Hearing of the Subcommittee on Economic Development, Public Buildings and Emergency Management of the House Transportation Committee - "Post-Katrina Disaster Response and Recovery: Evaluating Fema's Continuing Efforts in the Gulf Coast and Response to Rec

Hearing of the Subcommittee on Economic Development, Public Buildings and Emergency Management of the House Transportation Committee - "Post-Katrina Disaster Response and Recovery: Evaluating Fema's Continuing Efforts in the Gulf Coast and Response to Recent Disasters"

HEARING OF THE SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT OF THE HOUSE TRANSPORTATION COMMITTEE

SUBJECT: "POST-KATRINA DISASTER RESPONSE AND RECOVERY: EVALUATING FEMA'S CONTINUING EFFORTS IN THE GULF COAST AND RESPONSE TO RECENT DISASTERS"

CHAIRED BY: DELEGATE ELEANOR HOLMES NORTON (D-DC)

WITNESSES: PANEL I DAVID GARRATT, ACTING DEPUTY ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY; JAMES STARK, ASSISTANT ADMINISTRATOR, GULF COAST RECOVERY OFFICE, FEDERAL EMERGENCY MANAGEMENT AGENCY; PAUL RAINWATER, EXECUTIVE DIRECTOR, LOUISIANA RECOVERY AUTHORITY PANEL II RODGER WILDER, IMMEDIATE PAST PRESIDENT, GULF COAST COMMUNITY FOUNDATION; GARY LOGSDON, JUDGE AND EXECUTIVE, GRAYSON COUNTY, KENTUCKY

Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at cnyberg@fednews.com or call 1-202-216-2706.

DEL. NORTON: Pleased to welcome our witnesses to this second hearing devoted to our post-Katrina evaluation of the Federal Emergency Management Agency, or FEMA.

To assess FEMA's progress as the nation's only disaster response agency, we will examine progress not only in Louisiana and Mississippi, where FEMA's failing had been documented by our subcommittee and many others, but also in Texas, which recently saw major damage from Hurricanes Gustav and Ike, and in Grayson County, Kentucky, declared a major disaster county by President Obama after recent ice storms devastated the midsection of our country.

Hurricane Katrina was a disaster of mammoth proportions, but its major lesson went well beyond its scope and uniqueness and the failures of FEMA in 2006. Katrina teaches that FEMA must be nimble enough to move quickly before and after any Stafford Act emergency or disaster.

The country cannot be assured that FEMA is always prepared without frequent oversight by our subcommittee, which began in the 110th Congress. Gustav, Ike, and this year's ice storms all provide markers by which to measure FEMA's progress in disaster response and recovery agencies. We want to look at outstanding issues in Louisiana, Texas, Mississippi and Kentucky.

In Louisiana, there are still public assistance projects awaiting disposition by FEMA. In Texas, there are continued challenges with remaining storm debris and with providing housing in coastal -- in the coastal areas. In Kentucky, although initial reports seemed to indicate a satisfactory response by FEMA, we need to understand the expectations of FEMA's -- the expectations concerning FEMA's assistance to local counties and whether they were, indeed, met in Kentucky and throughout the Midwest.

Today, we will be particularly interested in FEMA's work in housing, in rebuilding public infrastructure and in case management services during the three-plus years of recovery in Louisiana since Katrina. We remain particularly concerned about the backlog of large infrastructure projects that have been delayed in the aftermath of Katrina. The sewage and water board of New Orleans's main facility, an essential component of city infrastructure of any city anywhere is still not protected after the disaster because of protracted negotiations over the definition of mitigation.

Whatever the legitimate differences between Louisiana and FEMA, there is no excuse for failure to devise a way to come to agreement, to use millions upon millions of available funds that had been appropriated by this Congress to repair an essential part of the New Orleans infrastructure, which remains, as a result, vulnerable to natural disaster today.

Moreover, there are many public assistance infrastructure issues in municipal systems across the state still waiting on FEMA. And an agreement to proceed the rebuilding of Charity Hospital, an essential part of the New Orleans health infrastructure, and the rebuilding of the criminal justice infrastructure in New Orleans are stalemated.

We have -- why have projects of great priority stalled or slowed for all these years? Why does Louisiana currently have 4,135 projects determined to be, quote, "in dispute due to excessive delay, overt disagreement or other factors," with 2,894 of these projects currently valued between 55,000 (dollars) and 500,000 (dollars) for a total value of approximately $500 million and 1,241 projects currently valued at an amount over half a million dollars for a total of -- listen to this amount -- $3.7 billion waiting for somebody to come to an agreement about how to spend it and not getting to the people of the state?

We know that some of these projects are likely shovel-ready and will -- and amount to -- and amount to a huge amount of already appropriated money in stimulus funds for the state of Louisiana. It is unconscionable to allow these projects to wait, while at the same time we are sending new stimulus funds to the states, including Louisiana, while these major projects could be putting people to work now on the most vital infrastructure for the state.

This backlog of 100 percent federally funded projects is so serious that, out of justifiable outrage at years of stalemate, Senator Mary Landrieu inserted into the stimulus bill a binding arbitration clause for FEMA projects over $500,000 to expedite the recovery efforts from Hurricanes Katrina and Rita in the Gulf Coast region.

Although the new binding arbitration requirement raises other issues that would likely cause further delay, I am working with Senator Landrieu on a good compromise that I assure you will emerge soon. We will not tolerate this another month. At the same time, we see some successfully completed infrastructure projects, such as the New Orleans Police Department Headquarters.

However, with such clear deficiencies, such terrible delay, it is particularly disappointing that the Senate itself did not act on H.R. 3247 in the 110th Congress, which contained provisions that specifically addressed many of the public assistance and infrastructure problems. For example, the bill authorizes the FEMA administrator to include Gulf Coast recovery efforts under the public assistance pilot program authorized by the Post-Katrina Emergency Management Reform Act. And H.R. 3247 permits the use of third parties to review and expedite public assistance appeals and allows FEMA to use simplified procedures under which small projects are permitted to proceed on estimates for projects up to $100,000.

With more than $3 billion in projects held up by disputes, however, the time for pilot projects is over. We will require a third-party dispute resolution within the government for FEMA that we believe will meet the challenges and the concerns of all involved.

In June of last year we had hearings on Mississippi, which is still recovering from Hurricane Katrina as well and is working with FEMA to replace and repair public infrastructure and to address mitigation issues for any new construction along the Gulf Coast. Mississippi also had serious management -- it had service management problems for disaster victims.

According to the U.S. census, when Hurricane Katrina made landfall, Mississippi had the highest poverty rate in the United States, only increasing the necessity and importance of recovery services.

We need to know whether Mississippi is now meeting the many challenges that were laid out in our previous meeting and whether FEMA has been instrumental, as required, in helping the state to meet those challenges.

At the Mississippi hearing, the subcommittee received compelling testimony from case managers and service providers concerning FEMA's recovery efforts in areas of Mississippi that lost city halls, fire stations and schools. In many areas, most standing structures were reduced to concrete slabs. I flew over the affected Mississippi counties shortly after Katrina and saw firsthand large areas that quite literally had been blown away.

At our June hearing, we learned of systemic contracting problems. Again here, they arise in Louisiana, again going back to Hurricane Katrina, and again hampering recovery efforts in Mississippi -- as I have just described, in Louisiana.

Congressman Bennie Thompson of the state called for, quote, "mechanisms of dispute resolution for contracts," end quote. Congressman Gene Taylor reminded us -- also of Mississippi, and the member whose district was particularly struck by Katrina -- reminded us of the necessity for timely payments and keeping the nation's word.

Long-term housing needs and solutions continue to stymie both FEMA and HUD. We must crack this structural problem FEMA apparently has everywhere, with appropriated dollars tied up, stalemated and unspent, and the failure, therefore, to meet the needs of disaster victims, as mandated by Congress.

That is why we are developing a required third-party resolution within the government to break this open and free these billions of dollars for the people of Mississippi and Louisiana. I'm frankly outraged to hear that there is this much money piled up over so many months and nobody from FEMA has come to this committee with anything approaching a question, much less a solution, to these funds.

We are especially anxious also to get an understanding of FEMA's efforts in Kentucky after the ice storms. Speaker Nancy Pelosi, Chairman Jim Oberstar and I met with midwestern House members during the ice storms this month to see how we could be more helpful. Kentucky and the midwest will continue to receive this attention from the leadership of the House, our committee and this subcommittee.

Again, we thank our FEMA representatives and witnesses from Louisiana Mississippi and Kentucky for preparing testimonies today to help the subcommittee continue to ensure that the agency is up to the challenge of meeting disasters anytime and anywhere in our country.

I am pleased to ask our ranking member, Mr. Diaz-Balart, if he has any opening remarks.

REP. DIAZ-BALART: Thank you, Madame Chairman.

Let me first thank you for holding this important hearing today on disaster response and recovery to evaluate FEMA's continued efforts in the Gulf Coast and, frankly, their response to recent disasters. Again, I want to thank you for your leadership.

You know, as a member of -- representing the state of Florida, unfortunately, we're a state that sees a lot of hurricanes, and so I appreciate the important role that FEMA plays in disaster response and recovery.

Now, when state and local resources are frankly overwhelmed and communities are just trying to figure out how to recover and rebuild from a major disaster, FEMA is the one that provides the resources and expertise that help those communities get back on their feet and try to continue to evolve and prosper.

FEMA plays a crucial role in disaster response and recovery. And it's -- that is exactly why FEMA must be quick and nimble, as the chairwoman said, and lead federal response and recovery efforts on behalf of the president of the United States.

Now, following Hurricane Katrina and Rita, we saw serious problems with FEMA's preparations, their response and their recovery, among other problems as well -- not only of FEMA, but we're dealing with FEMA today.

Now, there have been improvements since we passed the Post- Katrina Act. There are still deeper problems that still persist, I think. The sluggish decision-making created by FEMA's lack of autonomy, I think, undermines its mission. And so whether FEMA remains in -- under DHS or not, its autonomy clearly must be strengthened.

FEMA is buried in this large department that has, I think, eroded its ability to be quick and to be agile and nimble. And this has resulted in unnecessary delays that impact the states and the communities that count on FEMA's assistance after a disaster.

It has been more than three years since Katrina and Rita hit the Gulf Coast, and many of those communities, as the chairwoman has just stated, particularly in Louisiana, are still struggling to recover from those disasters. And we know that that's going to take some time.

And since that time there have been other disasters, including Hurricanes Ike and Gustav, and the recent ice storms that impacted Kentucky and a number of other states. Now, the ice storms, by the way -- something that, as a Floridian, we do not have a lot of experience.

DEL. NORTON: It's the only one.

REP. DIAZ-BALART: That's right, exactly. It's -- as the chairwoman says, that's probably the only disaster that we don't have in Florida, are ice storms.

But they left more than 700,000 homes and businesses in Kentucky without power. And ice-encrusted debris prevented many of those rural areas from even seeking assistance. So this ice storm is considered the worst natural disaster in the history of Kentucky, and I can only imagine its scope.

Now, I'm pleased to see that Judge/Executive Gary Logsdon -- I don't know if I pronounced your name, sir. With a name like Diaz- Balart, I should be able to deal yours -- with yours rather easily -- but from Grayson County, Kentucky, he's with us here today. He'll provide this committee with his input and observations regarding FEMA's response and recovery.

And I know that Mr. Guthrie will be introducing him later on. So thank you, sir.

I understand that he has been the chief executive of this county for some time and should be able to provide us with key insight into this topic, as I'm sure that ice storms are not the first disaster that his county has had to deal with. But I understand it's the largest one in the state's history. So as a Floridian, I'm actually very interested in learning something absolutely new for me.

Now, when FEMA was transferred into the Department of Homeland Security, it was unfortunately stripped of many of its functions and authorities. The failed response to Hurricane Katrina was an unfortunate -- and a yet, I would probably say, predictable consequence of FEMA's diminished capabilities. Following Katrina, this committee and the Select Katrina Committee conducted a full investigation and a review of the government's preparations for the response of Katrina. And in 2006, of the -- as a result of those investigations, we drafted and passed into law the Post-Katrina Emergency Management Reform Act to improve the government's response to all types of disasters, not only just that type of hurricane.

While some of those provisions have been implemented, many of those -- many have not, including very key provisions. Like, HSPD-8, HSPD-5, and the National Response Framework have yet to be revised to reflect the changes mandated by this legislation that I just spoke of.

So, again, inconsistent policies and slow decision-making are just some of the symptoms of the problems that we have with the bureaucracy because FEMA is buried into this huge DHS department.

Hurricanes Ike and Gustav were the first real tests following the reforms -- the first real test for FEMA following those reforms. And it's clear that there have been some improvements, I would say many improvements, in FEMA's response. However, there are still areas such as transitional housing that clearly need still further work.

Now, unfortunately, after the Katrina -- after the aftermath of Katrina, we can still see that there are many years -- many years still, I guess -- or a lot of things that still have to be fixed. And there's -- and they're things that -- and the chairwoman talked about that extensively and in great detail, and I think we all share her sense of -- I don't know if the right word is frustration, and -- or indignation, or just lack of patience.

While FEMA's Direct Housing Assistance program and HUD's Disaster Housing Assistance Program had been extended, there's frankly -- there's no real strategy that has been developed to address the long- term housing issues in Louisiana.

In addition, earlier this month, Ranking Member Mica hosted a roundtable, requested by Congressman Cao of Louisiana, on the ongoing problems with the public assistance programs and billions of dollars of delayed public infrastructure projects. The chairwoman was talking about that a little while ago. So I hope FEMA can update us today on the efforts to speed these projects up.

By the way, Representative Cao is not here because he is in the hearing in Homeland Security today, where they are -- where the secretary of Homeland Security is testifying.

The chairman -- the chairwoman also mentioned that the Senate was successful in including language in the recent stimulus bill that would require binding arbitration to settle these disputes. As the chairwoman also said, you know, that provision does raise some serious issues, maybe some legal issues and policy implications. So I'm hopeful that a solution can be found. I'm very optimistic that it will be found. I know that the chairwoman, as she stated, is looking at that aggressively, trying to come up with a solution to free up much-needed assistance to the state and to local communities in Louisiana.

The overarching issue, obviously, is that we must ensure FEMA has the necessary authority, the tools, the resources and the nimbleness to effectively and efficiently carry out its vital mission, obviously, that we all depend on. To the extent that there are problems, we must work together to identify them and to find real workable solutions.

FEMA's mission is so critical. It's critical to saving lives and rebuilding devastated communities recovering from major disasters. So, obviously, when FEMA fails, everybody loses. The whole country loses.

So I look forward to hearing from the witnesses on these and other issues.

At this time, Madame Chairman, I would respectfully ask unanimous consent that a written statement submitted by Representative Scalise of Louisiana be entered into the record.

DEL. NORTON: So ordered.

I will ask now if any members have any opening remarks.

Ms. Shuler, North Carolina?

Mr. Shuler. I'm sorry.

REP. HEATH SHULER (D-NC): Madame Chair, I don't have any comments at the moment, right now.

DEL. NORTON: Ms. Markey? I'm sorry.

REP. BETSY MARKEY (D-CO): Yes. Thank you, Madame Chair.

I'm very glad that we are here today to discuss and evaluate FEMA's efforts in the Gulf area.

I have witnessed the importance of FEMA's funding in my own district. Last May, a tornado struck in the town of Windsor, Colorado. The tornado was a mile wide at times, and damaged nearly a thousand homes. FEMA offered assistance. That included grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and businesses recover from the effects of the disaster. Representing a district that has also experienced the natural disaster, I have glimpsed tragedy, but on a different scale.

We have a responsibility to help people whose lives were destroyed by these storms, and I look forward to hearing about the progress that is being made in the region. Thank you.

DEL. NORTON: Thank you very much.

Ms. Shuler -- could I ask, Mr. Guthrie, if you have any opening remarks?

REP. S. BRETT GUTHRIE (R-KY): Yes, ma'am. Thank you, Madame Chairman -- Madame Chairwoman.

I appreciate the opportunity to be here today and for this hearing, and particularly -- and I'll introduce later Judge Logsdon, and -- judge in Kentucky -- that is county -- sometimes county judge, like a county executive or a mayor of a county, but we refer to him as "Judge." But I appreciate the opportunity.

And I will tell you, Madame Chairwoman, I bet I spoke a dozen or more times in the district work period, and every time I mentioned the meeting the speaker hosted in her office, and the fact that you were there and the fact that Chairman Oberstar was there, and told them I -- the people that I represent that I believe we sped up the emergency declaration that came from the president because of the meeting and your cooperation. So I thank you for that. And it's important that we do work together on these issues.

The ice storm, when you first think about it -- as the ranking member say -- what does a(n) ice storm have -- how does it cause such a calamity? Well, just the weight of the ice -- in one area alone, the area that Judge Logsdon represents, there's a friend of mine who works for the electrical co-op, over 1,700 electrical poles came down. Some areas in the Congressman's Whitfield's district, some utilities had 3,400 or more poles that came down.

The debris, the trees that are everywhere -- it took them six days to cut down a path to get to a lady's home, an elderly lady that was in a home. But she -- they went down to see her, it was okay, but it took six days just to cut to her home.

The thing about storms, though -- you see the best in people. The local officials -- the first couple of days when I got home from here, I went to Judge Logsdon's emergency operations center and others, and you saw sheriffs and judges and local officials and the volunteer firemen. They were out day to day helping neighbors. And everywhere you went, churches would bring food to people. And you would see the local officials on the ground. So this just shows how good people can be to each other, and I just want to praise the people in our area for that.

But it is devastating. When you think of hurricanes, you think of other issues, it just -- you see them more, because it's not one limb at a time breaking over time that brings out all the power. It's just a full force all at one time. But it has been completely devastating.

Our local officials have worked hard. And I just want to say again -- and I'll talk more when Judge Logsdon has the floor -- but I just want to say, Madame Chairwoman, just how much it meant to us to work together. Now that I see the chairman is here -- Chairman Oberstar, thank you. From that meeting in the speaker's office, I think that sped up the emergency declaration that we had. I remember your comments on -- specifically in that meeting were very helpful, and I've shared them with people in my community. And I just want to appreciate that and look forward to Judge Logsdon in the next panel.

Thank you.

DEL. NORTON: Thank you very much, Mr. Guthrie.

In fact, the whole notion of ice storms, I think, illustrates just what FEMA has to be. You know, it needs to be able to go from the Gulf Coast and hurricanes to ice storms in a second. (Chuckles.) That's what we expect. It's what the American people expect.

But we have been graced by the chair of the committee, and I would certainly want to ask him if he has any opening remarks.

