Round Table with Congressmen from Gulf States - Delays in the Release of Disaster Assistance Funds to Recovering Communities in the Gulf Coast

ROUNDTABLE WITH HOUSE OF REPS MEMBERS FROM GULF STATES

SUBJECT: DELAYS IN THE RELEASE OF DISASTER ASSISTANCE FUNDS TO RECOVERING COMMUNITIES IN THE GULF COAST

PARTICIPANTS: REP. JOHN MICA (R-FL); REP. ANH "JOSEPH" CAO (R-LA); REP. MARIO DIAZ-BALART (R-FL); REP. STEVE SCALISE (R-LA); REP. CHARLES BOUSTANY (R-LA); PAUL RAINWATER, EXECUTIVE DIRECTOR, LOUISIANA RECOVERY AUTHORITY

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REP. MICA: What I'm going to do is go ahead and we'll proceed with this morning's meeting. But I'm going to take this opportunity to thank representatives from FEMA for joining us this morning. As -- I'm expecting Mario Diaz-Balart, who's the ranking member of the Economic Development, Public Buildings and Emergency Services Subcommittee. But I'm pleased that we're having this opportunity to have a very serious discussion and opportunity to review some of the issues relating to Louisiana recovery.

This meeting was requested by our newest member of the Transportation and Infrastructure Committee. Joe Cao is our newest member. And delighted to accommodate his request.

Actually, after I heard from our new representative on the committee, began to hear from some of the other members of the delegation. We had Mr. Scalise, who was on our committee, I think, for about one day; managed to be with the committee for one day but made his voice heard also on the issue of reviewing some of the FEMA reimbursements and the pending issues with the state of Louisiana and other governmental entities.

And then we're certainly pleased to have also among our ranks Representative Charles Boustany. And he also has been very active, even before we've had the new members, in trying to secure Louisiana's just reimbursement and also resolve some of the pending issues relating to both Hurricane Katrina, and I guess Rita where we still have issues.

So that's the purpose of today's meeting. You know, sometimes I like to have a small gathering of members and some of those in the federal agencies and try to resolve issues. Usually, I find that's the best way to work things out.

And again, I'm not an expert on Louisiana issues or the problems that they've incurred in dealing with them, the horrific natural disasters they've incurred -- little bit of experience from the Florida realm. And it does take some time to resolve these matters.

But again, let me yield, if I may, first to the individual who requested this meeting, and thank Representative Cao also for his quick leadership in trying to get some of these matters resolved.

So we'll go ahead and recognize you, and then we'll get to our other representatives.

REP. CAO: Well, first of all, I'd like to thank the ranking member of the Transportation and Infrastructure Committee, Congressman John Mica, for his assistance in organizing this roundtable discussion here today. Congressman Mica has pretty much been my mentor on the floor, and also on various other issues, and I appreciate all of the support that he has provided me since I came here to Congress.

I'd also like to thank all the other members from the Louisiana delegation -- Councilman Boustany, Councilman Scalise -- for attending this roundtable discussion. Their support for my district obviously speaks loudly of their character and their concern for the people of Louisiana.

I'd also like to thank Chairman James Oberstar of the Transportation and Infrastructure Committee. Both Chairman Oberstar and John Mica have shown their extraordinary dedication to the rebuilding of Louisiana's 2nd Congressional District and their desire to help the people of Louisiana.

And I also would like to thank my colleagues from Louisiana -- which I have already done. I would like to thank the senior representatives from FEMA and from the state of Louisiana to take their time to be here today.

Obviously, my number-one concern in this hearing is to address the inordinate delays in the rebuilding process of the 2nd Congressional District, especially with respect to release in the funding of the Public Assistance Project (worksheets ?) and the other projects that directly affect the ability of the 2nd District in the Gulf Coast recovery process.

Based on my understanding, there are approximately 4,000 projects representing over $4 billion that have yet to be released, and some of these projects have been outstanding for more than three years. And I do understand the difficulties of rebuilding. I do understand the difficulty in assessing damages with respect to what is disaster related and what is related to pre-existing conditions. My own house has been flooded twice in the last three years, so I know the difficulty in trying to convince the insurance company that this is storm-related versus what is pre-existing with respect to my own home.

However, I did not take three anda half years to resolve the situation, my personal situation. And obviously, one home is a lot less than the thousands of projects that we are facing in the 2nd District and in other parts of Louisiana, but to extend this problem three and a half years is somewhat unreasonable, from my perspective.

And while we are languishing in this bureaucratic impasse, our people are suffering, our children are suffering because of inadequate educational facilities, our elderly are suffering because of the insufficient health care system down there, and then our cities being held hostage because of crime-related issues.

So my concern here really is to address some of these roadblocks, and hopefully we can try to remove these obstacles in order to get things moving.

So there are some major topics that I want to discuss today -- first and foremost, the issue concerning Charity Hospital, the New Orleans Sewerage and Water Board, the St. Bernard waste water treatment plant, project at Louisiana State, project at Tulane University and Southern University, and other major projects.

I'd like to discuss whether there are any legislative or regulatory requirements that are impeding the speedy resolution of these projects and what is the schedule to resolve the backlog of appeals on public projects and what can we do to expedite these appeals.

So with that, again, I'd like to thank you all for attending this hearing, and I would like to give the floor back to John Mica.

REP. MICA: Well, I want to thank our newest representative again for his initiative here today in getting a focus on the backlog, as he said -- pretty -- if the numbers are correct, 4,000 items still pending and $4 billion and more than three years to get them resolved. Hopefully through this little meeting we can make some headway on that.

We've been joined by our ranking member of the Economic Development, Public Buildings and Emergency Management Subcommittee, Mr. Diaz-Balart. I offer opportunity for some statements. We've got two other Louisiana representatives we'll turn to after you.

REP. DIAZ-BALART: Thank you, Mr. Mica. I also want to thank Mr. Cao for putting things together, along with our two esteemed colleagues from the great state of Louisiana.

You know, as -- you and I both come from states that are, unfortunately, experienced with disasters.

It's nothing to be proud of, but it's something that we're -- that we always have to face. And we know that delays can hamper a state and a local community's ability to recover, frankly.

And -- but from the experience that I've had, and -- along with Mr. Mica, we know that when members can sit down with FEMA and others to discuss the problems, usually we can get some good solutions and some resolutions.

So I want to thank all of you for being here. I want to thank you, Mr. Mica, and Mr. Cao -- again, our newest member, but -- for his steadfast leadership. He has not stopped since he got here, advocating for the people that he represents, just like the other two members that are here. So it's a privilege to be here.

REP. MICA: (And ?) Scalise, actually -- if you'll yield a second -- bugging me, too, for a new member. So the -- pretty good activist team, tag team from Louisiana; and Charles Boustany hasn't stopped since he's been here. So --

REP. DIAZ-BALART: Impressive members.

REP. MICA: And they're here this morning, so --

REP. DIAZ-BALART: And it -- and it -- and all that does is help improve the system, improve the -- help the people that they represent and, frankly, all of us represent. So I want to thank all of you for your leadership. Thank you, Mr. Mica.

REP. MICA: Thank you. And let's see. We'll go in seniority. Mr. Boustany?

REP. BOUSTANY: I thank my friend, the ranking member of the Transportation and Infrastructure Committee. I served on that committee for four years and have now moved on to the Ways and Means Committee, where I'm now the ranking member of the Oversight Subcommittee.

But I've been engaged in these issues, working with my colleague, the ranking member and the gentleman from Florida. And I am really pleased that our newest member has hit the ground running and -- rapidly demonstrating leadership, Congressman Cao, on these issues.

And I want to thank you for calling this meeting. I think it's very important to catch up on -- and to get a status report on so many of these projects and issues that are still delayed. And this is something I've been fighting for quite some time, specifically with my district, pertaining to Hurricane Rita.

But I do want to thank former FEMA administrator David Paulison, who has -- who has worked with us closely in trying to resolve a number of these issues. But unfortunately, we still are encountering a significant amount of bureaucratic entanglement at the interface where federal meets state meets local, in trying to get these resources down to the communities and folks who need assistance the most.

