[FoCHAT] CHATNews: HMGP Grant Rules Update

Wed Mar 10 08:27:28 CST 2010

3/10/10

Dear CHAT Members,

Today is the deadline for applying for Hazard Mitigation (HMGP) grants (although they may accept later applications, LRA stated).

The state's hazard mitigation program can be 

 reached by calling 877.824.8312 or sending an 

email to 

hazardmitigation at mitigatela.org 
. 

 Website: http://mitigatela.org/    mitigatela.org

Here is the answer to my questions about the grant calculations that Robin Keegan, Exec. Dir. of LRA just sent to me. Below that are two recent newspaper articles about HMGP grants.

>From Ms. Keegan:

(1)   Will applicants be eligible for IMM even if they rebuilt their home after Hurricane Katrina?

Each applicant will need to be reviewed on a case by case basis.  Matters that warrant further consideration follow:

•       Is the rebuilt home eligible for funding under the Pilot Reconstruction program?
§  If Yes, it must be determined whether the intended IMM falls under the general requirement of code compliance in rebuilding to the Reconstruction program’s minimum criteria of 2003 edition of the International Building Code, or Two International Residential Code for One-and Two-Family dwellings  (i.e., window protection, etc).   
If the IMM falls under requirements for Reconstruction code compliance, then the IMM is viewed as part of the Reconstruction and the homeowner is reimbursed accordingly (Note: DOB and UCG are taken into account for the award calculation)

•        Is the rebuilt home eligible for funding under the Pilot Reconstruction program?
§  If Yes, then the HVAC should already be elevated to the proper height as a part of code compliance.  Elevation of the HVAC would then be viewed as part of the Reconstruction (not an IMM) and the homeowner would be reimbursed accordingly (Note: DOB and UCG are taken into account for the award calculation)  Since FEMA's guidance requires that Reconstructed houses be built in compliance to minimum criteria of 2003 edition of the International Building Code, or Two International Residential Code for One-and Two-Family dwellings,  the home by default should have HVAC that's already been elevated to the proper height. 

Ultimately IMM eligibility is contingent on those matters unique to homeowner situations. Generally speaking, OCD-DRU HMGP must consider the intended IMM, code compliance, DOB, and whether the applicant’s intended IMM falls under the Reconstruction program.

Clarification:s What happens if it was not built to code? But they are now trying to?

If the structure was not built to code, then the applicants have the opportunity to meet code using HM funding for the purpose of FEMA approved mitigation activities (i.e. Elevation, Reconstruction, IMM).   As with any award calculation, factors such as DOB and cost reasonableness (Elev/Recon) must be taken into account.

(2)   Will applicants be eligible for IMM for raising air conditioning even if they rebuilt their home after H. Katrina?

Again, the response to this inquiry is contingent on a homeowner’s specific situation.  Each applicant will need to be reviewed on a case by case basis. 

•         Is the rebuilt home eligible for funding under the Pilot Reconstruction program?
§  If Yes, then the HVAC should already be elevated to the proper height as a part of code compliance.  Elevation of the HVAC would then be viewed as part of the Reconstruction (not an IMM) and the homeowner would be reimbursed accordingly (Note: DOB and UCG are taken into account for the award calculation)   

(3)   Will applicants be eligible for IMM for window protection if they use any trustworthy window protection (any wind-proof shutters; wind- and bullet-proof plastic shields over the windows, which a number of applicants have installed)?

Assuming applicants are otherwise eligible for HMGP funding, they should be eligible for IMM funding for window protection if the method of protection meets code and applicants have not received sufficient funding for that mitigation activity via another program/funding source. Additionally, the program must consider whether these applicants are eligible for Pilot Reconstruction (see response to #1).

(4)   Will applicants be eligible for HMGP elevation if it cost more than $94 per square foot for them to rebuild their home?

All elevation and reconstruction projects undergo an analysis for cost reasonableness.   As is the case with Reconstructions, which I believe you intended to reference given the $ amount, projects are evaluated using FEMA’s Unit Cost Guide (UCG).  