REP. JAMES OBERSTAR (D-MN): Thank you, Madame Chair. I was, regrettably, as is always the case, dealing with other of the Transportation and Infrastructure Committee children -- (chuckling) -- other subcommittees' needs.

I just want to express on behalf of Chair Norton and myself -- and, I expect that Mr. Mica and very likely Mr. Diaz-Balart -- today I'm going to be introducing the bill to reestablish the independence of FEMA as an effective, nimble response agency outside of the Department of Homeland Security, with standing on its own, as it once had when it was a very effective agency. Putting it in Homeland Security -- Mr. Young, then the chairman of the committee, and I vigorously opposed the idea in a meeting with the president. Mr. Shuster, former chairman of this committee, vigorously opposed tampering with FEMA. He found that it was a very responsive agency in his district and in his role as chair, other places in the country.

I actually am responsible for creating FEMA as such from the old civil defense agencies in the 1980s. After a hearing -- when I chaired a hearing on the Subcommittee on Investigations and Oversight, complaints from a wide number of members on both side of the aisle about the proposed regulation of then-Reagan administration to reduce the federal share to 25 percent in only a handful of cases, and zero in most cases, with a quaint parochial view that disasters are local in nature and don't have a national -- and don't entail a national obligation.

Well, Republicans, Democrats; federal agencies; state, local entities were furious about that. And after extensive hearings, then ranking member on the committee, Mr. Klinger of Pennsylvania, and I together drafted a bill,

And I gave the bill to the lead advocate, who was not a member of our committee but a member of the House, to introduce and to be its advocate. And he said, "Why me?" I said, "Well, you have the guts to stand up to your own administration and advocate for a fair funding formula, which we've crafted now in this legislation, and that will be forthcoming in this new program that we'll call Federal Emergency Management Administration."

Later that member of Congress became the first secretary of Homeland Security, Tom Ridge. It's interesting how these things come full circle at times. And I think in his heart Tom Ridge would have loved -- would have preferred that FEMA stay separate.

But we're going to reestablish its separateness and its independent status and reaffirm what all of you practitioners at the local level know: This agency has to respond quickly, has to be in concert with the community, has to spring from the communities, and has to understand and coordinate effectively. That's what we're going to do with this legislation.

Thank you for your testimony today.

DEL. NORTON: Thank you very much, Mr. Chairman.

Now Mr. Cao of Louisiana.

REP. JOSEPH CAO (R-LA): First of all, I would like to thank Chairwoman Norton for holding this important hearing for the continuing of this subcommittee's attention to post-Katrina recovery, especially in the 2nd Congressional District.

And I also would like to thank today's witnesses from FEMA and from the LRA for being here to discuss their efforts with respect to the recovery needs of the 2nd Congressional District. I know that I've been pushing them for -- in the last several weeks, and it's been -- we have held several hearings prior to them being here. So I appreciate them being here again with respect to this hearing.

I'm also encouraged by President Obama's state of the nation address last night, in which he focused on recovery. And I was encouraged by his campaign promises to make right the delays in rebuilding New Orleans.

I'm asking the president to keep to his commitments, and was pleased by his action last Friday to extend the White House Office of Gulf Coast Recovery, which is responsible for overseeing the rebuilding of those states affected by the storms of 2005 and since.

And I recently came from the hearing -- just a few minutes ago -- with respect to the new secretary of DHS, Secretary Napolitano, and I am encouraged by her emphasis on leadership and transparency, especially with respect to FEMA.

Based on some of the hearings and some of the investigations that we have been doing, I found that there is a lack of leadership and a lack of transparency with respect to the GCRO office there in our district.

And I believe that some of these inefficiencies, some of this lack of leadership and lack of transparency might be some of the main problem in the recovery process -- the obstacles that we are facing. And I hope she'll address some of these issues to overcome these obstacles.

And with that, I would like to welcome the speakers, the witnesses for being here. And I give the floor back to the chairwoman. Thank you very much.

DEL. NORTON: Thank you, Mr. Cao.

Now, let us move on to the witnesses. Let us hear first from the acting deputy administrator, Mr. Garratt, then Mr. Stark of the Gulf Coast Recovery Office of FEMA, and finally from Mr. Rainwater, the executive director of Louisiana Recovery Authority.

Mr. Garratt?

MR. GARRATT: Madame Chair, thank you. In the interest of time, I'm going to forego opening remarks and defer to my colleague, Mr. Stark.

DEL. NORTON: Mr. Stark?

MR. STARK: Good morning, Chairwoman Norton, Chairman Oberstar -- I guess he has left -- Ranking Member Diaz-Balart, and other distinguished members of the committee. My name is Jim Stark and I am FEMA's assistant administrator for Gulf Coast Recovery.

I'm a career civil servant, having joined FEMA after a 28-year U.S. Coast Guard career. I've been a Gulf Coast resident for 12 years and I have lived in New Orleans, Louisiana, for the past six.

Thank you for inviting me to appear.

I am joined today by David Garratt, acting deputy administrator for FEMA. We're pleased to be here with you today to update you on our recovery efforts from Hurricanes Katrina and Rita, and discuss our perspective on the long-term prospects for the Gulf Coast.

As you know, in 2005, Hurricanes Katrina and Rita struck the Gulf Coast of the United States causing unprecedented and catastrophic damage to property, significant loss of life and public infrastructure, and the displacement of tens of thousands of people from their homes and communities. Nearly three and half years after the hurricanes, the Gulf states continue to press forward and make progress toward recovery.

Their recovery is not without its challenges. As the magnitude of these storms caused extraordinary level of destruction, FEMA continues to be an integral part of that recovery. Our recovery focus on the Gulf Coast is in the areas of individual and public assistance and hazard mitigation grant programs.

Much has been said about the methods and ways in which FEMA has provided assistance across the Gulf Coast following the 2005 hurricane season. In each of these areas, FEMA has seen successes and challenges.

While we readily acknowledge that we could have done some things better, we must not lose sight of the fact that nearly three and a half years later, after the most damaging storms in American history, nearly 95 percent of those whose homes were impacted by the disaster have returned to their pre-disaster housing or have moved on to other long-term permanent housing solutions; $10.5 billion has been obligated to Mississippi and Louisiana to rebuild public infrastructure. And close to $500 million has been obligated to Louisiana and Mississippi for hazard mitigation projects to lessen the impact of future disasters on those states' populations.

FEMA's Individual Assistance Programs are at the forefront of our recovery efforts. Over the past three years, FEMA's Individual Assistance Program specialists have worked hand-in-hand with voluntary and faith-based agencies, as well as state and other federal agencies to meet the needs of hundreds of thousands of people impacted by the hurricanes.

Over the course of the disaster, FEMA housed more than 143,000 families in travel trailers and mobile homes. The total number of households currently living in temporary housing has decreased to just over 6,600, with about 288 residing in hotels across the Gulf Coast.

Every occupant residing in FEMA-provided temporary housing, or hotels, or motels has been offered an alternative. And we are working with each of them to find a permanent housing solution that meets their needs. The primary challenge for the Individual Assistance Program going forward is to work with those remaining families being housed by FEMA. Travel trailers and mobile homes are intended only as short-term emergency solutions to fill the need for housing.

Clearly, FEMA and our federal, state and local partners recognize how important it is both to those affected families and the communities in which they live to expedite the transition of these individuals into more permanent and stable housing.

Another vital and visible component of the state's recovery is the Public Assistance Program. FEMA has been extremely active in working with the state and local governments to restore and rebuild public services and facilities.

While there has been some deserved criticism of this program, it's important to note that, though funded by FEMA, the state administers the VA program. Local governments and other eligible applicants receive their funding through grants managed by the states.

FEMA has prepared a project worksheet for every project that the state and local governments have identified to us. Preparing a project worksheet and reaching agreement on the eligible scope of work and cost estimates is a collaborative process that requires attention to detail at each level -- applicant, the states, and FEMA. It often requires more time to complete than any of us would like.

FEMA has obligated over $10.5 billion in public assistance to the Gulf states, $7.5 billion to Louisiana, and $2.9 billion to Mississippi. Once obligated by FEMA, the states as the grantee control the pace of such disbursement to the applicant. To date, Louisiana has disbursed $4.1 billion of that $7.5 billion. Mississippi has disbursed $1.6 billion of the $2.9 billion.

There are sometimes disagreements between FEMA, the applicants, and the state about the extent of disaster-related damages to facilities. Many of the facilities damaged by Katrina and Rita suffered from years of deferred maintenance and sometimes neglect.

However, the Stafford Act only authorizes FEMA to reimburse applicants to repair disaster-related damages. In some cases, FEMA must amend or prepare alternative versions of the project worksheet to revise the scope of work or cost estimate when more information becomes available pertaining to the repairs or replacement of those buildings.

At the request of the state of Louisiana, FEMA developed and provides a system of ongoing versions during the life of a public assistance project to help applicants with cash flow problems and to meet state and local contracting requirements.

This process, jointly developed with Louisiana's Governor's Office of Homeland Security and Emergency Preparedness, was meant to speed the process and clearly delineate roles and responsibilities. However, it's become cumbersome and needs to change. Currently, we're tracking over 1,400 projects that require an amendment or a version update. To assist us in accelerating the review process needed to verify the scope of work or cost estimate, FEMA has suggested in our last meeting with Congressman Cao and others, that a joint FEMA-state policy/technical team review and make determinations together, rather than conduct separate reviews of these version requests for completeness of information and eligibility.

Hazard Mitigation Grant Funding is made available to states following a disaster to find cost-effective projects to mitigate against future disaster damages. This program is not designed for immediate response, but as a long-term solution to reduce risk from flooding and other hazards.

In Louisiana, over $1.4 billion is expected to be available under the Hazard Mitigation Grant Program for Hurricanes Katrina and Rita. FEMA has obligated $349 million in federal funds for approved HMGP projects and state management costs thus far in Louisiana.

In Mississippi, approximately $393 million in Hazard Mitigation Grant funding is available to the state. FEMA has obligated a $150 million in HMGP funds to Mississippi. The administration, the Department of Homeland Security, and FEMA are committed to the recovery and rebuilding of the Gulf Coast. FEMA's Gulf Coast staff will remain an active and engaged partner until the job is finished.

Through our transitional recovery offices, we have piloted many new initiatives that have contributed not only to the recovery of the Gulf Coast, but have also contributed to the retooling and improvement of FEMA. These initiatives and our lessons learned will help to improve the effectiveness of FEMA's programs in future disasters.

While finding housing for the many displaced households and repairing damage and destroyed infrastructure has been and will continue to be a challenge, FEMA remains committed to providing or coordinating continued assistance to the victims of Hurricanes Katrina and Rita.

Together with our federal, state, local and voluntary agency partners, we will continue to pursue assistance solutions that will effectively and compassionately help individuals and communities recover and reestablish their way of life. I'll be happy to answer questions now.

DEL. NORTON: Thank you, Mr. Stark.

Mr. Rainwater?

MR. RAINWATER: Thank you, Chairwoman Norton, and Ranking Member Diaz-Balart.

And, Chairwoman, I just want to say thank you on behalf of the citizens of Louisiana for all the hard work you've done. You and I had actually spoken on the phone once when I was Senator Andrew's legislative director, and I just want to say that your passion for Louisiana is known by many. I just want to say thank you.

And also, Congressman Cao, for jumping into the fray so quickly. Your hard work is evident, sir, and we appreciate that, as well.

I also want to thank the Congress and the generosity of the American people for the money that they've invested in the state of Louisiana.

We believe it's a good investment, and we are working hard to make that investment worthwhile.

I want to talk to you just a little bit about the scale of the disaster and the reorganization, some progress that we've made, and then some issues that, obviously, that we'll be talking about. I don't know of any other state that suffered such destruction in the last three years or that faces as many complex rebuilding issues.

In the context, the combined impact of Hurricanes Katrina and Rita is largest disaster in U.S. history. Measured only in terms of Stafford Act funds, it's larger than the next largest disaster, which is the attack on America on September 11th, 2001, by four times and is larger than the remaining top 10 disasters combined.

From Hurricanes Katrina and Rita alone, Louisiana has more than 1,400 unique applicants in the Public Assistance Program. There are another 700 applicants eligible for assistance as a result of Hurricanes Gustav and Ike, which we are still recovering from.

For Hurricanes Katrina and Rita, almost 22,000 individual projects have been identified as eligible for repair or replacement and there have been more than 45,000 total project worksheets (and versions ?) written and obligated. The numbers are staggering, as is -- the process is staggering as well.

At the state of Louisiana, when Governor Jindal took over in 2008, we looked at our processes and decided that we needed to reorganize. So the governor appointed me as the executive director of Louisiana Recovery Authority, the executive director of the Office of Community Development which manages all Community Development Block Grant Money and also the governor's authorized representative to the Federal Emergency Management Agency responsible for public assistance and hazard mitigation, for a total budget of about $22 billion.

What this did is it made one person responsible for the recovery, because there was a point in which in the state of Louisiana there were three different organizations pointing fingers at each other and then back at FEMA and HUD, and the governor said, "No more." So now we have one person -- myself -- for better or for worse who's responsible for the recovery in Louisiana. I'm the -- I work with HUD and with FEMA to work through these issues.

Now, with the reorganization, we also looked at our processes and found that the state of Louisiana was taking 45 to 60 days to pay out invoices through the FEMA Public Assistance process. It was taking too long. As you know, businessmen have a 30-day billing cycle and they need their payments quick.

We looked at the processes, worked very closely with FEMA to do this. And, literally, now when an invoice comes from local government to the Governor's Office of Homeland Security and Emergency Preparedness, it takes between four and 10 days to cut that check. And that has been an average. I check it weekly and I brief the governor on it about every seven days. We have actually put out about $708 million dollars through that process.

We also in January of 2008 set out to reset our relationship with the Federal Emergency Management Agency. We were tired of the finger- pointing. We sat down in February and had a summit, went through 15 issues and wanted to work collaboratively with FEMA.

And I will tell you, Chairwoman, that we've had mixed results. There are things that we have made progress on, but there are many, many other things we have not. And one of those is scope alignment. The biggest -- the single biggest issue bogging down our recovery in Louisiana is scope alignment process in the Public Assistance Program.

It's the basic tenet of any construction project that in order to plan properly and ensure completion, you must know how much the project will cost and be able to provide adequate funding. This is common sense, but not common practice for the FEMA Public Assistance Program, which has -- more often than not undervalues project worksheets leading to months of negotiations that widen the scope of work and write a new version of the project worksheet.

While this process labors on, the applicant, a local or state government entity, can only move forward if he or she has the cash flow and willingness to risk doing the work for which FEMA may never ultimately reimburse the applicant. And we have -- we have many -- many examples. And when you hear the number of 4,000, that's what we're talking about.

Now, the most famous of these projects affected by scope alignment is the Medical Center of Louisiana at New Orleans, commonly known as Charity Hospital. The state and FEMA have been actively engaged in negotiating the scope of eligible damages to the hospital for more than three years. Hurricane Katrina completely destroyed Charity and, until last month, FEMA offered a paltry 25 million (dollars) for repairs. After three and a half years, FEMA increased the funding for the project to 121 million (dollars), but still fails to acknowledge the actual eligible damages to the facility itself.

Another example is an African-American university in New Orleans -- Southern University of New Orleans where cabling of the electrical system had to be replaced campus-wide at the cost of approximately $3.3 million because the underground conductors of its low-voltage systems were submerged in saltwater for three weeks.

No professional, no contractor, no building inspector, including FEMA's electrical engineers, would certify an installation reusing the existing saltwater-logged cable. However, FEMA, including its electrical engineer, refuses to pay for the obviously eligible project replacement.

The threat associated with not replacing this system is enormous and obvious to anyone. So it's very difficult to understand why this work is considered ineligible since it was underwater for three weeks and had saltwater in it.

In addition, FEMA has provided for a 1,500-student temporary facility. The current enrollment is 3,000.

Another example is at Tulane University. The Howard-Tilton Library is a government documents repository and its repair is $30 million -- a $30 million project to elevate the library that FEMA refuses to fund despite its own staff making the recommendation to pursue the elevation. The university went out and hired an architect and an engineer to do the work and then later on the work was de- obligated, meaning the university has to foot the bill. So all the documents remain in storage and the library remains on temporary HVAC since Hurricane Katrina. The school also has a partial or complete eligibility reversals on its alumni house and the McAllister Auditorium.

The issues we face in Louisiana are extraordinarily complicated with Hurricanes Katrina, Rita, Ike and Gustav. What we look for now is flexibility and a true partnership with FEMA.

Now, just several other matters just very quickly -- one of our biggest issues, obviously, is we're asking that the federal government look at the hundred percent federal cost share for Hurricanes Gustav and Ike because no state has experienced such catastrophic losses in such a short period of time. Paying even 10 percent match on these costs could stifle our recovery further. Granting Louisiana a hundred percent federal cost share for these storms would be a shot in the arm of our recovery and rid our state of a huge financial burden that we're currently working through.

One other issue -- the delay of the release of the floodplain maps in Louisiana, called DFIRMs, which Louisiana requested in December of 2008. FEMA is using these maps, which have not been formally accepted, to deny funds for public assistance projects and further delay the recovery. Currently, we estimate that 45 infrastructure projects, including schools, have been de-obligated because of the DFIRM map issue totaling a number of about $258 million.

I do want to say this, Chairwoman, I do appreciate the partnership we have had and the progress we have made with FEMA. I've met numerous times with Dave Garratt, the acting administrator, and Jim Stark, our Regional Transition Office director down in Louisiana, and I do appreciate them.

We have attempted -- since I've been here in January of 2008 -- to quantify our issues with FEMA and sit across the table and work through them, but as you know and as you hear from many, many, many applicants in Louisiana, there is an amazing amount of frustration on their part by the de-obligations that have occurred after universities, after local governments have gone out and spent money on projects just to have them de-obligated and then, obviously, the frustration with the gap in funding between 1.5 (billion dollars) and $2 billion to move those 4,000 project worksheets forward.

Thank you, Chairwoman. I look forward to your questions.

DEL. NORTON: Thank you, Mr. Rainwater.

I'm going to begin asking questions. Many members do want to come back and vote.

I was interested, Mr. Garratt, although your testimony is joint with Mr. Stark and although disaster directorate has the most hands- on, presumably, experience in how to manage recovery, that you chose not to speak to this issue. Would you like to speak to -- I mean, is your -- I mean, that's what you were before you became the acting administrator, isn't that the case?

MR. GARRATT: Acting deputy administrator, ma'am, yes. I was the deputy assistant or am the deputy assistant administrator for disaster assistance.