And so I thank the gentleman from FEMA. I want to thank our friend Paul Rainwater, who's been a staunch advocate in working on behalf of the people of Louisiana in many capacities.

And I hope that we can address some of these issues here and move forward. Thank you.

REP. MICA: Thank you. And our member of the T&I Committee for one day -- we enjoyed having him. We enjoy -- appreciate your interest in this matter, working with the -- your colleague who stayed on the committee. But pleased to have you, Mr. Scalise. You wanted to comment?

REP. SCALISE: Thank you. I want to thank Ranking Member Mica for his appreciation of the issues that we're dealing with that we're trying to resolve, and as well as Congressman Cao's leadership as a member of the committee.

While I only served for about an hour on the committee, I think technically -- (laughter) --

REP. MICA: We had you there for a day.

REP. SCALISE: I'm now on the Energy and Commerce Committee. But I did get an -- excuse me -- I did get an opportunity to speak with you over the past few months about a number of the issues that we're still dealing with and had the opportunity to bring those issues to Chairman Oberstar as well. And he's very familiar with a lot of the challenges we're facing. And I think we've been outlining what the problems are.

We've been working with our state and local leaders -- glad to see Paul Rainwater with the Louisiana Recovery Authority here and appreciate the representatives from FEMA and other agencies for coming to hear what our concerns are and also the things that we'd like to see come out of this hearing, because as I've talked to mayors and council members, local government entities, there's still tremendous frustration with the fact that there are over 4,000 project worksheets that have yet to be resolved. And as we're three and a half years removed from Katrina and Rita, many of us feel that this is unacceptable to still be at this point.

And not only do we have to resolve these issues and, I think, establish timetables so that we really can fast-track the problems that local governments are having as we try to figure out how to close these worksheets, when there are disputes that exist between -- something that we dealt with with one of the programs, the housing component of the recovery, the Road Home program, initially there were some problems because you would have homeowners that would get a settlement reached and they felt it was an amount that might be too low for them to do the work as they would go out to bid. And contracting prices have gone up in our region, and so in many cases the amounts that they were granted were lower than what it would cost to actually get the work done, even when this work was agreed upon.

One thing we were able to come to an agreement on there was if there is an agreement -- for example, a homeowner felt that it was going to cost $100,000 to repair the work, and the Road Home program felt that it would cost $80,000 to repair the work, well, at -- for a while, nobody could do anything, because no money was granted. And we finally reached an agreement that at least since the $80,000 was not in dispute, that they would go ahead and pay that $80,000, so at least people could get started in going -- start getting the electrical work done and get sheet rock replaced, and then the dispute would be over the remaining 20,000 (dollars) in that example. And of course there are thousands of examples like that, using amounts ranging from thousands of dollars to millions of dollars. But at least where there is no dispute on the minimum amount, if we could at least get that money moved and then have a fast track process to resolve the remaining amount, and whether the resolution is zero dollars or the full balance, at least they will have the money to go forward and at least start letting contracts and getting the work done, so that buildings don't remain vacant and in many cases in disrepair.

And in some cases it actually costs more money later if you're not able to start the work sooner, because, as the delays go on, the buildings get into worse disrepair, and it becomes even more expensive to fix them.

So there are a lot of different ideas that have been tried -- and some have even been proven successful -- to come up with better ways to resolve the delays and the differences in amounts that are agreed upon. While we can discuss those, hopefully we can come up with solutions, some at this meeting, some as we continue to work, because this is going to be an ongoing process.

But hopefully at this meeting we can at least start laying out some of those proposed solutions, and I'd be interested in hearing from all of you on this panel of ways that we can come to agreement to get some of those issues resolved, as well as some areas in the Stafford act.

And I think all of us that have dealt with these storms, both Katrina and Rita, have recognized that there are (such ?) flaws in the Stafford act, especially as it relates to major disasters. It's something that I know I've been interested -- and talked to a number of members of Congress on both sides of the aisle. I think there's very bipartisan agreement that we do need to overhaul the Stafford act. And a number of us are working on legislation to do just that. Whether it be ice storms in the Northeast or tornadoes in the Midwest or earthquakes in the West or hurricanes in the South, we all at some point have had to or will have to deal with a major disaster in this country, and hopefully nobody else has to go through the things that we've gone through.

And so these issues that we're trying to get resolved don't just pertain to the remaining items that are unresolved from Hurricanes Katrina and Rita; these are also things that we would like to resolve so that nobody else has to deal with the things that we've been dealing with in the future.

And so I look forward to discussing all of these various items and hopefully coming to some resolutions.

And again, I want to thank Ranking Member Mica for letting us have this hearing, and Congressman Cao for his leadership as a member of the committee, because all of the things that we're going to be working on, especially the changes to the Stafford Act, will have to go through the Transportation Committee.

And again, these are issues that I think have bipartisan support because, when we talk to Democrats and Republicans, storms and major disasters don't see political affiliations and they don't see -- they don't see district lines. They transcend. And as someone who had to help my dad gut his house -- completely lost his house during Hurricane Katrina; 5 feet of water sitting for over 10 days, and he literally lost everything he had. There's a human cost to all of this. And hopefully, the things that we do today will help at least relieve some of the frustrations and problems that people are dealing with as they work to get back to a life that they can lead where they don't have to worry about issues that are still unresolved from the storms of three-and-a-half years ago.

So I appreciate the opportunity to have this hearing.

REP. MICA: Thank you for your excellent comments.

I don't see Representative Melancon here. Does he have a representative? Okay. Are there any other Louisiana members of the House or representatives from the Senate here today? Well, we will also solicit their comments. This isn't a formal hearing, but we want to -- we'll try to weigh in.

I'll ask the staff, too, if we can get any pending issues from any of the other members and the two senators that are in (Landau ?). I think that would be helpful.

The purpose, again, is to try to get some of the issues resolved, some of the reimbursement satisfied. And then, as Representative Scalise said, that we fast-track this whole process, because sometimes as we get further away from a disaster, a natural catastrophe like Louisiana and others have experienced, even our state of Florida, as Mister -- as Voulard (sp) pointed out -- you get further away and things get shelved. And we don't want that to happen.

Maybe before I call on the FEMA folks, if I could ask Mr. Rainwater, who's the executive director of the Louisiana Recovery Authority, if you could tell us where you think you are.

And I guess you're part of the governor's office?

MR. RAINWATER: Yes, Congressman. I can explain.

REP. MICA: And you could give us a little bit, and then we'll ask our FEMA folks if they can respond.

MR. RAINWATER: Thank you, Congressman Mica. And I want to say thank you, Congressman Cao, for putting this together. Congressman Boustany and I have been -- and Congressman Scalese -- have been -- Katrina, Rita, Ike Gustav -- in the water knee deep. We all know each other really well.

I want to talk about three things just very quickly. When Governor Jindal was elected in 2008, there were three things we looked at. One was leadership. And the governor changed out the leadership in the state recovery apparatuses. He moved out the Governor's Office of Homeland Security -- (word inaudible) -- changed out the leadership. The Office of Community Development, which handles all the HUD community development block grant money, changed out the leadership. The Louisiana Recovery Authority, changed out the leadership. So we made some major leadership changes.

I basically serve as the governor's's hurricane recovery adviser. I also serve as his authorized representative to the Federal Emergency Management Agency. I run the Louisiana Recovery Authority. And I'm also detailed into the -- as the senior executive director of the Office of Community Development. So it's a one-stop shop. You got the Community Development Block Grant money, you got public assistance, hazard mitigation, alternative housing pilot project. I mean, everything goes to one place.

And so there's not this confusion anymore that we had in the state of Louisiana. There was very inefficient organization, there's no doubt about it. Policymakers and operational folks weren't talking to each other. That no longer exists. So there's one organization.

So we changed out the leadership, we revamped the organization, and then we started looking at our business practices. And there is no doubt that it was taking a long time for communities to get their money. Once FEMA obligated and approved the dollars and the invoices came to the state of Louisiana, it was taking about 60 days in order to get a payment out. We revamped our processes. It now takes eight days to get a payment out. Last year we paid out $1.2 billion in FEMA public assistance. We paid out $2.2 billion in Community Development Block Grant money. And so we think -- we feel like we have -- we've revamped our business practices, changed our our leadership and are very focused on providing services to local government.

