals. 

For example, an elderly New Orleans applicant who had 8 feet of flood, sewerage, and Gulf water in her one-story house for weeks was told that she had less than 51% damage by ICF during their determination of her grant. 

She lost the first-level appeal, which was also conducted by ICF, as do apparently most of the applicants appealing damage estimates by the Contractor. This is not surprising because the same division that determined damage estimates (the ACT division of ICF operations) “evaluated” the damage estimate, usually without another inspection. 

She was one of a small number of applicants who won the second-level appeal about damage estimates. She won this appeal because her son, who is an attorney, hired a structural engineer to produce a a long report in refutation of ICF’s damage assessment, and this son was very persuasive. 

In addition, unless their grants were processed early in the program, applicants in homes with a second story (no matter how small) and 8 – 12 feet of flood water were usually told that they had less than 51% damage. 

Damage assessments were made even lower by LRA’s decision in the summer of 2008 that mold and mildew damage was not even covered in the damage estimates for homeowners!

So, on the one hand, there are so many applicants with obviously incorrect, low damage assessments in this LRA-run program, and on the other hand, once again LRA is arguing with FEMA that Charity Hospital, a building with more than 12 stories and only 3 feet of water on the first floor has more than 50% damage. 

This 50% cut-off is very important because in both the RHP and for Charity Hospital, more than 50% damage is considered 100% damage, allowing costs for replacement, and not just repair. 

Here is the latest article about LRA appealing the FEMA decision that Charity Hospital was less than 50% damaged. At issue is repair of Charity Hospital or rebuilding it in a new location, displacing homeowners and at much greater cost with greater delays. 

It is also important to note that the RHP allows no independent appeal of grant determinations (1st level appeal by the Contractor and 2nd level by unnamed persons on a State Appeals Panel). 

 However, LRA is getting an independent appeal by administrative law judges even though it summarily and without explanation discontinued use of administrative law judges for third-level RHP appeals. There are no longer any third-level appeals and LRA argues that applicants cannot even go to court about RHP mistakes no matter what the nature of the mistake. Therefore, applicants never get an independent determination of their appeal.

In addition, LRA (and the related Louisiana Office of Community Development) vigorously and successfully fought in 2008 a popular state bill to use administrative law judges for the RHP appeals. 

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http://www.nola.com/news/t-p/capital/index.ssf?/base/news-7/1251782494206060.xml&coll=1 

Oct. 30 deadline on arbitration
New federal rules may affect Charity dispute 
Tuesday, September 01, 2009 
By Bill Barrow 
Staff writer 
The state of Louisiana has until Oct. 30 to decide whether to pursue a new arbitration process for disputed, large-scale recovery projects such as Charity Hospital in downtown New Orleans, under federal rules released Monday. 
Louisiana Recovery Authority Director Paul Rainwater said it won't take that long to for state authorities to decide whether to pursue arbitration for Charity. The high-profile dispute over damage to the 70-year-old hospital led to creation of the arbitration process within the FEMA Public Assistance program, the primary source of disaster recovery money for local governments and not-for-profit entities. 
The process is designed to shift the appeals from FEMA to an independent panel and provide a faster resolution. 
Louisiana's state facilities office, which owns the Charity building, says that the old Charity building was more than 50 percent damaged by Hurricane Katrina, compelling FEMA to pay $492 million as the replacement cost under federal disaster law. FEMA has disputed that claim, offering a maximum of $150 million for the building that has been shuttered since September 2005. 
"This arbitration panel could be the quickest way for the state to get the full replacement cost of Charity Hospital, which three reports prove we are owed," Rainwater said, a reference to assessments authored by state-paid consultants. 
…..
--- Arbitration panels --- 
Arbitration involves panels of three administrative law judges with no ties to FEMA or Homeland Security. The judges have experience settling contractor and construction disputes involving other federal agencies….
LRA spokeswoman Christina Stephens also pointed out that the rules for internal FEMA appeals allow the state to assist local entities with their appeals and then apply for FEMA reimbursement to cover those expenses. That would not be an option to recover arbitration expenses, she said.,,, 
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This is truly a double standard, one for homeowner disaster victims and another for state, organizational, and commercial interests. 

Best wishes, 

Melanie EhrlichFounder, Citizens’ Road Home Action Team (CHAT)
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