DEL. NORTON: Well, perhaps, you can begin by telling us why there -- what you have done to -- what steps FEMA has taken in light of the more than $3 billion in projects that are held up in the state. What steps have you taken or are you taking on to in fact allow those projects to proceed?

MR. GARRATT: I'll be happy to address that, Madam Chair.

I paid very close attention to your opening remarks, and you mentioned several times the absence of a solution to deal with this backlog of public assistance projects. You indicated that there was no excuse for the inability to come up with a way to resolve these outstanding issues.

And I would, in fact, argue that there is a system and has been a system in place for many years for resolving public assistance issues. We call that our multi-level appeal process. And that multi-level appeal process is designed to, once and for all and authoritatively, resolve these issues so that they can move forward. Right now, even though there are some thousand or more projects that are said to be languishing in a state of limbo out there, we only have 31 appeals that are actually in our system that we are adjudicating right now.

So I would --

DEL. NORTON: Mr. Garratt, in light of the billions of dollars stalled in the state, would you agree that that multi-level appeals project is not effective today to handle the major disaster issues in Louisiana?

MR. GARRATT: By no means, Madame Chair. I would say, in fact, it's been extraordinarily successful when it is actually used. In fact, in -- for the Gulf Coast states, for those appeals that have gone through our process, the appellants have enjoyed a nearly 40 percent approval rate on appeals that have gone through that process.

DEL. NORTON: So all we need to do is, people who have some money waiting for them, to simply file some papers?

Mr. Rainwater, would you agree that the appeals process is effective in dealing with this money and that the present process is sufficient to the challenge?

MR. RAINWATER: Chairwoman, thank you for your question. We worked very closely with FEMA to revamp the appeals process, and we appreciate their willingness to do that. The problem is that sometimes there's a lack of decision to even get to an appeal, and that's where the dispute comes in. When you've got numerous projects, worksheets that you're re-versioning or looking at the estimated cost of, and you can never -- you go back and forth in a process that never even gets you to a point where you're ready to appeal.

DEL. NORTON: Mr. Garratt, you've seen this yo-yo process. This -- have you ever questioned in your own mind why so few of the issues get to the point of appeal? Has anybody in FEMA even considered another way to deal with this or begun to develop any new approaches in light of the large amount of money?

Mr. Garratt, and for that matter Mr. Stark, are you simply willing to let the amount of money continue to pile up -- now at more than $3 billion -- until somebody in Louisiana gets his act together and appeals?

Do you really think that is the problem -- that is the source of the problem?

MR. GARRATT: Madame, the source -- Madame Chair, the source of the problem is that both FEMA and the state, on a number of very complicated, very complex public assistance project issues, have honest disagreements about what is and is -- what is not eligible.

DEL. NORTON: Let's stop right there, because that I accept. That I truly accept, that the government and the state would have disagreements. I would expect the state to want more. And you are supposed to be a good soldier with the government's funds. When you see impasse after impasse develop, do you think that the congressional mandate to proceed with these projects is, in fact, being -- is being recognized?

I mean, how many -- let me ask you. Because you seem to say your answer -- Mr. Stark, is it your answer as well? I don't want to leave this only to -- but it is your answer that until -- because I want to hear this -- until somehow the state of Louisiana finds a way to proceed even though there are differences that need to be worked out before you can appeal, is it your view that the present system is, in fact, sufficient to meet the challenge raised by more than $3 billion outstanding that is hung up?

MR. GARRATT: If you -- if what you're referring to, Madame Chair, is the recent legislation that required the establishment of an arbitration panel --

DEL. NORTON: I certainly am not. In fact, I made clear in my own testimony, as a lawyer, I can understand some of the issues involved there. We have to set up -- the president has to set up people to arbitrate. And I indicated to you that I'm working on something to resolve that. But in order to resolve it, I've got to get to what the problem is.

Now, you -- your testimony is inconsistent with Mr. Rainwater. And I wanted you all at the table because I'd like to reconcile this. Is it your testimony that no new mechanism -- leave aside binding arbitration; I believe that that is not the mechanism. And I don't even want to suggest what the mechanism is. I'm looking for a mechanism. So I'm asking you, are you satisfied with the existing appeals process as the mechanism to resolve this $3.4 billion that is stalemated?

Or, if you are not satisfied with it, do you have any suggestions that we should take under advisement before we mandate upon the agency how to resolve it? Because we really are open? We're just flabbergasted. We're looking for ideas from those who are on the ground who've had to deal with this issue.

Now, if you're in denial about it, that's why you've got the senator putting in binding arbitration. Although I see problems with that. The problem remains, how are you going to deal with the 3.4 billion (dollars)? And I am open. If you have a way to deal with it, then I want to hear it, because I don't want to jump forward with a way from Washington if there's a way that you are working right now to solve this problem.

MR. GARRATT: Madame Chair, over time, over many disasters, the public assistance appeals process has worked and worked very well. It does take some time. I mean, it takes -- appellants have up to 60 days to submit an appeal. There's a 90-day period to review and adjudicate that on the first appeal level. Then they have an opportunity to reappeal that. If --

DEL. NORTON: You know, Mr. Rainwater -- Mr. Garratt, I'm going to take that as a "yes." You were saying --

MR. GARRATT: Well, ma'am, let -- if you don't mind --

DEL. NORTON: Because you were -- you were repeating.

I mean, Mr. Rainwater said, and you're not even speaking to the issue he raised, before you even get to the appeals, which is why he says there have been so few, there are certain steps that have to be taken, certain agreements that have to be made. And he said they have not been made. Could you speak to that, please?

MR. GARRATT: Madame Chair, the appeals process works. It may not work fast enough for everyone who's interested in a very quick decision. It's not designed to provide a very quick decision.

It's designed to provide thoughtful, deliberate review of those appeals and come back with the right decision, if that system is used. And any public assistance conflict in the field can be appealed at any time.

DEL. NORTON: Look, thank you, Mr. Garratt.

Is that your answer, Mr. Stark? (Chuckles.) Because again, I've got to -- I'm -- let me let you respond before I go to Mr. Rainwater.

MR. STARK: Yes, thank you, Madame Chairwoman. I agree with Mr. Garratt on his description of the appeal process. What we try to do, however, prior to having to go to appeal, is to set up a process where we could resolve disputes having to do with scope alignments and cost estimating. We did that at the request of the state a little over a year ago, in full recognition that in many cases some of our project worksheets were undervalued.

There are some real good reasons for that, but regardless, as a -- if a public work -- or if a project worksheet was undervalued, we needed to get to the right amount of money regarding the eligible work, the cost estimate and the scope of work to -- the scope of the contract to complete that eligible work.

Unfortunately, what we haven't come to is a collaborative way to sit down at the table across from each other and work that out. What we have done is come up with our estimates and we send them over to Mr. Rainwater and his staff and his engineers look at them and then send them back over to us. And my proposal is that we sit down with a group of technical experts -- in fact, Paul and I came up with this together -- technical and policy experts to go through to a prioritized listing and get through the 4,000, the 1,500, the 2,000, whatever the number may be, number quickly.

Now, let me also explain a little bit --

DEL. NORTON: So you -- have you done any of that?

MR. STARK: We have not.

DEL. NORTON: Excuse me?

MR. STARK: We have not done that as of yet. We have --

DEL. NORTON: No, I appreciate, Mr. Stark, that you at least have answered my question. I wasn't asking to be educated on the appeal process. I was asking why the decision itself, which would have to appealed, was so -- was stalled.

Mr. Rainwater, you've heard both Mr. Stark and Mr. Garratt, and therefore, I'd like you now to respond to whether you think what Mr. Stark is suggesting is a viable way to move these, whether you agree with Mr. Garratt that the appeal process after all is a deliberative, thoughtful process, so what in the world do you expect, there are going to be delays.

I mean, I'm lawyer. I am used to delays in the process. So, that's his answer. What's your answer?

MR. RAINWATER: Chairwoman, if you bear with me just for a second, what I'd like to do is go back and give you an example of -- I mean, we have spent a lot of time in the state looking at our own processes. And one of those processes is that, you know, we admitted early on that we had systemic issues with our road-home program, and basically, it had a dispute resolution process and it had an appeals process.

We recognized at the state that the dispute resolution process was not working because you end up in a negotiation with the homeowner back and forth to a point where you could get nowheres. I got rid of the dispute resolution process and I set up two appeals processes. I set up an appeals process at the contractor level with our contractor and then a state appeals process.

And I also increased staff. Recognizing the large nature of what we were dealing with in our road-home program, we needed additional employees on staff to make -- and increase the number of decision- makers and decentralize it to a point where people could make decisions.

What I've told the Federal Emergency Management Agency, Mr. Garratt and Mr. Stark and other senior leaders at FEMA and the Homeland Security, is that you have to look at the large -- the scale of this disaster.

And the systems that we've designed, although they worked great -- and I was an emergency manager back in the '90s and I worked the flood in Lake Charles, Louisiana, where 50 homes were damaged, and the Stafford Act works great there and the processes work great, and FEMA works great in that particular situation -- but this is so large and so complex.

What we've asked for is a system that looks very different than what we have right now because it is moving too slow -- but not at any fault of the people that are involved, but the design of the system and the design of the process itself just doesn't work.

DEL. NORTON: This involves home individual homeowners?

MR. RAINWATER: Individual homeowners, 70,000 cases of individual homeowners that we worked through. And last year, we got out literally 33,000 grants last year and had 25 -- not just outreach -- work sessions where I brought policy people and operational folks together in a room out in communities with computers, laptops, policy manuals, you work through issues.

Now, not everybody is happy, obviously. As you know, Ms. Chairwoman, it's always difficult to work through some of those issues.

I've asked FEMA for the -- Jim and I have talked about doing the same thing. Let's get our operational folks together, our policy folks together and let's go out and work with the applicants one-on- one just like we did with the homeowners.

And we're talking about, you know, a lot less, obviously -- it's about 1,400 applicants -- go out to mayors, parish presidents, go to Tulane University where they're having the fight, go to Suno (ph) and get our folks to create a tiger team of policy and operation people who can work through these issues case by case by case, and let's set a time on and a goal for ourselves to get that done and answer back to Congress about what we've been able to accomplish.

DEL. NORTON: Well, I don't know. I'm going to ask Mr. Cao if he has any questions.

I can tell you this much. First of all, I absolutely applaud Mr. Rainwater. You're looking at the system and saying, "Wait a minute, this doesn't work. I'm in charge here, so why don't I try something else?"

And really that's my complaint with FEMA, and I'm not sure why that hasn't -- they've looked at what have you've done and approved it. I don't know why something that might fit this could not have been also developed.

But I warn you that with binding arbitration already in the bill, this is not something we would have ourselves done. But we may be well past the time. There has been a loss of confidence. And when the money gets that high and we're sending the money out to the states, I'm not sure we would have needed to send any money to Louisiana, or certainly not very much.

I'm not sure that you would have agreement on the part of the Senate. And, frankly, if it hasn't been started yet, I don't have much confidence based on the past record that somehow or the other there's going to be a system worked out that the Federal government, namely FEMA, would agree to.

Mr. Cao.

REP. CAO: Thank you, Madame Chairwoman. I was wondering whether or not you can continue with the questioning for me to allow me to go vote and I'll be right back.

DEL. NORTON: What's that again, a vote?

REP. CAO: Yes. There are two more series of votes that are five-minute votes each.

DEL. NORTON: We certainly would want you to have the opportunity. Not to worry. (Chuckles.) We're all in a little dialogue here.

If I sound spirited, I'm not angry. I'm looking for a solution.

MR. GARRATT: Yes, ma'am.

DEL. NORTON: I have to say the amount hits me in the face hard. Let me get down to some of the details.

Let's take the estimates provided by the state for Charity Hospital, where the analysis was provided by RSMeans, an estimator that apparently FEMA relies on often. Why did you, Mr. Garratt or Mr. Stark, you FEMA, refuse to accept that estimate this time?

MR. GARRATT (?): Mr. Chair -- Madame Chairwoman -- excuse me -- we did look closely at the RSMeans estimates. We also looked at reports provided by the state of Louisiana regarding the condition of Charity Hospital both before and after the storm. There was a --

DEL. NORTON: Could I just -- Mr. Rainwater, would you have accepted the RSMeans estimates?

MR. RAINWATER: Yes, ma'am. When we got here in January of last year, one of the things that the governor and I, you know, decided we would in working with LSU is to make sure that we had two good estimates.

We had two done -- one by RSMeans and one by Latchin Knievel (ph). We accepted -- I mean, in fact, we've had three studies done, three separate independent studies done on Charity Hospital by engineers and architects that basically show us that the damage is beyond 50 percent.

DEL. NORTON: Okay. As I say, I'm just trying to figure out. Okay, so Louisiana would have accepted it. Your guy. You don't accept it. Why?

MR. STARK: We don't because it's not estimating the scope of work to repair eligible storm-related damages. The estimates provided by RSMeans are to bring the hospital back to a level that it wasn't at before the storm and to repair other damages that weren't storm- related.

DEL. NORTON: Well, just moment. You told him what to do?

MR. STARK: No, we did not. Our estimates are the ones we accept. We did not tell them to do that estimate the --

DEL. NORTON: So you didn't tell RS? They were just looking at the overall damage?

MR. STARK: That's our position, yes, ma'am.

DEL. NORTON: But if they're your estimator --

MR. STARK: Well, anyone can estimate a scope of work once you tell them what that scope of work is.

DEL. NORTON: Don't you use them to estimate what the scope of damage is? I mean, isn't that the whole point? Am I missing something here?

MR. STARK: I believe so, Madame Chairwoman, respectfully. I think -- the point is we have asked our estimators to estimate the scope of the dam -- what it would cost to fix a certain scope of work, and that is, the eligible storm-related damage.

DEL. NORTON: Let me stop. Did you ask RSMeans to do that estimate?

MR. STARK: I'm not sure if we used RSMeans for the initial estimate. I'd have to check our -- check with that.

DEL. NORTON: What was the point of RSMeans then?

MR. STARK: That is one of the estimators we use in a variety of projects. The state, I think they're right in doing this, bringing in an estimator who we work with often and respect and understand, is the right move, but I think they brought them a different package to estimate.

DEL. NORTON: OK, so I mean, this is -- so if you have different estimates -- we're grown-up people here -- how do you resolve that?

MR. STARK: Well, we are at the point now where we have -- we have looked through the three reports, one of which, by the way, recognized $158 million of pre-storm repairs that needed to be made to the hospital to bring it back to standards. We've looked at those reports, looked at those estimates, looked at our several walk- throughs the building -- walk-throughs of the building with our engineers, and came up with the estimates that we have finally written in a project worksheet and presented to the state. That's the $150- million number that is now on the table.

DEL. NORTON: Mr. Rainwater, what is the status, then, with the state?

MR. RAINWATER: Chairwoman, right now, we're -- I mean, obviously, we're working through our appeals.

And there are a couple of things, I think, that, you know, we -- when we sat down and talked about, you know -- and literally what I've tried to do in each one of these programs that we run -- there are about 26 of them -- is look at it and say -- and the public assistance program obviously is one, and it's large -- and look at it and say, okay, is there something wrong with what we're doing?

So we hired RSMeans because we thought to ourselves -- and I think it was logical -- that, you know, this is the same estimator that the federal government uses to estimate damages and expenses in repairing a building. And so we hired RSMeans, and then we hired another firm, Blitch and Knevel, to make sure that we had some sort of -- some sort of checks and balances in the system.

We don't -- we try to be very reasonable about the way we approach these issues, and we try not to be combative about it. We just want to provide information, do what's best for the state of Louisiana, the citizens of New Orleans, in rebuilding Charity.

So we hired RSMeans to take a look. They came back with the $492-million number. We are going to appeal the number. We don't agree with the Federal Emergency Management Agency's review of our -- of the estimations themselves. It brings up issues; for example, the failure to protect the facility after the storm. As many people know, the city was in disarray at the time. And we were hit by two storms within three weeks, Katrina and Rita. Now, FEMA did provide $20 million to the state of Louisiana to help them protect the -- to help us protect the facility, but that wasn't done till about six months later.

So we had cash-flow issues. There was damage caused by the storm that FEMA believes was deferred maintenance. Obviously, we disagree, because LSU sent its facility planning and control folks into the building itself to look at it and saw mold and mildew building up in the system weeks after the storm had occurred.

So we're going to -- we disagree with their assessment, and we are going to work through the formal appeals process. We are establishing the appeal in such a way that if we lose the appeal, we -- LSU has said, and our office of state planning and control has said, that we'll go to court over the issue. Because it is a huge issue to the city of New Orleans and the rebuilding of the health-care system in New Orleans itself.

DEL. NORTON: Precisely. Now, see, I will -- I would expect that almost always -- perhaps not always, but almost always -- the state and FEMA would disagree.

When it comes to real money, there's going to be disagreement. Then the state is going to have to decide whether to appeal. Sometimes it will appeal and sometimes it's not -- it won't.

I am concerned with the initial stage, since I've been convinced by what you've said, that the appeal process is okay, but something else must be wrong.

Let me ask you, Mr. Garratt and Mr. Stark, was Charity Hospital more than 50 percent damaged by the storms?

MR. GARRATT: In our estimation, the answer is no.

DEL. NORTON: Mr. Rainwater, that's where the difference lies, then, I take it.

MR. RAINWATER: Yes, Chairwoman, that is where the difference lies.

DEL. NORTON: Yes. But this one is ready for appeal.

MR. RAINWATER: Yes, ma'am. And -- but it took us -- and it's an example, because it took us three and a half years to get there, which is --

DEL. NORTON: Yeah. And it's a hospital. Heavens help. It is a hospital.

MR. RAINWATER: Yes.

DEL. NORTON: And that's what our concern is, that -- you notice I'm not asking as many questions about what appears to be going better, homes, even though there's bureaucracy there. I'm concerned about the basic infrastructure of the city, and I am concerned about another storm, frankly, and being caught with sewers and the like unstarted because of these appeals. There will be no patience in the country for that, and that's why I'm looking for a mechanism for an initial decision.

I think the appeals -- how long do they take, Mr. Garratt? How long does an -- how would you estimate that an appeal itself would take?

MR. GARRATT: I would say if it goes through both appeal levels, it'll take approximately six months, maybe a little longer.

DEL. NORTON: Yeah, see, that doesn't bother me. Maybe it's because I am a lawyer. (Chuckles.) But it doesn't bother me in large part because of what Mr. Rainwater said, the nature of the beast you're dealing with, you know, the largest storm and the most complicated recovery in the history of our country.

So, I'm -- but how long has it been? We're at the stage, this is the beginning stage of appeal; all right, how long did it take us to -- when did this start?