I've told my staff -- and I'll tell you, we embedded right off the bat, first month, we embedded folks with the city of New Orleans on the HUD side and on the FEMA public assistance side to make sure we were synchronized. I said that we no longer needed to take a traditional approach to recovery -- you know, that is, we had traditional relationships. The state acted as the granter, received the money. And typically what would happen is you would go down and force the local government to make an argument about why they were -- (inaudible) -- their disasters.

I said, we can't -- we'll never get there. So what we did is we took that wall down and we said, let's work together and let's synchronize this. And then we went to FEMA and said, look, let's have a -- let's have a summit. Let's talk about 15 -- the top 15 issues that we have between the state of Louisiana, local government and the Federal Emergency Management Agency. And we had some successes early on. There's no doubt about it.

And I want to tell you, Congressman Mica, this is not about personality. It's not about people's intent. What we've tried to do is quantify what the issues are, quantify what we believe we're doing, the state of Louisiana, and develop a professional relationship, one where we can sit across the table and talk about issues.

And there's no doubt we've made some progress, but the reality of it is -- and you're absolutely right and all the members are right -- we are bogged down in dispute resolution. There is just no doubt about it. And we've got to figure out a way -- and Jim Stark and I, who you'll hear from with the Transitional Recovery Office, Jim and I have talked about a process by which we might be able to break through that.

As Congressman Scalise said and gave the example of -- when I took over the Road Home project which, you know, a lot of issues, as Congressman Cao knows and Congressman Scalise knows and Congressman Boustany hear from their constituents quite a bit. I revamped those processes. And we had a contractor in place, ICF International, who I beared (sic) down really hard and have fined them about $4 million in nonperformance. We went in, we looked at their process. They had a dispute resolution process by which files just got lost and never made it up to the appeals process.

Well, we feel like we're sort of in the same place right now. We feel like that what will happen is the FEMA, state and local governments will get in a dispute case and just sort of haggle back and forth. We feel like we need to formalize that process.

And one of the things that Jim and I have talked about doing is taking what we did on the state side, take our policy folks and our operational piece and get them in a room together, because what will happen, the public -- the public assistance operational folks might make a decision. Policy people will come back and overturn that decision.

So that has been one of the problems we've had and we've recognized, and what we've talked about is trying to formalize that so that we get through this.

REP. MICA: Okay. Well, we don't intend to end with just this meeting this morning. We're going to find a way to resolve these pending issues. And if it takes some formalized structure, additional attention from us in any way, I think we've got to get these issues resolved.

But appreciate it, and appreciate Governor Jindal's leadership. Bobby had me down there. It's hard to believe that some of the things we saw years ago when he was still in the House, before he became governor, were -- some of those issues are still not resolved, too. So -- and again, thanks for the update, and we'll be working with you, as I said, until, hopefully, we're down to the last one or two items.

But -- pleased that we've got from FEMA today -- and we are in a transition, and we do have an acting administrator -- and then today we have the acting deputy administrator. Hopefully -- I know the new administration's working towards getting us a full-fledged administrator soon. Appreciate Dave Garrett -- Garratt coming in. Dave is acting deputy administrator and has been responsible for helping resolve some of these issues.

Maybe you could give us your mental perspective, on behalf of FEMA, of where we are, where we are headed and what we need to do to resolve these issues.

DAVID GARRATT (Acting deputy administrator, FEMA): Sure thing. And I also would like to extend my thanks to you, Ranking Member Mica, and to Congressman Cao and gentlemen, for inviting us over to this round-table session. We appreciate the opportunity to come over here and roll up our sleeves and discuss with you some of the prevailing issues that are continuing to affect the recovery in Louisiana. Certainly there are some issues remaining. We recognize that.

I would like to reinforce the comments of Mr. Rainwater. Our relationship with the state has improved dramatically since Mr. Rainwater and some new blood has arrived there. We have a terrific relationship with them. Obviously, we had issues that we have to continue to work through, but it's been a very professional and largely satisfactory relationship with them.

And we appreciate the fact that the state of Louisiana has been working with us as good partners to resolve some of these issues.

I was very interested in some of the comments that have been made thus far. Representative Scalise, you, for example, outlined an issue involving Road Home and suggested that we shouldn't wait for the marriage of different funding strains or the availability of all of the funding, for example, to stop a homeowner from moving forward with the money that was made available to them. I think that's a great idea. I think, in fact, we have opportunities to do that in Louisiana.

There's been discussion here that we've got 4,000 project worksheets that have somehow been -- have not been resolved. I think that number's a bit high. But I don't want to diminish the fact or have that reduce the fact that, in fact, there are project worksheets and there are projects that remain in dispute and that we continue to work with individual applicants to resolve. But in many of these cases, we believe that should not stop applicants from moving forward with the funding that has already been obligated for those projects, even though what remains in dispute is the ultimate amount of funding that may be available for them.

And we're prepared and have always been prepared to continue to work with those jurisdictions to identify additional eligible costs. So we firmly believe that the example that you provided as it applies to Road Home is an example that can also be applied to the situations that we face down here and are anxious to see that happen.

Bottom line is we're ready to roll up our sleeves. We're ready to discuss with all of you ideas and issues affecting the pace of recovery down there and we're ready to get started.

I would like to, again, mention who we have available here to engage in this discussion. To my left is James Stark. James Stark is the assistant administrator for Gulf Coast Recovery. He reports directly to the administrator of FEMA, and he's responsible for the states of Mississippi and Louisiana and the recovery for Hurricanes Katrina and Rita.

Immediately to my left is Mr. Michael Buckley. Mr. Buckley is the acting assistant administrator of our Mitigation Directorate and talk about mapping and other issues. To my right is Mr. James Walke. Mr. James Walke is the acting assistant administrator of Disaster Assistance. And the programs of public administration -- or excuse me, public assistance and individual assistance fall under his bailiwick.

And with that, we're ready to get started.

REP. MICA: Well, Mr. Stark is the -- just a quick question, is this unique -- this backlog unique to Louisiana or is this across the Gulf Coast?

JAMES STARK (assistant administrator for Gulf Coast Recovery): There's a similar backlog in Mississippi, Congressman. It's probably not as critical as it is in Louisiana at this point. But I thought it would be useful to maybe give a little bit of background as to how we got to where we are, we have this kind of backlog.

As you all well know, the storm's breadth and depth was just immense. And when FEMA came in to start estimating damages immediately after the storm, they did their best efforts to -- or took their best efforts to put down in writing, on what we call the project worksheet, what the estimated cost of either repair or replacement of each of the infrastructure pieces that were damaged.

Admittedly, some of those were low estimates. There are a number of good reasons and there are probably a number of poor reasons for that. But the low estimates that came in would then lend themselves to something we call a version (requote ?), and that's simply a revision to the initial estimate. We either bring it up because more damages were noted or in fact the reasonable cost of making those repairs has gone up, as Congressman Scalise described as the (the road home faced ?), as cost of materials and labor and estimates went up.

But what's really important to do when we start looking at all of those estimates and trying to get our arms around what work is eligible and what needs to be done to restore the function and capacity of the infrastructure that was damaged, is to agree on scopes of work. And I think that's's where we're having some trouble. It's a matter of our engineers, our technical experts and sometimes our policy folks not agreeing with applicants on an eligible scope of work and the reasonable cost to then carry out that scope of work.

And Paul and I have talked about this over the last -- it's not something that clearly came to the fore in the last few days. We've talked about it over the last few months. And last year we did try to get our arms around a better way to get through this versioning process. And I think that's what we're all really concerned about right now.

And we've put in place a system where the state and the locals would submit version requests and go through a long, quite frankly bureaucratic checklist to make sure all of the documentation was provided.

