[FoCHAT] CHATNews: Road Home Numbers and Reality

[Melanie Ehrlich]

5/25/10                
Dear CHAT Members,
127,287 grants have been given out so far by the Road Home Program (RH), but many of these are far less than they should have been and too small to allow applicants to rebuild.
117, 013 of these grants are for applicants to rebuild (rather than sell their home to the RH)\
This CHAT newsletter is about numbers:
1. Numbers of RH applicants shortchanged on their main grant (so-called compensation grants; these are from HUD money)
2.  Numbers of RH applicants who will really get the publicized, generous-sounding mitigation grants (these are from FEMA money)
3. Despite the need, despite the promises of help after the poorly constructed levees failed under the faulty oversight of the federal Army Corp of Engineers, our state legislators want to divert remaining RH money from applicants. 
Leading the way in putting more stumbling blocks in front of disaster victims is the applicant-disparaging House Speaker Jim Tucker.  
 
1.  Numbers of RH applicants unable to build because of shortchanging their grants
·         More than 22,000 applicants tried to dispute mistakes in RH’s determination of their pre-storm value
o   The RH calculation of pre-storm value was critical for determining most grant amounts


The Louisiana Legislative Auditor in a Jan. 9, 2009 audit report stated the following. 

“If applicants dispute their pre-storm value, Road Home employees check the PSV dispute flag in eGrants. If this flag is checked, ICF uses the highest pre-storm value in the award calculation.
However, because the policy says that applicants disputing their pre-storm must go through the resolution process, all applicants with a PSV dispute flag should have a corresponding issue in JIRA which is the system used to record and track disputes.
However, we analyzed 50 applicant files of a total of 22,650 that had the PSV dispute flag as of March 2008 and found that 27 of the 50 (54%) did not have an issue related to PSV in either JIRA or JIRA archives.[1]”
 
·         At a meeting in the office of CHAT Co-Chair Frank Silvestri in fall, 2008, Richard Gray, Deputy Director of OCD, told me and several other advocates for RH applicants and Robin Keegan, then Deputy Director of LRA, that the main source of appeals was damage estimates. 
·         Therefore, many more than 22,000 applicants tried to dispute grant amounts
 
·         7,923 applicants won their first-level appeal for an average increase in grant size of more than $27,000 
o   They won their appeals even though these appeals were decided by the contractor (mainly ICF Emergency Services), who was responsible for extremely high levels of grant processing mistakes.
o   An additional 9,446 applicants were unsuccessful in their appeal 
o   A total of  17,369 applicants appealed. 
o   We know that many of the applicants who lost their appeal had no fair chance to win.
§  From RH applicants, former ICF staff and Al Blankenship (ICF Chief of Staff for RH operations), it is clear that only a very low percentage of applicants appealing mistakes in damage estimates, the most frequent type of appeal (see above), won their appeals
§  Appeals for damage estimates were almost entirely in the hands of the Housing Evaluation Team, the same contractor staff who determined the damage estimates in the first place.
§  The Housing Evaluation Team was so secretive that their files were not open to the applicants’ housing advisors or the contractor’s Appeals Department.
§  I have letters addressed to me from lawyers for former LRA Executive Director Paul Rainwater stating that there were no written rules for the final (second) level of appeals run by the state and that the state would not release to the public the names of the state employees who conducted those appeals.
o   So much for fairness in the final appeals!
 
·         And, if you want to go to court about outrageous mistakes in your grant, the state has staunchly defended, with your taxpayer money, that you have no right to do so, in contradiction to the state’s Administrative Procedures Act.
 
·         Many more RH applicants than the 17,369 who did appeal mistakes in their grant wanted to appeal. 
o   Applicants were often told that they had to sign their closing documents, with its covenant requirements to reoccupy their home by 3 years, before they appealed.
o   After applicants signed the closing documents, it was especially difficult to win or even to start an appeal.
o   Many applicants got fooled by the tricky requirement at their grant closing to send a letter requesting an appeal as well as checking a form requesting an appeal. 
o   If they did not send in the letter on time (with no reminders), they lost the right to appeal even though they handed in the form for appeals checking the box to appeal.
 
·         “The Louisiana Recovery Authority estimates that at least 20,000 Road Home recipients, or 15 percent, will be unable to rebuild their homes without substantial help.”
 May 24, 2010 http://www.nola.com/hurricane/index.ssf/2010/05/nonprofit_assistance_for_road.html
 
·         The non-profit agencies, that LRA seems to be relying on to help these applicants, already have long waiting lists, and use mostly volunteer help.
 
o   These non-profit groups can help only a very small fraction of applicants in need, which are often the several tens of thousands of applicants who unsuccessfully tried to get mistakes in their grants corrected by RH and, through no fault of their own, don’t have enough money to repair or rebuild their home.
The RH Additional Compensation Grants for low-income applicants are full of their own tricky loopholes that denied money to applicants, often after vetting their application and promising it to them.
·         The only real help for these applicants and for meaningful post-Katrina blight reduction would be to use the “surplus” RH money to help applicants repair their homes. It would be fair to add requirements for applicants to show that the money is going to repair. 
 