MR. RAINWATER: When -- Chairwoman, if I could, when we got here -- actually, it started right after the storm. When we got here in January of 2008, the governor and I sat down and said, okay, what are our priorities? And, obviously, Charity Hospital was the number-one priority for the recovery.

Then we said, okay, so are we right in the fact -- do we believe it was actually 50 percent damaged or not? So we sat down with our FEMA counterparts. They obviously disagreed. So we said, let's have two studies done. We had the two studies done. We presented the studies.

It's taken us -- it's taken us a year. In December of this -- of last year, Deputy Secretary Paul Schneider with Homeland Security, Chief Operating Officer Admiral Harvey Johnson, Director Jim Stark at the Transitional Recovery Office and General Doug O'Dell came to the governor's office and -- with myself and our Health & Hospitals secretary Alan Levine, and sat down and presented us the $150-million public assistance project.

So, you know, it took almost three years to get that point where you got to the 150 (million dollars) in -- obviously, the -- sort of the settlement offer, if you use that term loosely. You know, here's what we can pay for, and so now we're in the process of writing our -- or our appeal to that project worksheet that they presented to us, which by the way --

DEL. NORTON: It's -- what -- who -- let's talk about who is in charge of that appeal.

MR. RAINWATER: Right now, the state of Louisiana is working that appeal. We had 90 --

DEL. NORTON: Now, who makes the decision?

MR. RAINWATER: With the state of Louisiana?

DEL. NORTON: No. Who --

MR. RAINWATER: Oh, sorry.

DEL. NORTON: Who is the decision-maker? Is there any conflict of interest in that system?

MR. GARRATT: The first appeal will go to the regional administrator, in this case in Denton, Texas, at Region VI. Second appeal comes up to FEMA headquarters and is resolved by the assistant administrator for disaster assistance.

DEL. NORTON: Now, you say 40 percent of these appeals are, in fact, won.

MR. GARRATT: I'm saying that thus far, for the appeals that have been submitted for Mississippi and Louisiana, the number is think -- I think is over 40 percent -- have been resolved, either in whole or in part, in favor of the appellant.

DEL. NORTON: Do they then get, as is often the case in court -- one of the most wasteful things we do in the litigation system is we let everybody go through trial, and then after everybody's spent everybody's money, then we resolve the case as it is about to go to decision. Is that what happens in this appeal process?

Mr. Rainwater?

Mr. Garratt, Mr. Stark?

I mean, did it -- was there a decision by the decision-maker? Because apparently it came out okay, or at -- or -- well, let me ask Mr. Rainwater. I don't expect the state, again, not to want as much money as it can, but Mr. Garratt characterizes these appeals as producing a satisfactory result.

Would you agree with that?

MR. RAINWATER: The -- yes, chairwoman. I mean, the state has an -- we look at the appeal first, and we don't send up appeals that we don't think have merit. Not all of -- I mean, not all appeals are forwarded by the state of Louisiana. We go back to local applicants and we tell them that, you know, your appeal doesn't really have any basis and so --

DEL. NORTON: Well, are you satisfied enough? Would you agree with that 40 percent?

MR. RAINWATER: So -- yes, ma'am, so far. Yes, ma'am.

DEL. NORTON: So it looks like there is a mechanism, and it looks like FEMA does have a -- I'm just basing this on your testimony -- even though it is within the agency, as you might expect, that the system is not inherently unfair.

Were these decisions on the merits? Or were these decisions of the kind I just indicated, where essentially the parties get together at the point of decision and essentially resolve the matter by coming to some kind of compromise?

MR. RAINWATER: Chairwoman, these were appeals that went up through the process. Some of those appeals, and I don't know what the numbers are, but we actually have the ability to do an oral appeal now, which is one of the things that we worked on in February of last year.

DEL. NORTON: Excellent.

MR. GARRATT: And we just felt that --

DEL. NORTON: Is that because some things are fairly small?

MR. GARRATT: Well --

DEL. NORTON: How could you do an oral appeal?

MR. GARRATT: Chairwoman, what happens is, I mean, some of those things are so important to, you know, a mayor or a parish president or a university president that, you know, we felt like it was important that they be afforded the opportunity to either come down -- to either have the FEMA official come to Louisiana or the state or local official go to -- come to Washington, D.C., to make that appeal in front of someone, to bring their case.

And so we think it's worked very well. The applicants are very happy. They feel like there's, you know, some transparency there, where an applicant can argue their case in front of someone, so that they know who that decision-maker is.

As you know, you know, being an attorney, I mean, you want to, you know, be able to argue in front of a judge. And so that's what we heard from our applicants, and so that's --

DEL. NORTON: Are some -- are most of these resolved at the local level, or do you have to go all the way up to the Supreme Court, as it were?

MR. STARK: Ma'am, once it's in the appeal process, then an appeal will be rendered or -- an appeal decision will be rendered on that.

So I'm not aware that most of these are resolved before the appeal is ruled on. However, there are instances throughout the nation where final appeals are in fact litigated afterwards.

DEL. NORTON: Well, Mr. Rainwater, on -- in your testimony, you mentioned setting up a streamlined appeals process, that FEMA endorsed the idea of a streamlined process, that they participated in setting up such a process.

MR. RAINWATER: Chairwoman, we haven't gotten to that point of the streamlined process. I mean, that is one of the things that I mentioned earlier about the scale of this and in presentations to, you know, prior senior FEMA leadership in trying to provide and make sure that the Transitional Recovery Office and that, you know, everyone up and down the chain has the muscle --

DEL. NORTON: So I mean, by a streamlined process, you mean what, Mr. Rainwater? What would be different?

MR. RAINWATER: A process -- a little bit more robust, a bigger pipe, you might say, to take on more appeals. But remember, ma'am --

DEL. NORTON: You mean like more staff to take the appeals?

MR. RAINWATER: More staff, yes, ma'am. But remember, the challenge really is at the dispute area in trying to get the decisions --

DEL. NORTON: And I'm not going to --

MR. RAINWATER: Yes, ma'am --

DEL. NORTON: -- I'm not going to forget that -- (chuckling) -- despite Mr. Garratt trying to change the subject on me, because it's focused on something that I'm very pleased to say works.

And by the way, while we have been very tough on FEMA, I ought to say -- and I do want to say this for the record -- the point of a hearing is to -- in my judgment, is to solve outstanding problems.

And frankly, if FEMA had brought this to us -- and that is what I've always urged them to do -- we are willing to engage in that problem- solving process with you.

But I do want to put on the record that when Gustav began, I called Mr. Paulison, who was then the administrator -- (chuckling) -- I said, "This is it, Mr. Paulison. Are these people going to be evacuated? Can you assure me?"

It was over a holiday. I had to find him through some contorted mechanism. Are these people going to be rescued, or are we in for another Katrina? And he assured me that every living soul would be rescued. And guess what. That -- the rescue, the evacuation in Texas, we have not had lots of complaints about. That -- (chuckles) -- as we evaluate the agency, nothing could be more important than the fact that at least people got out, as they did not in Louisiana. That shows improvement, as far as we're concerned.

(Chuckling.) I'm sorry Mr. Paulison isn't here to be congratulated, but he knows how pleased we were at that. That was a very big marker.

And the reason I count it as a big game for FEMA is that Gustav and Ike weren't planned, that was another very major storm, and -- looks like the folks got out. We have some problems in Texas we'll hear about, but the major problem that the whole country judged FEMA by was in fact basically cured, it would appear, in Texas.

And all I'm trying to do with the appeals process, Mr. Garratt, is to not tackle with what may work and only with, as Mr. Rainwater keeps leading us back to, what apparently is responsible for the holdup of the $3 billion fund.

Let me ask you this, Mr. Rainwater. Do you believe that the holdup of the money basically is in Washington, that -- or do you think the holdup is really on the ground?

MR. RAINWATER: Chairwoman, if I could answer that by going back to the response, because I think there are similarities here, I wasn't -- I worked in the evacuation of the city of New Orleans during Hurricane Katrina, Rita, Ike. And in Gustav, the governor deployed me -- when I'm not doing recovery work, I'm a lieutenant colonel in the Guard, and the governor embedded me with Mayor Nagin and his staff for 14 days.

And what we all recognized is that we needed to do things differently. And so he gave me operational authority on the ground in working with the city and working directly with FEMA National in Region 6. Region 6 brought its folks over, embedded it in the governor's unified command. I was embedded with Mayor Nagin. We were able to make decisions. At Union Passenger Terminal, we evacuated almost 18,000 people, and we did that by making tough decisions on the ground quickly.

My point is this, is that it is -- if you take the response and then you overlay it over the recovery, you're almost in the same situation. But we have to look at the recovery, this recovery -- Katrina, Rita, Ike, Gustav -- differently than we've done other recoveries, because it's -- the scale and the complexity of it is just different, and it needs a different set, you know, sort of a different -- you know, let's view it through different glasses, basically.

And just as we did -- and you know, we thanked FEMA for their strong response to Gustav and Ike. We had a good partnership. Mr. Stark and I were able to work through some issues very quickly on the recovery side because he was engaged as well from the response side.

And so coming out of that, what we said is that, look, let's renew our partnership, let's get together on these sorts of issues -- though, you know, very frankly, what we feel like is that we've been bogged down in these sort of discretionary policy decisions.

The Stafford act, you know, although I don't -- I mean, in a catastrophic, you know, event, it's very difficult to work through, just because of the processes themselves. But it does give discretion to the regional administrators to work through issues.

And so our point has been this -- and we have shared this with Secretary Napolitano's chief of staff, Jan Lesher, and others, and I've spoken to this with Jim and Mr. Garratt, and that is, if you've got a Transitional Recovery Office, then let the Transitional Recovery Office make the decisions and only allow for the most, you know, egregious issues with the state -- if you think that I'm -- you know, if the state of Louisiana -- if you think I'm trying to get over on you, then take it to Washington, but not every decision.

DEL. NORTON: Yeah, it looks like the stumbling block may be in Washington. You've got to let people do what they do best.

Mr. Garratt and Mr. Stark, I congratulated Mr. Paulison, but I am well aware that you deserve part of that congratulation that Mr. Rainwater just indicated happened in Louisiana as well as Texas.

I'm going to -- (now that he's ?) back from voting, I'm going to be voting with him, Mr. -- (inaudible) -- any time -- soon, I hope. But meanwhile, we were able to keep the hearing going.

I do want to say, before I pass over to Mr. Cao, who was on the ground and I'm sure will have truly pertinent questions, that what you have said, the theme of your testimony, Mr. Rainwater, is the theme of the post- Katrina laws we passed.

Congress looked at Katrina and passed post-Katrina legislation. One piece of legislation not yet passed in the Senate had as its thesis Katrina was so different that we will amend the Stafford act with Katrina alone.

The reason we did that was that FEMA didn't move. We thought Katrina had the authority to move, but just to make sure they understood, we passed these laws. And the whole theory here -- both of the laws that include everyone and especially the laws that exempted -- that took on Gulf Coast alone was that this is one of a kind, at least for the time being. Everybody else get back. We're going to allow FEMA to operate in this way. It came out of testimony from the members, who begged for shortcuts, who even at that point were telling us that the money wasn't being spent.

So if you hear me -- (chuckling) -- you know, pulling my hair out -- (chuckling) -- it's because even legislation seems not to have resolved that.

I'm going to ask my good colleague from Louisiana to indicate his questions.

REP. CAO: Thank you, Madame Chair.

Mr. James Stark, Mr. Garratt, if I receive one complaint from the state, I might have issues concerning whether or not reasonable people can disagree. But when I receive complaints from the state, from the Archdiocese of New Orleans, from Tulane, from SUNO, from almost every agency that I have encountered, the City of New Orleans, there is an issue here with respect to how the offices function down there in Louisiana.

And in recent days, I have become aware of some serious problems in the TRO Office, in Louisiana, in New Orleans more specifically. My staff and I are investigating these claims, as are CBS News, which is due to air a preliminary segment in tonight's news.

And these problems that we uncovered concern whether, number one, the number of staff in the TRO Office is adequate; two, there are significant claims of Equal Employment Opportunity abuses; three, sexual harassment; four, discrimination; five, nepotism; six, cronyism; seven, ethics violations.

Can you explain to me some of these problems, Mr. Stark and Mr. Garratt?

MR. STARK: Congressman Cao, first, let me thank you for your visit last week. I was very pleased. Even though we've invited members to visit our office, you were the first to come. And I thank you for stopping by to talk with our people.

The problems that you just enumerated came to light last week. And we have immediately responded by bringing down a climate assessment team from Washington, to take a look at those serious allegations, which I personally am very concerned about.

I'm concerned about every one of our employees at the TRO in Louisiana. I'm concerned about their well-being. These are employees who live in Louisiana. They're helping their neighbors recover. And they need to be treated with respect and be taken care of.

Each one of those allegations that you brought up is being investigated fully. We look forward to the response from the climate assessment team that just went down there.

REP. CAO: Now, after speaking to some of your employees, they have conveyed to me that the FEMA office has basically lost its focus in rebuilding; that somehow senior staff members are just out for themselves.

And speaking to other employees, they're telling me that they're very, very unhappy down there and that the office is run out of fear rather than out of the -- to address the needs of the people.

What has happened to cause your office to lose its focus, Mr. Stark?

MR. STARK: Well, I'm not -- I don't agree with that statement that our office has lost its focus. Our office is focused on partnering with the state and the local governments, to rebuild the state. And I don't agree with that statement.

As I said, the climate assessment team is there to find out what the climate, the work employment climate, is with out people. And we'll take necessary steps to correct it.

REP. CAO: Now, I agree with Madame Chair that there are discrepancies, in the testimony, between you and between Mr. Rainwater. And I also sense the same discrepancy, when I speak with you, where I'm not sure whether or not there are misrepresentations or what have you.

But you're telling me that the state is not reaching out. The state is telling me that you're not reaching out. The city is telling me that you're not reaching out or you're office is not reaching out.

So who is not communicating to one another? Is it your office that's not communicating, with the state and with the city? Or is it the state and the city that's not communicating with your office?

MR. STARK: As I said in my testimony, Congressman Cao, I feel that the way to resolve these issues is a collaborative process. And quite frankly we have not always had that collaborative process.

In dealing with some applicants, we have been denied access to facilities that we needed to get into, to make certain estimates on damage, damage repairs and estimates of disaster-related damages. We're working through that with the state and with the individual applicants.

We have tried to reset or recalibrate our focus on that. And I think as we work through the very specific, project-by-project disagreements in collaboration -- rather than, as I said before, we come in with our position and throw it over to the state and then months later, they come back and months later, we come back -- we need to sit down now and solve these hard problems. All the easy ones are solved.

REP. CAO: Now, you just told me that some of these problems were -- came to the surface within the past week.

Now, there are allegations of sexual harassment that's been going on for almost a year. So how can you tell me that these problems only surfaced within the past week?

MR. GARRATT: Let me jump in here if you don't mind, Mr. Stark.

About a week and a half ago, we at headquarters were notified, by the director of our EEO office, Pauline Campbell, that she had received words that there were some -- an uptick in issues, at the TRO, in terms of equal opportunity issues.

We asked her at that time to investigate that. We asked her to form a tiger team, to send that team down there immediately, to essentially do what Mr. Stark described, which is a climate assessment. Let's go down there and get some feedback, on whether such conditions exist and whether we need to do a more robust and thorough investigation.

Well, that climate assessment team is still down there. They've been down there for a week and a half. They've been doing a number of interviews. And the purpose of that team is to come back and inform the leadership of FEMA what the status is at, down there, and make recommendations on what we need to do next. We take this very seriously and we're planning to tackle that.

In terms of specific allegations of sexual harassment, against any employees, those exist throughout FEMA. We process a large number of EEO complaints and other complaints, throughout the FEMA body, throughout the course of a year. They certainly exist in the TRO. And those are always investigated. And they're always investigated quickly through our standard, existing EEO process.

So if there are any sexual or allegations of sexual harassment, anywhere in FEMA, rest assured that the EEO architecture is investigating them. And when the report comes back on those investigations, action as required will be taken to deal with it.

REP. CAO: Now, Mr. Garratt, Mr. Stark, I hold in my hand here a detailed description of the Charity assessment, which is around 18 pages. The property is evaluated at $490 million.

My house is evaluated at approximately 350,000. It was damaged by flood and wind, similar to Charity Hospital, because of Katrina. And I can tell you that my insurance adjuster provided me with a bigger adjustment than what I am holding here.

Now, this adjustment shows $129 million in damages. Yet your statement says that the Stafford Act does not allow FEMA to compensate for damages not caused -- not related to disasters. Yet in the process of dealing with settlements for the state, you offer 150 million to the state, while these documents only show 129 million.

It seems to me that there is certain discretionary decisions that can be made, with respect to the Stafford Act. So why is this insistence on the inflexibility, on the limitations of Stafford Act, when you yourself are making decisions contrary to what the act is doing or is saying?

MR. GARRATT: In terms of the decision that was made, regarding the 150 million, FEMA had identified some number of damages that they had determined were related to the disaster, directly related to the disaster.

There was some number of other damages that were the result of or could have been a result of or in the estimation of FEMA were the result of failure to properly secure that facility and prevent additional damage from occurring, following a disaster.

FEMA program staff looked at the information and made a determination that X amount of this was within that preventable category and should not be reimbursed and X amount of that could potentially have been unpreventable.

It was a subjective call that was made by DHS leadership. They looked at the existing body of information, related to that damage, that was in that gray category, in their estimation, and made a judgment call that we're going to give the benefit of the doubt, to the state, on this particular damage.

And that's how we got up to 150 (million dollars). They essentially gave the benefit of the doubt to the state on those damages.

REP. CAO: I'm sorry. What was your last statement? I'm sorry. I didn't get it because of the bell.

MR. GARRATT: The determination to bump up the figure to 150 million (dollars) resulted in a DHS leadership determination that a portion of the damages that we could not validate as being disaster- related could potentially be disaster-related and gave the benefit of the doubt to the state on whether they were or were not disaster related.

REP. CAO: So this really brings me to the question that -- the allegations that decisions are being arbitrarily made with respect to damage evaluations. And it really -- it will ask me to question whether or not these decisions are being arbitrarily made.

And there are a lot of recovery issues in the 2nd District. And I'm not sure whether or not the problems are here with how you all operate, whether -- with respect to your staff, who's making decisions. Let me ask you a question. Who makes the final PA decisions? Is it you or is it Mr. John Connelly?

MR. STARK: Mr. John Connelly is the public assistance officer. He usually makes those final decisions unless it comes to a point where there -- it's my -- it's my actual signature, but I usually pass his decisions on as the public assistance officer.