Our FEMA folks would get that list and look at it and say, "You know, we needed this, this and this," and return it. And then it would sit on the applicant's desk or the state's desk or somewhere and on the other side for a long time and then come back again. And the back- and-forth is serving no one well. And I believe the solution that Paul talked about is one that we can certainly implement quickly, and we can bring, for lack of a better term, a tiger team of --

REP. MICA: This is dispute resolution --

MR. STARK: Well, what I'd say is resolving the issues, the scope --

REP. MICA: (Somebody ?) to make a final decision --

MR. STARK: Yes, sir. A final decision as to eligibility and reasonableness of the cost, to move the project forward.

Now there still may -- there still may be a disagreement over that decision, but at least we get a yes or no. And as the congressman mentioned, let's move forward with the funding on the yes part. And then if there is more disagreement, then it would go to something we call an appeal, a formal appeal.

REP. MICA: (Inaudible) -- or in what category -- I can -- that just need reimbursement, that there is an agreement --

MR. STARK: Well, right now --

REP. MICA: Is it a third, a third and a third, or, I mean, just --

MR. STARK: The number of 4,000 that Paul brought up we've talked about. I -- we placed that in our tracking system at closer to about 1,400 projects there that are versions that are in dispute that we need to resolve. And as I said, we worked through this --

REP. MICA: Are they are all with government entities, or are they also with private -- is it mostly government --

REP./MR. : It's all governmental --

MR. STARK: This is all government --

REP. MICA: All government? All government?

MR. STARK: Yes, sir. It's all local parishes, local --

REP. MICA: Because I mentioned the university and --

MR. STARK: And that's just a -- a slight clarification: Private nonprofit entities that provide a public --

REP. MICA: (Also ?) -- okay.

MR. STARK: -- are eligible under this program. So that would be your Tulane University, some of the hospitals.

The -- getting back to the numbers, we roughly have about 1,460 project work sheets that are in this dispute that we need to clear out. And I'm convinced that if we bring this team together quickly, we can have that done within 90 days.

What would happen after that, if there truly is another disagreement, it goes into FEMA's typical or -- administrative appeals process. And right now one of the successes of last year's meetings was a change in that process. And through that change, we've been able to accelerate about -- I think there were 300 appeals at that point pending, and we're down to 31 appeals that are at either at first level or second level to be decided.

So I think, with that, that streamlined appeal process and better service on that end, as well as something that we can do on the front end, I think we can clear a lot of these issues up quickly.

REP. MICA: Mr. Buckley, did you want to comment also? And you're the -- let's see. Your title is acting assistant administrator, Mitigation Directorate.

MICHAEL BUCKLEY (Acting assistant administrator, Mitigation Directorate, FEMA): Yes, sir. And I would also like to thank you for the opportunity to sit down and discuss these issues. They're obviously extremely important to Louisiana, but also to FEMA and the country as a whole.

Mitigation is really the key to a stronger recovery process. We do this through a couple of mechanisms. We do provide funding to rebuild back better than before, to elevate buildings so that when -- and I mean when -- the next hurricane hits, there won't be as much damage, and the recovery process should go much quicker.

We feel that mitigation has proven to be effective. There have been studies done that for every dollar you spend on mitigation, there's a savings of $4. That is a wise investment for the federal government and the state of Louisiana, local communities, to make.

So the role of mitigation is really to build back stronger and better so that it minimizes any future damages when the next hurricane hits.

REP. MICA: Mr. Cao, did you have a specific question?

REP. CAO: Yes, I do. And this is -- I direct this both to the state and to FEMA. Why is there the discrepancy between the number of outstanding projects, with the state saying close to 4,000; FEMA is saying 1,460. So why is there a discrepancy of approximately 2,500 projects?

MR. RAINWATER: Congressman, I can answer that. I mean, basically, all you have to do is -- it is (a ?) definition of dispute. And the reality of it is if you go and speak with Paul Vallas, who's doing a fantastic job of revamping schools in the city of New Orleans, or Paul Pastorek, our superintendent of schools for the state of Louisiana, they will show you a number of disputes that are occurring over very small items that are holding up bigger projects.

And so what our team did is went through and scanned, you know, those smaller -- those smaller items. And the reality of it is, you know, we stand by the number of 4,000.

Now, obviously, there is an official system that -- you know, that FEMA uses as dispute resolution, but the reality of it is -- and I can't believe I'm using "The Road Home" as an example, because it has been -- as you know and the congressmen from Louisiana know, it's been a very difficult program to work through. But again, it is about definitions and it is about -- it's about overcoming the bureaucracy and deciding that if a school superintendent is in three meetings about a small item, it is a dispute about something. It is a dispute about the value of a project. And just because we don't put it in an official category doesn't mean that we can't move forward on the project.

And so, I mean, I -- you know, it might be about definitions, and maybe that's something we need to talk about as a team about -- but I will say that we have been in -- I can think of numerous examples where we've been in numerous conversations about one very small-ticket item that holds up an entire building that we just can't move forward on. And so I think that's probably what that discrepancy is.

Would you agree with respect to --

REP. MICA: I can agree, but we agreed upon a tracking system for versions, and that's the 1,400, where the state or the local applicant has said, "I need a revision to the initial project worksheet." And that's a number I think -- I think your staff would agree that that's in -- in the tracking system.

What I would say, though -- and since Mr. Rainwater brought up the Recovery School District and the issues there -- we're at a point where about $640 million has been obligated for repair of the school system, to the Recovery School District. And we're also at a point where it's time for the Recovery School District to identify schools that they will take the money from the projects that has been obligated and commit to rebuilding, for instance, the five Quick Start schools that Mr. Pastorek created (and to move on ?).

That's ready. And again, the example that Congressman Scalise brought up, the money that's obligated can be used to move forward right now.

REP. CAO: And just on that issue, let's assume that the money that's been obligated is not sufficient to fully rebuild the school. What's going to happen? Is the school -- it's going to be left halfway built, three-fourths the way built? Or how is that going to work?

MR. RAINWATER: Congressman, if I could, the difference with the Recovery School District is there was legislation passed, when I was working for Senator Landrieu as her legislative director, to take the Recovery School District, for example, and allow them to move dollars around. They are allowed to, you know, look at schools they don't want to rebuild, for example. They're putting together a master plan, as you very well know.

It's a little bit different, because -- in other cases, because these dollars aren't fungible. You can't move them from one project worksheet to the next. What Senator Landrieu's legislation allowed was for the Recovery School District to lump sum, basically let's settle on -- let's look at all the damages, let's look at the dollars that we're going to receive, and then let's decide how we're going to rebuild the Recovery School District without a penalty.

Now, in other cases, like, for example, St. Bernard, where you might have five fire stations, let's say you've got -- you know, you've got dollars obligated to rebuild all your fire stations back, but St. Bernard says, "You know, I want to do this a little bit differently. We're going to have to take a penalty." And there are other things that they have to work through.

President Craig Taffaro in St. Bernard Parish right now believes that he's got about a $50 million funding gap. And so we're trying to figure out ways to advance him money to keep his cash flow going, but the challenge is, you can't take from one project worksheet and move the dollars over to another one.

It gets -- it's against the rules, or I -- and we believe there could be some discretion on FEMA's part to allow that, which would allow us to move our cash forward. So that is the -- that is the challenge.

REP. CAO: And Mr. Stark, is there a discretion within FEMA to allow the state or the school district to move funding from one project to the next?

MR. STARK: As Mr. Rainwater pointed out, sir, there was a legislative change to allow that with the Recovery School District and I believe it also allows it for some of the criminal justice projects as well as public safety and health care. The -- and that's been moving forward, as I said, though. We are at a point where we need to identify the schools that will contribute to the greater -- larger schools or the new schools that the district wants to -- (inaudible).

But you also had a good question earlier about what if it's not enough money. And as long as we can agree upon a scope of work -- to either repair or rebuild the school -- FEMA will pay the actual costs of that scope of work. Again, it gets back to another example that Congressman Scalise mentioned. That is part of the program that's been in place long before these two disasters.

There is -- there will be at least some agreement or disagreement on what that reasonable cost is. And I think, again, with the team that we put together to work through those issues, if our first cut doesn't work, can work through those issues and get them resolved.