If the Total Project Cost (TPC) exceeds the FEMA allotted amount for that structure, then FEMA’s UCG is used as the starting point from which award calculations are derived.  If the TPC does not exceed the FEMA allotted amount for that structure, then it is used as the starting point from which award calculations are derived (Note: DOB must be accounted for during the calculation process). 

An example calculation follows: 
(Note: The example assumes that the TPC was less than FEMA’s UCG for that structure)

RECONSTRUCTION Grant calculation:
TPC (Total Project Cost)*    $364,000.00
Subtract money received from Hazard Insurance    - $3,000.00
Subtract money received from Flood Insurance (structure)    - $139,000.00
Subtract money received from FEMA IA (for home repair)    - $0.00
Subtract money received from Road Home Elevation Incentive    - $4,000.00
Subtract money received from Road Home Compensation Grant    - $126,000.00
Subtract money received from ICC    - 0.00
TPC remaining after subtracting other moneys received    $92,000.00
Total Potential HMGP Award (capped at a maximum of $100,000)**    $92,000.00
             NOTE: The Midpoint Payment Award is capped at $36,000 (half of total potential amount)

* Total Project Cost (TPC) is calculated by totaling all of the expenses associated with the Reconstruction project that are eligible for payment per FEMA HMGP guidelines.
** The OCD-DRU HMGP is a supplemental program with a reconstruction award capped at $100,000.

Newspaper articles

http://www.nola.com/news/index.ssf/2010/03/deadline_looms_for_elevation_g.html 
Deadline looms for elevation grants 
By David Hammer, The Times-Picayune 
March 08, 2010, 6:47AM 
Road Home recipients have until Wednesday to tell state officials whether they want additional money to help with elevating their houses or protecting windows, roofs or large household equipment against future storms. 

So far, about 40,000 homeowners have expressed interest in the Hazard Mitigation Grant Program, a state-run, FEMA-financed effort to help homeowners rebuild safer and stronger from Hurricanes Katrina and Rita. But only 293 participants have been paid so far, and all but 16 of them have received just part of their payments after midpoint inspections. 

The state has managed to spend only $6.7 million of the $750 million allotted for the program. The vast majority has been given to property owners who are raising their home, while a handful of applicants have received money for other kinds of reconstruction work. 

Eligible homeowners can receive up to $100,000 for elevation or reconstruction and as much as $7,500 for other storm-proofing measures. The money is for Road Home recipients only, but it is awarded separately and is not included in Road Home's $150,000 cap. 

The state is asking anyone who received a Road Home rebuilding grant and is interested in the additional reconstruction and mitigation money to return voluntary participation forms sent out in 2008. If a Road Home participant believes he or she should have received the forms but didn't, that person can call the state's toll-free mitigation hotline at 877.824.8312. 

The Louisiana Recovery Authority, which sets policy for this and other programs, says it will continue to accept statements of interest after Thursday, but only on a first-come, first-served basis, suggesting that the agency wants to get a final count on how many people will be seeking the money before finding other uses for any leftover hazard mitigation cash. 

And it appears there will be plenty of that. 

It took nearly two years after Katrina hit for the state and FEMA to agree on a use for the $1.2 billion for hazard mitigation. This allotment was in addition to the more than $10 billion the state received from U.S. Housing and Urban Development to run the Road Home program. 

It took another two years for the state to give hazard mitigation grants to qualified applicants, during which time it realized it could find only enough eligible and interested recipients for about two-thirds of the money FEMA originally offered. 

Late last year, the state eased some of its rules related to elevating or reconstructing properties to move more of the money, adding the option for up-front payments, easing limits on the size of rebuilt homes and allowing applicants to collect money to make up for aid they previously lost to documented contractor fraud. 

The state also launched a program that would pay up to $7,500 for storm-proofing measures, using the same pot of hazard mitigation money. That money -- set aside for storm shutters, roof tie-downs, elevating heating and air-conditioning units and other mitigation measures -- was originally supposed to come from the Road Home, but was shifted under the FEMA effort last year. 

The storm-proofing effort has had its own difficulties getting off the ground. Some interested homeowners say they were put off by program advisers when they called the hotline and can't get anything in writing to document their desire to participate. 

Program officials have been meeting regularly with a number of certified contractors since launching the program in November, but the contractors report confusion over ever-shifting rules. 