REP. CAO: And what qualification does he have with respect to these decisions and how they are evaluated?

MR. STARK: He's been a public assistance officer in FEMA for I believe over 15 years.

MR. GARRATT: Let me add on to that. We sent Mr. Connelly down to the Gulf Coast specifically because he is regarded as one of the premier public assistance experts in FEMA.

He comes out of Region 3, out of Philadelphia, lots of experience, but he was sent down there specifically to replace the existing public assistance officer at the time and to get that operation back on track from a public assistance perspective.

REP. CAO: And can you tell me how many times has Philadelphia been damaged by a hurricane?

MR. GARRATT: I can't tell you how many times Philadelphia has been damaged by a hurricane, but we can certainly, I think, provide you the probably large number of hurricane disasters that Mr. Connelly has responded to before he was sent down to Hurricane Katrina.

DEL. NORTON: Mr. Cao, I'm going to hold this until you come back in any case so that Mr. Guthrie can get in some questions. And I know you all have to go to vote again. Why don't you do that?

You've then run to vote. And don't worry, I got a lot of questions while you're gone.

REP. CAO: Thank you very much.

DEL. NORTON: Mr. Guthrie?

REP. BRETT GUTHRIE (R-KY): Thank you, Madame Chairwoman.

Well, let me first -- let me just, if it's okay -- a point of privilege -- my father just came in. He's up here to watch the speech last night and he came in the back of the room. So I appreciate that he's able to be here.

And -- so we'll go from the 2nd District of Louisiana to the 2nd District of Kentucky, I guess I would say.

And first of all, I just want to say in the -- Colonel Kadish (sp), who's the FEMA officer or head of the effort down in Kentucky, I met him the other day. He's done a -- I think he's doing a great job.

And the FEMA employees that I've been around have all been professional and have worked hard and had missed as much sleep as a lot of our local officials, we'll hear from -- working, as you'll hear from Judge Logsdon shortly.

The thing that -- I guess a couple of questions I was going to -- hopefully, maybe Judge Logsdon speak first and then maybe I'll ask some questions, but -- because he's going to -- I know what he's going to talk about.

And one, just how do you work through this issue? When Katrina was coming, I remember it; I mean, I remember Governor Barbour getting on TV, saying, this is Camille. And he said don't say "Cat 5," say "Camille" and people will understand it.

So I know you guys were working to get ready. The ice storm -- I know my wife was coming to D.C. when it hit, and so we got to get out of town because we have a storm coming. We didn't see it coming as bad as it was and the damage that it was until it hit.

So in order to get prepared and get people on the ground, how do you react that -- what kind of procedures do you have to say we didn't see this coming -- a tornado would be the same situation, I would guess -- and deploy assets quickly? Is there a way that you speed up the process in that? That was some of the concerns of getting assets on the ground quickly. That was one of our issues.

Not that your employees weren't working hard, just getting them in there in a quick way.

MR. GARRATT: Happy to answer that. By the way, I'd like to also compliment the state of Kentucky. As you know, Acting Administrator Ward, visited the state of Kentucky and all of the reports that we received from Mr. Kadish (sp) and others indicate that your guys performed exceptionally well down there.

I think as you reported earlier in your remarks, as you began to characterize the nature and scope of the response and how well your citizenry and the elements of -- the components of Kentucky responded to that, all reaffirmed by our own folks down there. Everyone thinks you did a fabulous job.

In terms of how we respond to a disaster, we have the ability to pull the trigger immediately on resources from any number of venues in the United States. We have logistic centers where we store products. We have teams that are ready to go at a moment's notice including the Incident Management Assistance Teams who are on alert all the time.

Once we're aware of an incident and once we're aware of a potential incident, we have the ability to begin moving assets to deal with that. And we will either do that proactively because we make a determination that it's necessary to begin pushing assets there because we recognize that they're likely to be needed or we'll do it if the state asks us to preposition those assets.

Either way, we've got the capability to move quickly. So it'll either to be a unilateral determination or it'll be in response to a request from the state.

REP. GUTHRIE: Okay. And one of the things that I'm sure you're going to hear from the judge when he speaks is just generator capacity. I know we're going to do an after-action review and try to -- how can we do things better. But our water systems, people were losing water, had the "boil water advisories" because the water systems went down.

And I believe there are instances of generators coming and they weren't the right, applicable generator for that facility. And then Colonel Kadish (sp) has talked about doing an inventory. And then maybe some of the local people didn't have the ability to hook to the generators -- or coming and they didn't work.

And so, I mean, that's a concern that -- how do we preposition our assets, just in general, in certain areas so when these unexpected kind of storms hit, they're available?

And just one other thing -- kind of tied to that because I know we're going to have to go vote -- you know, just contracting and flexibility. Maybe we hold you to that by statute, I don't know. I'm not sure.

But I know a road contractor talked to me and, matter of fact, Judge Logsdon kept calling to get backhoes. You know, they kept bringing backhoes, and then when you start looking at reimbursement for that, well, we're not approved contractor and, you know, these guys were down there. And I know people take advantage and we have to protect the taxpayer dollar, but if there's some way we can have on- the-spot decisions to get assets in, the local assets that -- to clear roads -- like I said, it took six days to get to one particular lady's home and she lived way off the beaten path.

So -- but if they can react quickly and be just be more nimble, I think, that's what we would like. I would like to hear if there's something we need to do here in order to make your job better so you can be more quickly -- and can act more quickly.

But -- so I guess my question we're getting to -- just explaining getting assets in the right place at the right time and how you can bring local people who can -- who have the assets on board the FEMA in a quick way as well.

MR. GARRATT: We're also -- we're interested in both of those.

Let me tackle the last one first, and that is in terms of the ability to contract quickly for debris removal. We're very interested in the ability of states to be able to do that. We stood up a contractor registry to specifically identify those contractors who have the ability to do that in states across the United States.

If there are concerns about your ability to have pre-existing contracts and whether they will support reimbursement, then we'll be happy to work with you out of Region 4 to make sure contracts that any of your jurisdictions have set up in advance for any type of debris removal are valid contracts and will be supported through reimbursement.

Let me address the generator issue because we recognize that was an issue in Kentucky. And I think we both have a part to play in that -- Kentucky and FEMA -- in that regard.

We packaged these generators in what we call 50-packs and they're normally assorted sizes in those 50-packs. We can shoot those out quickly. We can get them somewhere and we know that some number of those generators will meet your needs, but maybe not all of those generators.

In this particular case, what we found was fewer of those generators in those 50-packs ended up meeting your needs than was ordinarily the case. And so what we need to do is come up with a better way of packaging these generator packs or have the availability to immediately develop such generator packs based on what your actual needs are and send them to you so we're not in a situation where we don't have generators that we do not need.

What also would have helped was if we had complete, full assessments of all of your critical facilities and knew exactly what sort of generator was required and what would be needed to set that up. We didn't have that when we came in. The Corps has recognized that -- the Army Corps of Engineers, FEMA, we've got that on our plate. And what we want to do is work with the state of Kentucky to fully assess all of those critical infrastructures and know exactly what the requirements are so in the future, if we're faced with another situation like this, we're going to come in with the right generator, we're going to go right to the place where it needs to be installed and we're going to know exactly what's going to be required to get that installed.

So that should eliminate the problems in the future.

REP. GUTHRIE: Well, thank you. And I know we're going to go vote, so I'll be back shortly. But I just want -- I do want to reemphasize that every one of your employees that I've dealt with were extremely professional, very caring, very hardworking, and I really appreciate their efforts.

We just need to make sure, if we're hamstringing you to get assets in the right place or if there's better ways to plan, as you just said, with the generators, I'm glad that you took note of that.

And Colonel Kadish (sp) has talked about what you're describing. I just want to bring that out for the record, and appreciate that. And, you know, people were going several weeks without power, so we were all getting kind of frustrated in working to try to help them.

But, again, I'll close with -- appreciate the effort of your employees on the ground.

Thank you.

DEL. NORTON: Thank you, Mr. Guthrie.

I want to clarify on the appeals process. How, if at all, is the Department of Homeland Security bureaucracy involved in the appeals process?

MR. RAINWATER: The appeals process takes place entirely within FEMA, ma'am.

DEL. NORTON: So it does not involve anyone in the DHS bureaucracy, Mr. Rainwater?

MR. RAINWATER: If I could, Chairwoman, what did happen with Charity Hospital is it got a lot of visibility in the prior administration and there was some conversation about, you know, who was going to manage that.

And so Deputy Secretary Paul Schneider and Secretary Chertoff got with Secretary Levitt and helping him in services and started to sort of devise a plan to kind of work with us in sort of a broader sense, because we were looking at, you know, different ways to get to that $492 million.

And to their credit, I think they were trying -- and Chief Operating Officer Harvey Johnson -- Admiral Johnson was trying to be creative about the way they approached this. And that's where Homeland Security was involved in that one issue. But they haven't been involved in any other appeals.

From time to time, they'll get involved in the dispute piece as we raise issues up like Charity and Tulane University and others, but typically the official system rests between the state and the Federal Emergency Management Agency.

DEL. NORTON: I guess they saw this, as you say, high-profile Charity Hospital notion. And so that's important to know (that FEMA is it ?), and I have more questions on that process in a moment.

But let me try to get to the bottom of these valuing projects, undervaluing, as the state would say, valuing as FEMA would perhaps say, because the committee has heard, of course, repeated complaints about undervaluing projects.

Who does FEMA employ to do the estimates? How are they monitored, checked, or somehow verified?

MR. GARRATT: Ma'am, we employ contract firms that support us under our public assistance, technical assistance contracts. These are A&E firm, for the most part, employees who engineers or are expert in the type of assessments and evaluations for the type of structure that they're responsible for assessing.

So, generally, it's done by individuals who are practitioners in the field, but they are contractors.

DEL. NORTON: Now, Mr. Rainwater, do you believe that these professionals consistently undervalue the scope and estimates of projects any more than one might expect as to differences between FEMA and the state?

MR. RAINWATER: Chairwoman, I have spent a lot of time talking with architects and engineers at the state level. Our Office of Facility Planning and Control is where, you know, where the rebuilding of universities and other things takes place. and it is the largest public assistance applicant in the history of FEMA.

It is run by an architect, and he will tell you that many, many times the folks that he's sitting across the table are not architects and engineers. And he --

DEL. NORTON: Who are they?

MR. RAINWATER: In this particular case, it was a person that understood the public assistance policy but didn't understand that the engineering estimating piece --

DEL. NORTON: Excuse me. These are contractors?

MR. RAINWATER: Yes, ma'am. In this particular case, I think it was -- or it was a temporary employee with FEMA, I think what they call a core employee, someone that's on for two or three years, but -- and I don't want to speak to that, but --

DEL. NORTON: Well, wait a minute.

MR. RAINWATER: Yes, ma'am.

DEL. NORTON: I'm talking about who does the technical work? This undervaluing of projects with the scope and estimate problem, are you saying the contractor is not using experts, like architects and engineers?

MR. RAINWATER: Chairwoman, in our estimation, in some cases, that's not happening. I mean, and again, one of the issues and I'm a liberal arts major. I'm not an engineer and architect. But I do know that our Facility Planning and Control folks and the folks that local governments hire are engineers, architects who work in local, you know, who work with local governments quite often.

There was an incident just recently where our facility planning and control certified architect was having a conversation about estimates with someone who had a graduate degree in English. And although I think it's a great to have a graduate degree in English, because I have graduate work in English myself, but I am not -- I am not in any way qualified to sit across from an architect and engineer and debate about whether or not, you know, Cherry Hospital or any other -- or a fire station or police station should be built at a certain cost. I rely on the experts to do that.

And so it has been, you know, something that we've worked through and it raised as an issue that we needed more technical folks on the ground.

DEL. NORTON: I'm going to have to allow Mr. Garratt and/or Mr. Stark to reply to this statement by Mr. Rainwater that it is possible to have a contract of the federal government on scope and estimate work who is not tech -- who is not an architect, engineer or other -- or similar expert.

Is that the case?

MR. GARRATT: Well, Madame Chairwoman, I'm not sure that Mr. Rainwater said that. What I heard him say is that his chief architect or his head of FP&C was in a conversation with someone who was --

DEL. NORTON: Well, let's clarify. I don't want, you know -- we're sitting here at the same table --

MR. GARRATT: It's the first I've heard --

DEL. NORTON: Well, okay. Well, we're sitting here at the same table for a reason. I asked that instead of seriatim hearing witnesses, that they help us by sitting together.

Now, would you clarify, Mr. Rainwater, are you talking about somebody who your architect is talking to, who is the contractor who's in charge of this issue, and he's having to talk with this person who is not a technical expert.

MR. RAINWATER: The deputy director of our Office of Homeland Security, where our public assistance sits, who is a civil engineer, has told me on numerous occasions he's had conversations with people that were contractors who are not technical people.

They might have experience in construction, but, I mean, we -- and again, if -- Chairwoman, I mean, it is the narrow sense in which we're even having this conversation, that our chief architect would even be having a conversation with a person about a technical issue who has a graduate degree in English. Why isn't he talking to an engineer or an architect?

DEL. NORTON: So, Mr. Stark, you see, that's the question. So you -- now you've clarified the question.

MR. STARK (?): I also may have contributed to a misunderstanding here. What I said earlier was that we employ architectural and engineering firms to provide the personnel who make up our PA (tech ?) contracts. I did not necessarily mean to imply that every single person who is supporting this contract is either an architect or an engineer. What they are are experts. They are folks who have been hired by these firms and may have expertise in a lot of the unique subject areas -- roads, bridges, for example.

So they're hiring individuals, they may train the individuals, but they may not be an engineer or an architect.

DEL. NORTON: But why is the federal government paying money for people who are not technical experts who sit on the other side of people who are?

I mean, after all, you having the contract, what is the advantage to the federal government in facing people who are experts with people who are not?

MR. STARK (?): I'm going to turn over to Jim here in terms of this specific instance, but I'm not aware that this is a systemic problem at all.

DEL. NORTON: Well, he said on numerous occasions. That's why I'm -- you know, on an occasion, then, we could ask you to correct that.

But, Mr. Rainwater, you are saying, and repeat it, so we have on the record what the testimony is and we can get the response from the agency.

MR. RAINWATER: Chairwoman, I think it really is about consistency in making sure that, you know, the federal agency has the right number of technical people involved in the public assistance process. So that on a consistent nature, if we're going to -- you know, if we're going to be this narrow about it, that they're talking with -- our technical engineers, civil engineers and architects at the local and state level are talking to technical people when we get into conversations.

I understand that you're going to have public assistance policy contractors involved. I have no problem with that. We have our own policy -- public assistance policy folks involved as well that are contract, and they help us work through, you know, the policy issues of public assistance. That's not -- that's not what I'm complaining about. But when we get to a point where we're talking about the knots and bolts of a building are the cost, then what I expect is an engineer to be talking to an engineer.

And if I -- if on my part, on the stage part, if I don't have a technical person or if I find out I don't have a technical person making that argument, then shame on me, and I'll fix that very quickly.

DEL. NORTON: Well I've got to have a conversation with the appropriators because either FEMA has the technical experts in house or FEMA is contracting with technical experts -- there my problem. (Chuckles.) It wasting the government's money because it seems to me the state has an advantage, and it also has a reason not to agree with the contractor if the contractor doesn't look like somebody who has the technical background to make the decisions.

I see two problems there. And I think if the appropriators see it, they will make the required correction to make sure that federal money goes to people who are qualified to sit across from the state and local people and in no instance are using people who don't have the requisite qualifications.

Now, you said, Mr. Garratt, you didn't think this happen very often. That's why I had Mr. Rainwater to indicate how frequent this was, and I see another structural problem. And I don't understand why. Why in the world, since you're paying these people, would you not look for people who will assure the government that they -- that the contract will be handled exclusively by people with a requisite technical expertise as a part of the RPF and the awarding of the contract? Why would you not do that?

MR. GARRATT: Madame Chair, I -- I will still hew to the belief that, by and large, 99.9 percent of the time, we have the right people in the right place dealing with and representing public assistance issues and functions when they're out in the field. Are there going to be instances when someone's not available or we've got a general public assistance person dealing with an expert? There certainly are going to be instances like that.

If, in fact, this is a systemic problem, we want to fix this as much as you want this fixed. I'm not aware that that's the case. These sound to me like isolated cases. But we are certainly willing to look into this and see if this is more than an isolated problem, and that, in fact, it represents more of a systemic issue.

DEL. NORTON: Well, I'll tell you -- (chuckles) -- you didn't see any problem with the appeals process, either. And I'm about to ask a question on that, Mr. Garratt.

I don't see any reason to defend a process simply because it is a process. Now, Mr. Rainwater didn't have any reason to bring this issue up. And -- (chuckles) -- I don't know how to resolve it except one way.

Since you say 99-point-whatever -- 1 percent, there's no problem where you will not mind appropriation language for that 1 percent that says, under no circumstances may a contractor be -- may a contract be let to a contractor who cannot -- who cannot guarantee that the federal government's decisions are being made, toe to toe, technical person to technical person. They'll have to devise the language, but since you say it happens most of the time, it not a problem. I'm sure you won't mind the language.

All right. I'm going to ask one question before I pass it back to Mr. -- to Mr. Cao. I simply have to get your answer, Mr. Garratt or Mr. Stark, to the examples, and Mr. Rainwater's testimony. Remember, I'm trying to find out if the appeals process works and if you seem -- (chuckles) -- unconcerned about $3.4 billion outstanding with -- just sitting there because nobody's found a way to make a decision.

What is even worse, it seems to me, are at least some of his examples. Explain to me a government process that you would stand behind that, for example, in the recovery school district -- I'm looking at page eight and nine of Mr. Rainwater's testimony -- in the recovery school district -- of all places, a school district -- they spent a million dollars on architect and architectural engineering fees that then it was reversed after they spent the money. And you said, okay and no okay.

Then you go on to the Vermilion Parish, where you said, okay, go ahead, and then no okay -- de-obligated the entire amount, 800 -- ($)3.4 million -- de-obligated the entire amount, he says leaving the fisheries and evacuation route unprotected for future hurricanes.

Or let's go to the Westwego -- approved the full replacement of city hall and city police station for approximately $7 million, acting in good faith. They went ahead -- (laughs) -- and did what you do when you get approval. FEMA later recounted -- recanted their eligibility determination and de-obligated approximately ($)6.5 million.

I will give you an opportunity to respond to these very specific examples of decision made, money in most of these cases spent, going back to the locality or the state saying, we recant, we were wrong, we're not giving you the money after all. Explain yourselves.