REP. CAO: Now, with respect to the outstanding project, I would like to have a breakdown with respect to the district. For the city of New Orleans, how many outstanding projects are out there and what has FEMA obligated to them? And how much has the city drawn from -- drawn down in order to start rebuilding or repairing those projects?

MR. STARK: I'm not sure I have exactly the city of New Orleans, but --

MR. : Congressman, if I could, the public assistance dollars obligated to the city of New Orleans as of January 16th, 2009 are $2.4 billion. That's a change from -- 46 percent from last year. And PA -- public assistance payments out since January 16th are about $1 billion.

So we've paid out about a billion dollars. So they've got what, about 1.4 (billion dollars), I guess, left to spend.

On the Recovery School District, as Jim said, there's about 635 million (dollars) obligated. We've paid out about $230 million in public assistance to the Recovery School District.

REP. CAO: What are some of the projects in the Orleans Parish, the 2nd Congressional District, that are still outstanding? And what are the issues holding up those projects?

MR. : Well, one of those is extremely visible, and I've spoken with Congressman Mica's committee staff about it several times, and that's the sewer and water board.

It is a very complex system, and there is obviously, you know, the -- there's no doubt that there is discussion about, you know -- for example, I mean, Mr. Stark and I in a workout session -- (off mike) -- the prior federal Gulf Coast coordinator sat in several workout sessions with the sewer and water board, and literally were having conversations about, you know, should FEMA pay for the inspection, for example. How do you inspect the system itself? How do you go about -- you know, we haven't even gotten to a point really where we can even define how you -- you know, you treat it as a system, or do you go manhole to manhole to manhole and check, you know, for, you know, sewer -- you know, each sewer pipe; each, you know, length, you know. I mean, those are the sorts of things that we're struggling through to try to figure out.

There have been -- hazard mitigation, for example, a debate about, you know, what's called 406 hazard mitigation fits into the public assistance piece, and whether or not there are certain projects that are eligible or not eligible. So we -- that is one example.

Another relates around some of the police stations, which I know you're probably familiar with, and some of the fire stations.

Submerged roads has been a big issue for the city of New Orleans as well, and whether or not, you know, the -- obviously there was water there for three weeks, you know, that covered many of the roads, and those roads were damaged.

Or fire hydrants -- whether or not, you know, the water damaged the fire hydrants, or was it deferred maintenance? Had the city just not maintained, you know, the fire hydrants or the sewer and water pipes, those sorts of things? So that's where a lot of the disagreement is at.

REP. CAO: Now, with respect to specific projects in the 2nd District, I'd like to specifically address the issue of Charity, of Southern University, of Tulane University, of the Port of New Orleans.

First of all, with respect to Charity, there is a discrepancy within how much is -- how much FEMA's willing to pay, which is 150 million (dollars), and how much the state alleges as storm-related damages, which is $491 million.

Is there a process already in place in order to resolve the discrepancy between the two numbers?

MR. RAINWATER: Congressman, if I could answer that, what we had -- have decided to do, from the state's perspective, you know, working with, you know, the governor and LSU and the Louisiana Facilities Planning and Control (sic), which will rebuild the building, is to appeal that -- the project worksheet that was sent to us in late December. And it was basically for $150 million.

Well, we believe that, you know, based on the statute -- or the Stafford Act, that we are due 149 -- $491 million, because it's going to cost, you know, 50 percent more to repair than to -- or -- and so you get the full cost to rebuild, versus the repair piece.

There are several issues with that facility. And what -- you know, the -- what has happened, I think, is that we've sort of lost sight of, you know, what the need is. And the need is to build a -- you know, build a Charity Hospital, a new hospital, a hospital that can serve the needs of people in the region that's linked, obviously, to the, you know, VA hospital, which -- we work very closely with VA to, you know, to make that happen with the city of New Orleans.

LSU -- Dr. Fred Cerise, who heads up the medical teaching facility there, believes that, you know, the facility was damaged to a degree that, you know, allows for the full cost to rebuild. There have been conversations about whether or not there was the deferred maintenance involved, whether or not, you know, LSU failed to protect the facility.

And we have submitted about a 300-page document that basically lays out our argument why we believe that, you know, the facility should receive the $491 million.

We have yet to -- we have had several meetings with FEMA's public assistance folks. We have yet to really get down into the detail of what that discrepancy is from FEMA's perspective. And so what we decided to do is just go ahead and work the appeals process. LSU has talked about going to federal court once we finish the appeals process.

So that's where we're at, and sort of a very tenuous situation, where the state is not willing to, you know, back down from that argument.

REP. CAO: And Mr. Stark?

MR. STARK: Well, I think Mr. Rainwater put the issue pretty succinctly. We feel that by its own reports, commissioned by the state, Charity Hospital needed about $158 million of repairs just to bring it up to minimal standards prior to the storm, and those repairs were not made. That report was two years prior to Hurricane Katrina. That kind of falls into the realm of the deferred maintenance that he talked about.

After the storm, holes in the roof and the windows remained open for quite a long time. We feel that the additional damages were not eligible under the PA program. We did come up with an estimate of $150 million to repair eligible damages. And at that point, that project worksheet was written in detail and perhaps not to 300 pages but the state provided in there their engineering estimate. But the project worksheet does detail what's eligible and what's not eligible there.

REP. CAO: On that particular question, I'd like to ask you, just in commonsense terms that after Katrina, as the -- you saw on television the city was just ravaged by looters. You have policemen -- everyone in the city, the National Guard, they were -- everyone were out there trying to address the specific issue of looters.

I don't see how you can require the city or state -- just that manpower to fix leaking roofs and to shut down windows while we have looters breaking into businesses, stealing things and basically put the city into a standstill situation.

I don't see how you can require -- reasonably require a city to do that while, on the one hand, it's being ravished by -- by crimes and, on the other hand, you're expecting people be sent out there to address roof holes. I don't understand that.

REP. MICA: Well, sir, I don't think anyone would expect -- (audio break) -- state to respond and repair roofs right after the storm. But at some reasonable length of time, the $20 million that FEMA provided to stabilize the building should have been tapped and used to do so.

MR. RAINWATER: Congressman, if I could respond to that, I mean, one of the things that I've spoken with Mr. Stark about and Mr. Garratt about, and when chief Paulison was there, is that -- and Harvey Johnson, who's the chief operating officer for FEMA, and all the good people -- but what I think that people fail to realize -- and this is I think where the Stafford Act sort of falls short -- is that, yes, there was money provided to the state of Louisiana. But within three weeks, as Congressman Boustany knows, because he and I were in the emergency operations center -- I had been involved in the evacuation of the city of New Orleans during Hurricane Katrina. I was a city manager of Lake Charles, on loan to the state. I go back to the city of Lake Charles. There are about 20,000 Katrina evacuees, and we're trying to create a state committee. The state is responding to Katrina. Jerry Jones, and his folks with the facility planning controllers and architect responsible for the repair of those buildings, begins to focus on it.

But then three weeks later, Hurricane Rita hit, the third-largest disaster in the history of the country. So you've got the first- and third-largest disasters, you've got a state struggling to figure out where do you -- where are your priorities, what do you repair? Because we had as many -- I mean, we had, you know, Sowela Technical Institute, McNeese State University, a number of state facilities, social services facilities, that were destroyed during Hurricane Rita.

And so I think that's where the Stafford Act falls short, and I think it doesn't allow the discretion for gentlemen like Mr. Stark and others to look at an issue like this and say this is too big for, you know, an agency to look at in a very -- in a very regulatory way. There's got to be some flexibility to take into account that you've got such a large -- two large disasters that are occurring that prevent resources from moving directly to -- you know, to Charity Hospital to repair it, while you're continuing to try to save lives.

REP. : Can I come in for a second to ask a question?

REP./MR. : Please.

REP./MR. : You're right about the way this transpired, where resources had to be shifted. But I want to ask the question, is the root of the problem on this particular issue in the Stafford Act itself statutorily, or is it somewhere in the rules and regulations that have been promulgated down the line?

MR. : If you don't mind, I'd like to yield to James Walke, our public assistance chief from headquarters.