 
 
2. Rules updates: expected numbers of RH applicants who will get Hazard Mitigation Grant Program funds for elevation or elevation construction or Individual Mitigation Measures funding 
As I have written in previous newsletters, about $1.2 billion of FEMA money was automatically dedicated to mitigation for the State of Louisiana.
This is 7% of the post-Katrina/Rita clean-up money spent by FEMA. 
This is approximately the amount of money that LRA had set aside for FEMA-funded mitigation grants for RH applicants:
·         elevation or elevation/house reconstruction grants (Hazard Mitigation Grant Program or HMGP grants of up to $100,000 per grant for non-duplicated benefits) 
·         and for the Individual Mitigation Measures grants for shutters, raising air-conditioning, straps to tie down houses more securely (IMM grants of up to $7500).
However, the large amounts of FEMA money touted by the state as so helpful to and helping to make up for gaps in RH funding are just more broken promise for most of the more than 22,000 applicants.
The rules that will disqualify most applicants are generally unknown. These rules will further distress many thousands of applicants who are building elevated homes, signing house-elevation contracts, and assuming that they will get the promised mitigation money to pay their building contractors.
For example, we learned about one major new rule only by reading a letter from a state staffer that was posted on a New Orleans yahoo-group by KC King, the RH applicant who received the letter. The letter states the following.
Unfortunately, the current policy is that homes built after 2006 are not eligible for IMM's (the $7500 Individual Mitigation Measures Grants from FEMA money). The thinking is that homes built that recently ought to include mitigation measures as part of building code compliance. Please let me know should you have any questions about this policy. Again, I do apologize that this was not communicated to you prior to your exploring window protection options.

As with Reconstruction, you'll be given the opportunity to appeal this determination. I wish you and your family all the best with your recovery and mitigation process.

Best Regards,

Christopher Mewes
Elevation Team Lead
Office of Community Development
Disaster Recovery Unit
Hazard Mitigation Grant Program
504.284.4108
christopher.mewes at mitigatela.org
http://www.mitigatela.org
So excluding those who built after 2006 will disqualify large numbers of applicants from IMM grants.
As to the HMGP mitigation grants of up to $100,000, there are unreal rules about cost reasonableness not spelled out at the state’s website.
These rules are leading many HMGP elevation grant applicants to waste their time getting difficult documentation (architect’s plans, bank statements, etc.) applying for money they have no chance of getting.
·         Depending on the type of home (according to one-on-one comments from Lara Robertson, another Deputy Director of OCD), either $84-96 dollars per square foot is set as the limit for the amount of money that rebuilding your home is allowed  for an HMGP elevation/construction grant.
 
·         So, low-income applicants will presumably have the ridiculously low upper limit of $84/sq. foot while other applicants will have the upper limit of $96/sq. foot , a slightly less unreasonably low figure for the HMGP’s threshold of “cost reasonableness.’
That there is a major contradiction here for RH applicants because RH set $130/ sq foot as the cost allowed for damage-repair calculations (not for the grants themselves, but for the complicated grant calculations) seems to be easy for state officials to overlook.
And if the rules don’t keep you from getting a mitigation grant, having your application put in long-term limbo, like mine and many others, and getting into the cycle of repeated requests for documents that you already sent to the program will finish off your application.
·         Does this 2009-2010 administration of these mitigation grants that were supposed to deliver $1.2 billion for safer, smarter, stronger building in Louisiana sound an awful lot like the 2006-2010 administration of the Road Home Program? The main difference seems to be in the very much larger percentage of money that won’t get to applicants.
Bottom line: the state sounds generous with the HMGP and IMM grant funds “set aside” for RH applicants but state officials must know that so very little of the money that came to our state only because of the hurricanes that hit S. Louisiana will be spent on these applicants.
Instead much of this money will be diverted to other uses (as it already has) including outside the hurricane-stricken parts of Louisiana.
The state does not want to talk about this diversion of Katrina and Rita mitigation funds, and, in fact, refused to give me the numbers on the FEMA mitigation money already spent despite my public records request for this information filed almost two years ago.
Paul Rainwater told his attorneys to write to me (I have and will post the letter at our web site) that the state did not have a record of where this HMGP money was spent.
 
3. Comments on House Speaker Jim Tucker’s attempts to divert RH (HUD) money away from applicants
The following email was sent for posting in our newsletter, and is highly pertinent to above ongoing RH issues. 
I was at the meeting when [Speaker of the House] Tucker said those things (about how many RH applicants gambled away their grants and the state should go after them) and the arrogance and complacency with which he uttered those words made me sick.  The man just wants the money for his own interests and does not care about those who are still suffering because everything they had, everything they knew, everything they counted on (friends, family, neighborhood included) was wiped out in a matter of just a few short hours, then they were lied to about funding to compensate them for their losses, and never got that funding.  

This money was intended for one purpose and one purpose only and needs to go to the people who are the real victims in this mess.

The truth is that a good portion of this money was gotten through the efforts of grass roots neighborhood groups who sent representatives to Washington to appear before the Senate and plead for the money to aid flood and hurricane victims.  Senator Ted Stevens of Alaska minced no words when he voiced his concern that the corrupt Louisiana State government would divert the funds to other projects and that this money would not reach the intended recipients.  Diverting this funding to Tucker's pet projects proves Senator Steven's point that Louisiana is still a corrupt state and that we cannot be trusted to do the right thing.  

Give the flood victims the compensation they fairly deserve.

Thank you,
Laura
 
 
4. Webcast of my 40 min radio interview last week about some RH issues
 
http://wgso.com/?cat=41
 
Best wishes,
Melanie Ehrlich
Founder, Citizens’ Road Home Action Team (CHAT)
http://chatushome.com 
 
 





[1] http://app1.lla.state.la.us/PublicReports.nsf/6F905AB4148A123C8625753D0066BD41/$FILE/00008378.pdf, P.20
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