MR. GARRATT: I'll let Mr. Stark talk about the specifics of the individual cases that you mentioned.

However, in terms of recanting, we make mistakes, Madame Chairman. We make mistakes when we're out in the field. When we're evaluating thousands and thousands of projects, we recognize that there's going to be the opportunity for mistakes.

We have a multi-level review process for every project that comes into the field. And in fact, it is the obligation of those who conduct that multi-level review to make sure that that project is, in fact, appropriately scoped, that the work is eligible; and if they notice that there's a problem, it is to identify that, and it is up to us then to rectify that problem.

We think that overall we do a pretty good job of scoping these and identifying --

DEL. NORTON: No, but if there is a mistake on the part of the federal government -- notice there is a number of mistakes here -- who should eat it is the disaster area -- which doesn't have any money in the first place, which is why they need it -- they should somehow, even though, on the good faith of the federal government they have gone ahead. You are really saying you think that is a fair process -- because, after all, we have a number of appeals, so what in the world are you --

MR. GARRATT: Ma'am, what I'm saying is that we have an obligation to look for and catch our own mistakes. And if we catch a mistake, it's to rectify that mistake.

Now in a situation where no --

DEL. NORTON: If you made a -- if you make a mistake -- I'm sorry -- if you make a mistake, then you think that the burden should go entirely to the disaster area which has no money and not to do -- to even deal with some of your own mistake? You're here saying that in Louisiana, where people don't have any money in the first place -- which is why they come to you -- if you've made a mistake, the burden is on them because you've made a mistake, and there's nothing that they should expect from you because you've made a mistake? Is that your testimony, Mr. Garratt?

MR. GARRATT: What burden are you referring to Madame Chair?

DEL. NORTON: I'm talking about the burden of the people having started on the good-faith decision of the federal government, and then the federal government coming back after they started to spend money and saying, it's all wrong, we're not giving you the money. Who should bear the burden of that mistake, Mr. Garratt?

MR. GARRATT: I would agree with you that the federal government should bear the burden of a mistake when it makes one and it has a financial implication on those that they're supporting. I absolutely agree --

DEL. NORTON: Well, Mr. Rainwater, did it -- did these terrible -- these terrible examples -- who bore the burden in these examples in your testimony?

MR. RAINWATER: Chairwoman, the local school district; in that particular case, the recovery school district, that -- I mean, you know, for example -- yes, ma'am. I mean, it's the local government. In some cases, you know, we on the state level have taken some of the Community Development Block Grant money that you've provided to us and try to fill gaps through what we call a FEMA-eligible pile, which is about $270 million of disaster -- Community Development Block Grant money to try to fill those gaps where, you know, it doesn't work.

And if I could, Madame Chairwoman, I think this is where the Stafford Act doesn't work. And I don't think it's a fault of Mr. Garratt's or Mr. Stark's or some of the folks at FEMA. I mean, the Stafford Act I don't think ever solved the largest disaster in history coming at it. And I don't think it's designed in a way to allow people -- obviously, there are folks on the ground from FEMA and others that are concerned that they're going to be held liable at some point in time for decisions that they make.

And so I really think that that's something that we need to look at, and that would be --

DEL. NORTON: You know what, Mr. Rainwater -- (chuckles) -- I have news for you. They could fix this right now. If I found myself making one mistake like this, reneging on the work, I would not blame it on the Stafford Act.

Let me tell you what I'd do. I'd look at my appeals process instead of coming before the committee and saying there's nothing wrong with it because, obviously, this went upstairs some place and they turned around the people on the ground. And since you can't change your own appeals process, which you set up in the first place, I'd begin to say, "Wow, I must never do this again. I must never put -- do this to a school, or if I'd so, I must at least try to find some way to compromise the difference."

So one thing I want to know is whether or not anybody at FEMA has thought of making appeals at the local level and asking headquarters to embed itself right there on the ground so that you would not have the complicated appeals process which looks more like a federal appeals process, yeah, because I don't accept what you're saying, Mr. Rainwater. I understand it, but it's not as if this is an appeals process that we said you must use.

So I'm asking you, Mr. Garratt, this appeals process that you think works so well, don't you think that there's something that could be done to bring headquarters there so we're not making an appeal to the Supreme Court and putting the burden on the people who are there to somehow rest on your mistake and error? And if it is a problem, as Mr. Rainwater says, with perhaps the Stafford Act, don't you think somebody would have come to this committee and said, "Oh, God help us, because this is the process we are caught in"? I don't -- I have received no such message. I didn't know about this outrage until this hearing.

So I'm trying to find out what can I at least do with the appeal process so that if headquarters -- FEMA has to be involved, would it help instead of going upstairs to Washington to, in fact, have someone in the ground and say that person on the ground who's embedded, now we have let us say a streamlined appeals process that's over and done with, that's final, you can proceed in this school district or infrastructure district and do it, and not fear that the word of the federal government will be broken? Could you not fix this appeal process by bringing people down to FEMA -- to the ground?

MR. GARRATT: Madame Chairman, I'm not sure what part of the process you think would be fixed by doing that. Just --

DEL. NORTON: The multi-tiered appeal process -- I assume that this went up somewhere in the heavens and was turned around.

MR. GARRATT: The point I'm trying to make --

DEL. NORTON: And if that's not the answer and you acknowledge that this is unfair to the district, how would you fix it, sir?

MR. GARRATT: First off, in terms of locating headquarters personnel down at the local level to adjudicate or be involved in the adjudication of appeals, the actual adjudication process, making the decision, is done following what is a tremendous amount of research into that appeal. It's part of that validation and research effort. It's what we talked about -- that thoughtful, deliberative review of what that appellant submits. It often involves pages and pages of documentation and pictures, and what is often required is that, to adequately assess that appeal and the merits of that appeal, we essentially need to go out and reinvestigate all the parts of that. Having someone down at the local level is not going to eliminate of (sweeten ?) that part up.

DEL. NORTON: Okay. So, Mr. Garratt, once again, you don't have any solution. You like it the way it is. I don't. The committee doesn't.

And again, you yourself can see that it's not very fair to go to people who have no money and say, "Well, there's nothing we can do about it because we -- after all, these appeals are 40 pages; you know, it's our process."

See, that's the problem I'm having here. Do you concede that you yourself could change the process, or are you stuck with it?

MR. GARRATT: Well, it's a process that is out of regulation. So in the sense that the regulation can be revised, yes, ma'am, I would say we're stuck with the process that is proven to work over the years.

DEL. NORTON: Well, Mr. Garratt, I'm going to let you rest on that, given -- (chuckles) -- given the fact that you apparently accept the notion that, since it's an appeals process that works as far as you're concerned, there's nothing that can be done, leaving localities holding the bag that way. And guess what, when we get that kind of testimony --

MR. GARRATT: The process worked, Madame Chair, when it's used.

DEL. NORTON: Sorry?

MR. GARRATT: I want to make the point that when the appeals process is used, it works. If it's not used, it doesn't have an opportunity to work.

DEL. NORTON: Well, so the reason for this, Mr. Rainwater, is that the appeals process wasn't used. I thought they had the go ahead.

MR. RAINWATER: Madame Chairwoman, I don't think the appeals process is set up for 4,000 disputes. It's not. And so --

DEL. NORTON: Well, why did these people proceed?

MR. RAINWATER: In this particular case, this is an unresolved issue. And in this particular case, what happened is --

DEL. NORTON: No, I'm talking about --

MR. RAINWATER: Oh, yes --

DEL. NORTON: -- the several cases that you cited in your testimony --

MR. GARRATT: Yes, Chairwoman, and that's what --

DEL. NORTON: -- all involved people who apparently had word from FEMA to proceed, and then FEMA came back and said, "stop." That's what I'm trying -- is that the case? I mean, that's what you -- I mean --

MR. GARRATT: Yes, ma'am. But my point is this, Madame Chairwoman, is that we're still trying to work through that issue because the county school district believed, by policy folks in FEMA, that we could still work it out. We haven't gotten there as far as an appeal.

There are numerous -- there are hundreds of cases -- and I spend a lot of my days talking to mayors, parish presidents, recovery school district, Paul Pastorek, the state superintendent in schools, and others about these sorts of issues that we just can't seem to pull through. And again --

DEL. NORTON: Well, I tell you what, when they -- we're not talking just about delay. We're talking about not just costing the federal government money. We now talking about costing localities money. That -- I've had it.

And when I get testimony like yours -- I don't know, Mr. Stark, if you have any different testimony, but Mr. Garratt's testimony is an invitation to this committee to fix it, since you've not come forward with any way to fix something that leaves the locality holding the bag for a FEMA mistake.

Mr. Cao.

REP. CAO: Thank you, Madame Chair.

And I'd like to echo the concerns that you have conveyed in this hearing today, that while our children are not having adequate educational facilities, while our elderly are not only are not having adequate health care, while our city is being ravaged by crimes, we are dealing with appeals and we are dealing with recants.

I know that problem also was suffered by Tulane University when they carried out a project hoping to get reimbursement from FEMA, and FEMA recanted on the recommendations that Tulane follow. But I believe that some of the issues considering Tulane University has been addressed in the past week. Is that correct, Mr. Stark?

MR. STARK: Yes, Congressman Cao. Some of those issues at Tulane have certainly been addressed. And we are still awaiting some documentation of additional costs that Tulane may have incurred in design -- architectural designs based on bad advice from FEMA that may be eligible.

If I may take the opportunity to try to correct the record a little bit on the very specific issues that were just brought up by the chairwoman regarding Mr. Rainwater's testimony. In fact, at the RSD school, some of those A&E costs are eligible, but we have not received an invoice or documentation of those costs. And we look forward to working with the state as the grantee and the RSD as the applicant on those.

Vermilion School has been obligated $6 million for replacement. I'd like to work with the LRA to clarify their position that only $800,000 is left.

On the Timbalier -- I think I said that right -- Island, that's the responsibility of another federal agency. In this case, we believe that the EPA is the primary agency responsible for funding the restoration of an offshore island.

The city of Westwego, in fact, we made a mistake. We measured the building wrong, and under those calculations it looked like it was eligible for a replacement. In fact, under the correct calculations, it was eligible for repair. Those repairs had been made and funded by FEMA.

REP. CAO: I have just a couple of more specific questions concerning the archdiocese and SUNO -- first and foremost in connection with the archdiocese. I have been alluded to the fact that there are a couple of projects. One is the Ville St. Marie project that has been held up by FEMA. I believe the project is like 16 (million dollars) or $17 million in the Lower Ninth Ward. Can you inform me with respect to the progress of that particular project?

MR. STARK: Are you referring, Congressman, to the St. Mary's Academy?

REP. CAO: I have here as Ville St. Marie. I'm not sure what that alludes to. What is the St. Mary Academy, Mr. Stark?

MR. STARK: It's also a school in the Lower Ninth Ward, a Catholic girls' school, that we have approved $4.4 million for the replacement of the faculty house. And it turns out that, under the Stafford Act, regarding private nonprofits, certain portions of buildings that are related to strictly religion -- in this case, the housing of the nuns is not eligible for replacement, and we actually have to back that out. As far as the allegation that we've de- obligated the entire amount, I believe that is just not true.

REP. CAO: What about the Ville addition? Are you familiar with that?

MR. STARK: I think that's what we're talking about, sir.

REP. CAO: That's the nuns' housing?

MR. STARK: Yes, sir.

REP. CAO: Now, why is it not a purview of FEMA to address some of the issues concerning nonprofit organizations?

MR. STARK: That's the reading of the regulation and the law, sir.

REP. CAO: Now --

MR./MS. : (Off mike.)

REP. CAO: I have no idea.

(To Mr. Stark.) Now, could you quote to me those regulations, first and foremost with respect to the appeals process that Mr. Garratt has mentioned, that is in regulations? I would like where those regulations are, if you can quote me on that. And these regulations that you are spewing out to us here, I'd like to have specific sites where my staff can look at these regulations to see whether or not they are well-founded.

MR. STARK: Absolutely. We can provide that for the record, Congressman.

REP. CAO: Okay.

And Mr. Rainwater, with respect to the FEMA cottages, can you provide me with the progress of the FEMA cottages?

MR. RAINWATER: Yes, Congressman Cao.

With regards to the alternative housing pilot project, we -- you know, the governor directed me to take that program from the Louisiana Housing and Finance Agency last year. And basically, it's a grant of $74 million to build the 500 cottages.

One of the challenges -- and I will say in this particular case, Randall Kinder, who is -- who is actually the program manager with FEMA, has worked very closely with us. And he understood very well the nature of what I had taken over, and that is a very complex program, and has worked extremely closer with us. And I'm very thankful to him for what he has done because, to be very frank with you, we couldn't have worked through the complexity of these issues and the challenges that we're having, especially after getting hit with Ike and Gustav and delaying the movement of -- or the building of these programs.

We currently are going to be building Katrina cottages, or these cottages at Jackson Barracks and Hanno Fisher (ph), Westwego, Baton Rouge, Louisiana, and the City of Lake Charles.

Originally, we had -- the state, under the former administration, had looked at large group sites when we got there in January of 2008. What we decided is that what we needed to do is look at in-fill and so we, you know, began to work towards doing that. We are making progress.

We've started construction in Baton Rouge, Louisiana; construction in Jackson Barracks, outside of New Orleans. We are in the process -- in fact, it will be 91 units in Jackson Barracks, 42 in Baton Rouge, 100 at Hanno Fisher (ph), 27 in Westwego and then 100 at Norra (ph), the Audrey (ph) Development Authority.

We are in the process and we think that infrastructure will be complete at Jackson Barracks in March of '09 and at Westwego in April of '09. And then, housing construction, again, has begun in Jackson Barracks.

We believe that (end ?) construction in Jackson Barracks could be as early as July of '09, and then in Baton Rouge in June of '09, Hanno Fisher (ph) in August-September of '09, in Westwego August of '09, and then in Lake Charles, September; Norra (ph), September.

We may -- we've been talking with FEMA about the possibility of an extension, depending on what happens with the weather, obviously, and the fact that we were delayed by about 60 days by Ike and Gustav. What I've told my team is that we need to show progress. We understand the importance of showing progress in building those cottages. And so, you know, I think we're well on our way with that project.

REP. CAO: Thank you. Madame Chair, I don't have any more questions. Thank you very much.

DEL. NORTON: Thank you very much, Mr. Cao.

Mr. Guthrie, have you any questions for these -- further questions for these witnesses?

REP. GUTHRIE: No further questions, Madame Chairwoman.

DEL. NORTON: Thank you very much. We have kept these witnesses for some time, and it's -- well, tough on FEMA. We've also tried to give credit where credit was due, and it seems to me -- if you ask me what would be the most important thing FEMA had to show to show that it had made progress, it would be the evacuation that Rainwater says, and that we understand the problem, the officials in Texas did, in fact, occur. Our concern here is, frankly, at least, the concern of this chairperson, is being confronted for the first time with such large amounts of federal funds unspent.

I do want to say to you, I know there's a change in the administration and the rest of -- I mean, Mr. Stark says he's a public servant.

I do want to say once again, we can't help the agency if the agency doesn't bring issues to our attention. Then we'll try to work with the agency, to try to suggest ways to do it. We'll do what we did in the Post-Katrina Act and other legislations still waiting in the Senate to be passed. We'll try to fix it by legislation. We will make you understand that if you fix it, we do not consider it a violation of the Stafford Act, if that is in fact the case.

If the subcommittee says that you have our word, nobody goes back on that. Our frustration comes when we hear about problems like this only as we prepare for a hearing, have not had any advance notice so that we could have begun to think through a solution in partnership with the agency.

I enjoy working in partnership. (Inaudible) -- become adversarial, then, of course, that's what we have to do. We much prefer to hear from you early and often.

I congratulate you on the evacuation work you did on the Gulf Coast in the latest very major disaster. And I thank you for you testimony.

Could I call the next witnesses. Our next witnesses are Gary Logsdon, who is a Grayson County judge and executive of Grayson County, Kentucky; and H. Rodger Wilder, the immediate past president of the Gulf Coast Community Foundation.

Mr. Logsdon, you have the advantage, Mr. Logsdon, of having one of your own members on our committee. I would very much want to give him the opportunity to introduce you to the committee.

Mr. Guthrie.

REP. GUTHRIE: Thank you, Madame Chairwoman.

I just want the opportunity to introduce to the committee Judge/Executive Gary Logsdon. And of course, the term judge in this role in Kentucky is the county executive, or from previously, our testimony, like a parish president. So we appreciate him being here.

And Judge Logsdon's county was one of the most decimated or damaged counties in Kentucky, probably one of the most in the entire area, up through Arkansas, Missouri and Kentucky. And I went to see him in his operations center and how hard he worked on that, and he had some ideas. And I thought once we had this hearing to give us the opportunity to have a witness, and I thought Judge Logsdon would be able to really explain from the local level and the local perspective interacting with FEMA and just the storm damage assessment and reaction in general. But Judge -- he's been judge executive since 1993 and I really appreciate him being here.

DEL. NORTON: Thank you very much, Mr. Guthrie.

Well, let us begin with Mr. Logsdon -- or Judge Logsdon, excuse me.

JUDGE LOGSDON: Thank you, Madame Chair.

Thank you, Congressman Guthrie, for allowing us the opportunity to be here and for you coming down and visiting with us during the hard times.

I'm not here to point fingers or anything like that. I'm here to state a few things of how our community and others surrounding us were in during a state of emergency.

On Tuesday, January 27, the ice storm began. Power outage began -- by the end of the day, the county was 100 percent without power. The county lost at least 1,700 utility poles. Began to set up shelter at the Grayson County High School on the following Wednesday, January 28. All food donated by school system. The shelter was run on generators for five days until 2/1/09. All county and city water plants were running on generators.

Thursday, January 29th, one gas station set up to run on generators to provide fuel to emergency vehicles and the public. Approximately 25 National Guard arrived with no vehicles for transportation. Leitchfield sewer plant regained power on Thursday night. Shelter set up at Clarkson Elementary School to provide warm meals. All food donated by school system. Local radio station finally regained power on Thursday night. Hospital regained on Thursday afternoon, all but one building.

The next day, Friday, January 30th, Leitchfield utility water plant regained power, ran on generators for a total of four days until a boil water advisory for 24 hours. Due to water system struggles, factories were requested not to begin work until Monday, February 2nd, '09. Caneyville Elementary shelter set up to provide warm meals, all food donated by the school.

The next day -- Saturday, January 31st -- 170 occupants spent the night at Grayson County High School shelter. Center on Main -- that is our Chamber of Commerce -- opened to hand out food, water, necessary supplies. Eastern portions of Grayson County without water still. One hundred additional National Guard troops arrived with vehicles.