JAMES WALKE (director, Public Assistance Division, Disaster Assistance Directorate, FEMA): The (primary ?) issue with Charity Hospital is a difference of technical experts on what is disaster- related damages. I mean, that is the core of the problem. The state and its consultants have gone and reviewed the building, assessed the building, although their complete assessment was done, I think, fairly recently, about a year or so ago. Our team was there within about six months or so, I believe, after the event and performed an initial assessment. And we made our assessment based on the damage we observed at that point.

So at this point, we have one set of technical experts saying that you look at the building a year from now or a year ago, and the amount of money it takes to bring it back on line is X number of dollars. And that includes both deferred maintenance, disaster- related damages and any damages that may have occurred after the event.

We did our assessment a short time after the event, and we think that what we captured are disaster-related damages, which the Stafford Act authorizes us to fix.

So, therein lies the issue. Our technical expert has one opinion, and the state's experts have another conclusion.

REP. : Thank you. I yield back.

REP. CAO: I'd like to go back to the question of the $158 million that FEMA alleges were basically pre-Katrina-related issues. Mr. Rainwater, do you dispute that $158 million?

MR. RAINWATER: Yes, sir. LSU disputes that -- if you subtract out deferred maintenance, we still believe and we still stand by the fact that we believe it's 50 percent or more and that we're due the $491 million. I mean, that's what we believe. And we're not going to back down from that because we believe that the storm caused, you know, enough damage to, you know, create our ability to go forward and ask FEMA to pay, you know, for the rebuild of the hospital.

REP. CAO: Now, I'd like to get input from both FEMA and from the state with respect to a proposal that was done similar to the World Trade Center after 9/11. After the World Trade Center, FEMA and the state was able to arrive at a lump-sum settlement that will allow the city -- or state of New York to address the issues in connection with 9/11.

And basically, after that, FEMA just backed off and left them alone and they were able to do it quite expediently.

Can we somehow approach to resolve the issue of -- I can only speak for the 2nd Congressional District -- in the same manner, to provide the district with a lump-sum settlement -- FEMA say "Okay, here it is, we can agree to that amount; you have it and you can do whatever you want to do with it, and we're finished"? Can we approach that? What are problems -- what are some possible problems with that proposal? And I'd like to hear from both of you.

MR. GARRATT: I'd like to answer that one, at least, and then turn it over to Paul to talk about.

We're certainly willing to discuss virtually anything in terms of ideas or innovative ways of approaching solving problems. But we want to look at this practically and we want to look at it realistically and go in with our eyes wide open.

In this particular case, although that is a superficially attractive idea, I think we're going to face the very same issues that we're facing right now. And that is, if we're talking about a jointly negotiated settlement amount, we would face the very same issues that we're facing with these individual projects, in that FEMA's establishing that eligibility and the amount of funding available to cover those eligible damages is this amount of money, and the state is arguing for an additional amount of money.

And so those disputes, those issues, would still face us in trying to come up with a lump-sum amount of money as well. So I don't think it's -- it would be necessarily any easier to solve this problem that way. And what it might do, quite frankly, is slow down the process in the long term, because essentially what might happen is all of the projects would be held hostage to a single settlement, whereas in the current process we've got the ability to bust through some of these and get some of those projects moving along.

Again, certainly willing to explore it, but I think there are some inherent issues there that we would need to address. And we might face some of the same problems that we face right now.

MR. RAINWATER: Congressman, the -- I mean, what's interesting about the concept is that, I mean, basically that's what we do with Community Development Block Grant money. I mean, the Congress -- members of the Louisiana delegation in the Senate and the House negotiated on behalf of the state of Louisiana for $13 billion of Community Development Block Grant money, and then the state was able to, you know, decide what it was going to spend the money on.

And then we pushed dollars down to local governments for, you know, some infrastructure repair where FEMA can't fill that gap.

The question would be, I mean -- and we're talking about -- what that would allow us to do is to choose what facilities we wanted to rebuild and which ones we didn't, which, you know, would obviously -- and then rebuild the facilities we want to rebuild in the way we want to rebuild them, without the -- you know, the impediment of a regulation. The question would be, again -- and Mr. Garratt brings up a good point, and that is, you know, we'd have to agree on some definitions. We'd have to agree on, you know, what estimates we're going to use to come up with that lump-sum settlement, which is really sort of the crux of the matter, and where we're in dispute.

What we have talked about is, you know, like the Recovery School District -- and Paul Vallas and Paul Pastorek have both said, hey, get me within 90 percent, and I can do this, I can -- and then if we think there's a dispute, then let's settle on it at the end, which would be one way to do this.

But we've got to get closer, because right now we believe that some of the cost estimates are, you know, below some of the projects 25, 30 percent, which is, you know, too far removed, and it becomes difficult for local and state -- well, state government -- we have to have the money. I mean, by -- as Congressman Scalise knows in serving in the statehouse, you got to have the money up front to go out for a bid on a project. In local governments, if you have a reserve, you're willing to, you know, kind of bet that you're going to be able to settle up with FEMA.

With the city of New Orleans, who is somewhat cash-strapped, they can't -- you know, they have actually gone out and spent money on projects that were undervalued, in hopes that they could settle with FEMA.

So those are just things we'd to take into consideration and just figure out, you know, can we get closer, could we get a lump-sum settlement that gets us 90 -- to a 90 percent solution, and then debate on the 10 percent, you know, at a little bit later date. Yeah.

REP. : Mr. Garratt, is there any statutory block to taking that approach that Congress needs to address?

MR. GARRATT: In terms of coming up with a kind of a block grant approach?

REP. : A block grant approach, a negotiated settlement; as Paul has mentioned, trying to settle out 90 percent quickly and then maybe deal with the 10 percent or whatever it is later --

MR. GARRATT: We do not have the authority to do block grants under (public ?) assistance program, and I will defer to Mr. Walke to correct me where -- if in fact --

REP. : (Off mike) -- did, and I just want to get clarification.

MR. : Let me just make one point. You mentioned, Congressman, about the World Trade Center. And I would caution about using that as a model, because I think Congress appropriated a specific amount of money for World Trade Center. And we followed our normal eligibility criteria. And if there were things or gaps, there were money appropriated for that by Congress.

So that was outside of the normal public assistance program. So the model there is that the foundation is, everything has to be eligible under the Stafford Act. And that's what we're trying to define, the common ground here.

So any kind of rent proposal or any other type of similar kind of arrangement; the bottom line is, one has to agree on what is eligible damages. And that's what we're trying to do right now. The devil is in the details.

I mean, the block grant versus how we do it now is just a processing of funding stream. But the underlying description of damages is what we're trying to get to consensus on.

MR. : On some of these issues, I think there has been a lot of gray area. What is really allowed under the Stafford Act? How much flexibility? And clearly there are some areas of the Stafford Act that don't provide flexibility. And I'd be interested in getting from FEMA, and I've already talked to Mr. Rainwater about this, various specific areas of the Stafford Act that you think do need to be changed, to give you the flexibility.

In some cases, we've had people at the local level that have looked at the Stafford Act. And their interpretation is that there is the flexibility there and have even been able to provide precedent for previous storms where there was. And then FEMA would come back and say that the Stafford Act doesn't give them the flexibility.

So there's, I guess, a difference in interpretation. But even where there is historical precedent for doing something, where later we find out there isn't, from some people in FEMA. And that's something that, if we could try to get a better grip on if something was allowed to be done in a past storm and then isn't being allowed today, with the reason given that the Stafford Act doesn't give the flexibility, if we can try to resolve that.

And then another problem we've had is getting things in writing. A lot of local agencies feel that they aren't able to really get an answer in writing. They'll have a conversation verbally where they're maybe given approval to move forward on a repair of a project. And yet they can never get it in writing. And then later on there's turnover. And that's been a problem with heavy turnover.

And next thing you know, they're dealing with a different person. And they have to start all over again. And there's no written paper log to say, this was our benchmark of where we finished, before that person left FEMA. And they literally have to start all over again.

And that really creates problems on the ground, where people are frustrated that they're -- they feel like they're just running around in circles and can never get something in writing to at least say this is where we are.