For example, some companies wrote agreements with applicants months ago to cover as many windows with storm-grade shutters as a full $7,500 mitigation award would buy. But then in February, FEMA ruled that all windows in the house had to be covered for a grant to be paid, regardless of the out-of-pocket cost to the homeowner. 

The state initially said there would be a "work-around" in which some windows could be covered with shutters and others with cheaper material, such as a film that keeps the glass from being blown out by high winds. Then, a week ago, contractors were informed that, too, was not possible under the program. 

. . . . . . . 

Homeowners with mitigation questions can call 877.824.8312. 

David Hammer can be reached at dhammer at timespicayune.com or 504.826.3322. 

http://www.nola.com/news/t-p/neworleans/index.ssf?/base/news-13/1268202875206210.xml&coll=1 
Deadline today for Road Home grants 
Confusion over program increasesWednesday, March 10, 2010 By David HammerStaff writer 
As Road Home recipients rush to meet today's deadline to apply for separate reconstruction, elevation and storm-proofing grants, confusion over the state's Hazard Mitigation Grant Program is intensifying. 

Applicants, their advocates and the contractors who hope to get paid with the mitigation money are having trouble understanding ever-changing rules, getting clear answers to their questions and even confirming if the state has properly recorded who wants a share of the $750 million in grants. 

For example, Tanya Scott of New Orleans filled out all her paperwork to apply for up to $7,500 for storm-proofing measures, but when she called her state mitigation analyst last Friday, she was told the program is "on hold." 

Christina Stephens, spokeswoman for the Louisiana Recovery Authority, says nothing is on hold and Scott shouldn't have been told that. 

Dozens of other homeowners have complained in recent days that when they call the program hotline at 877.824.8312, they are told their files are "under review" and can't get any written confirmation that they have applied. Stephens said that even if a person's file is "under review," he or she can still get in line for the grant simply by expressing their interest over the phone. 

Tim Clark, the owner of a local elevation contractor, is at his wits' end because it's been more than six months since he completed some house-raising jobs that qualified for grants and he's never been paid. He fronted the cost of the jobs on the promise of collecting the grant money. 

"This is discouraging a lot of homeowners because people are going through a major deal to get back into their houses and now they face this," Clark said. 

"I'm only $700,000 in the hole, but other contractors, they've fronted millions. If we got paid right away we could do it, but we don't want to start the job because they're not paying us at all." 

Nonprofits, too, are feeling the pinch. Tess Monaghan, whose Build Now organization in Gentilly promotes its expertise in hazard mitigation, has also waited more than half a year for some grant payments. She's defended the program in the past, but now says it appears overwhelmed. 

"It's hard to get information up front from them, like 'This is what you need and this is the format we need it in,'" she said. "It's frustrating." 
The program has gone through several major changes in the past six months -- the state hired Shaw Group to manage it and the design has shifted from strictly reimbursement to an advance payment option. Stephens said state officials are trying to work through delays. 

So far, the program has paid fewer than 300 homeowners a total of $6.7 million in two years. 

Some delays stem from recent decisions by FEMA limiting who can get aid, including strict rules about mixing and matching different types of window protections. And some applicants are now shocked by rules that have been in place all along, such as the one that says work started after March 16, 2008, without FEMA approval is ineligible for reimbursement; or one that states the larger the home, the less FEMA will pay per square foot. 
One applicant from Metairie , who declined to give his name because he is afraid of undermining his appeal, found out recently that FEMA set his eligible reconstruction costs at less than $80 per square foot based on his home's larger size. Because the total amount he's received from Road Home, a Small Business Administration disaster loan and insurance proceeds exceeds $80 per square foot, he's been ruled ineligible for a hazard mitigation grant to pay his actual costs of rebuilding. 

The Road Home, incidentally, set replacement costs at $130 per square foot for all destroyed homes, regardless of size. 

The state's hazard mitigation program can be reached by calling 877.824.8312. 

News reporter David Hammer can be reached at dhammer at timespicayune.com or 504.826.3322. 

Best wishes,

Melanie Ehrlich
Founder, Citizens' Road Home Action Team (CHAT) http://chatushome.com

Comments: chatlra at yahoo.com

Member, LRA Housing Task Force
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