Sunday, the next day -- February 1st -- Leitchfield sewer system still has some lift stations running on generators, having to move generators around in order to make sure lift stations do not run over. National Guard provided two "water buffaloes" to Easter Grayson County residents.

Following day -- Monday, February 2nd, 2009 -- Grayson County High School shelter closed and occupants were relocated to Potter's Hope local church. National Guard began 100 percent door-to-door search for welfare checks on Grayson County residents. Warren RECC reporting approximately 40 percent of power restored. Grayson County Water District is still running on generators. Hospital has 100 percent power.

Following day -- Wednesday, February 4th, 2009 -- debris-removal site opened.

Following day -- Thursday, February 5th -- Warren RECC reported approximately 65 percent of power restored, peanut butter recall.

The following day -- Friday, February 6th, nine days after the incident -- when FEMA came with generators, closed Potter's Hope, remaining occupants went to hotels, and some went to Cave City shelter where we were able to close the shelters due to sending some personal heaters so we could get them back in their homes.

Following day, Monday, February 9th, Grayson County Schools and our local Christian Academy resumed their normal schedules. Garbage collection services resumed their normal schedules.

Notes: 49,172 meals were handed out to Grayson County residents during the storm; 5,000 gallon jugs of water were handed out; 48,310 bottles of water were handed out; 3,460 donated to residents for kerosene, propane, or fuel to run generators and heaters. Total estimated cost, storm is 1.2 million (dollars), not counting our co-op utilities company.

And one of the questions is do we have local representation with FEMA?

Madam Chair, thank you.

DEL. NORTON: Thank you, Mr. Logsdon. That's a good question for us -- (chuckles) -- and we'll take it up.

Mr. Wilder?

MR. WILDER: Good afternoon. It's now afternoon. Thank you for --

DEL. NORTON: Put your mike on.

MR. WILDER: Thank you. Good afternoon, and also thank you for allowing me to come here today to speak to you, and to the committee for hearing us.

By way of introduction, I'm Rodger Wilder. I'm an over-32-year resident of the Mississippi Gulf Coast, one of the founding members of the Gulf Coast Community Foundation, and from April of 2006 until November of 2008, I took over the operation of the Gulf Coast Community Foundation.

The Community Foundation during that period of time, with the help of a lot of -- a lot of donations, was able to make grants in excess of $30 million to people on the Mississippi Gulf Coast, primarily for hurricane recovery, organizations and individuals. Much of that was directed to housing redevelopment.

I want to say a special word of thanks to Congress for the support that you've given to the folks in the state of Mississippi and Louisiana and Texas and Alabama. We are eternally grateful for what you have done for us. I'm also thankful to the other agencies like FEMA for what they've done. And finally, I want to say thank you to, literally, hundreds of thousands of people who came to the Gulf Coast following Katrina to help us, who brought with them materials, money -- literally, hundreds of millions of dollars in money -- who had such a tremendous outpouring of generosity and support. It literally would not have been possible for us to have recovered, had it not been for their generosity.

Mr. Guthrie, I noted your comments earlier this morning about the generosity of people. I have been -- my faith in my fellow human beings has been renewed and reinforced and elevated to a tremendously high level as a result of what I have experienced after the storm.

I sat through the storm, and I have been involved or tried to be involved in the recovery process, primarily in the housing area since then. It's my understanding that you all would like to know a little bit about what's going on at least in the recovery. I don't have -- I have not had a lot of contact with FEMA, but I have had a lot of contact trying to get people back into homes.

I can tell you that we are well on the way to recovery, but our recovery is by no means over. We still have people in FEMA trailers and in what we call Mississippi or MEMA cottages. By and large, the people who are in the FEMA trailers are the more difficult -- the most difficult to place in permanent housing.

Our biggest problem now is the cost of housing. We do not believe that we have a problem with the availability of single-family homes, but we do have an issue with the availability of affordable rental. Following the storm, cost of rental has gone up such that many people cannot -- many of the people who are still in housing supplied by FEMA cannot afford to get into permanent housing because it's just too expensive.

One of the big costs that contribute to both rental and single- family ownership, the high cost of single-family ownership and rental, is the insurance issue. Insurance costs are driving those costs up to the point that -- that it's costing two (hundred dollars) and $300 a month more than it did pre-Katrina. And that, in turn, is just making the rental property not affordable to the low-income folks with whom my organization primarily dealt. We need Section 8 vouchers. We need more Section 8 vouchers to help get those people out of the FEMA cottages, the FEMA trailers, into rentals.

I will mention briefly, we have the alternative housing project -- what we call the Mississippi cottages, the MEMA cottages. I think those have worked well. We've got about 2,800 of those on the coast. The issue that we have now is whether or not those will be allowed to remain permanently, and we hope that in certain locations it will.

Briefly, I want to -- I want to offer some suggestions, not so much as -- not as a criticism of what has happened in the past, but as a way of responding to another large-scale natural disaster. We will have another Katrina. There will be another disaster of that magnitude. We on the coast measured everything by Hurricane Camille in 1969. People lost their lives because they said Katrina was the worst we've ever suffered; it'll never be that bad. And they drowned. People in Katrina -- excuse me, in Camille lost their lives because they said the same thing about the '47 hurricane. We will have this again, and we will have to deal with it again. And so we can say that this is the worst, but it will not, I'm afraid, be the worst in history.

As we go forward, I think there needs to be more collaboration, in advance and after the fact, between the non-profit communities and FEMA. I think we need to do a -- I think we need to do a post- disaster review, bringing together all of these organizations and seeing what worked and what didn't work. I think there needs to be an ongoing established relationship between FEMA and the non-profit communities in the future so that when the next disaster occurs, we won't be going down there and meeting new friends for the first time.

I agree with many of the comments that I heard from this task force that there needs to be agencies -- strike force. They need to put folks on the ground who can make decisions, and then stick by them so that we're not -- and this doesn't apply just to FEMA. I have to tell you that I think all government agencies in a disaster need to have something like a general on the ground who can make those things happen, they can make the calls and they can stick by them.

And, finally, I think that FEMA needs to spend a little bit of money -- it's really just a piddling amount of money -- to set up and keep going with these long-term -- long-term recovery centers that they recommended we set up following the storm, that were to coordinate the activities of the non-profit communities. They got little funding and they got -- and they struggled to get their feet under them. With a little bit of help, they could have done a lot more good than they have.

The non-profit community on the coast to date has rehabbed or rebuilt literally thousands of houses, working with -- I think we need to be working more closely with organizations like FEMA on the front end than we have. And that's not a criticism; that's an observation based on the fact that this was a substantial disaster.

Again, I appreciate the opportunity to speak with you; be happy to answer any questions.

And I ran way over.

DEL. NORTON: Thank you very much. This has been very, very interesting and useful testimony.

I'm going to go first to Mr. Guthrie this time.

REP. GUTHRIE: Thank you, Madame Chairwoman.

My question is -- thanks to Mr. Wilder for coming. It's nice to hear local stories how people react and have to react, and it's good to hear that.

But with Judge Logsdon, could you kind of just walk us through just briefly? You knew that the storm came, it hit, and then you assessed the damage and realized that it was major. It was a national emergency. And then -- because we're really interested in how the FEMA part of it interacted and how that went with FEMA through the first couple of days until you got everything working, how that interaction happened between local -- you locally -- I know you went through the state with the governor and to FEMA.

JUDGE LOGSDON: Yes, Congressman and Madame Chair.

When we declared a state of emergency -- back in 1994, somewhere right there close, we had an ice storm, and it was an ice storm that was nothing like what we had this time. It was ice on roads. It was no power lines or anything. So we didn't focus anything like what was coming. We didn't have an idea that we was (sic) going to get this.

So we woke up that morning and it was popping trees and popping lines, and it was devastating; ice everywhere. So we went on. We declared a disaster. We set our EOC up in our Emergency Management Headquarters. And you know, we've got a shelter in the courthouse. And I said, you know, "Let's open our courthouse because we get us 15 cots, and we can put 20 people in that courthouse."

Well, you know, right quick, when they started coming in, we opened our high school, which we had that available also. So they started coming in our high school and we're getting calls. So -- and we hadn't seen anyone from Red Cross.

We went to our local Wal-Mart. Their electric was off. The lights were out. They said, "Look, we'll write down what you all need. You all make a list. We'll make a list. We'll -- you all can pay us when you get done." So we went into Wal-Mart. We bought around 8(,000 dollars) to $9,000 worth of food. We took it out to our shelters and we set them up and started gathering people and getting them in, with volunteers of our community working together.

So we still hadn't seen the Red Cross either or heard from FEMA. So we went on several days and doing every elected official -- we had magistrates that would get out and haul constituents in and different folks with needs. And it got pretty hectic for the first few days, but we all focused on saving lives, and that's what our main goal was and we did that, and we helped everyone.

And like I said, it went to about -- the ninth day, we heard FEMA going to send us some generators. And they sent two, but there was a group that wouldn't let anybody hook them up and there was a group -- electricians came and sat one whole day waiting for somebody to show up with them, but they didn't show up. I think that was the eighth day.

And -- well, we got on the phone and we got to renting generators from other places -- Louisville, Bowling Green, everywhere that had one available. So we did -- we found a few and got our sewer plants going. We only had one generator in the community -- and I know it goes back to our preparedness, and we're focusing on our preparedness, too -- is it was the one that did the sewer plant in Clarkson.

So we had to use it to take it to the bulk plant. We only have one bulk plant in our community to get us fuel so that we could have our emergency vehicles and our county and city vehicles running to go transport people. So we did that. Then the sewer was backing up, so we had to juggle it. But we did do it and it was something that taught us a lot.

But you know, going back to the FEMA side of it, it's just that I heard congressman say awhile ago, when do you activate or when do you all move when there's a disaster declared, and that's just one of my questions also.

And we kept on working together. Our school was down for about two weeks. They were out of school. We used three schools for feeding people and shelter, and we didn't lose any lives because of this ice storm. And thank the Lord, and we were blessed. But we did a lot of generator renting/juggling.

And one of the focuses that could help us is if, you know, if FEMA -- if we could get some generator for these facilities that's in need, like our water/sewer, and we had a local radio station that we rely on. We only have one radio station in our little community, and it was real vital when it come to letting people know that there's a disaster because the first day, everybody knew there was a problem. Then their power went out. So there wasn't any communication. The only little communication they had was Bluegrass cellular phones. All of our officials in cities are on Cingular. We were down.

But we all worked together. We kept our calmness and we kept our faith, and we turned something that -- we all learned a lot.

REP. GUTHRIE: Thanks. And so the FEMA part, we just need them there quicker. We need more coordination, I guess, when they come forth. And they did say they were looking at the generator situation and a couple of other things.

So I appreciate your testimony. No further questions, Madame Chairwoman.

DEL. NORTON: Thank you very much, Mr. Guthrie.

That's very, very instructive, Judge Logsdon, what you said.

Let me just say, I do not think a county ought to have to buy generators for infrequent events. That's what -- that's what classically FEMA is for. You know, it's a lot of money, and these are these big hoggish things. So, that goes to preparedness. We'll have to find out more about the generator issue. That is -- when we met with the speaker, that was an issue that came up time and time again.

Now, let me -- (chuckles) -- I was intrigued by your testimony. It was very good testimony, very fact-driven testimony. You said in here -- I'm looking at the outline you provided the committee -- on Wednesday, that's the second day, all food donated by school system. By the -- you say again, on Friday the 30th, all food donated by school system. All I can say is thank God for the school systems. That, again, is a classic FEMA function.

The theory is that if the national disaster was declared in your county by the president of the United States, that two things you're not going to have: You're not going to have energy and you're not going to have food. Why did FEMA indicate it did not have food when it came on those first few days?

JUDGE LOGSDON: Madame Chair, I don't know of that answer because we never saw any food. The only thing that we saw was --

DEL. NORTON: Ever?

JUDGE LOGSDON: Not that I'm aware of, any FEMA food. We had some MREs that came right toward the --

DEL. NORTON: MRE is --

JUDGE LOGSDON: Is that Army -- that --

DEL. NORTON: Yeah, like they have in the armed services.

JUDGE LOGSDON: Meals ready -- yeah, ready -- and they had the peanut butter --

DEL. NORTON: Who gave you those?

JUDGE LOGSDON: They came through, I think, Red Cross and then maybe the National Guard. And the MREs, and they had peanut butter that we had to break into them and get the peanut butter that was in the little package that they -- had salmonella in it and get those out, and -- but the food, we absorbed all that the schools had. And then they knew that this thing was going to last, so they opened their freezers and we got to use their food. And that's really a great asset that -- what brought us through.

DEL. NORTON: Very troubling. Very, very troubling that there was no food available except -- it happened that you could get it through the school system, provided food.

You also say, in your testimony, it looked like the National Guard was trying to do the best they could because you say 25 National Guard arrived, but there were no vehicles. You mean to transport people from place to place, like to the schools to get the food and stuff like that?

JUDGE LOGSDON: Yes, Madame Chair. We asked --

DEL. NORTON: How did they get there? By the way, Judge Logsdon, how did they get there?

JUDGE LOGSDON: Well, they drove their personal vehicles. And we furnished gas for their personal vehicles, the 25 that was there, until they found out that they could not use their personal vehicles, so they stopped.

DEL. NORTON: Did the governor -- did the governor declare them to be available to you?

JUDGE LOGSDON: We have a Guard unit in our -- a nice Guard unit in our community, in Grayson County.

DEL. NORTON: Right in the county?

JUDGE LOGSDON: Right in the county, a nice facility. And these were local guardsmen. And they said -- you know, they stood the first couple of days and just -- doing nothing, and they said, we can't do this. You know, it was bottom.

And so finally, on down at -- the following Saturday, they sent them 100 more. And then they finally -- they sent four Hummers. And the -- one of the Hummers, when he started, he dropped the transmission, so it left us three Hummers.

And so then they got on the line and started getting more troops in, with more vehicles, but it was the -- around four or five days before we seen any vehicles with the full Guard.

DEL. NORTON: One of the things we're concerned about is the relationship between the National Guard -- or it looked like, look, they saw some problems to be done. They were even locals, so they got out there and did what they could, even with their own local vehicles. You know, that's one of the reasons I love the Guard. I love my guardsmen. They are always ready for us, and we lament the fact that so many of them are gone.

But you said early in your testimony -- you asked a question, what is supposed to be the -- who is supposed to be the local representative to FEMA. And that, I thought, was a penetrating question, Judge Logsdon.

To what extent was the state of Kentucky, which has its own emergency disaster system, involved with the county?

JUDGE LOGSDON: Madame Chair, the state pretty much took care of the state. You know, on a local level, our county, we had our county, and we were not only battling the power lines that were falling with -- over-iced; we were battling -- the streets were nothing but ice, and our salt trucks were running continuously, trying to salt roads and get people where they could even get there once we cut them out. So we did ask the state to try to get some salt, and the state came back and said that they weren't letting any counties have any salt. You know, if we ran out of salt, pretty much, we was out of salt, so --

DEL. NORTON: Oh, because they just didn't have enough of it.

JUDGE LOGSDON: They had a lot of salt, but they weren't releasing it to the county.

DEL. NORTON: You don't know why?

JUDGE LOGSDON: No, they didn't give no answer. This --

DEL. NORTON: We'll have to find out, because, again, FEMA, it seems to me, could have coordinated that, or had some salt, and I'm not sure -- and we'll have to find out what the answer to that is.

Judge Logsdon, I was interested in your notes -- 49,122 meals were handed out to Grayson County residents during the storm; 9,000 gallon jugs of water were handed out; 48,000 -- it looks like (48,)810, or thereabouts, bottles of water were handed out. And my question is by whom.

JUDGE LOGSDON: Local citizens, local people, and right at the end, the Red Cross came in to help out. But this was done by our local churches, our local volunteers. It was done by elected officials, the community.

DEL. NORTON: You know, I'm -- (chuckles) -- trying to find traces of FEMA somewhere here. I see the National Guard -- I'm talking about in Kentucky. I see the National Guard, and my hat is off to them. I hear the school system. I hear the Red Cross, a private organization.

Where was FEMA? At what point did you see -- or was there any indication that FEMA was involved in this ice storm, where the president of the United States had declared a national emergency?

Now, I'm not sure when -- Mr. Guthrie will make me understand when it was occurred -- when he had -- you know, it wasn't the first day, but certainly by the end of the time, when you were passing out all this stuff, it had been declared.

Where was FEMA? Did you see FEMA? Did you see it?

JUDGE LOGSDON: Madame Chair, there was a -- a representative came through, but they were passing through, they said, and they just passed through.

And we was on the phones trying to get help. And then, you know, we called our congressman, and he came down, and he got on the phone. And there again, he got the thing rolling to where that we got help, but it was about the ninth day before we seen any real action of help. And that was the generators, and then they were smaller. And by that time, we had -- we couldn't set there and just wait, wait, wait, or we would've had a disaster, worser than a disaster.

DEL. NORTON: So what did you do in -- rather than wait for the generator?

JUDGE LOGSDON: We went to renting, to other counties, to going to Louisville. We went to Louisville, Bowling Green and Nashville, everywhere we could possibly get one, that had those generators.

And our local rock quarry, they do -- on their mine, they had a large generator that they run their mine with, and they let us use it to run our shelter for our high school, for all of -- it had about 500 people in it at one time.

DEL. NORTON: Well, it sounds like, Judge Logsdon, like the county was saved by self-help.

JUDGE LOGSDON: Yes.

DEL. NORTON: And I'm including the Guard in that.

Have you been reimbursed for the meals, the water, the other services that the county provided -- or was the state providing --

JUDGE LOGSDON: Madame Chair, we're keeping up with all documentation, all paperwork. As of right now, we have not been reimbursed. And, you know, as a local -- a small local government of a population of 24,000, our budget is not very big.

And there again, we are -- we would like to ask FEMA if there's any way on immediate relief for funding for such as that, because it would be a great help to our -- and I'm speaking for the city also, their budget's not large either. So, you know, it would be a great help.

DEL. NORTON: Mr. Guthrie had a question, before I go on to Mr. Wilder.

REP. GUTHRIE: Well, just a point on that. Now -- so if you're going to spend $1 million, your 13 percent would be 130,000 (dollars). And the president has approved 75 percent. And we're looking for a waiver. If we could do the waiver, they can -- there's a provision that can waive the first seven days of costs. They would be 100 percent covered by the federal government. And I think that'd be helpful, because there are a lot of rural counties, particularly Judge Logsdon's, that are in that situation.