And then the final thing, if I can just bring up, another problem we've heard is that even when some projects are obligated, that there have been projects that later -- that money's de-obligated, where initially they were told by FEMA they can go forward. They go out to bid. They even start the work. And then at some point later they're told by FEMA, those funds that were initially obligated are now de- obligated and they're in the middle of a process where they've put their own funds out there, their own borrowing capacity out there and are told they can't do it in the middle of the project.

And I've been told that there is flexibility in the Stafford Act to allow them to continue if they've been given by the approval by FEMA at some point, that if they've moved forward that FEMA can't stop them in the middle and say we're not going to give you the money now.

So I know that's a lot of different things. You don't necessarily have to address them all here, but I would like answers on those questions and issues.

MR./REP. : Anybody want to comment?

MR. STARK: I'll take a couple of them, sir, and then I'd ask James to talk about the flexibility under the Stafford Act. He has much more experience with that.

The -- getting things in writing, oftentimes as soon as we put a decision in writing, that triggers an appeal process, that triggers a timeline that often -- what we were trying to do at the request of the applicants and often the state is try to resolve these issues informally. And often we wouldn't get it in a letter or a project worksheet, because we wanted to continue the dialogue until we got to the right answer or an answer that would be acceptable and maximize the funding or the support that we could bring to the project. But I'll take the issue and we'll put that in writing. We'll make decisions and move those forward.

I think now the turnover issue should be resolved. Any time you have a disaster that goes three-and-a-half years long -- and what we did in Louisiana -- I think you and I have talked about it before and I know I've briefed Congressman Cao on this -- we stood up a workforce of now 900 core employees who are limited-term appointments -- GS appointments, who live in Louisiana. They're there for the long term. Their appointments are years long, to be stable, have a stable workforce.

Early on in the disaster, that wasn't the case. We had a lot of temporary people moving through. And I think that's progress. It's taken a long time to get to that core group of stable employees.

So I think that will improve. That certainly was a problem in the past.

James, if you don't mind talking about the flexibility of the --

MR. WALKE: We use the term flexibility quite a bit. And I'm sort of not clear on what is really expected. I mean, on the one hand, we are committed to writing in documents our policies and regulations and -- (inaudible) -- document all of our (actions ?) so that our folks can consistently apply the program. I mean, we are pilloried on one hand by people doing things differently from one disaster to the other.

So when you're talking about flexibility, are you talking about flexibility in policy interpretation? Because I don't think there's a lot there.

But if you're talking about differences in technical opinions, whether or not one engineer or one technical person has one thought and another has another, then I think there's some room for flexibility in that regard, respecting differences of technical opinion.

So unless there are some specific cases that we can respond to, my sense is that -- you know, we've tried for so long to be consistent, and I think we're still trying to be that way. And if there are some cases where we have applied some policy in previous disasters that we're not doing so in this disaster, then we need to know about that.

REP. : And we can discuss -- (inaudible).

MR. WALKE: Yeah. Sure.

REP. MICA: I -- yeah -- I -- just a second. I'm going to have to scoot out the door. I just got called. We have the stimulus bill. It's a minor little thing. (Laughter.) And I've got an emergency call with the secretary. And they've also asked me to come to the floor in a minute.

Mr. Diaz-Balart had to leave because he's also on the Rules Committee, and he's helping handle the rule, which we'll have a vote on shortly. And we will need to conclude this by 10:30. I'm just told there'll be about -- a vote about 10:40.

As I leave -- and I'm going to leave Joe in charge here -- we need to reconvene this, obviously. I -- we -- I need some dispute- resolution mechanism. We've got to get these things resolved. So we're going to figure out some way -- and we've got to get the low- hanging fruit resolved immediately, if not sooner.

Now, you told me there's -- some of this can be resolved in 60 days. But we're going to have to find some mechanism to resolve the bulk of these issues. So we will reconvene after the recess next week. We'll go down there; if we have to take them project by project, if we have to get some arbiter in there to make a final decision, we're going to get it done, so -- one way or the other.

So I will let you -- if you wouldn't mind taking over -- sorry. I'm going to run. And if you can divide some of the time equally between the two representatives, I'd appreciate that. But -- and I appreciate your help on Florida. We had a resolution, but we had to -- we had to do some arm-wrestling and then get some arbitrary decisions made. We're going to have to do the same with Louisiana.

It's much bigger in scope and much more complex, but we can do it.

So I thank you all for coming.

(Cross talk.)

MR. : I'd like to just take a moment to address this issue about dispute resolution. Just so we all --

REP. MICA: One final note: I have additional questions we haven't gotten to, some from Mr. Diaz-Balart. And we'll have additional ones we'll be submitting. If you wouldn't mind responding to us in writing, we'd appreciate that.

(Cross talk.)

MR. : Sir, can I take a moment just to talk about the existing dispute resolution process or the appeals process as it currently exists? I think it's important we all understand exactly how that exists. And I think it's also important that you recognize just how successful the appeals have been, coming out of Louisiana, that have followed a formal appeals process.

We have a two-level appeals process. Any public assistance issue can be appealed. That first-level appeal will go to the region that oversees that particular state. That region will render a determination on that appeal.

If the state challenges that appeal determination, they may file a second appeal. And that comes up to FEMA headquarters. There are time limits associated with those.

Anything that has not been formally appealed may be a dispute. But the appeals process was specifically set up to formalize and finalize resolution of those disputes.

Louisiana has been pretty successful in terms of their appeals. I think that the number is roughly 40 percent of all appeals coming out of Louisiana, for Katrina, are resolved in favor of the appellant, either in whole or in part. That's a -- I think that demonstrates a couple of things.

One, it demonstrates that this appeals process is not just a rote activity, that in fact they're going to get a fair, impartial and indifferent view potentially, a look at those appeals when they come through that appeals process, that they've got a legitimate shot, not far from a 50-50 shot, as it turns out, of getting a favorable review of those appeals.

So because we only have 31, as Mr. Stark indicated, appeals in the process right now, and we have anywhere from 1,400 to 4,000 disputes, my recommendation would be that a lot of these we could move towards resolution on them if in fact they were appealed and we could get them in the appeals process. And they've got a reasonable shot, based on our track record to date, of getting an outcome that would be favorable to them. Can't guarantee that, but certainly the record to date indicates that they've got a reasonable shot at that.

REP. CAO: I noticed that Congressman Boustany and Congressman Scalise wanted to ask questions before Congressman Mica interjected.

Congressman Boustany?

REP. BOUSTANY: Yes, thank you. I think, as Mr. Walke mentioned earlier, probably working through these case by case -- because otherwise you get caught up into definitions and everything else -- I think you really need to get to the specifics. And that's probably going to be the best way to go about it.

I need an update on where we are in my congressional district, mostly as a result of Rita, with the -- most cases that are still in dispute, and perhaps, Paul, your numbers and the FEMA numbers, to see where -- you know, I'm sure there's probably a discrepancy.

And I know we had cases such as the Cajun Dome in Lafayette following Hurricane Katrina, where we have a lot of expenses incurred for housing those who were displaced. And there was a dispute about the initial money that was given, that had to be given back. We went through some of that, and there's still some ongoing appeal, I think.

MR. RAINWATER: Let's see -- that appeal has been resolved.

REP. BOUSTANY: That one's been resolved?

MR. RAINWATER: Been resolved.

REP. BOUSTANY: Okay.

MR. RAINWATER: And it wasn't a total approval, but we did approve partial --

REP. BOUSTANY: Right.

MR. RAINWATER: A certain amount of money. We didn't approve --

REP. BOUSTANY: Yes, it was about half, I think, or so.

MR. RAINWATER: Yeah.

REP. BOUSTANY: Yeah, I remember that. But that was a case where, again, we had some questions. We had another case involving the Vermilion Parish -- (off mike) -- system that I remember, where they were told to move forward with total replacement, and then subsequently had a decision saying no. I don't know if that one's still under appeal or --

MR. RAINWATER: I think that's where -- (off mike) -- is at.

REP. BOUSTANY: The Vermilion Parish?

MR. RAINWATER: Vermilion Parish -- (off mike).