Another one that's got 130 -- about 130 (thousand dollars), 140,000 (dollars) that they have to pay locally, which really puts a strain on their budget. So I'm just encouraging that we go that direction.

DEL. NORTON: Well --

REP. GUTHRIE: And I know we talked about that in the meeting with the speaker, and appreciate your help on that.

DEL. NORTON: Well, just let me say for the record right now, Judge Logsdon, that I know I can get Mr. Guthrie to work with me.

We don't know a state -- in fact, the statistic shows that 50 states are losing jobs. That's why there had to be a stimulus package in the first place.

Record shows that people are laying off vital personnel. That's why there were state stabilization funds. You know -- who, after all, work for the state? Cops, nurses.

Now, I can't imagine that a county of 24,000 people was in a position to pick up any of FEMA's costs and particularly not after the president of the United States has declared the same kind of national emergency that was declared after all in Louisiana following Katrina.

So if Mr. Guthrie will work with me, I say to you that we will do all we can not only to see that you are reimbursed but quickly reimbursed.

What bothers me is the state of the economy leaving anybody, as you saw in the -- I couldn't stand it in the last witnesses, that there was money that could be spent. Well, I certainly can't stand that you spent money in this economy and have not been reimbursed.

Mr. Guthrie.

REP. GUTHRIE: I greatly appreciate that offer to help, and I certainly will work with you to do that. That would mean a lot to our communities, not just in Kentucky, but Arkansas and Missouri as well.

DEL. NORTON: We don't mean to leave you without questions, Mr. Wilder. Indeed, I understand your concern about the relationship between FEMA and the nonprofit community.

We are going to make inquiries about whether or not there can be some more systematic relationship. They do have a relationship with the larger nonprofits, Catholic charities, the Red Cross and so forth. But, you seem -- you appear to be a vital community foundation. And we will certainly be back to you about that relationship.

I don't think that would be hard to do. I mean, if you -- after housing, what would say is the most sought after service the case managers in your organization provide advice concerning?

MR. WILDER: Probably the -- and this is suggest -- I have to say it's a guess because I don't know a direct answer to your question, but I suspect it's home furnishings, because not only did folks on the Gulf Coast lose their homes, but most of them, many of them, lost everything they owned including a bed to sleep in and clothes to wear.

So I would say that probably, home furnishings are the second most needed thing.

I might also add that following the storm, we've had a serious uptake in mental health problems, as you might imagine having to put that many folks into travel trailers.

I'm not criticizing the travel trailers, because they needed some place to live, but they stayed there for a long time because unlike other disasters where there was a place for people to go and get out of the disaster area, we were confined or stuck in the devastation and had to stay there for a long time. So mental health was a big issue. I think it still is a big issue down there.

DEL. NORTON: Have you been assured that the trailers where people will continue to reside are not the trailers that have the formaldehyde and the other problems?

MR. WILDER: I have not heard in recent months any criticism or concern about that.

There was, as you know, Madame Chairwoman, there was that concern a year or so ago but, as it stands now, I believe that problem has essentially been resolved.

DEL. NORTON: Of course, the root problem as you said was housing. Now, there had to extensions.

I'm informed that FEMA's extension on its housing program is only for 60 days. Have you been -- or any of those you serve informed of whether that would be extended?

MR. WILDER: Well, I saw on the e-mail this morning that suggested that, that might be extended until June. It's a little longer than 60 days, I think, but not much longer. And the problem is, as this subcommittee knows is, "What do you do with them?" I mean, you can kick them out of what they're in, but where are you going to put them?

And as I said before, the issue of affordable housing is critical to, I think, the New Orleans area, and it's certainly critical to the Mississippi Gulf Coast area. The cost of housing, those rental and single family ownership has risen to the point that people simply cannot afford it.

We now also have this residential credit crisis that's going on so even if some of these families could afford the rental or the -- excuse me, to buy the home, the monthly payments on the home, they can't get credit. And so we've been trying to address those issues, but they are extremely difficult issues to deal with.

DEL. NORTON: Mr. Wilder, we have some information that the local government is opposed to allowing the cottages, and that you spoke of in your testimony, to be permanently affixed to lots.

Would you describe what the problem is?

Who is the local government? What's the county? What's the locality?

MR. WILDER: I think there only two or three localities at this point, local governments, who have agreed, which have agreed to allow the Mississippi cottages to be placed permanently.

DEL. NORTON: Now, what would be their opposition in light of the -- ?

MR. WILDER: Their opposition is the concern that -- I think, they equate FEMA trailers to Mississippi cottages, and they are not. There is a huge difference between the two.

The Mississippi cottages both -- well, there are three kinds as you know. There is this one, two, and three bedroom units. Those are very well-built.

I have tell you, there are a lot better houses than I grew up in, and they are good alternatives, but the local government seem to be concerned that over a period of time, those cottages will become slums. And that seems to be the primary opposition.

DEL. NORTON: This is very troubling.

MR. WILDER: We're making some progress.

DEL. NORTON: How?

MR. WILDER: I don't want to trouble you too much. I'm hopeful that we're going to work out -- we're going to be able to work out with some of those.

DEL. NORTON: Well, this just doesn't look like a FEMA problem. It looks like the local government --

MR. WILDER: It's a local government problem.

DEL. NORTON: -- where its own people only has not just decided -- and again, if you're getting the government to give you some housing, I know that it has nothing in common I must say, with the trailer. If they had the trailers there, why did you have to almost ask?

You say these people have no place to go, and you also mentioned Section 8 vouchers in your testimony. Well, suppose more Section 8 vouchers were available. Somehow, we could get more Section 8 vouchers there, will there be available housing even in that circumstance?

MR. WILDER: There are currently being constructed apartment complexes. Some of them are affordable. Some of them are government subsidy programs.

So yes, I believe there will be. Unfortunately, the cost of that housing is still -- even the lower cost of that housing is still more expensive than some of the lowest income, disabled, and elderly can afford. And that's a problem.

DEL. NORTON: Mississippi has got to face the fact that these people are, as it were natural, this is a federal government. And if there are disabled, extremely low -- or extremely low-income people, we've got to find a way -- it looks like -- to work with the state in this case so that people face the fact about this people.

At some point, this is a kind of thing where it lingers and lingers. Somebody writes a big story, and this time, it looks like it will be that the state of Mississippi is allowing their disabled people or very low-income people just to languish in trailers.

If there is some affordable housing and these cottages and, again, we will look into, I will say to you, we will look into the Section 8 vouchers notion with HUD and with the administration.

MR. WILDER: Don't -- if I may, Madame Chairwoman --

DEL. NORTON: Yes.

MR. WILDER: Let me make certain that you don't misunderstand what I'm saying.

We are, in Mississippi, attempting to make an effort to get these folks into good, affordable housing. It has been difficult.

It has been difficult because of the scope of the disaster, because a lot of the lower priced rental and residential property was destroyed. We, in the nonprofit community, have done a lot to restore that.

Our primary focus has been working with the very low income, the disabled, the elderly, the single-parent families. And the state is also attempting, I believe, to do something. They have several programs that are on their way. To be honest with you, sometimes, as you expressed earlier today, the red tape of federal government could be awfully red and we're having some trouble working our way through all of those red tape issues.

DEL. NORTON: Well, we were very distressed at the last hearing on Mississippi. We had, what I call -- it's really terrible -- the testimonies from the local officials and from the state of Mississippi.

We had to intervene in order to get the FEMA, I guess it was housing program extended to somewhat minimum from Congress, because it was another one of those cuts.

I hate to see people go through this, and yet I sympathize with the state also on the -- housing is a market commodity. So we will have to look further.

I did not understand you saying anything differently from what you have just described. It is inherent in the Mississippi situation the scope of the disaster and the sheer unavailability. But you see, we have to intervene to get it extended and maybe it's going to come up again.

Mr. Garratt, would you take the seat. I appreciate that you're here again. Would you like to say something about, first, the FEMA cottages?

It looks like you are willing to let them be permanently affixed to the ground but they have not been. And then I'd like you to ask about this extension for 60 days and whether FEMA intends to ask for yet another extension, in light of the testimony you've heard from Mr. Wilder.

MR. GARRATT: Yes, Madame Chairman.

First of, I think Mississippi has done a fabulous job with the Mississippi cottage program. They stood them up in pretty much record time, populated them very quickly with the deserving disaster victims, and a very good job of managing that program.

I know that they're working with their local jurisdictions to try to get them to accept them permanently. I will reinforce what Mr. Wilder said. They are impressive temporary structures, but, in fact, they are much more than a temporary structure.

And I think that this whole pilot program that Congress authorized is going to bear us some excellent fruit for us in this regard.

So, yes, we support that, and we'll stand behind them in that regard.

In terms of --

DEL. NORTON: And, of course, they now have trailers as the alternative. So I can understand people not wanting trailers, but these are little cottages. It looks like disabled people -- you know, even when people don't want people who are using that in their community if you're disabled or elderly.

Normally, people, you can get public funding for housing, so I appreciate what you're saying, Mr. Garratt.

Now, the extension that I've asked Mr. Wilder about rather --

MR. GARRATT: There are no plans at this stage to extend it beyond May 1st. As you know, the secretary announced that there would be a 60-day extension. But at this stage, no decision has been made to extend beyond that date.

DEL. NORTON: So what do you think should be done with these most difficult to place residents on May 1st if there is no extension?

MR. GARRATT: Let me back up just a little bit, Madame Chairman, because what I like to do is just paint a little context here for how we got to where we are.

As you know, these are individuals who are largely in travel trailers. And you know the issues and the background behind the travel trailers. They're very small.

And the idea that we've had families living in these very small travel trailer conditions now for approaching 3 1/2 years is problematic for us as I'm sure it's problematic for the state of Mississippi, is that's no environment to be living in for that period of time.

These are designed for recreational use. They were never designed to be used for this period of time.

FEMA has, over the course of the last year, offered every one of these residents a minimum of three apartment opportunities -- apartments that are at or near the (former ?). And when they were initially offered these opportunities, they would have been fully subsidized under the DEHAP program at that time.

They rejected that.

In many cases, these families rolled the dice -- these households rolled the dice, electing to stay where they are in a fully subsidized --

DEL. NORTON: Well, because they want to go to where they originated, is that it? Why would they --

MR. GARRATT: A number of issues, Madame Chairman, some of them -- the apartments aren't as close as they would like to where they are now. All of them would be within 30 to 50 miles, these apartments, of where their travel trailer is. But in many cases, they rejected it.

Another reason that they were rejected was that they recognized that the subsidy in the apartments was going to end at some point. In other words, it was designed to step them down to become self- sufficient and some of them elected to stay in a fully subsidized travel trailer rather than begin paying or having to begin paying a portion of their own rent down the line.

We recognize that they're very low income. But at this stage of the game, we think it's time to demonstrate some resolve in this regard. And for those individuals who have been reluctant to take that step to self-sufficiency, we think it's time to draw a line in the sand and help them in that regard.

DEL. NORTON: Yes, even if they have to re-subsidize. I think you're right. There's people that believe that the subsidy is going to continue forever.

I have serious concerns for some of these people, and it's all case work management. People do have to understand that FEMA is a disaster agency, not permanent housing. This is not HUD.

And some of these people may qualify for HUD. And a whole lot of folks in this country, after a disaster, get to live where they never thought they would live or wanted to live. But this has to do a lot with case management, and talking some turkey to people and then seeing who really has a problem and who does not and whether or not they can be subsidized where they are, if their concern is very low income, and not willing to use it.

Remember, some of these people weren't using, were living in with somebody, like the daughter or the son of someone else. So the whole notion of giving any portion of their income for some of them would, of course, be seen as a horrific hardship.

But, again, with a proper case management, allowing people to understand where you see that there really is available housing even if it is not where they want to.

Here, I'm with Mr. Garratt. Go ahead.

MR. GARRATT: I would just like to follow up on the case management. We have a good partnership with the state of Mississippi in that regard. We have been funding a case management pilot program in the state of Mississippi, even doing a very good job with that.

We recently authorized Mississippi at no cost extension on that case management program through June or at least until June 1st, so that will take them beyond the May 1st date and to continue working that.

And we're hopeful that at the end of that case management pilot that we're going to learn some lessons from Mississippi and be able to potentially apply that to a national model.

DEL. NORTON: Again, Congress has to intervene then in order to get your case management extended. But this hearing is important because, obviously, the first thing you do is sympathize with the person who finds out late. We don't want to find this out in April if it's supposed to go out in May. But we do need to know what Mr. Garratt has told us. And it looks like some of these people would never leave that trailer, even if your section 8 voucher was available, even if that new housing that you see being constructed came available.

And, again, that is a terrible thing that someone has to pay. It's terrible to go to a trailer in the first place. I'm not sure I want anybody to get used to that, if that what's happened here.

Mr. Wilder.

MR. WILDER: Madame Chairman, I absolutely agree with you.

We don't want people remaining in the FEMA cottages any longer than they have to. It's not good for them. It's not good for the community.

So I agree with Mr. Garratt that we need to get those folks out.

The point that I was making was not necessarily, did not necessarily relate just to the people who were in the FEMA trailers. We have many other low income need housings other than what you're talking about here.

And so what I directed my attention to was not only that small group that's still in the FEMA cottages, but also the broader low income group, many of whom are not now receiving FEMA --

DEL. NORTON: What the government's responsibility is for the ones that the FEMA cottages and the ones in the trailers. And it looks like, you know, endless extensions do not help us to, in fact, reduce that need.

Mr. Garratt, I'm going to ask you if you would provide the subcommittee with how many movements after the extensions. For example, we've had multiple extensions.

So if we could have figures to show us how many were in these trailers, and for that matter, I suppose cottages, although we should look at them separately and then what the movement was after the extension.

It would give us some notion of whether people are essentially regarding these as -- look, I think I'd rather stay here, because I do not think that the subcommittee would condone that if there were available housing. And if for example, as I feel motivated now, we were able to get Section 8, more Section 8 certificates there.

If one part of the government is keeping people housed, and there's another part of the government, and these are, as you know, quite scarce, but Section 8 vouchers, my priority would be that the Section 8 vouchers go to the ones who are dependent on the government entirely. And so that is something I'm asking the staff to look into.

And finally, Mr. Garratt, I think I already gave you the opportunity to respond on the Kentucky ice storm, because -- (chuckles) -- I kept looking for FEMA at all and couldn't much find it. What's your view of where FEMA was?

Heard the National Guard, heard the meals, heard the water. Didn't hear of any responses about FEMA, even in terms of reimbursement, despite the fact that Grayson County was declared a national emergency. Would you like to respond to that?

MR. GARRATT: I would actually have a difficult time responding, Madame Chair, since I was actually out of the chamber here through most of that discussion. So not being privy to what was being said, and I apologize for stepping out --

DEL. NORTON: No, that's all right. No, Mr. Guthrie and I have agreed to together to work to get some reimbursements.

We were very -- it's interesting; Mr. -- Judge Logsdon did not bring us a bunch of complaints. He brought us -- (chuckles) -- a(n) extraordinary set of facts. And he indicated who provided what, that the food was provided by the school system, the water was -- and so, at -- the usual question is, okay, so who paid for this? And we learned that county itself paid for it, apparently not even the state.

So we would be -- he also asked a very probing question, like what is the relationship between a local community, like a county, and FEMA and -- we're not asking you to respond. We said we will look into that, because we're not sure what's the state's responsibility was here either and where FEMA's should be.

We were concerned that in this rendition of the facts, we did not hear about FEMA. We did hear, of course, about the generator. But even that caused some problems, as you heard in my opening remarks. What I'm concerned with is that FEMA be -- this may seem unfair, but it's not, considering the mission of the agency -- wherever, whenever, FEMA is nimble enough to get there. Part of your problem has been this has not been the best-funded agency in the United States. But these are matters that Mr. Guthrie and I will be bringing to your attention.

How -- yes --

MR. GARRATT: No, I just would like to answer one, if I understand that. And that is, if a county, if a jurisdiction, if a city incurs cost taking care of its citizens in a federally declared disaster, if they're providing food at shelters, those sorts of activities are reimbursable under the Stafford act. And they can be reimbursed for those once they fill out a project worksheet to get reimbursed for that.

We're beginning to kick off meeting process in Kentucky. We're actually still just completing PDAs in some of the counties in Kentucky. All of that will inform subsequent add-on decisions.

But bottom line is, those are eligible costs. They can be reimbursed. There's a process for getting them reimbursed. Right now, that reimbursement rate is that it's 75-25.

DEL. NORTON: Well, Judge Logsdon told us he runs a -- (chuckles) -- he runs a tight ship. They were keeping a record of every cent they paid.

Judge Logsdon, have you submitted those bills to FEMA, since you are eligible now for national disaster aid?

JUDGE LOGSDON: Madame Chair, I think we were the first county, that I can -- best of my memory, that declared a state of emergency -- was the first one. And we have been compiling those.

And I think since then our emergency coordinator has talked with the some of the FEMA representatives. And what we're hoping for is, there is immediate relief on payment, where a lot of times it takes like a year to get your money reimbursed. And we're just hoping that there's something like immediate relief up front.

DEL. NORTON: Mr. Garratt, this is a county, and I wonder if there's any way that some advance payments can be made, based on the records they have of payments that are not in dispute because they have the records to show.

MR. GARRATT: Yes, ma'am. We've got -- we can do an expedited PW. It's called immediate needs funding. We can do that for Cat B, and will provide up to 50 percent of the estimated cost of that in advance, then we reconcile that down the line.

So that's an existing policy we have. They have to request that, but we're certainly willing and prepared to do that.

DEL. NORTON: That's what a hearing should be all about, problem solving.

Mr. Logsdon, don't leave this room before you --

REP. GUTHRIE: By the way, Mr. --

DEL. NORTON: -- Judge Logsdon -- before you've made the appropriate arrangements because Mr. Guthrie and I will be following up with you and with Mr. Garratt.

I want to thank all of our witnesses. If we asked a lot of questions, it's because we're trying to understand. I don't want anyone to misunderstand my tone. I come to this more as a trial lawyer -- (chuckles) -- than as a nice member of Congress, but I'm really a nice member of Congress.

I am always open to the other side. By being open to the other side, I've really learned something from Mr. Garratt. And indeed, what perhaps I find at -- certainly at this point of the hearing most gratifying is that Mr. Garratt has said to Judge Logsdon that he's willing to work on an advance payment based on the records they have for at least 50 percent of what is owed to the county. As far as we're concerned, mission completed, at least for part of what this hearing was all about.

And I thank all of you for your testimony and for lingering with us while you made us understand what we had to learn.

Hearing is adjourned. (Sounds gavel.)

Source