MR. : Henry School.

REP. BOUSTANY: The Henry School. Right. Okay. But I need an update.

And you don't need to give me that today. I mean, I'm just asking for an update down the line.

The other question I have has to deal with the flood maps in Cameron Parish. Administrator Paulison was very helpful in trying to work through a temporary resolution, but going forward there's still some unresolved areas, one being the issue of looking at sites -- site-specific exclusions to the "D" zone designation.

And in the last meeting that we had, he was going to get back to me with progress on that, if indeed there would be exclusions. And then, I guess related to this, there's been a lot of discussion back in Louisiana regarding a dispute about methodology and determining the maps. I know I saw some of this in Lafayette Parish, as well, where we had projects underway and then there were disputes about the methodology in determining these flood zones. These areas we need to look at. I need to maybe -- perhaps sit down at a later date, and work through them with you all.

Let's see, I had a couple of other things. One issue that did come up in Cameron Parish, subsequently, we had homes that were elevated, in Holly Beach on the coast, and the -- but one of the problems we had was in the hurricanes in this last hurricane season damage to the foundations. And that was not a reimbursable expense. And for some reason, there was an exclusion to the -- to dealing with the foundations.

I don't know if, Paul, you probably heard some about this. And I need some clarification on that issue.

MR. RAINWATER: Does this -- did this relate to the flood insurance policy?

REP. BOUSTANY: Yes.

MR. RAINWATER: I believe if there's damage to the foundation, in an event like Hurricane Ike that damaged the buildings, that should be covered.

But we can look into that more specifically. I --

REP. BOUSTANY: There was something that was causing a dispute there, and I would have to go back and look at my notes from when I visited down in Holly Beach. But perhaps we need to look at that issue, because -- and I forget what the ruling was, but there was some ruling issued by FEMA that prevented national flood insurance dealing with that, that particular aspect. So if you have a damage to the foundation in the elevated building, you're basically saying, well, even though you followed all the other FEMA regulations and guidelines, this was a block to getting some reimbursement here and --

MR. RAINWATER: If you can give us specific examples, we'll look --

REP. BOUSTANY: I have some back in my files.

MR. RAINWATER: -- we'll look into those. And like there is an appeal process for the public assistance funding, there's an appeal process that's set up in a similar fashion --

REP. BOUSTANY: Right.

MR. RAINWATER: -- for flood insurance claim disputes.

REP. BOUSTANY: Okay. And finally, in -- just in general terms, I -- in conversations with Administrator Paulison, I don't want to mischaracterize what he said, but -- (audio break) -- a lot of the rules and regulations in light of the '05 hurricanes to see what needs to be revised, possibly clarified.

And that -- I think that might be a useful exercise, you know, because we have learned a lot. And we've learned about some grey areas.

I applaud FEMA for, you know, addressing the issue of the rapid turnover, because it was causing a lot of difficulty on the ground, that -- I remember just literally being frustrated with having to deal with somebody new. As soon as they got under -- you know, as soon as someone understood what the problems were on the ground, they were rotated out and we had to start over again. So I applaud that effort.

But there are probably some other areas in rules, regulations, policies and procedures that, in light of the '05 hurricanes and the last hurricane season, might -- it might be useful to go back and look at those things.

So I think we need to continue this dialogue to improve the process. But certainly if there's anything from a statutory standpoint that needs to be dealt with, then we need to know. And we need to rely on your expertise to get -- (inaudible) -- on that.

Thank you. Thanks, Joseph.

REP. SCALISE (?): Thanks, Congressman Cao. I know one thing that our entire delegation has formally requested -- and this is something we requested to President Obama -- is that the Gulf Coast Recovery Office stay in -- stay in place as we continue to resolve all of these issues. Because that's a lingering issue. And I know some of that's a political decision, but do you know, from FEMA's standpoint, has any decision been made? Or have recommendations been made from your side to the president on whether or not that request will be granted?

MR. STARK: Just for clarification, I am the Gulf Coast Recovery Office assistant administrator for FEMA, and you're referring, I think, to the office of the federal coordinator for rebuilding -- (off mike).

REP. : That's correct, yeah.

MR. STARK: Dave?

MR. GARRATT (?): And the answer is no, I'm not aware that a decision has been made. And that will be made at a level above FEMA. And I really can't provide you any information on where we are in that. But I do know that we certainly expect a decision to be made soon.

REP. : Thank you. And there are a lot of individual projects that are in my district that I definitely want to get updates on, and my office can get you that later. I know we don't have time.

MR. : And we're available to meet with your staff at any time, sir. (Off mike) -- done on a regular basis.

REP. : Appreciate that, and again, look forward to getting the specific responses to suggested changes to the Stafford Act as we continue to work on putting together legislation to address those areas.

So thank you. (Inaudible.)

REP. CAO: And before we end the discussion, I'd just like to address a couple of other issues that are not related to the public buildings but the nonprofit/private, and one of my main concerns is the Tulane University issue, where I spoke with Dr. Cohen (sp) and Dr. Sachs (sp), and they have informed me that they have used their own money to repair and/or replace a certain building, $217 million worth. They were paid -- reimbursed by FEMA in the amount of $53 million. And they are still waiting for another $56 million.

Is anyone here familiar with the issue concerning Tulane University?

MR. RAINWATER: I am, sir, and what I'd like to is perhaps visit with your staff in the district and show you the spread sheets of that -- I don't have them with me -- that will align the claims for damages that Tulane brings forward, some $200 million, their insurance that they received and should apply to those buildings, what we were able to identify as the damages that were eligible for reimbursement, and what may still be in some kind of dispute in the versioning process.

I will tell you that I do know that -- (audio break).

REP. CAO: (In progress following audio break) -- familiar with that issue?

MR. RAINWATER: Not off the top of my head, Congressman, although I have been in conversations with Superintendent Vallas about Ben Franklin High School and some of the disputes they're having about that. But I'd have to get the details.

REP. CAO: Well, the students came up here about two weeks ago. And they told me that three-and-a-half years after Katrina, they still don't have a library. And that's one of the best public high schools we have in the state. And for them not to have a library, after three-and-a-half years, I think something needs to be done.

MR. RAINWATER: Congressman, some of that dispute was about whether or not -- some of the dispute with the Recovery School District was around whether or not there was vandalism or theft during -- following Hurricane Katrina. And there is -- FEMA will cover one but not the other. And so that's some of the conversation we're having.

With relations to Tulane University, there is, and I'm sure you've heard from President Cowen about the library situation. It's a depository full of government documents. And the whole issue of, you know, moving the electrical pieces of -- you know, the basement was flooded. They want to build a second floor.

Tulane has gone out and gotten an architectural and engineering study done, done some design work. And then FEMA came back and deobligated that. That is his -- that's part of what his dispute is about. And some of -- what Tulane is concerned about is moving forward on other projects and having the same thing happen.

The Recovery School District, as I mentioned earlier, and I think that's where we, you know, look. I always say to my FEMA partners, FEMA partners, we can agree to disagree.

That's where the dispute resolution piece; I don't think we've done a good job of, you know, really getting in and saying, okay, what is -- let's define what a dispute is, and let's decide from this point forward what -- how we will work those disputes and not, and get out of the conversations, because we're just not able to move them forward.

And we're not getting people yes and no answers. We're getting them maybe answers which as you know, from a budgetary perspective, it's very difficult to move forward on rebuilding when you're trying to do that.

REP. CAO: I'd like to thank you all for being here today. I know that your schedules are probably as busy as ours here in Congress. But I would like to readdress this issue.

I know that we spoke briefly about possible brokering some kind of dispute resolutions between the state, FEMA and the City of New Orleans, if we can sit down briefly after this, to see what we can do, how we can get together to move the thing forward.

I've made a pledge to my district that I will do whatever I can in the next two years to rebuild the district, to help rebuild the district. And I will hound every single one of these agencies until things are being done. And I hope that in the future if you start hearing -- receiving phone calls from my office every other day, if we have to do that, we will do that.

But thank you very much for being here. And hopefully, we can get things done. Thank you very much.

END.

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